TARIFF BOARD BILL
SPEECH BY THE PRIME MINISTER, THE RT. HON. R. G, HENZIES
IN THE HOUSE OIF REPRESENTATIVES
TH-APRIL, 1 2
Sir I think that this is a proper opportunity to say
something not I think, unduly contentious about the Tariff
Board Bill as it fits into the general pattern of overall policy,
because there may be some confusions here or there. It may
therefore be helpful to indicate how we understand this matter.
This is a bill which, if you put it in a short way, is designed to
facilitate the imposition of Q. R. quantitative restrictions on
imports in certain uncommon cases. These are special cases
demonstrated by special circumstances. This measure does not
represent a reversion to import licensing as we knew it. Import
licensing as we knew it, in the broad, inevitably meant what Ithink
most people would call a bureaucratic control, and it had
heavy implications of an unscientific second line of tariff
protection. That second line of tariff protection was quite
unscientific because it covered iabroad sweep so many hundreds of
items. I describe it as ar unscientific second line of tariff
protection because, although my colleague, the Minister for Trade
( Mr. McEwen) ad I time after time endeavoured to make it clear that
this was not regarded as a protective device, it perhaps
inevitably came to be regarded in that sense, as I think the
honourable member for Richmond ( Mr. Anthony) pointed out late this
afternoon. This broad sweep of import licensing was not to be
regarded as a protective device. It had two disabilities, to say
nothing of the others. One was, as I have said, that it was
unscientific, because it covered a wide field, not in a
discriminating way. In the s. econd place, it was something that
could be imposed by a governnent through a Minister without
reference to any outside authority or check. My colleague, the
Minister for Trade, who, I am sure, would have liked to be here
and who, I venture to say, is doing a magnificent job for us
overseas, liked this broad sweep no more than I did. In the
result, the Government gave thought to it. considered the
problems that are arising, some of them in the short run and some
of them, perhaps, in the longer run. J~ decided, as I announced
some time ago, that we would set up machinery involving a
reference to an independent adviser to enable import quota
restrictions to be imposed, not as a general rule, but in very
particular cases in very particular circumstances. In other wrords,
as one honourable member has said in this debate, this is a
holding measure introduced in order that we may prevent things
from getting worse in certain instances before they become better.
There is one other thing that perhaps ought to be said,
Sir, for these things cccasionally are overlooked. That is that
the restoration of general import licensing which has been
advocated here or there could not be justified internationally when
our overseas funds are as healthy as they are now, and at a time
when it is perhaps the fashion an undesirable fashion to
pretend that what was announced at the end of 1960 is now
abandoned. I remind the House that one of the many great
products of the policy then established is that today our overseas
funds are healthy and our current overseas balances of trade are
healthy. These are good things. They are not to be forgotten C
certainly not to bu cpologized for.
What this bill does is to provide for an independent
inquiry. I will not pursue the question of the identity of the
gentleman who has been appointed to conduct this inquiry, excep'
say that if there is one matter on which my friends opposite and
can agree entirely it is that Sir Frank Moore is a distinguished
honest civil servant of great cxperience and, I think, of great
objectivity, 4o wanted an independent inquiry, Sir.
That is the first thing. The second thing that we wanted was tlat
there should be in the independent adviser a faculty to recommend
quota or quantitative restrictions only in special cases in
special circumstances. If I repeot that for the second time,
honourable members will realize why I do. ' o are literally dealing
with a very particular set of circumstances which may exist for a
yeor or for two years, but wrhich we hope will not necessarily exist
for ever. Thor. fore, the third essence of the proposal is that
quantitative re. strictions, if they are recommended and adopted,
should be temporary. Honourable members know from their perusal
of the bill what is involved in that.
