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Wednesday, 3 October 1906

Senator McGREGOR (South Australia) . -As a member of the Tariff Commission, I desire to say a few words on the Bill, but at this late stage of the session I do not think it altogether wise to go into a full discussion of the merits of protection or free-trade.

Senator Pearce - Protection or more protection.

Senator McGREGOR - Yes. When the Commission was deliberating upon the evidence with a view to arriving at some conclusions, naturally there was a difference of opinion. Four Commissioners thoughtit advisable that the existing duties ought to be increased on certain conditions, whilst four others considered that, from their point of view, the existing duties were quite sufficient to give all the necessary encouragement to local industries. I suppose I ought to state why I voted for the recommendations in favour of the imposition of increased duties. In the various States', the Commission took a vast body of evidence with respect to not only harvesting machinery, but agricultural machinery generally. But, so far, the discussion in the Senate has centered round harvesting machinery.

Senator Millen - We are reserving the discussion on the other machinery for the Committee stage.

Senator McGREGOR - If the discussion on the Bill in Committee is going to he as exhaustive as the debate on its second reading, then I suppose that we shall be here until Christmas, if not longer.

Senator Millen - I think that we might finish by the end of next month.

Senator McGREGOR - Another striking feature of the discussion is that, in the view of those who have spoken, there is no manufacturer in Australia but Hugh Victor McKay. Apparently he is the only individual who has agitated for the imposition of increased duties, and given any reasons why they should be levied. The Bill deals exclusively with agricultural machinery, including harvesters. In most of the States the Commission found that factories for the production of various kinds of agricultural machinery had been in existence for years, and had sprung up under various conditions. The opinion was almost universally expressed by the manufacturers that the imposition of increased duties was necessary. There were very few instances in which the witnesses asked for increased duties for the purpose of raising the price to the consumer. The evidence tended to show that these industries were in danger from foreign competition owing to the greater aggregation of capital in America and elsewhere.

Senator Walker - Does not the Australian Industries Preservation Act provide some remedy?

Senator McGREGOR - That was not before the Commission. The honorable senator knows very well that that measure met with as much opposition as is now being directed to the proposed increase of duties. Honorable senators opposite have no right to shelter themselves behind the Act referred to.

Senator Millen - No; but we want to nail the honorable senator to his declaration regarding it.

Senator McGREGOR - If the honorable senator looks at my declaration, I am afraid that he will experience some difficulty in carrying out the nailing operation. I do not believe that the Act, viewed from the point of view of honorable senators opposite, will be very effective. I conceive that it will probably have a deterrent effect upon trusts and monopolies in Australia, and to that extent prove beneficial; but it cannot operate in any appreciable degree in regard to trusts in other parts of the world. The cry of honorable senators opposite, when the Australian Industries Preservation Bill was before us, was: "Why not come honestly forward with proposals for the imposition of higher protective duties?" Now that the Government, acting upon 'the recommendation of a section of the Tariff Commission, are coming forward with proposals for increased duties, they are being met with just the same objections that were urged against the Bill referred to. It was not with the idea of obtaining increased prices for their productions that any of the manufacturers of agricultural machinery put forward their claims for higher duties. They feared that unfair competition on the part of trusts and combines in other countries would have a prejudicial effect upon their industry, and I think that the experience of the past has been quite sufficient to justify their alarm. Several manufacturers in South Australia gave very straightforward evidence with respect to not only harvesting machinery but other agricultural appliances, and honorable senators have only to turn to the evidence of Messrs. J. F. Martin, Bagshaw, and Rees, in order to ascertain that they have no fear of Australian competition. When it was suggested that manufacturers in other countries might come to Australia, the gentlemen referred to unanimously declared that they had no fear. They said, " Let them come here and compete with us under similar conditions, and we are prepared to take our chance."That really is the substance of their evidence. Some of these manufacturers have been known to me for many years, andI would readily accept their word upon a question of this kind, because I believe that they are honest in their endeavours to do the best they can for themselves and the country in which they live. I should like to call attention to one feature of the recommendations of the Commission. Many Australian manufacturers and inventors complain that, after having devoted their time, intelligence, and money to the development of machinery and implements suitable to our conditions of climate and soil, copies of their inventions have been taken to America and imitated there by manufacturers, who have immediately sent their products over to Australia, with the object of underselling those engaged in the Australian industry. At the same time, it was pointed out that if machinery developed in America were copied in other parts of the world, it could not be introduced into the markets of the United States of America, because of the prohibitive Tariff restrictions imposed there. Hence our manufacturers considered that they had a just claim for protection against the manufacturing organizations of the United States. It will be noticed that agricultural machinery and implements which have been invented or developed in Australia, such as combined harvesters, stripper-harvesters, stump-jumping ploughs, and seed drills are given a distinct preference.

