House of Representatives
26 February 1948

18th Parliament · 1st Session

Mr. SPEAKER (Hon. J. S. Rosevear) took the chair at 2.30 p.m., and read prayers.

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– Will the Minister for Air inform me what action has been taken to recover more than 2,250,000 gallons of fuel which, the Auditor-General stated, had been issued for the forces or other administrations and to aviation companies by the Department of Air and which had not been accounted for ? Has the Minister also investigated statements’ made last January by the Administrator of the Northern Territory, Mr. A. R. Driver, that a war-time dump at one abandoned airstrip contained 90,000 gallons of petrol, and thousands of gallons of petrol were stored in other dumps? If the Minister has investigated those statements of the Administrator of the Northern Territory, will he inform the House of the results of his inquiries?


– The first matter which the honorable member raised is now being dealt with by the Department of Air. In addition, when reports of fuel dumps in the Northern’ Territory were received, .investigations were immediately made. These supplies of fuel had been left of necessity, in the area. I understand that such of the petrol as was available and could be brought to suitable points for disposal has been handed over to the. Commonwealth Disposals Commission.

Mr Harrison:

– What quantity of petrol has been recovered?


– Offhand, I am not able to state the exact quantity, but I shall endeavour to obtain the details for the honorable member. ‘


– Is the Minister representing the Minister for Supply and Shipping aware that the quantity of petrol available to mail contractors in country areas in Tasmania has been reduced by 10 per cent, of the original minimum quota? Will he have the ration restored, as contractors have been placed in a very awkward position?

Minister for Defence · CORIO, VICTORIA · ALP

– I did not know that petrol supplies for mail contractors had been reduced. I assume that the honorable member has already discussed the matter with the Postmaster-General, but in any case I shall bring it to the attention of the Minister for Supply and Shipping, who, I am sure, will take whatever action is necessary.

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Age and Invalid


– As the cost of living has risen steeply since age and invalid pensions were last increased by this Government, will the Prime Minister again have the matter investigated with a view to bringing these pensions into line with the altered conditions?


– For some years, increases of the cost of living were applied to age and invalid pensions. However, on one occasion, the cost of living figures in the six capital cities declined, resulting in a decrease of pensions by 6d. or ls. a week in Tasmania. Following this fall, many protests were made against associating age and invalid pensions with the cost of living figures, and the Parliament then amended the act, so that these pensions are now a fixed amount, irrespective of whether the cost of living rises or falls. The honorable member may rest assured that at all times, social services payments are constantly reviewed by the Government, the Minister for Social Services and myself.

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– I desire to address to the Prime Minister a question in reference to a deputation which I introduced to the right honorable gentleman in Sydney last year concerning the building of a wool-selling centre at Rockhampton. The Prime Minister advised the members of the deputation to interview State building control officials for the purpose of obtaining consent to the use of certain timber in the building. I am now informed that consent has been obtained, and that the Government has been advised of the fact that authority to use this timber has been granted. Will the Prime Minister inform me what further consideration has been given to the matter by the Government, and when is action to proceed with these buildings likely to be taken?


– A decision was made by the Government to build wool-selling centres at Rockhampton and Townsville. In regard to the Rockhampton proposal, a deputation was introduced by the honorable member. Another deputation, headed by the mayor of Rockhampton, interviewed me when I was in Queensland. The reason for the delay in the construction of the building at Rockhampton was that the Queensland timber controller reported that the use of timber for this purpose was undesirable. The honorable member is aware of the facts relating to that matter. The deputation that he introduced undertook to interview the Queensland Timber Controller and, as the honorable member has just stated, the Timber Controller now believes that timber could be made available for this work. The proposal to erect wool-selling centres at Townsville and Rockhampton was reviewed by Cabinet approximately three months ago, and it was -decided that no further action should be taken in regard to either building for another twelve months, at the end ‘of which time the position would be reviewed again. That is the situation to-day.

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– I wish to ask the Minister for Immigration a question concerning information about Australia given in London to prospective- migrants. I have been shown a letter from an intending migrant to a relative of his in my constituency. The letter describes pictures of prefabricated houses which were displayed at Australia House on the 14th February. The writer was pleased with these houses, and said that he had been informed at Australia House that one of them could probably be bought “ about 4 miles outside of Melbourne “. He wrote to ask his relative to arrange the purchase of a dwelling as he had already made the necessary arrangements with a shipping company to transport his furniture and other belongings to this country. In view of the .shortage amounting to hundreds of thousands of houses in Australia, will the Minister for Immigration direct that pictures and information of this kind shall not be used as publicity at Australia House t

Minister for Immigration · MELBOURNE, VICTORIA · ALP

– I do not believe that anybody at Australia House did any of the things that the writer of the letter says were done. We have only the ex parte statement of the person who received the letter. I was in London, last year, and I saw no evidence of any false pictures being painted about Australia by anybody at Australia House. In fact, we are telling the British people the truth in rather naked terms. We are informing them that unless they have persons in Australia who are prepared to nominate them and tr> provide their accommodation, they had better forget about migrating to Australia for a considerable time. Under the free and assisted passage scheme we are bringing to this country only those whose accommodation has been guaranteed, and my advice is that approximately 90,000 people have Australian nominators who are prepared to accommodate them. These people receive first preference.

Mrs Blackburn:

– -The writer of tb, letter has been nominated.


– I am glad to hear that. I am certain, however, that there has been some misinterpretation or misunderstanding in regard to the matter. The statements made by the writer of the letter are not evidence of any general propaganda issued from Australia House.

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Mr SPEAKER (Hon J S Rosevear:

– -With regard to the question directed to me by the Leader of the Opposition . some days ago concerning the matter recently referred to the Committee of Privileges, I am advised by the Attorney-General, who is chairman of that committee, that the committee had almost concluded its work when fresh proposals were made to call additional witnesses, but, owing to the inability of certain honorable members to attend further sittings at that time, it was not possible to complete the inquiry before the meeting of the Parliament. Although official duties are detaining the Attorney-

General in Melbourne at present, I am informed that he is making every effort to expedite the proceedings of the committee and hopes to be able to present a complete report before the House adjourns for the Easter recess.

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– I ask the Treasurer whether land values are still pegged for sale purposes at 1942 valuations. If so, in view of the greatly increased prices of all primary products since that year, will the right honorable gentleman consider permitting a percentage increase of land values for sale purposes ?


– Values at February, 1942, have been taken as the basis of present land values, but there has been some relaxation of control in order to allow prices to rise above those levels. My impression is that values have been allowed to increase, on final appraisements, by 10 per cent, over the February, 1942 levels. Some increases may have been even greater than that. There ha» been some elasticity in the system of valuation. I do not think that the increased prices of primary products would warrant the Government allowing land values to rise to fantastic levels, as they would do in some instances, so that purchasers would suffer when prices fell later and would need subsidies to enable them to carry on.

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– In view of the very great importance of motor transport in Australia, will the Prime Minister give every encouragement to the importation of spare parts for motor vehicles in order to keep cars, lorries and tractors in efficient operation ?


– I make clear at once that there is no embargo upon the importation of spare parts for motor vehicles as the result of the dollar situation. The Government realizes the necessity for private and commercial motor vehicles to be kept in working order- -

Mr Anthony:

– Sparts parts cannot be obtained, nevertheless.


– I was about to add that there are difficulties in the way of obtaining spare parts. This is particularly true of older models of motor vehicles, such as those dating back to 1925. Normally, the owners of these old vehicles would buy new ones, but they have not been able to do so. Great difficulty has been experienced in obtaining parts for them, and, in some instances, the manufacture of spare parts has been discontinued. However, every endeavour is being made to obtain supplies.

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– I direct a question to the Treasurer concerning the value of sterling currency vis-a-vis other cur r encies in the light of the widely canvassed suggestion that sterling may be depreciated. In these circumstances, does the Government consider it proper to make government-to-government sales of primary products on the basis of sterling currency rather than Australian currency? I ask this question because two recent announcements by the Minister for Commerce and Agriculture indicate that almost within the last few days there has been a re-adjustment of the sale price for butter and cheese supplied to the United Kingdom in terms of sterling, and that a new contract has been concluded within the last two weeks for the sale of eggs and egg products to the United Kingdom for the next five years in terms of sterling. Do those contracts contain any safeguard against depreciation of sterling in relation to Australian currency?


