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Tuesday, 21 March 1972
Page: 748

Senator SIM (Western Australia) - In years gone by Senator O'Byrne and I have spoken on the matter of the Tariff Board. There was one time when he and I were in complete agreement, and the wheel seems to have turned full circle. At one period we seemed to have parted. He began to express views which seemed to me to reflect a change in the policy of the Australian Labor Party and a return to high protectionism. Tonight I am pleased to see that he seems to have expressed views which would be very much in line with the views which I and some other honourable senators on this side of the Senate have expressed constantly for many years. I agree with a great deal of what Senator O'Byrne has said tonight. It is not my intention to speak at any great length. In days gone by I was a very strong critic of the tariff policy that was being followed. I think that on this side ex-Senator Bull and 1 were voices crying in the wilderness in our criticism of the policy. We have witnessed a change in policy which is more in line with the views which we and many others have constantly expressed.

I agree with the closing comments made by Senator O'Byrne that tariff policy is one of the important factors in stabilising and widening the economy. 1 also agree with his comment that the administration of tariff policy is a major factor in determining the cost structure in Australia. I think that be very rightly laid considerable stress upon the inflationary effect which could follow certain tariff policies. I agree entirely with his comments as I understood them on this particular aspect. I and others have constantly said that one of the major factors in determining the cost structure in Australia has been the high tariff policy which was followed for many years and which meant a diversion of our scarce capital resources to high cost industry.

I supported and defended the Chairman of the Board, Mr Rattigan and, indeed, Sir Leslie Melville the past chairman when they were advocating changes, in the tariff policy. I particularly praise the courage of Mr Rattigan, who stood up against great pressures. He stood by what he believed to be the right course. I believe that eventually he won out because over successive years from 1966-67 the Tariff Board reports have laid down the criteria which the Board would follow. The Board began to look at those areas of high cost industry which had been granted high tariff protection many years ago. Much of this protection had been granted during the 1930s because of the economic conditions which existed in those days and there was no inquiry by the Tariff Board. There has been no inquiry since to determine whether the high level of protection which has been granted to these industries is justified under conditions which exist today. A campaign of denigration has been carried out by vested interests in Australia against the Tariff Board. This campaign has continued' up to recent times. I think that only last year merchants were being bombarded by certain organisations representing vested interests which opposed the Tariff Board. They were making all sorts- of wild allegations against the Board. 1 for one was delighted when both the Government and the Board stood firm against these pressures.

Senator O'Byrnementioned first of all the dissenting report by Mr Cossar in relation to the employment of temporary staff. Of course this was a factor which enraged certain sections of industry, j. atn bound to say that I support the Tariff Board in this situation. If the Board can take advantage of outside expert staff to assist it more quickly to make determinations then that situation should be supported. 1 think it is fair to say that the Minister for Trade and Industry (Mr Anthony) made a statement in support of the Tariff Board. He made certain qualifications which were justified but he generally supported the Board in the employment of temporary staff. I think that there is great merit in .employing specialists from universities and elsewhere if they assist the Board more quickly and more expertly to make recommendations. I trust that this policy is continuing wherever it is needed. J have always questioned whether the Tad Board has sufficient staff so that it can more quickly carry out its investigations.

As I think Senator O'Byrne mentioned, there is often a very long delay between the time when a reference is given to the Board and the time when it makes its report. I believe that we should always ensure that this time lag is cut down as far as possible so that the reports and recommendations follow far more quickly from a reference than they have in the past. The Board should be given adequate resources to carry put its tasks. I ani not in a position to say whether today the Board has adequate resources. I believe that its resources have certainly been improved. I also note that last year an additional member was appointed to the Tariff Board to facilitate its work. But I believe that long delays between references . and reports are not in the best interests of industry or of the economy. Certainly the Board must be given adequate resources so that it can carry out its own policy of reviewing tariffs and high cost areas. Its review should then follow down in the medium areas and, eventually, into the areas of low tariff protection to ensure that protection which has been granted in years gone past is justified under conditions which exist today. I also agree with the Board which is giving industries warnings that they have to put their house in order, that there has to be rationalisation.

