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Wednesday, 9 July 1930

The PRESIDENT (Senator the Hon W Kingsmill (WESTERN AUSTRALIA) - As I intimated on Friday, I have received from Senator Colebatch a letter informing me that it is his intention to move the adjournment of tho Senate for the purpose of discussing a matter of urgent public importance, namely, " The consequence to Australia of retaliatory action by other countries that are penalized by recent tariff schedules, and more particularly the statement made recently by the Consul-General for Belgium, in its application to the frozen meat industry of Western Australia and the position of the pastoralists in the Kimberley districts of that State."

Four honorable senators having risen in their places in support of tha motion.

Senator Sir HALCOLEBATCH (Western Australia) [3.5]. - In accordance with the letter which I have forwarded to the President, I move -

That the Senate at its rising adjourn till 10 a.m. to -morrow.

My purpose in doing so is to direct the attention of honorable senators to a matter of great urgency, namely, the consequences to Australia of retaliatory action by other countries which are penalized by recent tariff schedules, and more particularly the statement made last week by the Consul-Gcncral for Belgium in its application to the frozen meat industry of Western Australia and the -position of the pastoralists in the Kimberley district of that' State.

I take it that my first duty is to establish the urgency of this' matter. Last week's newspapers contained a statement from the Consul-General for Belgium, which I shall not read, although 1 propose to direct attention to one or two paragraphs in it. The Consul-General for Belgium pointed out that the purchases by Belgium from Australia last year amounted to over £9,000,000, while sales by Belgium to Australia during the same period represented a value of £910,000, leaving a trade balance of over £8,000,000 in our favour. He went on to enumerate the classes of goods purchased by Belgium from Australia, but the only one to which I intend to refer, as being pertinent to this motion, is frozen beef, valued at £438,000. The Consul-General also pointed out that all the commodities which Belgium purchased from Australia, with the single exception of butter, were imported into Belgium duty free. On the other hand, he stated that the new tariff schedules recently introduced ' into this Parliament' practically meant that imports from Belgium are now almost barred. He said that very few of the articles affected can be listed as luxuries; that practically all of them are primary products for some secondary local industry, such as plate and window glass, glassware, velvet, piece goods, cotton linen and ticking, parchment paper, precious stones unset, chemicals, and machinery. The Consul-General went on to say that the public and the Government of Belgium are aware of the difficulties with which the Commonwealth is confronted, and wish Australia a prompt and complete recovery. He added that for the time being Belgium would not enforce any measure which would . hamper in any way the speedy reestablishment of complete prosperity; but that if tho prohibitory measures, and the elimination of fair competitive conditions of commercial intercourse, were given a permanent character, Belgium would feel fully justified in taking appropriate measures for directing the patronage of Belgian buyers to those countries where goods manufactured in Belgium are not excluded from the market by drastic customs dispositions. That is an extremely courteous statement. But it is so strong that we cannot afford to ignore it.

Shortly after that statement appeared in the press I received an urgent telegram from the Premier of Western Australia drawing ray attention to the fact that the imposition of a duty on frozen beef entering Belgium would mean the closing down of the Wyndham Freezing Works, with disastrous results to the whole of the cattle-raisers in the East Kimberley district. The measure of those results F shall indicate a little later.

Senator Daly - There is no danger of that now. The Consul-General for Belgium is quite satisfied.

Senator Sir HALCOLEBATCH.L' do not think that any one is quite satisfied. I want first to refer to the position of our trade with five countries - four European countries and Japan - with which we have had trade connexions, none of which is at all satisfied with the present state of affairs. " The following table reveals the exchange of business between Australia and the countries men,tioned taking the average for' the past five or six years : -