– We have the assur- ance of the British Government that it does not intend to devalue sterling. The Government must accept that assurance because members of the British Government are the best judges of the ability of their country’s economy to retain the present value of sterling against the United States dollar. I have already indicated that while the present exchange rate, namely, 4.03 dollars to the £1 sterling, remains the Government proposes to retain the present ratio between the £1 sterling and the £1 Australian. Should circumstances occur which bring about a devaluation of sterling the matter will have to be reconsidered, but I can make no pronouncement on that possibility at this stage. The other matter mentioned by the honorable member is a most important one. The selling price of some Australian produce sold to the United Kingdom is based on Australian currency. Wheat is a striking example. However, a number of contracts for the export of Australian produce to the United Kingdom which were made some time ago are based on sterling, and these provide that the selling price shall be fixed so as to cover the cost of production and give a reasonable margin of profit to the producers. Although I cannot recall the terms of these contracts, they include a condition that the contracts may be reviewed in exceptional circumstances. It is evident that any serious change in the international exchange value of sterling would, because of its effect on Australia, involve a reconsideration of those contracts. I assure the honorable member that none of the matters which he mentioned has escaped the attention of either myself or the Minister for Commerce and Agriculture, and he can rest assured that Australia’s position will be protected in the event of any serious change occurring.

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– Can the Minister for Commerce and Agriculture inform me whether permits have been issued for the export of live-stock to the Philippines and other Pacific areas, and whether such permits have, in some instances, been exceeded? If so, is the Minister prepared to name the firms concerned? Was a licence issued to Far Eastern Exchange Proprietary Limited, and did that firm exceed the limits imposed by its licence? If permits are exceeded in any instance is it intended to institute proceedings ?

Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– Licences have been issued for the export of a specified number of cattle from the Northern Territory. I should not like to mention offhand the name of any particular firm, because a number of firms with similar names to that mentioned by the honorable member are concerned, and I might innocently furnish the name of some firm in which the honorable member is not concerned. However, I shall have inquiries made and inform the honorable member of the result.

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– Can the Minister for Defence indicate what progress has been made in regard to the preparation ‘ of a scheme of pensions for members of the armed forces? Is the scheme nearing completion, and when will it be made public? Does the Minister realize that dissatisfaction exists amongst members of the armed forces because of the delay in its preparation?


– A pensions scheme for members of the services is almost completed. Some details remain to be settled but I hope to secure Cabinet approval to the scheme in the course of the next month.

EARTH-MOVING machinery.


– There are a number of large irrigation schemes in Victoria, Queensland and New South Wales. As only a few of the large tyres used on earthmoving machinery are required they are not being manufactured in Australia. Will the Minister representing the Minister for Trade and Customs say whether import procurement licences for these essential articles have been granted?


– I shall obtain the information required and inform the honorable member as soon as possible.

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Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– Can the Minister for Commerce and Agriculture give any information to poultry-farmers of .South Australia that will disclose to them from where they can obtain wheat supplies at 6s. 3d. a bushel? They complain that under the present retail system they must buy in certain quantities at a price of approximately 8s. a bushel.


– I have never asserted, nor do I know of anyone else who has done so, that poultry-farmers can buy wheat from a retailer at 6s. 3d. a bushel. As a result of decisions made by this Government, wheat for poultryfarmers and other Australian consumers is priced at 6s. 3d. a bushel f.o.r. However, before it reaches the consumers, unless they are bulk buyers, it passes through the hands of intermediaries,, who have to be paid for their services..

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– Oan thePrime Minister say whether the interdepartmental committee investigating: the finances of the Australian Broadcasting Commission has completed its report? If so, is he able to make a statement on the matter? Is he able to say,, further, whether the report will be considered by the Broadcasting Committee?


– I presume thehonorable member is referring to the committee, consisting of Mr. Fitzgerald, Mr. Harris and Mr. Bonney, that inquired into the financial affairs of the Australian Broadcasting Commission. I understand the report will be available shortly.. I shall endeavour to ascertain- the datewhen it may be expected to be in thehands of the Government, but until it is received I can give no indication of what action will be taken upon it.

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– Has the Prime Minister any official information or seen newspaper reports that the United States is launching a big drive to build upthe dollar resources of other nations which appear as potential good customers for American goods? Does he know of reported moves for a campaign to educate Americans tobuy foreign goods and to. guide foreign suppliers in marketing methods that will be acceptable in the United States ? Does the Australian Government propose toseek the advantage of this campaign to build up dollar credits?


– There is no doubt that the United Kingdom is making a drive, by a degree of direction of labourto factories producing goods intended for export to dollar areas and by other persuasive methods, to increase dollar earnings. We in Australia have no need toengage in a drive to increase the sale of goods in dollar areas, our difficulty being to produce enough goods to sell. This istrue of worsteds, and it is also> true- to some extent of steel, cement, hides and even rabbit skins. I assure the honorable member that the Minister for Commerce and Agriculture, on the primary production side, and the other Ministers concerned, on the secondary production side, are doing everything they can do to ensure that a due proportion of what we produce is sold in dollar areas. We are under an obligation, however, to ensure that we do not sell in dollar areas goods which are needed by our own people, or which are necessary to the economy of Great Britain.

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– Having regard to the rising cost of building, will the Prime Minister consider increasing immediately the present maximum advance for home building from £1,250 to £1,500?


– This matter was discussedsome time ago with the Governor of the Commonwealth Bank. I shall supply the honorable member with more information on the subject later.

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Dental Services


– In view of the numerous complaints about the dental services available at Alice Springs, will the Minister for Labour and National Service confer with the Minister for Health with a view to increasing the staff at the dental clinic there, so that a better service may be rendered to the public, and particularly to children?

Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

-I will certainly do as the honorable member has suggested. The Minister for Health is now in the Northern Territory, and is looking into the very matter mentioned, as well as into other aspects of public health.

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British Purchasefrom Denmark


– Has the Minister for Commerce and Agriculture been advised by his commercial attache in London of the terms of a contract just concluded between the Government of the United Kingdom and the Government of Denmark for the purchase of dairy products? Is it correct that under this contract Britain will buy Danish butter at 321s. 6d. stg. per cwt., or approximately 3s. 81/2d. per lb. in Australian currency? Will the honorable gentleman furnish me with information from the commercial attache as to the price at which butter is sold in the United States of America and in Canada?


– I have some information regarding the terms of the sale of butter by the Danish Government to the United Kingdom Government. I can only say that, having regard to the circumstances governing the cost of production of butter in Australia as compared with its cost in Denmark, the Australian Government has no intention of squeezing the life-blood out of the United Kingdom people.

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Queensland Strike: Unemployment Benefit - Prosecutions


– Unfortunately, there is a serious strike in the Railways Department in Queensland. After the strike had been in progress for some time, the Railways Commissioner approached the State Arbitration Court and obtained permission to stand down, without pay, railway employees who were not gainfully employed because of the strike. Are these men entitled to receive unemployment benefit? Are such payments now being made to them? Will the Prime Minister clarify the position regarding the payment of unemployment benefit generally ?


– The question of the payment of unemployment benefit to persons unemployed as the result of strikes is of a very complex character. It is not the policy of the Government to pay unemployment benefit to people who are on strike, or to those who sponsor or contribute to strikes. I looked into this matter yesterday with other Ministers and ascertained that the decision made by the Cabinet in May, 1947, fully covers the position. I issued a statement yesterday in regard to this subject and I shall be glad to furnish the honorable member with a copy of it.

Mr Francis:

– Did the statement deal with persons compulsorily stood down in the circumstances I have mentioned ? If so, what decision has been made in regard to them?


– It dealt with all aspects of the payment, but not with individual cases.


– Will the Prime Minister ascertain from the AttorneyGeneral whether press statements allegedly made by Mr. A. G. Platt, State secretary of the Road Transport Union, in connexion with the threatened hold-up next Friday of overseas, interstate and intra-state air services constitute a breach of the Commonwealth Crimes Act, particularly those sections relating to, first, the obstruction, or hindering, of the transport of goods or the conveyance of passengers in trade or commerce among the States and, secondly, conspiracy to carry out a seditious enterprise? If so, will the Prime Minister authorize the immediate commencement of the necessary criminal action ?