Over the past twelve or eighteen months many of the Board's reports have advised industry that protection will be maintained for a limited period and that when that period ends the Board will again review the position to ensure that the rationalisation which is believed necessary is being carried out before granting the industry protection for the future. It is all very well to talk of rationalisation and changes in the structure of our primary industries. Senator O'Byrne referred to pricing ourselves out of world markets. If we are going to compete on world markets and have a reasonable cost structure in Australia then an area which must be under continual examination is the protection granted to Australian industry. If we are going to have the scant resources - and they are in Australia - of capital diverted to the areas where they can make the greatest contribution to our national growth then we have to see that as far as possible they are diverted to those areas which make this contribution. These are the arrangements which I and others have used over the years. It is a matter of some delight and satisfaction to know that after a long struggle, and sometimes a very lonely struggle, many of these policies are now being put into effect.

As I think Senator O'Byrne mentioned, Into any great length I merely express my continued support for the Tariff Board. I particularly pay tribute to the chairman, Mr Rattigan, who, against great odds, fought for what he believed to be right. I think that eventually he has achieved his objectives. He fought against a lot of very powerful opposition. I believe we must continually keep an eye on tariff policy. In the past it seems to have become the custom in this place for Tariff Board reports and customs Bills to be brought on in the last days or dying days of a session when they could not be fully debated. I can remember making protests about this.

Senator Webster - Hear, hear!

Senator SIM - I thank Senator Webster for his support. I want to make a very brief reference to a reply I. received a few days ago in response to a question I asked in December. I notice a smile on Senator Cotton's face and I think he knows what I am going to say. I asked a question about the interpretation of the expression 'suitably equivalent'. I find some difficulty in interpreting the reply I received.

Senator Cotton - I had the same problem.

Senator SIM - I am delighted to hear that I am not as dull as I thought and that the Minister for Civil Aviation had the same problem. I believe that the administration of tariff policy is almost as important as tariff policy itself. I agree that there must be some flexibility in the interpretation of the phrase 'suitably equivalent' and I suppose there must be some arbitrariness in making decisions. I confine myself to saying that tonight but at some later date perhaps, when I have studied the matter more carefully, I will have more to say about it. According to this reply I find that the criterion in the final analysis is this:

There is no availability of a local product that is being or could be used- for a purpose similar to that for which the imported goods are required-

I think you would require a lawyer to define what is meant by that. The reply goes on to state: and the granting of a tariff concession would not be detrimental to the interests of Australian manufacturers. . . .

I merely raise the question - one to which I will get an answer some time - as to which criterion is used if it will be detrimental to the interests of an Australian manufacturer who is a high cost and inefficient manufacturer. Is that manufacturer protected by the use of this phrase suitably equivalent' or is some study made of the economics of the particular industry? I went on to ask whether price is a factor taken Into consideration when determining eligibility of goods for by-law admission. The reply I received states:

The answer is ' Yes' in determining whether locally made goods are reasonably available.

Quite frankly I have some difficulty in interpreting what that means.

Some time ago I had a case involving a person in Western Australia who wanted to import second hand fire engines from the United Kingdom for between $6,000 and $7,000 for sale to farmers and local authorities. Under the by-law regulations he was not allowed to import these because it was said that suitably equivalent products were available in Australia. I was told - and I have to accept this - that the price of the suitably equivalent product was in the vicinity of $25,000. A person may be able, to afford $6,000 or $7,000 but cannot afford the suitably equivalent item costing $25,000. It seems to me that that price was not a major factor in determining what was suitably equivalent.

Senator O'Byrne - Would the Australian fire engines be second hand?

Senator SIM - No. I can only repeat what 1 was told but it is my understanding that the fire engines had to be specially manufactured. They were not stock types and they had to be manufactured to specifications. The price was $25,000. The second hand fire engines could have been bought for a specific purpose by farmers and local authorites. They could not afford the higher price but they could afford to purchase the imported ones, in those days, for between $6,000 and $7,000. That prompted my question about the definition of the phrase 'suitably equivalent' and I am still somewhat in the dark.

I do not intend to carry on with this tonight but I point out that there have been some quite learned papers by certain academics on the question of by-law admissions. I think that by-law admissions have been one aspect of tariff policy which in the past has been administered against the recommendations of the Tariff Board. I serve notice that at some suitable time I may well have more comments to make on this particular matter. I conclude with those comments. I support the Bill.

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