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Tuesday, 17 October 1972
Page: 1574


Senator MURPHY (New South WalesLeader of the Opposition) - I move:

That there be referred to the Standing Committee on Industry and Trade the following matter - Legislative and administrative measures necessary to protect the leather footwear and allied industries and, in particular, their access to Australian raw materials. 1 have moved for this inquiry because urgent action is required by the Government if the Australian tanning and leather industry is not to collapse. The tanning, leather manufacturing and boot trades Eire being gravely damaged by several factors. One is the abnormal demand for Australian hides by overseas markets and the resulting shortage of the raw material for the local industry. Australia is the only major hide exporting country with no governmental control on the export of hides. Because of the controls imposed by the Argentine and the United States of America on their export of hides and the subsequent inflated demand for Australian hides, local tanners are alarmed that they may not be able to obtain sufficient raw hides to service the shoe and leather industries which employ approximately 50,000 people.

Already Australian tanning factories and manufacturing industries have closed down. In Victoria alone, the Australian Leather Goods and Allied Industries Section of the Miscellaneous Workers Union has lost nearly one-third of its membership in the past 5 years. There has been a decline from approximately 4,500 to 3,000 which represents a loss of 1,500 members. Three major tanneries have closed down in Melbourne in the past 3 years with 800 men laid off and other tanneries and manufacturers are threatened with closure. I was told last week that unless there is a change in the position one major tannery will be forced to make a decision on whether it should close down its operations before Christmas. At least 2 others are in a similar position and the tanning industry generally may be faced with a collective decision to close down within the next several months. In the case of one major tannery I have mentioned hundreds of workers could be thrown out of work. It is hardly necessary for me to point out that this is a cumulative problem which would spread rapidly to the footwear industry. The problem could place in jeopardy not only the livelihoods of those engaged in the tanning and leather industries but also the livelihoods of thousands of workers in the associated industries.

The shortage of raw hides is so severe that prices have jumped by 200 per cent since December 1971. Shoe retail prices have jumped by several dollars a pair and more. Sections of the shoe manufacturing trade are dying out because retailers find it cheaper to import shoes. Thus we have this raw hides shortage contributing to the most serious economic problem facing this country today - inflation and unemployment. A second factor involved is the acquisition of one of Australia's 3 largest hide exporting companies by the British hides monopoly, Barrow Hepburn and Gale Ltd which owns nearly all the other tanning organisations in the United Kingdom. Colyer Watson Pty Ltd, the Australian hides merchant taken over by the British monopoly, operates in all States of Australia. I am told that Barrow Hepburn and Gale Ltd is trying to take over one of the other 2 large Australian companies, Wilcox Mofflin Limited, but so far has been unsuccessful. A third large hide exporting company is William Angliss and Co., a division of the giant British firm, Vesteys.

The acquisition of Colyer Watson Pty Ltd places Barrow Hepburn and Gale Ltd in the invaluable position of having captured a raw hides supply before Britain's completed entry into the European Economic Community which gives it a major advantage over the other European leather producing companies. If this opportunity is exploited and if the Australian Government's policy towards the free export of hides remains as it is today, the Australian tanning industry will be unable to compete for the hides because of the trade barriers and duties in the markets of the western world. Because of the monopoly position and Australian interests of Barrow Hepburn and Gale Ltd, together with the Government's refusal so far to curtail local hide exports, Australian tanners will face duties previously not experienced on their leathers entering the United Kingdom as well as undue competition from the United Kingdom in gaining its own raw material supply at a time of world wide shortage. Both these factors can be influenced heavily by action of the Australian Government. The extent and direction of such action can be investigated and recommended quickly by a committee. Significantly, this request for an inquiry into the need for quick action comes from both employers and the unions. They have co-operated because they realise that co-operative action is the only method by which an important Australian industry and a major employer of labour at a time of high unemployment can be saved.

Both sides of the industry have suggested possible solutions. Firstly, and most importantly, they seek urgent action to restrict the export of Australian raw hides, perhaps with cutbacks of between 30 and 40 per cent, with the remainder to service local industry. Secondly, they believe some action by the Government is necessary for our raw material to be processed to some stage, using Australian labour, together with trade initiatives to be explored for the development of markets in Eastern Europe for 'crust' and partly produced leathers. In fact, the industry believes that the best growth potential for the Australian industry is in developing markets for leather in Eastern European countries. The industry also suggests that import quotas should be placed on the imports of finished leather goods. The industry believes that the Government should set up the necessary machinery now to ensure that, if there is any export restraint by the United States or any other country which poses impossible problems for the Australian industry in its access to raw materials, immediate action could be taken to guarantee adequate supplies of Australian raw hides so that the local industry would not quickly collapse.

Further, the Government should seek to remove any discrimination against Australian leathers by Eastern European countries and Japan. It has been stressed that inquiry and action by the Government is extremely urgent. I have been informed by industry representatives that, if the shortage of raw hides becomes much more critical, further tanneries throughout Australia will certainly have to close. As I have indicated, some of the closures arc imminent and many hundreds of persons will lose employment. With seasonally adjusted unemployment at over 100,000, and large numbers of school leavers about to enter a depressed labour market, the gravity of the industry's case for inquiry and action is obvious. The Government was made aware of the crisis last May, when a deputation of representatives of the tanning, footwear and shoe retail industries called on the Department of Trade and Industry with a detailed submission. Soon afterwards, I addressed a question on the matter to Senator Cotton in his capacity as the Minister representing the Minister for Trade and Industry. I gave notice of this motion on 26th May 1972.

A major industry is at crisis point and the Government should realise the deterioration which has occurred even since May. I have been informed that the most reliable and responsible persons amongst the unions and the employers consider that the state of the industry is extremely brittle, because of the acute supply problem, and urgent action is necessary. Any delay in dealing with this crisis will probably cause irreparable harm to the industry. It is open to the Standing Committee to consider recommending that the Government should accede to requests made by industry that the export of hides be placed on Prohibition List of Customs Schedule No. 10. This would enable the Government and the industry to keep a continuing watch over the balance between the export of hides and the supply needs of local industry. Quite reasonably industry leaders are not urging a total prohibition which would perhaps cut down the benefits which otherwise might accrue to the Australian primary industry. Industry leaders ask simply that the free export of hides should not reduce the supply for local processors.

It is evident that action is required. In proposing this motion I am not suggesting in any way that there ought to be a delay in urgent action by the Government to ensure that this industry does not collapse and to ensure that it does not suffer irreparable harm. I am conscious of the fact that the Standing Committee on Industry and Trade has a good deal of work to do. Nevertheless, here is an industry which, with its associated industries, comprises a considerable part of Australian industry and commerce. It is closely related to our primary industries. It is one of the areas in which we want to preserve not only the employment but also industrial opportunities for processing ourselves, either entirely or to some extent, the products of primary industry.

I suggest, with respect, that the industry is so clear in what it thinks should be done - the clear view which is held by the industrialists is shared by the trade union representatives - that it would be comparatively easy for the Committee to establish a sub-committee, which it is entitled to do, to hear the industry representatives and to report rapidly to the Government on what action ought to be taken. Therefore, I commend this motion to the Senate so that this Committee, which has done valuable work, may have this matter brought within its jurisdiction. There may be long terra solutions which could be postponed by the Committee, but it is quite clear that recommendations for immediate action ought to be made in the interests of the Australian community - particularly those who depend upon the industry for their livelihood. Therefore, I commend the motion to the Senate.







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