-I shall have examined the points raised by the honorable member. I have seen certain statements reported in the press as having been made by Mr. Platt last evening. I do not know the particular matter to which those statements referred ; they were of a general nature. I shall have a reply prepared in answer to the honorable member’s question.

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– Has any advice been received by the Government of a proposed boycott by the Malayan Nationalist leader of Australian goods in Malaya as the result of the Government’s decision to repatriate Malayan seamen? Is it a fact that Australian exports, probably valued at more than £2,000,000 annually, are threatened by the suggested boycott? What steps, if any, does the Government propose to take in the matter ?


– I have not in recent times seen any protest from the Malayan

Union or from Malayan peoples about the repatriation of fourteen Malayan seamen from Australia. It is true that when the decision to repatriate the seamen was first announced some protests were received. I understand, but from press reports only, that there was some talk of retaliatory action. It was made perfectly clear to the country and to the House that the Government’s decision to repatriate certain Malayan seamen - the Minister for Immigration has already dealt very effectively with this - would be given effect irrespective of what results might follow from it.

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– In view of the report that a contract has been let for the construction of a permanent administrative building at Canberra at a cost of £1,439,000, will the Minister for the Interior inform the House what progress has been made with plans to transfer the balance of Commonwealth Departments from Melbourne to Canberra? Would not the speeding up of those plans save the taxpayers much of the cost that will be incurred in acquiring a large area in Melbourne for Commonwealth offices?

Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP

– A contract has been let for the construction of a permanent administrative building at Canberra. The tender for the work is considered by the Department of Works and Housing tobe very satisfactory. I do not think that the honorable member expects me to be able to give an accurate estimate of the period which will be required to complete the transfer of Commonwealth Departments from Melbourne to Canberra. However, immediately the more urgent buildings are constructed and the department can divert its attention from housing, plans for the transfer of Commonwealth departments will be expedited. The implication in the latter part of the honorable member’s question reveals a very short-sighted view of this problem. The experience of the Government during the last six or seven years has been such that it is resolved to avoid similar experiences should the circumstances existing during that period recur. Consequently, it is taking a long-range view in: preparing plans to meet such a possibility.

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– I lay on the table the following paper : -

United Nations Conference on Trade and Employment - Memorandum showing alteration of Tariff duties (in substitution for the paper tabled on 18th November, 1947).

The Minister for Commerce and Agriculture, tabled the original paper. This substituted document, whilst including all the information contained in the previous document, gives additional information and should be of greater assistance to the House when studying the tariff alterations resulting from the International Conference on Trade and Employment. A motion for the printing of the paper already appears on the notice-paper.

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Sydney- Brisbane Services


– I ask the Minister for Civil Aviation whether an application by Ansett Airways Proprietary Limited for a licence to operate an air service between Sydney and Brisbane has been held up for a week? Does the Department of Civil Aviation intend to issue a licence for that service? When will the licence be issued? What is the cause of the delay?


– The honorable member has asked four questions, all of which involve detail. Ansett Airways Proprietary Limited have applied for a licence to operate a service from Sydney to Brisbane. It desires to provide a service to Coff’s Harbour, which, I think, is already adequately catered for by another airways operator, who has been serving that centre for some time. The position is being examined. No unnecessary delay has occurred. Legal aspects have to be inquired into. When the inquiries have been completed, the question whether the licence should be granted or not will be decided. I hope that will be very soon.

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cronulla Fisheries Training School.


– During the last sessional period I asked the Minister for Post-war Reconstruction a question about the rehabilitation trainees at the Cronulla Fisheries Training School, and he indicated the possibility of some retrenchment there. Has that taken place and, if so, to what degree?


– I think “retrenchment “ is the wrong word to use. It is true that the original training scheme was more elaborate than it is now. It was not possible to place as many men in the fishing industry as originally anticipated. A wrong estimate was evidently made of its absorptive capacity. That was brought to the notice of the Department of Postwar Reconstruction, and, having had experience of the first group of trainees at Cronulla, it changed the conditions of those to be trained subsequently. If the honorable member desires any details of the changes which have been made, I shall be glad to supply them.

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Queensland Railway Strike - Trade with Netherlands East Indies.


– I direct the attention of the Prime Minister to the fact, of which he must be well aware, that there is a serious transport strike in Queensland initiated and directed bywell-known and acknowledged Communists, and that whenever other unions have held a secret ballot to determine whether their members should participate in the strike, the men have rejected the” proposal by an overwhelming majority. I also direct the attention of the right honorable gentleman to the fact that Dutch shipping authorities state that they would resume trade between Java and Western Australia if the ban on Dutch ships were lifted. Will the Prime Minister inform me whether it is proposed now, or at any time in the near future, to take some action to assert the authority of the Government over the Communist influences which are directing the external and internal affairs of Australia?


– The honorable member has included in one question two matters which are almost dissociated.

Mr Anthony:

– Both of them come under the one heading.


– The parties concerned in the transport strike in Queens- land - both employer and employee - come entirely under the jurisdiction of State authorities, namely, the State Government of Queensland and the State Arbitration Court. I am informed that at 2 o’clock this afternoon a special conference was called for the purpose of ascertaining whether any action could be taken to settle the dispute. In those circumstances I would not be justified at this stage in making any comment on the matter. Approximately 22 unions are affected by the transport strike in Queensland, some partly and some wholly, and precisely what is the political philosophy of all the officials of those unions I do not know. Regarding the resumption of trade with the Netherlands East Indies, I have already indicated that we are hopeful that, as the result of the work of the Good Offices Committee, to which Australia was a party, the political differences existing in that country will be settled, and trade will be freely resumed between the two countries.

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Proposed Charter of International Trade Organization

Debate resumed from the 11th November, 1947 (vide page 1889, volume 194), on motion by Mr. Dedman -

That the following paper be printed: -

United Nations Conference on Trade and Employment - Second Session of Preparatory Committee - Ministerial Statement.

Leader of the Opposition · Kooyong

– There are three orders of the day relating to tariffs and trade, to which I desire to refer in the course of my speech. The first is “ The United Nations Conference on Trade and Employment - Proposed Charter of International Trade Organization”. The second is the statement which the Minister for Commerce and Agriculture (Mr. Pollard) made on the United Nations Conference on Trade and Employment, with a memorandum showing an alteration of tariff duties. The third arises from a statement on international trade relations and tariff requests which the Prime Minister (Mr. Chifley) laid upon the table of the House.

Mr SPEAKER (Hon J S Rosevear:

– Does the Leader of the Opposition (Mr.

Menzies) consider that the three orders of the day should be treated as cognate matters, and discussed together?


– Yes, if that would be convenient.


– With the consent of the House, that will be done.


– That is the only suggestion which I desire to make on that point. The conduct of a debate on these matters is by . no means simple in the present circumstances. If my memory serves me correctly, we have had placed before the House at one time or another a report of the Preparatory Committee, and annexed to that document was a draft of the International Trade Charter. This document was laid upon the table of the House simply as a draft, and it has not yet been debated. Subsequently, discussions were held at Geneva, which the Minister for Post-war Reconstruction (Mr. Dedman) attended. As the result of the discussions at: Geneva, we appear to have presented to us, although we have not yet debated them, a set of specific tariff proposals which will be the next important matters to be debated in the chamber, and, in addition, a document known as the General Agreement on Tariffs and Trade, which, so far as I am able to judge, is a concluded document covering some of the ground which will ultimately be covered by the International Trade Charter, but not necessarily all of it. If any of my assumptions be wrong, I should like to be corrected, because I have endeavoured to follow the process of what are necessarily very complicated events.

Since the Geneva conference, and the tabling of the individual tariff schedules and the General Agreement on Tariffs and Trade, the Minister for Post-war Reconstruction has attended a conference at Havana, the purpose of which, I understand, has been to debate a draft charter, and, if possible, arrive at a concluded and final charter. Those discussions, I understand, have not yet been completed. The Minister has returned to Canberra, and we have not yet had an opportunity to hear what the progress of those discussions has been, nor have we at present the slightest idea as to what the final form of the charter will be. Therefore, I point out to the House that the present debate is handicapped by the fact that we are dealing with some matters which appear to have been concluded, and with other matters which are still in the arena of discussion at an international conference. In those circumstances, I find it extremely difficult to offer any observation which might not prove to be completely falsified in a few weeks by the results of the Havana discussions.

