PROTECTION: PRICES

Evening Post, Volume CXII, Issue 152, 24 December 1926, Page 5

PROTECTION: PRICES

AUSTRALIA'S TARIFF

ITS EFFECT ON FARMERS' COSTS

MINISTER QUOTES TEXTILES.

Tho tariff controversy in Australia cannot fail to interest a, country that is Itself faced (as New Zealand is) with the prospect of tariff revision nest session, and with a special preliminary investigation into protectionist proposals.

The Australian dairy farmer has long been saying: "I don't believe in protection, but as it is to be had I want some." He has said this so long now that he is forgetting the first part of the sentence. But, if challenged, ho is still ready to retort that the protected urban industries so put up the .Earner s costs that th£ farmer simply must get some of it back. And so he reached | out for the Paterson Plan (a levy on all butter to provide a bounty for exported- butter), and now he wants a straight-out Government bounty on the exported article, plus an excluding duty on New Zealand butter. FARMERS' EXPORT BOUNTY. Dealing with the Paterson Plan "for giving stability to the butter market in the Commonwealth/ the Australian firm of Holdenson and Nielson Fresh Food Pty., Ltd., in their review of the butter season of 1925-26, point out that the 12 months' trial of the project is now rapidly approaching an end. They say it is certain that the great majori ity of dairymen in Australia realise that 'it has been an unqualified success, as it has been the means of increasing substantially the earnings of the farmers. It has accomplished all that was claimed for it, and has been worked most economically and with much less friction and difficulty than was expected. The firm contends that the arrangement should be continued. In. connection with the plan, however, it is suggested that instead of butter factories paying the levy of ljd a lb to provide an export bonus, the Government should pay a bonus of 3d a lb on all butter exported. This would be a parallel to the protective duties provided for secondary industries in order to obtain a payable market for Australian manufactures. The payment of an export bounty on butter would be merely applying the principle of protective duties in the only way possible to benefit those whose cost of production is so greatly increased by the operation of the tariff, and who have to sell their produce in the world's markets in competition with the produce of the world's cheapest labour countries. The firm refers to the effect of the competition of Aus-tralian-made margarine upon the dairying industry, and holds that the manufacture of it in the Commonwealth should be prohibited. As recently reported, the Australian Dairy Council asks for more than the 3d bounty recommended above. It asks for an export bounty of 4d per lb on butter and 2d on cheese, which, with correlated concessions on other dairy products, would cost the Commonwealth Government three millions a year. CUSTOMS MINISTER AND CRITICS. The National Party of New South Wales (the party of the Nationalist or Bruce branch of the Commonwealth Government) had the tariff issue before it at its recent annual conference. A delegate moved: "That the present tariff, in many respects, is not in the true interests of Australia, and that the increasing high cost of living is attributable very largely to the unsatisfactory incidence of the present Customs tariff and that the Federal Cabinet be advised accordingly." The Minister for Trade and Customs (Mr. Pratten) said that the Commonwealth Statistician had said that the cost of living in Australia to-day, compared wih the cost of living in England, had increased only 42 per eenj., compared with 73 per cent.; so that the cost of living in protectionist Australia had not increased to the extent that it had in free-trade England. Tho statistician's latest figures showed that there had been practicaJTy no iucreaso in the cost of living since the recent' tariff was imposed. The recent tariff had not affected primary producers, and so he could not see how primary producers could possibly have a grudge against tho last tariff. Mr. Pratten sairl that ho was convinced that tho national policy of the people of Australia wa3 protection —effective protection, tempered by Imperial preference. The tariff had been imposed for several main purposes—firstly, for the purpose 'of raising revenue. A voice: "And you are doing that all right. THE CASE OP TEXTILES. A second reason, added Mr. Pratten, was to shelter our own industries against tho cheap labour production of other countries. The tariff also provided an instrument with which to negotiate reciprocal tariff arrangements with other Dominions. It would be no good talking about population if jobs were not created for those who came to Australia. There had been, an amazing development of the textile industry alone, and though prices of textiles had not been increased to the consumer the industry had greatly increased employment.

A voice: "Yes, at our expense."

Mr. Pratten said that tho Federal Ministry was trying to stimulate the export trade and manufacturers aa much as possible, so that there would be a favourable balance of trade. It was a policy of national development. The motion was rejected, and an amendment approving of the Australian policy of effective protection, especially in the interests of secondary industries, was agreed to by 94 votes to-36.

From the free-trade point of view the "Argus" comments: "While Dr. Page (Acting-Prime Minister and Leader of the Country Party branch of tho Commonwealth Government) is explaining to Victorian farmers how it is that Australian agriculture has not expanded at a greater rate than 2.8 per cent, per annum, Mr. Pratten, in Sydney, is trying to induce consumers of commodities to believe that the effect of a high tariff is to reduce prices to them. The man on the land finds it difficult to reconcile these statements. Markets for wool and wheat have not been at a low level for several years, and the run of good seasons has furnished large supplies of products for sale abroad. Accordingly, had everything gone smoothly the inducement existed to bring a larger area of land under cultivation, particularly as the improvement in farm implements has tended to cheapen costs and the use of fertilisers to increase crops. If in addition a high tariff had meant that the cost of commodities to the farmor had fallen, his lot should have been so comfortable as to have removed nearly every ground for complaint. Instead of that grumbling still goes on, accompanied by a daily call for State assistance in some form or other. HOW TO KEEP MEN ON THE LAND? Dr. Page fails to explain the anomaly. He advises improved method* of production, of distribution, and of marketing. He does not say that to allow market conditions again to have free play would be a mistake, but by directing attention to the work of certain departmental organisations he indicates that it is tho State which may bo able to keep people on. the land. It has yet to be established, that State intervention has ever benefited tli« farmer jnoro

than temporarily. No one can say that by its acts the State has assisted to cheapen the cost of labour, to lower railway and shipping freights, to lighten taxation, or, despite all Mr. Pratten may allege, to reduce the price of farming essentials to such a level as to make agriculturo more attractive. In addition, Dr. Page fails to realise that attempts to interfere with existing means of distribution abroad may end in Australian products being neglected by those who control the best channels to the markets. Mr. Bruce, when speaking in Scotland, implied that he had been made to realise the danger of interference in this direction."