>

of ‘goods in the Commonwealth. For many years the cost of
production generally has been increasing, and unfortunately
these increases appear to have been maintained.
“ If Australia were entirely isolated from oversea sources of
supply and independent of them, and if it were also independent
 of overseas markets for the disposal of some of its
products, high cost of production would matter less to its
people. Seeing, however, that Australia is not isolated and
is dependent to a large degree upon overseas markets, the
seriousness of the position lies in the fact that the cost of
production in competing countries has declined while costs in
Australia generally have risen—thus increasing the already
wide margin of difference between the costs in overseas
countries and those in Australia.”
48. The Customs duties are not all definitely fixed by statute.
They are elastic in that they may be increased to prevent dumping,
and within the limited range of deferred duties may be imposed
suddenly by administrative action. We do not say that the powers
thus entrusted to the Government have been capriciously used, but
there is a danger that in imprudent hands they might be so used;
and if they were trade would be seriously hampered. What
virtually amount to administrative additions to Customs duties
through special preferences given by authorities undertaking public
works to the products first of their own and next of other States
as against imported products, even though the latter when charged
with the duties prescribed by the tariff may still be cheaper,
are gravely to be deprecated. Action in this direction is in effect
an arrogation of powers which by the constitution are entrusted
to the Legislature and Government of the Commonwealth.
49. We realize that the objects of a protective tariff are not
surely economic, and that a protective policy may be adopted, in
part at least, on other grounds. A young nation may feel that it
1s due to herself to have a proper share of that diversity of occupations
 and industries which characterizes the older peoples of the
world, and that her national life would be one-sided and even
starved without it; and she may feel that from the point of view
of the dangers to which she may be exposed in case of war she
cannot afford the risk of being deprived of essential commodities by
Interruption of oversea communications, or, if the war be one in
which she is herself engaged, of being without the industries
Indispensable for the production of armaments. She may be
Prepared to pay for these objects through economic sacrifice; but
if this be necessary it is important that she should make the
sacrifice with her eyes open and be ready to count the cost.
50. It is with the economic aspect of the protective tariff, therefore,
 that we are mainly concerned, and not with any abstract
controversy on the respective merits of protection as such and of
the rival svstem of free trade. We recognize that protection is

Alteration of
luties by
administrative
 action.

Objects of a
protective
tariff.

[ts economic
aspect.