The draft charter which was presented to this House - that is to say, the one which preceded the Geneva talks - has already been discussed by honorable members to some extent. All honorable members will recall that a good deal of debate occurred particularly upon the matter of how far the setting up of an international trade charter would affect the long-established and unquestionably valuable system of Empire preference. If the principle of British Empire preference is to be destroyed either immediately or by stages, then it will no doubt be so destroyed by the charter -which is now under discussion at Havana. It is not altogether destroyed by the General Agreement on Tariffs and Trade, about which I shall make a few remarks in a moment, although it is unquestionably affected by it. Most honorable members will wait with great anxiety to find out to what new principle in the field of Empire trade or of world trade we might be committed by our ultimate signature to the Havana Charter.

Therefore, at this time, there are three matters which call for discussion. I shall not take them in chronological order or in the order in which they appear on the notice-paper. The first is the statement by the Minister for Post-war Reconstruction, and the General Agreement on Tariffs and Trade which he laid upon the table of the House. The second is the discussion upon specific duties, which were the subject of broad negotiation at Geneva. The third will be the discussion on the Havana Charter. Unhappily, that discussion cannot occur at this stage because the subject is still in the arena of anticipation. Conducting, for my own part, this necessarily truncated and very difficult debate, I merely desire to offer some general comments, and then some particular ones.

First, I make this broad comment : Before “World War II. international trade negotiations were almost invariably bilateral - if one must use these polysyllabic methods of expression that have become so popular. That is to say, if we wanted to make a treaty with Great Britain we did so. We made a treaty that we thought would have some reciprocal advantages to the treaty makers; and if Great Britain wanted to make a treaty with Argentina it did so. Individual treaties were made between any two countries, and they were always based on the idea that by making mutual concessions the countries concerned might improve their individual positions not only in relation to each other, but also in relation to the rest of the world. There was a great deal to be said for that practice. But since we have emerged from war, in fact since the last war was well advanced towards victory, there has developed, and nowhere more than in this country, a complete passion for better schemes of universal application - multilateral trade agreements - the idea presumably being that if 50 nations subscribe to a trade charter they are more likely to adhere to it than if it were confined to two nations only. I find it almost impossible to understand that proposition, but, as I have said, there is a passion for this type of agreement to-day. We must have multilateral contracts. But, unless the Havana Charter turns out to be something quite different from the draft charter that has been submitted, these multilateral agreements will all contain obligations that each contracting nation shall extend to all the others “ most favoured nation “ treatment. I do not intend to occupy the the time of the House again with a long excursus- -

Mr Chifley:

– I think that the right honorable gentleman should refer, to the genesis of all this, and point out that it originated in the Mutual Aid Agreement.


– I was about to mention that. I was saying that I did not intend to occupy the time of honorable members again with a long excursus on this matter, because, on the previous occasion when it was debated in this House, I referred to the Mutual Aid Agreement and to the development through the latter part of the nineteenth century and throughout the twentieth century, of the “most-favoured nation” clause in international contracts. All that I need do on this occasion is point out that the essence of these modern schemes is to he found in two things : The first is that there must be multilateral treaties. Thus, with many nations entering into one contract, if an individual bargain by one nation involves a concession by that nation, that concession shall extend to all the contracting nations by the simple and direct operation of the “most favoured nation “ clause. In effect, therefore, discriminatory bargains between nations are to be brought to an end. I realize that that is putting it baldly, because we all know that the documents are bound in qualifications, subtractions, and escape clauses; but when one looks at the principle that is sought to be established, it is that nations shall not make discriminatory bargains. Bluntly, I believe that unless we can continue to make discriminatory bargains, we shall come off very badly in our search for world trade, and. in particular, unless we can continue to make discriminatory bargains with those nations that are close to us in outlook; unless we can exchange with them particular benefits that will strengthen both of us ; we may very well find that we have thrown away the substance for a shadow, and that will be only the thin paper on which these international contracts will be printed. Indeed, I make this further comment: This idea that we must universalize the “ most favoured nation “ clause, and automatically extend all concessions to all nations that are inside the charter, is designed, in all good faith, by those who believe in it, to free the .channels of world trade. I for one have been familiar during the past fourteen or fifteen year3, in this Parliament and in negotiations in other countries, with the belief, constantly expressed by certain leaders in the United States of America, that world peace will depend upon the revival of world trade and that, in turn, the revival of world trade will depend upon freeing the channels of trade. Nobody believed more firmly than did Mr. Cordell Hull, who was the most distinguished proponent of that proposition and a man for whom I had the most profound respect, that in it was involved tariff reductions1 and equality of treatment between the various nations of the world. That is all very fine in theory, but how does it work out in practice? Suppose for example that Australia as a member of this postulated International Trade Organization decided that it would be a good idea, in a nondiscriminatory world of course, to make certain tariff concessions’ to the United Kingdom on cotton goods, the United Kingdom in turn making certain concessions to Australia in relation to, say, sugar. Let us assume that after a few years, because that is all that the proponents of the scheme have ever visualized, preference has gone and we Iia vo entered this completely nondiscriminatory world in which, automatically, every concession goes to every contracting party. The result will be that the special concession on cotton goods to the United Kingdom will instantaneously become available to India, Japan, and other countries that have an entirely different standard of production costs and whose interests are not by any means as vital to us as the interests of the United Kingdom. If that were the position, what would be the outcome? It would not be that .we would negotiate and grant these concessions. Rather should we say, “ We had better have another look at this. If this concession is to go to every country, is it worth while making it? It will not benefit the country that we desire it to benefit. The benefit will go instead to countries B, C and D “. Consequently, the existence of the universal “ most-favoured-nation “ obligation in these charters and agreements is, in the long run, if it is obeyed, rather calculated to make nations more reluctant, and not more willing, to enter into trade negotiations. The whole question, therefore, of these multilateral agreements and charters seems to me to be not only doctrinaire but also extremely dangerous, and having made these preliminary remarks, I should like to offer some broad comments to support that view. First, these contracts concentrate all their attention on the problem of the distribution of goods. It is, indeed, the common socialist fallacy of 1948, all over the world, that the real problem that is being dealt with is that of distributing what the world produces. Everybody who thinks about thi,= matter at all knows that the world’s real problem is to get things produced. If we can get them produced efficiently at a reasonable cost and in sufficient quantities, and if we can get the instruments of transport moving at a reasonable speed, the world is so full of unsatisfied demands that the problem of distribution will probably solve itself.

But all attention here is concentrated upon distribution! The real problem in this country is not the problem of distribution at all. Simple research on, this matter will indicate that there is less production in the world now than there was ten years ago. That has been stated quite authoritatively by the research organization which worked on this matter for the last United Nations conference. The world’s production is less now than it was ten years ago. The world’s population in the same space of time has risen by 200,000,000. There we have, in two simple sentences, a statement of the basic problem. It is the problem of how we are to get more things produced to satisfy human demands. As far as we in Australia are concerned, that resolves itself into the question of what we are to do to increase production and to accelerate the movement of goods in and out of the country. That is the first and most important contribution that we can make to the world at this time. Have we had any real attack on the problem of production in Australia? Time after time this matter has been ventilated, not only in this House but also on a thousand platforms and in every newspaper in the country. Are we encouraging production? I shall not repeat what I and many other people have said on that subject, but the realization is beginning to sink into the public mind that we are so concerned with certain other matters in Australia that the most vital problem, that of production, has gone right into the background.

The next thing is employment. We now have very many more people engaged in factory employment, for example, than we had immediately before World War

  1. Factory employment in Australia rose from 539,000 a couple of months before the war to Sl!8,000 a.t the r-nd of 3 947. Employment in rural industries, it is interesting to notice, rose from 522,000 to 525,000- a very slight increase. Employment in Commonwealth departments, of course, increased from 6S,000 to 160,000. But that is another story. With all of that increase, one would have expected that our capacity to export goods to the rest of the world would grow correspondingly. One would have thought that, as a country eminently favoured for the task of production, with almost every circumstance in its favour, and with this increased body of employment, Australia would increasingly become a substantial exporter to the rest of the world and that the movement of goods within the country, from State to State, would also be sensibly” increased. Well, what has happened? ‘ As far as interstate shipping cargoes are concerned, we were moving 746,000 tons monthly before the war and we are now moving 707,000 tons monthly. There has been a marked reduction of the movement of interstate cargoes. The average monthly shipment of overseas cargoes in 1938-39 was 519,000 tons, and in 1946-47 it was 371,000 tons. I will not overload this matter with figures.

