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Wednesday, 9 July 1930

Senator HOARE (South Australia) . - I was astonished at the remarks of Senator Colebatch. The honorable senator adopted a very sympathetic attitude towards the Government of Belgium which has protested against the action of this Government in taking steps to correct Australia's overseas trade balance. It seems to me that some honorable senators are protectionists when it suits them and when it does not suit them they declare for freetrade. Protection is the settled policy of Australia. I hope it will be endorsed by the people for all time. Since we stand for protection, surely it is unreasonable to expect the Government to alter its policy at the dictation of a government of another country which may be affected by increases in the Australian tariff. If we lower the tariff against Belgium, other countries which have trade relations with Australia will expect the same treatment. Senator H. E. Elliott reminded us that during the war Belgium was on the side of the Allies.

Senator Rae - What about the assistance which the Allies gave to Belgium?

Senator HOARE - No one can deny that Belgium received great assistance from the Allies during and after the war. If we acquiesced in the request of the Governments of all those countries that fought on the side of the Allies, and lowered our tariff barriers Australia eventually would become a freetrade country, and it would be impossible to establish new or extend existing industries in the Commonwealth. If all countries adopted a uniform wage scale and observed our standard of living, we might then be able to surrender our protectionist policy ; but so long as we observe a higher standard of living and pay our operatives in industry higher rates of wages than obtain in other countries, we must protect Australian industries and Australian workmen by customs duties. It would be unreasonable to expect Australian industries to compete on even terms with industries in other countries where the wage-rate is, in some cases, as low as lOd. a day. I am surprised at the attitude of Senator Chapman, who is a free trader and a protectionist by turns. I assisted the honorable senator to have a duty imposed on New Zealand butter, because I am a wholehearted protectionist, and T considered that all industries should be equally safeguarded. Senator Glasgow also reverses his policy when it suits him. The . honorable senator comes from Queensland, which State is interested in the export of beef to Belgium or other countries. For this reason he supported Senator Colebatch in his protest against any action by this Government which might jeopardize or endanger that trade. Because he is interested in the exportation of beef he is inclined to adopt the role of the freetrader, and, I assume, would have no objection to the introduction of Belgian manufactured goods at lower rates of duty. Possibly, even he would not oppose the importation of cotton goods from Belgium, although a week or two ago he supported the Government's proposal to pay a bounty to cotton-growers in Queensland. To say the least he is inconsistent in his fiscal faith. Let us be honest about this matter. I fail to see how we can support any movement to interfere with this Government's policy. Recently we passed a measure under which bounties to the amount of £800,000 will be paid to encourage the establishment of cottongrowing and its allied secondary industries in Australia. We, therefore, cannot consistently lower duties against imports of cotton and other goods which would threaten the destruction of our new industries. I cannot follow the Une of reasoning adopted by those honorable senators who are supporting the motion. Because Japan, for example, imports Australian commodities to the value of £9,000,000 a year, that is no reason why we should allow Japanese manufactured goods to compete on unfair terms with the products of Austra-. lian secondary industries.

France, Belgium, Italy, Japan and other countries purchase Australian products because they are either cheaper or better than can be obtained elsewhere. There is no sentiment in commercial transactions. Senator H. E. Elliott stated that owing to the shrinkage in our import trade there will be fewer vessels coming to Australia to lift our surplus primary products. That is a difficulty which every protectionist country has to face. No one denies that we must find an outlet for our surplus production in other countries. I agree that in return Ave must expect to receive from those countries goods of equal value, but not a fraction more, if we are to build up secondary industries in Australia. I contend that we cannot differentiate in our tariff policy. This Government has decided that curtain duties shall be imposed in the interests of the nation and we must stand by its decision. I am in sympathy with the cattle-growers in Western Australia who depend upon the Wyndham meat works for their outlet, and I should be exceedingly sorry if anything happened to make the closing of those meat works necessary. I am not satisfied that our tariff policy has injured Belgian trade to the extent mentioned. If Belgium wants our meat, and if it is cheaper or better than that country can obtain in other countries, it will continue to take the Australian product. I hope it will at all events.

Senator Carroll - I hope so, too.

Senator HOARE - Quite so. We must, however, remember that the adoption of a protectionist policy must, to some extent, affect other nations. I hope that some way will be found to assist the meat export industry of Australia, If we were to meet the wishes of Belgium in this matter we should be confronted with requests by other nations. We must face the position as we find it to-day. If the wool producers, for instance, are in an unsatisfactory position, the services of scientists must be utilized to assist them to produce a finer wool that will favorably compete with artificial silk, which is at present seriously affecting the woollen industry of Australia.