It has been said I have no doubt in the best of good
faith, that the very presentation of this bill to the Parliament
exhibits some want of confidence in the Tariff Board. I want to
say on behalf of the Government that that is not true. We are not
challenging the Tariff Board. W hat we realize is that in spite of
the measures that we have taken in the past to increase the
personnel and the services of the board the pressure on that body
still remains enormous. I reject the idea, ; rhich has been given
some circulation, that the board has slowed down and is not dealing
with matters as quickly as it used to deal with them. If I had
time I could cite figures to demonstrate how untrue that idea is.
The Tariff Board is a very great authority, and we stand in great
debt to it. It has a reputation, not only in this country, but
around the world, for integrity and objectivity, and nothing that
we propose in this bill is designed to iwaken its authority or " o
give even the vaguest hint that we might want to be without it.
That idea is not true.
When you are dealing with temporary matters for which a
pressure comes suddenly a pressure that you hope will not
continue to exist indefinitely in the future there is an
unanswerable case for taking uncommon measures. If we had stood
still and said, " On, well, leave it to the Tariff Board; we willdo
nothing about it", we would properly bo accused of leaving some
industries or some sections of industry to be murdered by a sudden
spate of overseas competition. Perhaps one of the best
illustrations of this is that my friend, the honourable member for
Richmond, rwhen saying something at slight variance from what had
been said by my thoughtful and able friend, the honourablo member
for Wakofiold ( Mr. Kelly), said, "' ell, thure are cases in which
quantitative restrictions may be desirable". He instanced timba:
Well, I can understand that. Somebody else, somewhere else in the
House, might have instanced p per. The honourable member for
Braddon ( Mr. Davies) might very well be heard to say, " hat about
pap. r?' Somebody else might instance chemicals of certain kinds.
Somebody else might instance glass of certain types. The truth is
that not one of us can have within his own knowledge a complete
survey of all the industries. But when you get down to brass
tacks you will find that there are a few industries not too many;
this is not of universal application or sections of industries
in which the sudden impact of competition from overseas calls for
unusual measures, not in the long run but in the short run. That
is one of the reasons for this bill.
I wonder, Sir, whether I right pause at that point to
direct attention I an not the first tocb it to one espect of
the iuropean Common Market negotitiions which has, I think, beeocontinually
overlooked. It is quite true that at this time my
colleague, the Minister for Trade who, in spite of all the si.
tittle-tattle that I hoar, is a great defender of Australian
industry has immediatoly before him problems of our rural
industries and of our export industries, questions such as what
going happen to butter, w. hat is going to happen to Iat, driet
and canned fruits and r: any other co.. odities. But we can very
easily overlooked the fact that one of the great forces rm) ving
United Kingdom in the direction of the European Commnon Market
Mr. Cairns Is the United States. i
Mr, Menzies No. I will make my own speeches, if you don't mind.
They usually turn out a little better that way. One of the great
forces moving the United Kingdom in the direction of the Common
Market we know this from what has been put to us is the fact
that inside the European Common Market there will be, for the great
industrial manufacturing countries, an extended home market.
Nobody can fail to understand the position of a British Minister,
sitting in Whitehall and saying, " We have a home market of
million people, but inside the European Common Market we will have
a home market, with internal free trade, of 250 million people".
As everybody knows, that was one of the main reasons why the six
European countries got together, beginning with the Schumann plan
for steel, and then developing a wider association. They saw at
once that if they could get this home market, something roughly
corresponding to the almost fabulous home market of the United
States of America, they might expect to produce more cheaply and
therefore sell more cheaply. What has been overlooked, to some
extent, is that British entry into the European Common Market, if
and when it comes, while presenting an obvious challenge to our
primary export industries, will also represent a powerful
challenge to Australian manufacturing industries. It will mean
that the producers of manufactured goods in European countries,
including, for this purpose, the United Kingdom, will be in a
powerful competitive position in our own market. So, not for the
first time, we have to boar in mind that we are all involved in
this matter. The manufacturer is at risk because of the Common
Market; the farmer is at risk because of the Common Market,
Therefore it is rather foolish-certainly unnecessary to revive
at this stage some of the old battles between protection and free
trade which were waged befo: re any of us thought of coming into
Parliament. All these considerations show clearly that we have
immense interests in common, and they show to me and to my
colleagues that we neglect any of those interests at our peril.