I mention these facts merely to illustrate to people that, although there is more employment in Australia, we have fallen down upon two things of major importance. One is the production, by an all-out drive of the kind that has been mentioned many times, of everything that we can produce. The other is the quick and effective movement of those goods either to markets inside Australia or to markets outside Australia. Of course, everybody who has considered the problem at all knows some of the reasons for these failures. I shall not rehearse the items of government financial policy which, in my view and the view of my colleagues, definitely retard production and reduce incentive, but I shall point out to the House once more that it is idle for us to go on saying, “ There is a shortage of shipping “. W e ourselves have assisted to create the shortage of effective shipping in Australia by allowing the time taken to turn around ships in our ports to reach scandalous levels. That is not the fault of decent men. Basically, if we conic right down to the truth of the matter, it is the fault of the rising influence of the Communist loafers and schemers in this country. That is what they are - loafers and schemers! Every honorable member on the government side of the House agrees with me in his heart on this matter. These people have said, “ We will hold up work in the ports. We will control shipping policy. We will say what ships shall sail and what ships shall not sail. We will determine with what countries Australia shall trade.” The 1-esult is literally that where once it took a matter of days to have cargoes of great importance loaded and despatched out of Australia by ship, now the same function takes weeks. If we as a community are going to sit down and accept that, or allow the Government to accept it, we need not pretend for one moment that we are playing our part in world production.

We must not stop at production. Production matters only if it means more things reaching the people who want them. Therefore, we cannot separate production from transport. ‘ The two things must go together. These are the problems to which we might devote some of the time, attention, energy and enthusiasm which, as I see it, are being dissipated at international conferences. Not one of these conferences touches the problems at all, but all of them are designed to produce some airy fairy sheets of paper on which will be masses of obligations, most of them cancelled out by qualifications appearing three or four pages later.

I should also like to have some light thrown, in the course of this discussion, on an allegation that has been made that the export of goods from Australia is very seriously interfered with by masses of unnecessary restrictions and official red tape. I do not speak as an. expert on this matter, but I received a letter a few days ago from a responsible and representative body, which made the following statements : -

In 1948, we still find that there exists export restrictions on 187 groups of commodities, each group covering, on an average, at least twelve individual items.

The effect of these restrictions is to make it almost impossible for the exporter to quote an overseas buyer with any degree of certainty that export permits and/or licences will be available when the time arrives to ship the goods. For it is not unusual to find that export permits for certain commodities are available one week but not the next, with little or no regard to the exporters’ commitments and the possible repercussions, both financially and goodwill, when the overseas merchant is told that they cannot be shipped.

Other factors which prevent export trade development are the embargo on shipping to the Netherlands East Indies, Government to Government trade and the multiplicity of government departments with functions touching on export trade. The first mentioned you are fully acquainted with and we can assure you that the remaining two are no less cumbersome and restrictive. 1 am not going to take up the time of honorable members by reading this letter in extenso, but honorable members know from their experience that a mass of red tape and restrictive rules interfere with the re-opening of normal trade relations between this country and other countries which are potential customers. All the matters I have indicated are more worthy of our attention at this stage than the execution of multilateral paper scheme.; with 50 or 60 other nations.

The second comment I make grows out of the first. The agreements to which I have referred deal very frequently with ideas which are completely unreal, and all too often we find that in those documents nations propound doctrines which they do not in fact practise.

Mr Haylen:

– Would that be a reason to repudiate those agreements?


– No doubt the honorable member for Parkes (Mr. Haylen) has observed the tendency which I have mentioned, because I know that he has read a great deal about these matters. It is a very curious misfortune, but the fact remains that governments seem to divide themselves into two sets of authorities. While one set is engaged negotiating a multilateral agreement, the other stays at home and says, in effect, “ Now that they are well out of the way we shall get on with the business of making specific contracts with particular countries, because those contracts will be of some use to us “. The result is that, whilst we are informed by the terms of various recent international documents that no “ discriminatory “ agreements are to be made, we find that, within the last few days,

Argentina has concluded a bilateral agreement with the United Kingdom, one which I hope will prove to their mutual advantage. The United Kingdom has also been busily engaged assisting the formation of a single European customs union, and it has now succeeded in reaching an agreement with the smaller customs union established between Belgium, Netherlands mid Luxembourg, now known compendiously as “ Benelux “. Those agreements, which were made on the old arrangement and model, seem to be operating while representatives of the countries concerned are meeting at Havana discussing the generalities which express themselves in such phrases as “ the abolition of discriminatory treatment “.

Mr Archie Cameron:

– A Danish treaty was also announced this week.


– In the last six months seventeen treaties have been made by the United Kingdom with individual countries, and, I trust, to the advantage of the United Kingdom - indeed no one wishes for their success more sincerely than I do. But how does that fit in with the general idea that there is to be a general charter disposing of all special arrangements and getting rid of all discriminatory agreements made between “ country A “ and “ country B “ ?

The third comment I make is this - and it concerns something which we must state in the simplest possible terms. The real, burning problem of world trade today, apart from production and effective transportation, arises out of the relationship between the United States of America and the rest of the world. We hear, day after day, of dollar shortages and the effect of the dollar famine on the whole fiscal and economic policy of the United Kingdom, Australia and other countries. Why is there a dollar famine? I do not think that we need to be too subtle about this matter, even if we do not become too simple about it. The great problem of the world to-day is to persuade the United States to buy more from the rest of the world, and - putting it quite bluntly - to sell less to the rest of the world ; but certainly to buy more. Therefore, the first thing that has to be done in regard to world trade is not a multilateral one; it does not concern 50 or 60 nations purporting to exchange obligations with each other. If the United States views the problem fairly the first thing needed is for that country to adapt its tariff policy and national economy so as to buy more from the rest of the world. It cannot any longer say to the rest of the world : “ I want a cutlet for a cutlet. If I am to huy a million pounds’ worth of goods from your country, it must buy a million pounds’ worth from mine “. That can no longer be said, because until the United States of America buys more from the rest of the world, it is pursuing a path almost tragically similar to the one which it pursued after World War I., a policy which led ultimately to the occurrence of the great depression in ‘hat country.

I distrust over-simplified statements, and I certainly do not desire to make them ; but I think that it is, in broad substance, true to say that after World War I., the course of American economic history was this : Its international trade has always been only a trifling fraction of its total trade - a fact which should be remembered - and at its height its international trade never represented more than 10 per cent, of its total trade. Although America’s export trade represents only a fraction of its total trade, and is much smaller, proportionately, than that of either Australia or the United Kingdom, it is an important fraction because it is associated intimately with American investments overseas. After World War I. the United States found itself with overseas investments, which was a novel position for that country to occupy.1 It had emerged from World War I. a creditor country. Now, Great Britain had a great deal of experience as a creditor country, and it had always understood that when treasure is invested there must also be imports; that if. it invested money in other countries it must be prepared to accept the earnings of that money in the form of goods from those countries. However, the United States endeavoured after World War I. to have it both ways; it wanted to continue its overseas investments on’ a large scale, and at the same time it maintained a high tariff in order to exclude goods exported from the countries in which its money had been invested. The result was that after the world’s gold had been aggregated by the United States there was nothing more to bring into that country. Americans said, in effect, “ We have the gold and we do not want the goods. We have to sell more than we buy “. Because of that policy, the United States sterilized ils overseas investments, and the whole credit structure which had been built up by its many investments fell to pieces. The .moment the price of one thing fell, the prices of all other things had a tendency to fall. I foresee that that might very easily happen again, and I am sure that the leaders of thought in the United States of America realize this much more clearly than I do. It is very easy, indeed, for it to happen again unless the United States makes a firm decision that it will buy more things from the rest of the world and be prepared to sell fewer of its own goods to other countries. So long as the United States is intent on selling more and buying less there will be a dollar famine, and the whole world will be thrown into disequilibrium. Although what I have just said seems to me to be unanswerably true, the United States has, much to my astonishment - I am speaking quite plainly about this - been putting forward various charters and concentrating a great deal of attention upon the abolition of trade preference. Why should the British preferential system be under attack by the United States of America? Why should a great country like that, which has a preference among its own States going to the length of complete internal free trade and which has at all times maintained the right to grant preferences to countries like Cuba, while preserving the whole of this internal scheme of complete mutual advantage and of complete discrimination inter se, be so concerned as to say to the countries of the British Empire that if they are to enter into international trade in the full sense of the term there must be no discriminatory treatment ?

