Second Reading
Database House Hansard
Date 12-10-1983
Source House of Reps
Parl No. 33
Electorate O'CONNOR
Page 1672
Party LP
Speaker Mr TUCKEY
Context Bill
System Id chamber/hansardr/1983-10-12/0073


Mr TUCKEY(6.10) —The Industries Assistance Commission Amendment Bill (No. 2) and cognate Bills deal with increases to bounties on tractors in particular and the bounties on tractor cabs. These are matters that interest me particularly. In addressing myself to the question of the tariff and revenue, I think it is worth noting in this place that an inspection of the Budget Papers shows that the revenue that the Commonwealth Government will receive from customs duty-that is, the tariff-this year will be $2,182m. In fact, the Government will expend $329,160,000 on bounties. That is a differential of $1, 852,840,000 in favour of the revenue. I am not for a moment suggesting that the practices of this Government are in any way dissimilar from the practices of the previous Government. It is a fact that, for a long time, governments have earned substantial revenue from the tariff. In my view every effort should be made to see that that practice ceases. I cannot see how any Minister for Industry and Commerce-or whatever designation anybody controlling customs and excise might happen to be given-who was sufficiently enlightened to want to reduce the tariff in the interest of Australia, would be able to go before Cabinet and say: 'Here it is. I have worked out how I can reduce tariff'. I can just hear the Treasurer (Mr Keating) saying: 'Yes, and where will it get the $2 billion that will be lost'. It is a pity that we have a hidden revenue. It is a pity also that at one stage a previous government took the decision to have a revenue component within these tariffs. In this respect I refer to the 2 per cent tariff that is charged on all imported items other than those specifically excluded under the General Agreement on Tariffs and Trade.

Since my entry into this Parliament, I have been drawing to the attention of the government of the day, to date without success, that this tariff applies to a local tractor manufacturer within my electorate, the Phillips Acremaster organisation, which, over the years, has manufactured highly expensive, very large tractors in small volume quite successfully. But the facts are that this company which recently got into financial difficulty, partly as a result of this tariff, operates in its field of endeavour within Australia in a negative fashion. It is obliged to import the components of engines, transmissions and other items, purely because it certainly could not manufacture them and they are not made in Australia generally. The company has found that it is not taxed to any great degree but it is suffering as a result of the 2 per cent revenue duty. Further, under GATT, similar types of imported tractors with which this company competes-these are the very large four-wheel drive tractors-are admitted duty free. So, compared with the cost of an imported tractor, the Australian manufacturer of large four-wheel drive tractors as a result of the 2 per cent duty finds that it starts off at probably 2 per cent of 60 per cent of the value of the tractor behind the company selling the fully imported tractors.

The manufacturer is of the opinion that with the world recession some of the imported tractors in recent times have been dumped in Australia. Further, when Western Australia received rain last year and the east coast did not, tractors were certainly dumped interstate. The price of those tractors was probably discounted but the dumping procedure had the same effect on that manufacturer. The cost of these tractors varies from $70,000 to $250,000 and the 2 per cent tariff can add as much as $1,000 to the cost of such a tractor. This is a substantial disincentive to a small operative.

We should be supporting this industry. Unlike the mass produced small tractor market we find that these people-even the big manufacturers throughout the world of this type of equipment, the specialist manufacturers-often only make 1,000 of these tractors a year. So it is quite all right for a business in Australia to make, say 100 of these tractors a year. This particular industry which is decentralised 200 miles from Perth has proved to be very effective. I hope that the Minister Assisting the Minister for Industry and Commerce (Mr John Brown) will look back through the files to see whether he can at least arrive at some means by which that manufacturer or any similar manufacturer is not called upon to make a duty payment that his overseas competitors are not. As far as I am concerned, it is the height of the ridiculous. Again the previous Government was unable to resolve this question for me.

I think this matter is worth noting in the terms in which I raised it in a notice of motion this morning. The value of the Australian dollar is strongly a matter of protection or the lack of it. The Government is presently allowing the value of the dollar to drift up again by artificial adjustments. Every time the dollar goes up, it reduces the protection to local manufacturers of any product, including tractors. If the Government is hell bent on that arrangement, I think it will find that we will have fewer local tractor manufacturers and fewer farmers wanting to buy tractors because the financial return to them in Australian dollars will not be great. I congratulate the Government for supporting Chamberlain John Deere Pty Ltd in Western Australia by the provision of this additional bounty. I am a supporter of bounties as compared with the tariff although, as I have said, I would like to see them balance. I must express my disappointment at the fact that the Government has yet to resolve the situation of placing an overseas order for tractors with a company that is not really classified as an Australian manufacturer of tractors. I think that is a great pity. I think the Chamberlain company, which has a wonderful history, should be supported.