Senator SirHAL COLEBATCH (Western Australia) [5.53.]. - I do not feel that there is any necessity for me to apologize for having raised this question. It seems to me that it was high time that the Senate had an opportunity to discuss at least one feature of the Government's fiscal policy. I do not disguise my own resentment of the fact that for eight months exorbitant customs duties have been imposed and collected without Parliament being in any way consulted. While I welcome the assurance of the Minister (Senator Daly) that these very high duties and prohibitions have been imposed only because of the present emergency, the satisfaction that I obtained from that statement was destroyed by the utterances of other honorable senators who supported the Minister. They assured us that these duties were in fulfilment of

Labour's policy and that it is the desire of the Government nnder its protective policy to give the fullest possible protection to Australian industries, even to the point of prohibition. I am now wondering which is the correct statement. I accept that of the Minister because he speaks with a sense of responsibility. I believe that the Government has adopted this course only in this emergency, and therefore I must ignore the statements of other honorable senators opposite that this course has been followed- in pursuance of the policy of the Labour party.

SenatorRae. - We did not say that the emergency tariff was to remain in operation.

Senator Sir HAL COLEBATCH - The embargoes and prohibitions?

Senator Rae - Yes.

Senator Sir HAL COLEBATCH - I. am not prepared to admit that these prohibitions are necessary in the interests of Australia, and I assert without fear of truthful contradiction that the great volume of expert financial and economic opinion in Australia is entirely hostile to such a course. The Minister has directed attention to the last report of the Directors of the Commonwealth Bank. The words to which he directed particular attention were these - . . drastically reduce the importations of things non-essential, until such time us we are again in a position to pay for these from overseas surpluses the result of production.

But the importation of the chief nonessentials has not been drastically reduced. In fact, no serious attempt has been made to reduce importations in this respect. Senator E. B. Johnston referred to such articles as motor chassis, picture films, and things of that kind in connexion with which there has been no attempt to reduce importations, the prohibition of which would not have had such a serious effect upon Australia as the prohibition of a number of other essential commodities such as agricultural machinery has had. It is the first time that I have had an opportunity to peruse the report of the directors of the Commonwealth Bank, and when I endeavoured to obtain a copy, I was told that it was the only one available. I suggest that all honorable sena tors should be furnished with a copy of the report.

Senator Daly - Hear, hear! The honorable senator should have received a copy.

Senator Sir HALCOLEBATCH.This one is rather out of date; but I suppose another report will be available shortly. We were informed by two or three honorable senators that the countries to which reference has been made did business with us only because they could obtain better goods or secure them at a lower price in Australia than elsewhere. But the fact of the matter is that our goods are as cheap and of a quality equal to similar goods of other countries. That is all. Competition is extremely keen. The3½ years' experience I had as AgentGeneral for Western Australia in London, showed me how difficult it is to secure and retain markets. Most of the countries mentioned trade with Australia because we trade with them. It is not because our goods are better ; they are only as good and as cheap as similar goods of other countries. When other nations have, to choose between two countries offering articles of the same quality and at the same price, they naturally trade with the country which does business with them. They do not do it for sentimental reasons, but because the shipping freights and exchange rates are more favorable. It is not a question of whether one is a freetrader or a protectionist. It is the duty of honorable senators to bring before the Government the dangers of imposing excessive customs duties against good customers. Attention having been drawn to this matter the Government now says that it recognizes the position and intends to modify its policy when the time is opportune. The high protective policy which has been adopted by Australia for many years has not given very brilliant, results. I do not think it can be contended that our policy of protection has brought Australia to a state of prosperity, or that an extension of such a policy is likely to get us out of - our troubles. I am more inclined to accept the views of responsible economists in this country who say that our policy of protection and the payment of bounties must be reasonable, formulated with the idea of helping those industries suited to the country, and which do not suffer a maximum disadvantage as against other countries. The Government should not impose exorbitant customs duties or absolute prohibition without considering the effect that such a policy will have on other industries. That is my attitude. It is entirely reasonable and not inconsistent either with the policy of assisting Australian industries or giving reasonable preference to the Mother Country. 1 do not propose to detain the Senate in discussing this subject further. I repeat and emphasize that the views I have expressed are not only my own, but those of thousands of people throughout the country who believe that by imposing high customs duties, and prohibiting certain imports without reference to Parliament, the Government has abused the confidence of the people of Australia.

Senator Daly - I would not say that the Government has abused the confidence of the people.

Senator Sir HAL COLEBATCH - The Senate having been given an opportunity by this means to express its opinion on this important subject, I ask leave to withdraw the motion.

Motion, by leave, withdrawn.

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