Mr. Burke

– Order ! The right honorable gentleman’s time has expired.

Motion (by Mr. Dedman) - by leave - agreed to -

That so Hindi of the Standing Orders lie suspended as would prevent the Leader of the Opposition (Mr. Menzies) from concluding his speech without interruption.


– I am obliged to the House for its indulgence. I do not under stand why it should be thought .by theUnited States of America that British preferential trade should be one of the first objects of attack, but it has been. It cannot be because it seeks to imposeupon us the same rules as it imposes upon i.t3 own people. As I have shown, theUnited States of America has a much greater white population with completeinternal freedom of trade. It cannot bethat the United States thinks that thedestruction of British preference will mean that it will buy more from therest of the world or sell less. If there isany purpose in this, it is surely that the United States will be able to find an. entrance to markets in which the United Kingdom now enjoys preference, and that it shall be able to enjoy that entrance on the same terms. In other words, the purpose of this policy seems to be to enablethe United States of America to sell more, yet the problem is not how it shall sell more, but how it shall buy more so that, in the end it, is buying from the rest of the world more than it sells to it. Until that occurs, the dollar problem will not be solved.

The fourth comment I desire to makeconcerns itself with the General Agreement on Tariffs and Trade. This, at least,, is completed, although it may possess a tentative character. I am not clear in. my own mind about how far this agreement will ultimately be affected by theHavana Charter when it is executed, but. at any rate, it purports to be complete. I admit it is rather bold, to say that anything emerges clearly from it. I havealways thought that the Minister forPostwar Reconstruction (Mr. Dedman) is prejudiced in favour of clear thought, and clear speech, and he must share my horror when he looks at this document,, which is, unquestionably, the world’s worst. If there is one thing that emerges clearly from this general agreement, it isthat preferences are to be reduced and ultimately destroyed. Apart from that,, there are masses of obligations, to one ortwo of which I shall refer in a momentThere are some obligations which sound magnificent, but they are completely wiped out by exceptions, reservations, and escapes of one form and another.. There is a preamble to this document, towhich a variety of countries, including ourselves, are parties. The last clause of the preamble reads -

Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other harriers to trade, and to the elimination of dis.criminatory treatment in international commerce, have, through their representatives, agreed as follows.

I emphasize the words “ elimination of discriminatory treatment in international commerce “.

The second page of the document contains Part I., Article 1. At the top of the page, in a position in which it catches the eye, is “General Most-Favoured-Nation Treatment “. The most-favoured-nation treatment is stated; there is no beating about the bush. It reads - any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined fo.r any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.

That was what I was referring to when I mentioned earlier to the House how this clause of universal application will operate. Then it is provided that the provisions of that article shall not require the elimination of any preferences which do not exceed the levels provided for in paragraph 3 and which fall within certain descriptions. The first description, which refers to preferences in force between two cr more of the territories listed in Annex A, includes the countries of the British Commonwealth. Therefore we heave a sigh of relief momentarily and say that that gives us a breathing space, because it does not require the elimination of the levels of preference provided for. Then wc ask what they are, and if we look al clause 3 we find it is said that the margin of preference on any product in respect of which a preference is permitted under paragraph 2 of the article, but is not specifically set forth as a maximum margin of preference in the schedule, shall not exceed certain limits, which are “set out. A formula is used, but I need not read it. The margin is not to exceed, in effect, the preference existing on 10th April, 1947.

When some one had written that, he thought that a few definition clauses should be put into the agreement, and they appear at the end. They are called “ In terpretative Notes “. Paragraph 3 of the notes- provides -

Thu term “margin of preference” means the absolute difference between the mostfavourednation rate of duty and the preferential rate of duty for the like product, and not the proportionate relation between those two rates.

Various examples are given, some of which are expressed in a percentage ad valorem. The third example reads -

If the most-favoured-nation rate were 2 francs per kilogram and the preferential rate were 1.50 francs per kilogram, the margin of preference would be 0.50 fram-s per kilogram.

Let me put that in terms of our own money. If we impose a duty of 15s. on a particular commodity and assume that the preferential rate to Great Britain is 10s., the difference is 5s. It is the 5s. difference that is protected and not the proportionate difference. We are living at a time when the value of money is falling and prices are rising. During the next few years there may be substantial rises in price levels in all countries. However, whatever the rise in price levels may be, the preferential margin is pegged by that provision at 5s., which may in the course of time be equal io a preferential margin of only 2s. 6d. or ls. I hope I make that clear to honorable members, because it reveals quite plainly that, with no change whatever negotiated by any other particular treaty, under this general agreement preferential margins, will automatically fall as prices rise, because they are being pegged in absolute terms and not in proportionate terms. At page 22 of the document, we come upon Article 11, which provides for the general elimination of quantitative restrictions. Some one has said that whatever is done in the way of freeing channels of international trade or the reduction of tariffs, countries can still control the coming and going of goods by fixing quotas or imposing quantitative restrictions, which would be just as effective. Indeed, they might be more deadly, because they ‘ could interrupt the flow of trade more effectively. The draftsman started off on a high note in paragraph 1 by saying -

No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.

All that is high, wide and handsome. Tariffs, yes ; we are making treaties about them, and they will apply to everybody. Countries may impose duties, &c., but not quantitative restrictions. Then, having stated that, the draftsman goes on to say-

The provisions of paragraph 1 of this article shall not extend to the following: -

export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party;

Thus, a contracting party may say, “ I know I cannot impose a quantitative restriction, but this happens to deal with a commodity which is essential to me”. I can hardly imagine a case in which a country will not say that the matter is essential.

Mr Lemmon:

– Like our merino rams.


– Exactly. Or an importing country will claim that it is vital to its economy that a certain commodity should be kept out.

Mr Lemmon:

– That is what is called a safeguard.


– Yes. It looks like plus one, minus one, and the answer is zero. Paragraph 12 is headed “Restrictions to safeguard the balance of payments “. When we read this paragraph we find that, notwithstanding the provisions of the high, wide and handsome general proposition which I read, any contracting party, in order to safeguard its external financial position or balance of payments, may restrict the quantity or value of merchandise permitted to be imported, “subject to the provisions of the following paragraphs “. When we read the paragraphs we find that they boil down to this : If, for any reason which seems to it to affect its international trade position, a country desires to restrict imports or exports it may do so. Therefore, a positive affirmation is again whittled down by the application of certain conditions. The one thing that is not whittled down is the provision against preferences.

All this, of colrse, is really so much jargon. I do not think that’ it was in tended to have any coherent meaning at all, and for that I do not blame the Minister for Post-war Reconstruction. We come finally to Article 16, which appears at page 41 of the document. It deals with subsidies, and is one of the most interesting of the lot. I will read it all, because it will cheer everybody up to know that it means the “ stone end “ of subsidies. The article is as follows : -

If any contracting party grants or maintains any subsidy, including any form of income or price support, which operates directly or indirectly to increase exports of any product from, or to reduce imports of any product into, its territory . . .

When I first reached this point in the reading of the article, I was prepared to learn that the parties would be hanged by the neck if they transgressed its provisions because such transgression would be flying in the very teeth of the multilateral trade agreements, but the article goes on to say - . . it shall notify the Contracting Parties in writing of the extent and nature of the subsidization, of the estimated effect of the subsidization on the quantity of the affected product or products imported into or exported from its territory and of the circumstances making the subsidization necessary. In any case in which it is determined that serious prejudice to the interests of any other contracting party is caused or threatened by any such subsidization, the contracting party granting the subsidy shall, upon request, discuss with the other contracting party or parties concerned, or with the Contracting Parties, the possibility of limiting the subsidization.