Senator Millen - Does the honorable senator contend that one country should not reproduce the inventions of another?

Senator McGREGOR - No, but I say that it is very unfair that one country should reproduce the inventions of another and send back machines to compete with those who brought about the improvements, whilst at the same time keeping their markets closed against imitations of their machinery.

Senator Millen - We have not one invention that is not founded upon or drawn from an invention of some other country.

Senator McGREGOR - That is going a long way back. Noah invented shipbuilding, and, according to the honorable senator, that fact would preclude any country from claiming a specialty in that line.

Senator Col Neild - Who says that Noah invented shipbuilding?

Senator McGREGOR - I am referring to the first recorded instance of shipbuilding. If any of the ancestors of the honorable senator were sailing about the globe before the time of Noah, I shall be very glad to hear about them. Specialties in the way of machinery and appliances and methods of construction may be founded upon ideas which have been in existence for thousands of years, and any developments of this kind belong to the country in which they take place, just as fully as if the original idea had been conceived there. Take, for instance, the stump-jumping plough. Would any honorable senator say that that development originated in any other country? The idea of the plough was conceived thousands of years ago, but this particular development was first brought into practical use in South Australia. Consequently, it is a purely Australian application of the plough. There is evidence that that instrument has been copied in America, and the probability is that the American machine will soon be competing in Australia just as the American harvester has already done. We should, in considering this subject, disregard the name of Hugh Victor McKay. Senator Trenwith has shown that that gentleman has spent time, money, and energy in the development of the machine that has brought him his fortune, and I do not think that any honorable senator would begrudge him the success that he has attained. But there are other men in Australia who have also been developing the same machine, and are still endeavouring to improve it. I believe that they will even surpass the Sunshine harvester in time. Are these men to run the risk of spending years of time and thousands of pounds in developing a machine, only to have it copied in America, and to be undersold by importers?

Senator Col Neild - There is not a quorum present. [Quorum formed.]

Senator McGREGOR - The local manufacturers, of harvesters have a right to consideration. The Tariff Commission, in considering its recommendations, proposed to give them the advantage of a higher duty than now obtains. The Commission proposed that machinery invented in Australia should have an additional duty of12½ per cent., while general machinery should have an additional duty of per cent. I consider that the Commission was wise in adopting that principle. It also recommended, in the interests of the primary producer, that some arrangement should be made with the manufacturers for a reduction in price, consequent upon an increase of the duty. That principle has also been embodied in the Bill. The Tariff Commission considered that the workers in the industry should receive some of the benefits of protection. As a result of that, another Bill relating to the one before us provides that if the manufacturers are not prepared to share the profits arising out of their increased output with their workers, they will not receive the advantage of the increased protection. The Bills before us embody the recommendations of the Tariff Commission fairly well. There has been a slight alteration in connexion with the duty on stripperharvesters to comply with the request of many manufacturers who desire a fixed instead of an ad valorem rate. The advantages and disadvantages of that proposal have been amply discussed. One advantage was suggested by Senator Millen by way of interjection - that it would put it out of the power of the Minister to interfere with the business of importation, as has been done in the past. It will have a still greater advantage in preventing dishonest importers from cooking their' invoices and endeavouring to make the Customs Department believe that their machines can be produced at a lower price in other parts of the world than in Australia.

Senator Millen - Of course, if the duty is prohibitive, there will be no invoices.

Senator McGREGOR - The honorable senator is probably right under ordinary circumstances, but there are cases in which articles can be introduced at a nominal value, and thus defeat an almost prohibitive duty. So long as it is left to the importer to state the value of an article, there is always a risk that he will get over the Customs in some way or other. It is marvellous to notice the methods that importers have adopted to cheat the Customs. Nothing short of prohibition would prevent them doing anything of that kind. But the local manufacturers have declared that they will be satisfied with a reasonable duty, to put them on an equality with producers in other parts of the world. I think that the Tariff Commission, in making the recommendations it has done, arrived at a very fair medium, and I hope that the duties set forward in this Bill will be carried into effect.

Senator Col. NEILD(New "South amendment upon the motion now before the Senate, as follows : -

That all the words after "That" be left out, with a view to insert in lieu thereof the following words - " the Senate declines to further proceed with the Customs Tariff Bill, No. 35, until other more pressing measures, and urgent public business have been dealt with."

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