We have purchased approximately £15,000,000 worth of goods per annum from those five countries, and . in return they have bought from us goods to the value of" £55,000,000, a trade balance iri our favour of approximately £40,000,000. We are told that this is all emergency legislation. No matter how acute our difficulties may be, what good are we going to effect for Australia by disturbing trade relations that are so tremendously to our advantage? Personally, I do not hesitate to say that this form of legislation cannot possibly be of any good in any emergency. I direct the attention of honorable senators opposite to a statement that was recently made by the British Chancellor of the Exchequer, Mr. Phillip Snowden, who uttered a warning against a rush to quack remedies which, he stated, only aggravated bad conditions. He was afraid that there was a good deal of that to-day. Those are very wise words. Mr. Snowden went on to say that he was sure that high tariffs, being such a hindrance to trade, were in some degree responsible for the depression of world trade. He added that the Government must bc as reasonably assured as possible that the schemes it sanctioned were sound, and would conform to the conditions that it had laid down as to the efficiency of industry and the low cost of production. Those are the two things that we are putting right out of our minds. We are adopting instead what Mr. Snowden describes as quack remedies. How is it to be supposed that those countries can continue making their purchases from us if we refuse to buy from them ? France has already imposed retaliatory duties on our wheat and butter. Germany has imposed duties on our products, but they cannot be termed retaliatory because they have also been extended to the products of other countries. Whereas in 1926-27, Germany, France and Italy purchased from us 33,000,000 bushels of wheat, representing 52 per cent, of our total export, last year Germany and France purchased none of our wheat and Italy only about 3 per cent, of our total export. That indicates that we are cramping our market. The Italian trade with Australia is of comparatively recent origin. It began in a comprehensive way in 1919, when Italy established a line of steamers to trade from Europe to this, country. . Since then Italy's purchases from Australia have reached as high a figure as £10,000,000 in one year and haveaveraged £5,250,00.0 per annum. On the other hand her sales to us have been between £1,000,000 and £2,000,000 per annum, a great balance in our favour.. During the eight years from 1921-22 to- 1928-29, we have bought from Italy £10,500,000 worth of goods as against Italy's purchases from Australia in that period of £49,000,000, a trade balance is* our favour of approximately £38,500,000. An Italian steamer calls at our ports about once a month, and during the last two years 22 have visited Australia and have payed in harbour and wharfage, other dues and wages, an average of £12,500 each, or a total of about £140,000 a year. Italy now contemplates putting on bigger steamers for our trade. They will be motor ships, and while they will need less coal, they will call for greater service in other directions. Similar remarks apply to the trading activities of France and Germany with Australia. Their ships come to our ports, give employment on our wharfs, in our coalmines and in many other directions. The biggest item that Italy takes from Australia, and this applies very much to Germany and France, is wool, of which Italy bought 120,00.0 bales last year. Of that total that country was under an obligation to buy only two-thirds of her requirements from Australia. Because of the quality of our wool, Italy could not, without injury to itself, refrain from buying less than 80,000 bales of wool from Australia, but it could- purchase the remaining 40,000 to. 50,000 bales from any other country as well- as it could from us. The same remarks apply to France and Germany.

Tallow is another' commodity that Italy purchases largely from Australia. It also buys a good deal of our wheat, as well as copra from the islands, through Sydney. All of those products could be purchased just as well from other countries, and in all of those matters Italy could have retaliated without any injury to herself.

We want the very opposite set of conditions to apply. We want to see those countries buying more of our products. There is no reason why we should not build up a trade with them in our butter and meat. Only recently tenders were called for a contract to supply tinned meat to cover the army and navy requirements of. Italy. I have very good reason to believe that had we been on sound friendly trading relations with Italy, a part, at least, of that very considerable contract would have ' come our way. Two tenders were received from Australia, one from the Wyndham meat works and the other froma meat works in one of the eastern States.

The reason given why Australia was not favoured with the contract was that there was no shipping available. I venture to suggest that that is not altogether a sufficient reason, and that had Italy been treated as a good customer ought to be treated, a very good fight would have been put up for that tender, with a reason able hope of success.

Our next step was to prohibit the importation of lemons from Italy. Australia has not imported lemons from that country except when the product was not available in Australia.

SenatorRae. - That is not correct. I have seen thousands of cases coming in when we had plenty of our own in the

Senator Sir HALCOLEBATCH.Usually we purchase Italian lemons only when our own are not available. I have a letter from the -New South Wales Wholesale Distributors Association setting out that point very clearly.. It states that there have been no importations of Italian lemons in recent years,- except in the summer months, when they are badly wanted and our own are practically unobtainable. I suggest that Australian consumers will discover between December and February next, when it will be difficult to purchase lemons, that an injury has been done- to them by excluding the Italian product.

One of the best known imports into Australia from Italy is the Borsalino hat. I wonder whether honorable senators realize what happens in regard to that hat, which sells in Sydney, Melbourne and other centres at 37s. 6d. The first stage is that the Italian manufacturer buys in London Australian rabbit skins for each hat, at a cost of 3s. to 4s. I understand that he manufactures the skins into a Borsalino hat and sells the finished article at11s. f.o.b. Genoa. From that l1s. it is necessary to deduct approximately 3s. 6d., the price of the skin, leaving 7s. 6d. as the total amount remaining for the Italian manufacturer.

Senator Hoare - What is wrong with the Australian-made hat?

Senator Sir HALCOLEBATCHNothing, so far as I know. The Borsalino hat is delivered at Sydney at 15s. 6d. c.i.f., to which must be added. 8s. 6d. for duty, making a . total of 24s. It costs to distribute the article almost double as much as the manufacturer receives for making it. That is the condition of affairs that must always arise from excessive tariffs. They invariably lend themselves to monopolies of that description, involving the consumer in a much greater charge than is justified.