This is how the world is to be saved. We are to have these rigid, multilateral contracts containing such meaningless nonsense as that - and that is only one example out of a hundred which I could cite. The perusal of these documents leaves me with a very strong feeling that while the nations of the world will probably go on making contracts as before, regarding this agreement as a sort of curiosity, it will be used against British Empire countries to show that they have abandoned the principle of Empire preferences - though they may put a time limit on the application of the agreement. Empire countries will be told, time after time, that they have made their bargain. If we point out to the other parties that they, too, have made a bargain, and have undertaken to do this or that, they will reply, “ If you look at the contract you will see thatwe had a way of escape. You have bound yourselves to the principle of no discrimination, and that means that you can no longer continue preferential trading “.

A day or two before the meeting of the Parliament, an interesting article was published in the Melbourne Age, and I take leave to read to the House by way of conclusion two passages from it. The first is this -

Only the very naive would expect an early lift in the volume of trade from agreements hedged about with so many reservations, exceptions and escape clauses that their practical results are matters of conjecture. If the woolgrowers of the United States of America, for example, were able to show “serious injury” to their industry from the 25 per cent, reduction in raw wool duties, whatever advantage Australia may expect could be nullified by restoration of the old duties. How” nondiscrimination ‘’ works has been shown in the United Status loan agreement, by which Britain, if forced to curtail United States imports, was obliged to make corresponding reductions in purchases from other countries, including those of the British Commonwealth.

Objections to the British preference system have come mainly, if not wholly, from America, which operates almost watertight preferential tariff agreements with the Philippines, Cuba, Puerto Rico and other contiguous areas, not to speak of the 100 per cent, preferences that American States give to each other. The debates may be expected–

The writer was referring to this debate - to bring searching criticism to bear on what is proposed in the light of what is actually happening to disrupt trade. One country after another has been forced to restrict imports, due to the world shortage of dollars and inability to sell enough products that would earn credits in dollar countries. Shadowing the whole prospect is the grim balance or payments crisis in Britain, while our own difficulties threaten even more serious effects than there is already being felt. The present distorted picture is a strange commentary on idealistic professions and elaborate paper proposals for promoting the flow of world trade.

It is not my general experience to be able to quote a passage from a leading article with 100 per cent, of approval, but I certainly quote that one to the House as containing the essence of good sense.

Minister for Works and Housing · Forrest · ALP

– Listening to the address delivered by the Leader of the Opposition (Mr. Menzies) one was forced to the conclusion that he was carrying out his task as a representative of

His Majesty’s Opposition. His whole approach to this subject was one of purely destructive criticism. The right honorable gentleman, knowing the conditions of world trade to-day and the unfortunate financial position in which the United Kingdom hasbeen placed since the termination of World War II., one would have expected him to offer some constructive criticism of this agreement which would be of assistance to the Government in its endeavours to devise means for adjusting the disequilibrium in world trade. The right honorable gentleman did nothing of the kind. He discussed the agreement, article by article, with the sole object of attempting to destroy and to ridicule the work of the representatives of no fewer than 58 nations. He laid great stress upon the maintenance of the British preferential tariff. I remind him that before any alterations in the British preferential tariff were agreed to they had to be endorsed by the British Government and the Canadian Liberal Government. Provision has been made in the agreement for the continuance of the British preferential tariff margins as they exist at present. The right honorable gentleman has sought to instil fear in the minds of the people about the effect of this agreement. His own fears are groundless. We must make up our minds whether we shall go back to the old order of world trade or whether we shall adjust our trade relations to conform to the changed conditions of the present. The Leader of the Opposition claimed that only two things were worth while in international trade, namely, bilateral agreements and the maintenance of Empire preferences. Thoughtful people realize that great changes have taken place in the economic and financial condition of the United Kingdom since the end of World War II. Prior to the outbreak of the war, the British nation received from foreign investments more than £400,000,000 annually. Thus it had a huge international credit balance. To-day all of those investments no longer exist. Great Britain was compelled to sell its foreign holdings in order to purchase the requisite capital goods with which to carry on the war. Thus, Great Britain, which before the war was a great creditor nation, has now become a great debtor nation. The Leader of the Opposition would have us go back to the trade conditions that existed between 1918 and 1945. Sir Stafford Cripps put the position very forcibly when, at the first meeting of the Preparatory Committee of the International Conference on Trade and Employment, he said -

We know that in the period between thu two wars, when there was substantially no provision for world economic co-operation and no rules of international conduct in matters of trade and commerce, we. all of us, suffered from one another’s acts. In the result, by piling restriction upon restriction, we most seriously blocked the channels of world trade with the consequence that millions upon millions of our peoples suffered poverty, unemployment and frustration. “ Poverty in the midst of plenty “ became a catch phrase of the widest practical application. No nation benefited though perhaps some suffered less or at different times than others.

We, in common with the other nations represented at the conference, have to decide whether we shall revert to world trade conditions that prevailed before the war, which developed through bilateral agreements, or whether we. in cOOpera.tion with the other nations, will make a multilateral agreement which will be of benefit, not only to Australia and the Empire, but also to the rest of the world. I look upon this agreement from three view-points: First, its effect on the general economy of the world ; secondly, its effect on the British Commonwealth of Nations ; and, finally, its effect on the internal economy of this country. In 1945-46 the United States of America exported goods worth 26,000,000,000 dollars and bought from other countries goods worth only 9,000,000,000 dollars. No country can continue to maintain such a favorable trade balance without grossly disturbing world trade conditions. I agree with the Leader of the’ Opposition that Americans must buy more and more goods and export fewer goods. This agreement is partly designed to bring about that result. When the agreement is examined in detail it will be seen that it confers great benefits on Australia. The advantages which we gain from it very much outweigh the concessions which we have yielded. It is true that the agreement contains many safeguards. It is natural to expect that when the represent- tatives of 58 nations of the world gather together in conference there will be a certain degree of nervousness and mistrust, and inevitably any agreement reached, will contain safeguards insisted upon by the signatories in order to afford reasonable protection to the economy of their respective countries. The Leader of the Opposition has drawn attention to certain safeguards in the general tariff provisions of the agreement. Some of them were embodied as the result of pressure by the Australian representatives at the conference. One of the safeguards we achieved under the general agreement with respect to exports from this country, and which is of vit al concern to Australia, is that we shall be enabled to implement plans for the stabilization of various primary industries. Those safeguards were inserted in the general agreement on Australia’s initiative. Obviously, it was quite proper for Australia to seek such safeguards; but, that being so, it was equally natural that other countries, likewise, would ask for certain safeguards under the agreement.

In considering the general agreement, we must ask ourselves three important questions : first, can we make certain reductions of tariff duties applying to the products of secondary industries without seriously affecting the welfare of those industries? I believe that, to-day, many of our secondary industries can stand a reasonable reduction of the tariff protection they now enjoy, because, in many cil ses, the existing duties were imposed in order to enable the industries concerned to become established. To-day, however, those industries have achieved a high degree of efficiency, and are operating in many cases, on a mass production basis equally as efficiently a9 industries in other countries. Therefore, there is definitely room for a reduction of the tariff duties applying in respect of their products. The second point I emphasize is that at present our price level is much lower than that in any other country. That in itself gives substantial protection to secondary industries in Australia. Thirdly, all of the increases of freight rates effected subsequent to the imposition of protective duties some years ago now represent a far greater protection to many of our secondary industries than do the actual duties themselves. Bearing those facts in mind, honorable members will agree that in respect of many of our secondary industries we can well afford to make some small reduction of existing tariff duties ; and I need hardly add that the reduction of such duties will assist in reducing the prices of the goods concerned.

I emphasize that under the general agreement we retain the right to provide protection for any secondary industry which we may desire to establish in this country in the future. For instance, we may desire to establish an industry in respect of which we possess the basic materials it requires, and which we may believe will have a good chance of success. Under the agreement we may provide protection in respect of such an industry in order to enable it to become established and reach full production.

