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Thursday, 7 October 1971
Page: 2094

Mr KELLY (Wakefield) - I have heard some of the debate whilst present in the chamber and 1 have listened to some of it elsewhere through the public address system. I must admit that 1 find it saddening that there is such an area of ignorance about this very important question. 1 think it is proper that 1 should go over the fundamental details of it for some of the honourable members present. One of the principles with which we have to begin is the clear statement of fact that the more industrialised we become the more dependent we are on imports. This goes for any country. This is surprising to many people in Australia but it follows a common pattern. The more industrialised we become the more we depend on our ability to buy imports. Our ability to buy imports then depends on our exports. What will hold Australia back more surely and cause our standard of living to fall is our inability to buy the imports that a developing economy demands. That being the starting point, we then have to buy imports and there is only one way yet known to buy imports and that is by producing exports. If we cannot produce exports the whole economy will slow down.

The burden of the tariff, if there is one - and there is not always a grievous burden - is always carried, and the price for tariff protection is always paid, by exporters, not necessarily by farmers. The greater the proportion of exporters the greater the proportion of the burden borne by the export industry. Coming back now to this problem of employment, the important thing to realise is that we do not get good employment figures out of a sick economy and to have a flourishing economy we must be able to buy imports and to do that we must produce exports. Anything that increases the burden on the export industries automatically diminishes the health of the economy and our ability to create employment. That is one matter. The other matter is that there are too many people who think that protection is necessary in order to ensure employment for our people.

Let me run through some figures. Approximately 28 per cent of our people are employed in secondary industries and about half of those depend on protection for their viability. The important thing to realise is that the price for protection is always paid by someone. I beg members of the Opposition, particularly the diehards, to realise this. As we know, there are a lot of bright younger members on the Opposition side who see things in more realistic terms. Let me give a clear example that was given the other day. There was a tariff duty on shirts and in the Tariff Board's Report it was pointed out quite clearly that part of the problem of the shirt industry, that is, of the people who make shirts in Australia, is that they have to pay a high price because of protection on shirt material, and if we make shirt material dear by protecting it at a high rate we make it rauch more difficult for those who make shirts to compete with the shirts that come from overseas. So do not let us argue about it being just a question of creating employment. I emphasise that we will get employment in some industries but the employment in these industries is bought at the cost of employment in other industries. I do beg the Opposition to realise this as an economic fact. There is a price to be paid for protection. In many cases it is worth while, it is a justifiable cost. But do not ignore the cost in economic terms, and do not ignore the effect of the cost on export industries which must be able to produce the exports a developing economy demands. This is a price that has to be weighed in the balance, but what must be chiefly considered is the cost of employment that is jeopardised in the industries which are effected by the high cost of their raw materials.

When I started on this exercise 10 or more years ago, criticising and worrying about the high rate of protection, it used to be mainly the farmers and exporters, but principally those in the rural sector, who would support me. But now the people who come most frequently say: 'Will you please look at the effect of the tariff on the cost of our raw materials?' I do wish the Opposition would see it in these terms. There is no such thing as a free meal in tariff protection nor in any other walk of life and the price for high protection has always to be paid by other industries and at the cost of employment in other industries.

When we come to discuss this matter again I hope we will not get this rather - I was about to say 'infantile' but that is too strong a word - primitive idea that we are discussing employment as against unemployment. We are discussing the question where Australia's resources could be better used, whether we could put more of our limited resources into one area rather than another, and the whole judgment is made to my mind on where we create the most worthwhile employment. I beg the Opposition, particularly the diehards in the Opposition, to realise that it is not just a matter of arguing whether people will be put out of employment in a factory. It is a question of deciding where we can get the most employment out of the economy. If we look at it in that light we will get a higher standard of living all round and more worthwhile employment.

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