Japan sells to us approximately £4,000,000 to £5,000,000 worth of goods per annum and purchases in return commodities to the value of £12,500,000, an advantage in our favour of about £8,000,000. Among the' articles sold to Australia is a comparatively small quantity of Japanese oak which pur furniture makers say is essential to enable them to carry on their business satisfactorily. Our importations of that item amount to about £150,000 per annum. Japanese oak has now been shut out, to our detriment, and to the great annoyance of the people who are our very good customers. I understand that already Japan's purchases of our wool have fallen off in recent years.

Senator Guthrie - The -honorable senator is in error. The purchases of our wool by Japan have increased.

Senator Sir HALCOLEBATCH.That being so, the figures relating to our trade with Japan are even more striking. The fact that Japan is increasing its purchases from Australia, entitles that country to more consideration at the hands of this Government.

I come now to the case of Belgium. Our exports to that country last year totalled' over £9,000,000 and the total value of our imports from Belgium was only £910,000. Under the provisions of the Belgian Tariff, it is competent for the Government of Belgium to impose certain import duties without reference to Parliament. There is a marked difference, apparently, between the practice in Belgium and the practice here. In some countries, including the United States of America, no tariff duties can be collected by the Government until Parliament has approved of the schedule; but in Great Britain a tariff becomes operative directly it is tabled in the House of Commons, although it is regarded as a strict obligation on the part of the Government that it shall give Parliament the earliest opportunity to consider the matter. In Belgium, and apparently also in some other countries, the Government has discretionary power, within certain closely defined limits, to impose tariffs; but in Australia, which is supposed to be the most democratic country in the world, we are living under a very complete despotism in this matter. It is competent for the Commonwealth Government to impose a tariff by simply laying a new schedule on the table. In this way a tariff may be imposed and duties collected under it for many months before Parliament has an opportunity to consider the Government's proposals. This Government has done that. Eight months have elapsed since its first tariff schedule was laid on the table in another place, and I venture to say that a period of twelve months will elapse before the representatives of the people in this Parliament will have an opportunity to discuss it. This condition of affairs does not obtain in any other country. If the Government of Belgium exercised its power to impose a tariff on Australian frozen meat, as it threatened, it could, without consulting Parliament, levy a duty of between id. and i of Id. per lb., which would be sufficient to exclude the whole of our Wyndham frozen beef from the Belgium market.

Senator Daly - Will the honorable senator give me the reference to the legislation which he has mentioned? I understood' the Government of Belgium proposed to levy 2-llth of Id. duty on Australian beef.

Senator Sir HALCOLEBATCH.The tariff on frozen beef is 30 francs per 100 kilograms, which the Belgian Government, without the consent of Parliament, could impose.

Senator Daly - That is about l-5th of Id. per lb. duty.

Senator Sir HALCOLEBATCH.With reference to our Wyndham frozen beef, I ask honorable senators to believe that I speak on this matter with a fairly exact knowledge, because for seven years I was a member of the Government in Western Australia. For the greater part of that time I was Minister controlling the Wyndham meat works, and, later, as Agent-General in London, I supervised the selling of its products. In connexion with this matter, I should like- to read to honorable senators the following tele* gram which I received from the Premier of Western Australia a few days ago: -

Exports Belgium last season £150,000 equals 07 per cent, total output. During last six years output to Belgium represents 83 pur cent. Loss of this market will inevitably close works as Germany already prohibited imports of frozen beef since 30th June. Result on pastoral industry Kimberleys disastrous as Wyndham only outlet, and in Northern Territory result serious. Wyndham lias been carried on for many years at heavy loss to maintain pastoral industry which will inevitably close down if Belgium prohibits imports. Contract for tinned beef for Royal Navy docs not improve position as could be carried out without interference Belgian trade.