In other words, we must take steps to ensure the continuity and
growth of manufacturing. We will be imperilled if we fail to take
steps to avoid building up the costs of our export primary
industries to a point at which those industries will be priced out
of a market which is vital to our future.
So, Sir, this is not a conflict in the orthodox sense.
This is a great opportunity for showing a unity of approach to
those matters. v'hon I hear certain attempts being made to drive
a wedge between parties on this side of the H) uso, I say to
myself, " This is all nonsense. We are all on the same side in
this matter. We may have opinions which vary a little in degree,
but certainly not opinions which differ in deep principle".
Now, Sir, I do not want to involve myself having
already used a little more than half my allotted time in
detailed and technical arguments as to whether a quantitative
restriction, carefully selocted, oads costs in Australia or
reduces them. I have listened with groat respect to arguments
which suggest that a quantitative restriction will load costs
more than a high tariff. All I want to say at this stage is that
I am unable to subscribe to that view.
Mr. Pollard You are an innocent abroad.
Mr. Menzies I am not. I am an innocent at home. I wonder
whether my distinguished friend the honourable member for Lalor
( Mr. Pollard) means that he is quite satisfied that a quantitat
restriction will increase costs in Australia. If he docs, I ar
little puzzled as to why he is supporting the bill. Perhaps I
not so innocent as he thinks. But, Sir, I just offer my own vi
that there will be cases in which the imposition of a quantitat
restriction will reduce the risk of having costs and prices ri'
in Australia.
Mr. Pollard That is right.
Mr. Menzies Now he says that is right! Previously he said I was
an innocent abroad. Anyhow, my friend agrees with me that i is
right. One of the beauties of this piece of legislation is that it
is a temporary proposal. It will be as I shall explain further
later, merged into longer-term legislation, and if my own view
happens to be wrong not for the first time
Mr. Pollard Oh!
Mr. Menzies You are thinking of matters different from those I a,
thinking of. Anyhow, if my view happens to be w rong, we will awe
ample opportunity to examine it when we cre discussing the longerterm
legislation. In short, if I may adopt the phrase used by one
honourable member, this is a holding measure.
The next thing I wiant to say is that we attach enormous
importance to stabilizing costs in Australia. If any item of
policy pursued by us loads the costs of production of the major
export industries of Australia, then it will deliver a crippling
blow at the Australian economy.
Mr. Pollard Everything you have done since 1949 has had exactly
that result.
Mr. Menzies I heard you; now you lister to me, dear boy. I
heard one of your heelers make that statement this afternoon. All
I am doing now is what I am allowed to do offering my own views,
on behalf of the Government on this matter. We believe that one
of the central principles of economic policy is that we must not
put the export industries at risk. The task is far from completed
as yet, because my distinguished colleague, the Minister for Trade,
is still abroad fighting our battles. We are preparing a further
Tariff Board measure. As I and others have made clear in public
statements, we propose to weave quota restrictions into the
general Tariff Board fabric for use in selected cases where a
tariff is not the appropriate remedy. I do not need to tell
honourable members that this is not simple. This is not something
you can run up overnight on a typewriter. This requires a great
deal of thought, and I am determined th,; t before we do anything
my colleague, the Minister for Trade, will have the fullest
opportunity to offer his views.
In the general armament of the Tariff Board we will
include the capacity to impose a quota restriction wrhere the board
is of opinion that no normal tariff procedure will be appropriate
to the case.
Mr. Pollard There is no provision in this bill to do that.
