1931

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Part 5. DISABILITIES. The relative reduction of costs as between the first quarter 1926 and fourth quarter 1930. The following information has been gathered from the Commonwealth Bureau Census and Statistics 17/6/31:—

___________________________________________________________________________________

                                                                       |                          |                        |
                                                                       |    First Quarter,   | Fourth Quarter, |    Fall below
                                                                       |           1926.       |        1930.        |   1926 Level.

_________________________________________|_______________|_____________ |____________

                                                                       |                          |                        |

Average nominal weekly wage, adult males | 97s. 0d. | 96s. 9d. | per cent.

                                                                       |                          |    1st Quarter    |        0.3
                                                                       |                          |         1931.       |
                                                                       |                          |                        |

Retail price index numbers (Food and Groceries | 1815 | 1526 | 15.9 only) | | |

                                                                       |                          |                        |

Retail price index numbers (Food, Groceries, | 1748 | 1531 | 12.4 and Rent) | | |

                                                                       |                          |                        |

Wholesale price index numbers (Melbourne) | 1841 | 1407 | 23.6

                                                                       |                          |                        |

Average price of wheat on trucks, Williamstown, | 6s. 3.16d | 2s. 2¼d. | 63.6 per bushel | | |

                                                                       |                          |                        |        

Average price of wool per lb. | 1s. 5-11/16d. | 0s. 9½d. | 48.4 __________________________________________________________________________________

It will be remembered that wages show a further reduction since the last quarter of 1926, particulars of which are not yet available. However, with a shrinkage of 63.6 in wheat and 48.4 per cent. in wool which must be recognised as an unprecedented collapse in the prices of our staple production and it would be most inconceivable for the general price level to be reduced during that currency in the same ratio but so far, comparatively, little effort has been made to reduce other charges such as taxation, transport, and handling charges. These will be dealt with under their respective headings.

Tariff.—The evidence tendered to your Commissioners is almost unanimous in condemnation of the very heavy imposts on the primary producer due to the tariff and it is very evident that its incidence constitutes the greatest disability under which primary producer is labouring. There is no escaping its effects, and if the present protection be the accepted policy of Australia, then in effect (your Commissioners grant, unintentionally) is destined to crush the primary producer out of existence and incidentally have a similar effect on Western Australia, dependent as it is, basically, on primary production. In support of this your Commissioners refer to pages 1 to 3 of. "The Australian Tariff," an economic inquiry by Professors Brigden, M.A., D. B. Copland, M.A., D.Sc., and L. F. Giblin, M.A., and Messrs. E. C. Dyason, B.Sc., and C. H. Wickens, F.I.A., appears the following conclusion:—

Paragraph 6. (2)—"The adoption of a considerable, but not unlimited amount of protection is justifiable on economic grounds in the circumstances of Australian industry. But the extreme applications of the tariff have undoubtedly been the cause of net loss. Further extensions may involve a more than proportionately increased loss."

Paragraph 6. (3)—"The principal effect on production and employment has been to divert them from export industries to protected industries."

Paragraph 6. (4)—"We estimate that Australian products which are protected, cost £36m. more than the same goods could be imported for, duty free. In considering the cost of protection, we take no account of the added price of imported goods, because the duty paid goes to the Treasury and takes the place of other taxation."

Paragraph 6. (5)—"Protected manufactured goods cost about £26m. more than free imports, and protected primary products about £10m. There is also, partly in consequence of protection, about £12m. of assistance to primary industry given by Governments from general revenue, but not all this assistance is effective. Preferential duties against non-British goods add something more to Australian prices, perhaps £2m. or £3m., but this is a cost of preference and not of protection and is not further considered."

Paragraph 6. (6)—"Of this £36m., the excess cost of protected products, £7m. is for luxuries, and £6m. 'sticks' in sheltered industry in process of passing on or is cancelled by Government assistance. The remainder is borne by fixed incomes and by industry dependent on world's price. The final effect is to raise the general price level (excluding luxuries) by 10 per cent. above prices with a purely revenue tariff. Taking Government assistance into account, costs of production in the export industries are raised 9 per cent. by protection."

Paragraph 6. (7)—"The effects of this cost are to increase the number of industries and the volume of production which cannot subsist without the tariff or other assistance. It leads to claims for compensating assistance and even to subsidies for exports. The cost of the tariff becomes a cause of its extension. Part of the tariff is required as a protection against its own costs."

Paragraph 6. (8)—"The tariff falls with the greatest weight on the export industries. The value of their land and fixed capital is reduced, and the expansion of their production is retarded. They are limited to the use of land which can carry the costs imposed."

Paragraph 6. (9)—"The States which naturally depend more than others upon the export industries feel the burden, not only upon their individuals and industries, but upon the State finances. Taxable capacity in the export industry has been decreased and production has been retarded without equivalent benefit (in those States) from the incomes protected by the tariff. The tariff has therefore borne unequally on the different States."

Paragraph 136.—"Before going on to discuss the possibilities of wheat, a cautionary note may be useful.

"We are not considering the possible future expansion with lower cost of these industries. Some expansion would be likely in general, with present costs, and that expansion would be irrelevant. We are considering, rather, what expansion would have taken place up to the present time—strictly, up to 1926-27—if these industries had been working with so much lower costs, or so much increased prices for their products. We must base our increased prices for their products. We must base our judgment on methods of production and their efficiency, as developed up to 1926-27, not on future improvements of technique and future possible efficiency. The possible gain through increased use of fertilisers or more thorough cultivation is not to the point. We are concerned only with the use of fertilisers and cultivation as practised in 1926-27.

"On the other hand, we must take the market conditions as they were up to 1926-27, and not the prospects at the present time. We must not base the possibilities of wheat on the present price of about 4s. 6d. and a prospect of low prices continuing for some time, but on