The market for that class of beef is very limited, because the beef is regarded as second grade. By this I do not mean that it is inferior in quality, but it is lean meat from small cattle, and it is almost impossible to sell it satisfactorily on the Loudon market. If it -were placed there, the exporters would certainly have to take much lower prices, and it would be impossible for them to carry on the industry. Consequently, they are obliged to look to the continental market for their outlet. They have been, selling their meat in Belgium and other European countries, practically ever since the Wyndham meat works started. The construction of those works was begun in 1914, prior to the war. When war broke out the Government then in power, a Labour Government, found itself in serious . difficulties, and wisely or unwisely - I do not propose to debate that point now - it decided to complete the contract itself. As a result the works cost £880,000. Since then there has had to be added loss of interest amounting to £692,000, bringing the capital value of the works up to £1,572,000. Since 1919 up to the present time, with the exception of one1 year, the meat works have been carried on by the State. During the first three years, the losses were very heavy, but since then the loss has been equivalent to the charge for interest and amount to be set aside for the sinking fund. The Government realized that even if the works were closed, it would be losing just as much money, because interest and sinking fund charges would still have to be met, so in the interests of the cattle-growers of East Kimberley, who depend upon the works as an outlet for their stock, it determined to keep the works open. The industry provides employment for a considerable number of men, who receive good wages. I do not suggest that the men do not earn them. I have visited the works on many occasions and I can say without fear of contradiction that no mull work better than do the employees of the Wyndham meat works. As I have said, the establishment is of advantage to the community generally, and particularly to the cattle-raisers, who, if the works were closed, would have no outlet for their stock, and consequently could not carry on. There has been a small loss in addition to the interest and sinking fund charges in the operation, of the works during the last seven years. If now the Belgian meat market is closed to us the loss to the exporters will not be less than id., per. lb., and it will amount to £25,000 a year; If the works are closed the effect upon settlement in that part of Australia- will be disastrous. It is true that Vestys and Bovril Estates Limited have large interests in the Northern Territory. One of the firms mentioned has important interests in the Argentine, and the other in the United States of America, so I have no doubt that they will be able tq carry on. But what will become of the hundreds of small growers of cattle who depend, upon the Wyndham meat, works for the sale of their stock.

Senator Guthrie - Vesty's works at Darwin have been closed for years.

Senator Sir HAL COLEBATCH - 1 was referring particularly to Vesty Brothers' interests in cattle stations. 1 understand they have about sixteen properties, and, if I remember right, nine are in the Northern Territory, and seven in Western Australia. A fair number of cattle from those stations is sent to the Wyndham -works. Bovril Estates Limited also have' large properties in North Australia, and they, too, send some of their cattle to Wyndham. These two big firms have huge interests in other parts of the world,' and they could carry on even if the Wyndham meat works were closed down. In fact, I think it likely that, between them, they would absorb the bulk of tlie small cattle-owners who would be forced to go out of business. There is no more stirring epic in the colonizing history of Australia than the' wonderful achievement of the Duracks, who, in 1S83, sot out from Queensland with 8,000 head of cattle, on a trek lasting two years and eight months. They lost five members of their party and one-half of their stock before they established the cattle-raising industry in the East Kimberleys. These people and their descendants have stuck to the job ever since, and it is deplorable to think that they are now in danger of being driven from their holdings if the Wyndham meat works are forced to close. The cattle industry of the Kimberleys has decreased considerably during the last niue or ten years. There has been a falling off of from 640,000 head in 1916 to 564,000 head in 1927. The East Kimberley portion of 1 lie north-west is served by the Wyndham Moat Works; but most of the West Kimberley cattle go down to the Perth market, which cannot be reached by those in .the East Kimberley. Notwithstanding the general decrease in the Kimberleys as a whole, the number of cattle in the East Kimberley district has increased in the period named by 56,000.

Senator Guthrie - How many beasts are slaughtered at Wyndham?

Senator Sir HALCOLEBATCH,From 25,000 to 30,000 a year.

Senator Sir William Glasgow - Practically all of the meat is exported.

Senator Sir HALCOLEBATCH.Yes; at times a small quantity has been despatched to the local market. I think honorable senators will realize that it is practically impossible to sell frozen beef in competition with, fresh beef, and that only in exceptional circumstances will it be possible to sell frozen beef if our present market is closed to us. According to the statement of the Premier of Western Australia, which I have quoted, and that made to me by the general manager of the Wyndham Meat Works, who has been in his present position since the works were established, if the Belgian market, which has been taking practically SO per cent, of the works' output, is closed, the works will have to be- shut down, and the people in that district will be left without any possible outlet for their cattle. The time allotted for the discussion of this motion does not permit me to touch upon many of the phases of this question that I should like to discuss. We cannot, however, ignore the possibility that France, Germany, Belgium, and Italy may, under present circumstances, combine to totally shut out Australian products. It will then be found that our difficulties are more serious than they are to-day. It has been said in another place that France has no right to discriminate against Australia, because in imposing u general tariff we are not discriminating against France. People give their own interpretation 'to words. It is all very well for us to say that the Commonwealth does not discriminate between States in the payment of bounties to those producing a certain commodity iri a particular State, but it is doing so. Foreign countries will naturally say that in imposing a tax on particular goods which they produce we are discriminating against them. If it is considered by other countries that we are discriminating against them they will naturally discriminate against us. . If they choose to place a certain interpretation on our action we cannot contest their opinion. In submitting this motion to the Senate, I will mention one point which I have not time to discuss at length : We all hope the League of Nations is going to make for peace. The Government appears to have almost childlike faith in the League; but there will never be anything approaching enduring peace and real prosperity amongst the peoples of the world unless we mete out to each other international justice, cultivate international friendship, and encourage international trade relations. Without these things there can be no world peace or world prosperity.

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