Mr. Menzies I am referring to the bill which, unless I am
bitterly disappointed, will be presented to the House in the
Budget session. All this means that we are uxamining the underlying
problems of the economy. The greatest problem of the economy is
to reconcile a few matters, each of which is ma; gnificently
important in its own fashion but each of which may have to be
modified a little in the interests of accommrodating the lot. Le'
me re-state shortly the problens that we have: First of all, wr
must build up our population by natural increase and by substant
migration. This, I think, isa national objective to which all
honourable members subscribe. Secondly, we must achieve and
maintain full enployr. ent for that increasing population.
Opposition Members Oh, no
Mr. Menzies In stating these factors I cam unrmoved by the
professional unemployment non rs on the other side of the House,
They will all be absent on sick leave when we find that there are
no unemployed in Australia because, like Othollo, theiroccupation
will be gone indeed. Thirdly, we must support actively and
continuously the growth of manufacturing industry which I say
categorically is vital to the absorption and employment of our
increased population. That does not mean that I am ignoring the
tertiary or service industries. I know that they have just as big
a part to play as have primary and secondary industries, but the
truth is that if you look at employment and increasing population
in Australia you must look first, in modern circumstances, at what
is happening in the manufacturing field. Therefore, we are all
for it. Our clear policy is to support actively the growth of
manufacturing industry. Fourthly, we must develop the basic
resources of the nation. Government expenditure, sometimes rather
sneered at by people, is the vital foundation of industrial
development and of population increase.
We must try to do all these things while encouraging
the export industries which, in the most literal sense, are vital
to our international trade and solvency. At our national peril we
must not cost them out of their markets. This seems so clear that
I could hardly imagine any one would deny it. How are we to do
that? In our recent announcements we have indicated several ways.
The first is to keep down rural costs by measures designed to
increase the efficiency of rural industries. I have only to refer
to the work done in scientific research and in extension, in
which so many of my friends are so deeply interested, to make it
clear that from our point of view the first great thing to be
done for the primary industries is to help them to produce in a
quantity and at a cost level which will defend them against other
increases in the Australian economy.
The second way by which we hope to achieve our
objective I emphasize this point because occasionally it is
overlooked is by measures calculated to increase the efficiency
of local manufacturing and so enable the local manufacturer to
keep his costs and prices within proper limits. Whatever is
done, * hethetr by way of investment allowance or in any other way
to help the local manufacturer to keep his costs within bounds,
has a direct bearing upon the ultimate costs of the ru-' al
producer who cannot pass on his additional costs but has to bear
them. Concluding on this aspect, let me say that one vray in which
we can help the Australian manufacturer to keep his costs within
bounds, apart altogether from granting investment allowances, is
by making it possible for him to secure a share of the Australian
market which will enable him to spread his his overhead costs
over the largest possible number of units.
We might look occasionally at the rest of the wrorld to
see what has happened in modern industrial history. What does it
show in relation to America and modern Germany? It shows that
lower costs and greater export markets are the product of a large
sustained and assured home market. There is a lesson to be
learned from all this. Why should we deny co our own great
manufacturing industries I am not talking about casual fly-bynight
enterprises the very thing which has made their rivals in
the :-orld powerful and has enabled them to put such pressure on
our business as to require hearvy tariffs to provide protection?
These are all matters which have to be taken into account.
Perhaps I have gone a little . rider in my rumarks than one or tv
rulings that I have heard might have permitted.
Opposition members.-Hoar, hears
6.
Mr. Menzies That is right; but still I have done it. I wanted
to put this matter in the picture. First, I wanted to make it
clear that -re have the liveliest interest in protecting the
production costs of the primary industries because vithout them
this country is finished. Scondly, ,. re have the liveliest
interest in maintaining a vast increase of population and
therefore a vast increase, among other thinz, z of manufacturing
enterprise on proper terms. Really, one of the great problems of
statesmanship in Australia today is not to engage in a lot of
slang-whanging in these matters but to see how you can reconcile
these matters to the greatest possible extent. It is for all
those reasons that this is a bill to set up a temporary machine
to deal aith a temporary problem, so that we will not have the
whole thing run away from us before we :, et to the point of
establishing permanent machinery and a permanent body to deal
with it.