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Friday, 2 December 1938

Mr FADDEN (Darling Downs) . - I congratulate the Government upon the introduction of this bill, which is calculated to assist in the establishment of a new industry in Australia, and to encourage the expansion of certain enterprises already operating here. Any measure which has the result of rendering Australia more self-contained, and therefore less dependent on overseas countries* is worthy of support. The. report of the Tariff Board on this industry deserves the careful consideration of every honorable member. In it will be found substantial reasons for supporting this bill. I am glad that the industry is to be established in Tasmania, which has great natural resources for the purpose. In particular, it has an abundance of hydroelectric power and large supplies of suitable raw material.

I wish to refer to one or two safeguards that may be necessary in the interests of those who will be associated with this industry. The Tariff Board has made some remarks on certain aspects of this subject on which I shall, touch. It should bc borne in mind that we shall probably never be able to provide more than about half of our total requirements of newsprint, and so will always have to draw upon outside sources of supply. The Tariff Board in framing its schedule based the landed price on charges of cost, insurance, freight, exchange, and primage, but omitted wharfage, harbour dues, stacking charges and cartage. The omission of these costs makes a very important difference. Had they been included there would be less objection to the scheme, but if they are to be ignored the figure of £15 should be reduced to £14 at least. On page 12 of the Tariff Board's report reference is made to the refusal of the opponents to the manufacturing project to enter into a. newsprint buying pool with the promoters of the Tasmanian scheme. There were several reasons for this refusal. First, it was known that the newsprint buying pool was organized primarily to assist tho Tasmanian scheme, the original idea being to levy a charge of 10s. a ton on all paper obtained in this way, thu amount so levied to go in aid of the Tasmanian scheme. This would have imposed a great tax on the independent newspapers, particularly the country newspapers of Queensland. Secondly, its opponents declined to enter into the scheme because they would have lost all control over the selection of the paper and over export arrangements. There ar>' numerous matters in connexion with export control that are vitally important to the users of newsprinting paper, such as surface finish, packing, diameter of reels, &c. It was, therefore, felt that the newsprint buying pool would place fur too much power in the hands of the big newspaper group in Australia. Thirdly, the contract referred to would strengthen the hands of the paper cartel and make it impossible for newsprinting paper to be obtained in Australia on an annual basis at current market price. That thi* is a very bad state of affairs can scarcely be denied. It indicates the strong bid made by the promoters of the Tasmanian scheme for the control of this important raw material of the newspaper industry. I am reliably informed that the landed cost of newsprint paper in 1939 will undoubtedly be higher than it is to-day, simply because of the existence of this gigantic contract with the Canadian paper cartel. Paper costs in Australia will be increased. Australia is now a closed market for paper. To-day newspaper proprietors cannot make contracts for a single year ahead; they must either contract for a period of seven years or pay through the nose. Nowhere else in the world do such stranglehold buying conditions obtain. This bad state of affairs is due entirely to the remarkable contract made between the Australian group and the Canadian combine. Unfortunately the British mills have adopted the same bad practice. The Tariff Board in its report referred to the general tariff rate on newsprinting paper from countries other than Great Britain and Canada, and recommended that the duty be reduced from £4 to £2 a ton. I submit that the interests of the independent newspapers and the struggling country newspapers not in this scheme should be safeguarded by this Government. I particularly request the Minister for Trade andCustoms (Mr. Perkins) to see that nothing is done by virtue of this bounty that will be detrimental either directly or indirectly to the interests of the independent newspapers of Australia. I emphasize the necessity for safeguarding these independent interests because of the fact that, when t he industry is established in Tasmania it is estimated that it will never be able to supply more than 50 per cent, of the requirements of the Australian market. At page 16 of its report the Tariff Board stated -

The boardhas already explained in its report of the 25th March, 1937, that this margin is subject to negotiation between the Australian Government and the Governments of the United Kingdom and Canada. The board still holds the view that this preferential margin is much wider than is justified, and is liable to be abused. It may prove that a reduction of this preferential margin would force a reduction in the landed cost of Empire paper and thus necessitate greater assistance by means of a bounty. However, it would be better that this shouldbe so than that the calculation should be based upon a high prior made possibly under cover of an excessive preferential margin of duty. The board reafirms its view that the preferential margin of duty shouldbe limited to £2" per ton.

The present rate of duty is £4 a ton. The definite recommendation of the Tariff Board should be given effect to by this Government in the interests of users of paper who are desirous of buying outside the Australian combine. Anybody who has regard for the internal or domestic arrangements of Australia must use every possible effort to discourage and quash the operations of trusts, cartels and combines. We want to be as free from their disastrous influence as long as we possibly can, and, we should give every encouragement to the independent users of paper to combat the detrimental effect of price fixation by combines or cartels, by enabling them to purchase their requirements in the best possible market. There is no secret about the fact that the powerful Canadian cartel fixed the price of newsprinting and other paper after the war. and also that there exists in Australia to-day a huge combine which has a monopoly of the importation into Australia of newsprint . from theCanadian combine. The injustice that is being done as the result of these conditions is appalling. The present, high rate of duty invites inflation of prices. So inflated is the Canadian price at present that it is actually possible to land Scandinavian newsprint in Australia duty paid, at about the same price as is charged for Canadian newsprint. Yet in spite of this, the Government thinks that the duty should not be reduced. Let us take a comparison of charges. Through the Australian purchasing pool under a fixed contract for seven years, and with little or no protection in respect, of quality or service, the price without wood ends is £12 19s. 6d a ton ; on the basis of a seven years' contract with one Canadian mill the price without wood ends is £13 4s. 6d. a ton, and with a contract limited to one year without wood ends, £19 14s. 6d. a ton; the c.i.f. price of Canadian and British newsprint paper for 1938 supplied under contracts made early in 1937, including cost of wood ends, is £10 10s. a ton ; whereas a firm quotation for Scandinavian newsprint, with wood ends, for 1939 delivery is £10 a ton c.i.f.

I wish this industry every success. I am pleased to see that this measure will afford an opportunity for the establishment of another Australian industry. Any such development is desirable because it helps' to make us independent of importations from other countries and enables usto provide employment under Australian conditions and to maintain desirable Australian standards. I again ask the Minister to see that essential safeguards are extended to those independent newspapers which arc not directly interested in the cartels. The first thing to do in an endeavour to achieve that object is to adopt the emphatic recommendation of the Tariff Board by reducing the duty on foreign paper from £4 to £2 a ton.

Debate (on motion by Mr. Barnard) adjourned.

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