I come now to the benefits which Australia will derive from the implementation of the agreement. I refer first to wool. The advantages which will accrue to Australia’s economy solely as the result of the reduction of the American tariff on wool by 6d. per lb. on clean scoured wool and 3d. per lb. on greasy wool, can mean far more to Australia’s economy than all of the reductions which we have agreed to make in our duties. The reduction of the American tariff duty on Wool .alone is of fourfold benefit to Australia. First, although the concession will not be of very great benefit to Australia while prices remain as high as they a re to-day, it will be of very great benefit to this country when prices decline. The processor of Australian wool in America now knows that he can get our wool over the American tariff wall, and that knowledge, in itself, will be an immediate encouragement .to him to expand his industry, and thereby extend the selling range of woollen products and create a greater demand for wool. That is the first advantage which the reduction of the American tariff duty on wool will mean to this country. The second is that this encouragement of the industry in the United States of America will discourage investments in synthetic fabrics which compete with wool. That is a very important consideration to the wool industry throughout the world ; but it is of particular import ance to Australia’s economy because we grow such a large proportion of the world’s wool. On the basis of the quantity of wool which the United States of America now buys from this country, the reduction of the American tariff duty on greasy wool of 3d. per lb. will mean, a reduction of £6,000,000 of the cost of our wool to the American processor. ‘

Under the agreement, the United States of America will reduce its tariff duty on lamb by Std. per lb., on mutton by 2d. per lb., and on butter by 5d. per lb. “Whilst it might be said that these reductions will not be of immediate advantage to Australia, because, while weproduce 10,000,000 lambs annually in this country, the whole of our exports of :”i,000,000 lambs go to the United Kingdom, two factors must be borne in mind. The first is the increased production of fat lambs which will continue as the result of improvement of pastures in this country ; and, secondly, the United Kingdom Government, because of its financial position, must continue to strive for the greatest possible degree of self-sufficiency. Consequently, to-day, the United Kingdom Government .is producing ,an everincreasing proportion of its own requirements of foodstuffs.

Mr White:

– The British people will never be able completely to feed themselves.


– That is true. Nevertheless, because of Great Britain’s present financial position, the United Kingdom Government must continue with its policy of ‘self-sufficiency. The point I make is .that, whilst we enjoy the United Kingdom market to-day, that policy on the part of the United Kingdom Government could substantially reduce the share of the United Kingdom market which we now enjoy for lamb and mutton. Consequently, the .reductions of the .American tariff duty on lamb and mutton will be of considerable economic value to this Country.

On broad principles, the agreements which we have entered into represent an endeavour on the part of the Government to help to establish world trade on a basis far more advantageous to all countries than that on which world trade was carried on between the two great wars. “We believe that if we were simply to go back to bilateral agreements, or rely solely on a British Empire protective tariff, we would again drive countries outside the British Commonwealth of Nations into trade blocs. “We believe that once nations are driven into trade blocs and trade wars physical wars follow. We entered -the negotiations in the belief that they are designed to bring some order out of chaos and that a freer flow of trade and economic co-operation between nations will make for a better world.


.- One would think to hear the Minister for Works and Housing (Mr. Lemmon) that some new policy has been evolved and that Australia has suddenly discovered a means of ensuring greater world trade. I intend to show that the policy is revolutionary for the Labour party in that, here and now, it practically abandons its traditional protectionist policy and that, far from being new, the policy was enunciated more than 100 years ago by Cobden and Bright. It is a variation of laisser-faire in trade. I am sorry that the Minister for Post-war Reconstruction (Mr. Dedman), who, with an army of officials, has spent months in conference, has been fooled into signing away Aus- tralia’s economic sovereignty, because this is economic disarmament. I do not think he knows what he has done, and I am sure that the Government, in backing this proposal, has not’ seriously considered it. It is quite right that we should take part in international conferences and pacts for the world’s good. The greater the l amity and co-operation between ourselves and the United States, of America the better, for that is undoubtedly our greatest hope against the encroachment of the ruthless, totalitarian system that is extinguishing the lights of freedom in Europe. But there are many ways of establishing closer relations with the United States of America to help world betterment - pacts of mutual defence and a broadening of understanding ; . but, in the process, we must be very careful not to wreck our future by discarding trade traditions and sinking our individuality and accepting dangerous expediencies. L direct attention to the proposed charter. It is a ponderous volume containing numerous schedules. The Ottawa Agreement, which meant millions of pounds’ worth of trade and much mutual strength to the Empire countries, was contained, with all its articles, in three pages. I ask the Minister for Works and Housing to read it, for apparently he has not. In his speech he wandered into that realm, but lost himself in a territory that he has never explored. This document is called “ United Nations Conference on Trade and Employment - Second Session of Preparatory Committee “. Highsounding words ! The document contains much legal jargon and pious hopes about unrealizable results. The agreement will help the United States of America, but be disastrous to not only Great Britain but also to Australia. We are asked to abandon Empire trade preference and adopt multilateral trade agreements, which the United States of America, with an economic strength greater than that of the rest of the world, in its unwisdom, is trying to force upon a perplexed world. We can see its point of view. It wishes to retain the development it achieved during the war when British and European factories were bombed and destroyed. In World War II. , the United States of America grew and grew in economic strength. It is making a colossal mistake internationally. It may sound presumptuous for one to make that statement in the Australian Parliament, because Australia is only a small part of the world ; but the United States of America made a similar mistake in 1930, when, as one of the victors of World War I., instead of taking reparations in goods and allowing trade to flow a little more freely, it brought down the prohibitive Hawley-Smoot tariff, under which imports were cut in half, causing an intense economic crisis and drawing off half of the gold of the world. I think three-quarters of the world’s gold is now in the United States of America. That was the beginning of the economic blizzard that swept the world and affected us here. In 1932, Great Britain called a conference of the Empire nations at which the Ottawa Agreement was formulated. It undoubtedly worked. Quite apart from sentiment, this is a matter of economic common sense. To operate the new proposal would be to hand over our trade, as it were, to a gigantic trust, because that is what will happen. Under the proposed charter of the International Trade Organization, there is a grave danger to the British Empire of the reduction and ultimate abolition of Empire protection. That will mean that British economic units will lessen their economic powers. Trade will be hindered and frustrated by the multiplicity of rules in the proposal. I was sorry to hear the Minister for Works and Housing say that Britain has suffered to such a degree that, having sold its investments, it is in a perilous financial state. “We know that ; but Great Britain still is the greatest customer of the world, and it will be the greatest buyer from us in any circumstances. All the Minister’s hopes of selling lamb to the United States of America have been expressed before. In the depression years, when I was Minister for Trade and Customs, the Department of Commerce proposed over and over again to the United States of America that it should take our surplus lamb, butter and other products. But the United States of America is self-sufficient in that regard. It is ridiculous for the Minister for Works and Housing and the Minister for Post-war Reconstruction to be fooled by proposals of that kind. The Minister for Works and Housing takes great comfort in saying that the United States of America has reduced the tariff on wool. If it wants our wool, it will buy it regardless of the duty. The wool-clip of Australia is sold whatever the circumstances, and, if the United States of America does not buy it, Great Britain, or some other country, will. As for the story about synthetic fibres competing with our wool, we heard it ten years ago when the German Consul-General in Australia delivered an ultimatum to our Government that if we did not make a trade treaty with Germany, it would use synthetic fibres and shut out our wool. I inspected the factory near Leipzig that produced the supposedly synthetic wool. It was not synthetic wool at all but only another fibre which might compete with cotton or linen, just as much as with wool. It was mixed with our wool, as an adulterant rather than a substitute. Australian wool is the world’s best. “We produce the greatest quantity of fine wool. The delegates of the United States of America at Geneva outsmarted our delegates at the outset by saying that the duty on our wool would be raised and then, after a long pause, that they would not do that but would make a slight reduction of the duty. And simple Australians there held that up as a great victory! I am amazed that the Government has thrown away valuable business under an arrangement which must profit the United States of America, and which will not profit Australia. Honorable members have only to examine some of the articles in this report. I do not propose to deal with them in detail. The Leader of the Opposition (Mr. Menzies) has already referred to some of them. Article 17 relates to the reduction of tariffs, and the elimination of preferences. Can the Minister for Post-war Reconstruction inform the House what preferences will be retained? The ultimate objective of this article is the elimination of preferences. The United States of America, of course, will retain its preferences with Cuba and other countries which already have agreements with it. If we agree to article 17, we shall surrender our fiscal sovereignty. Responsibility for altering tariff rates should rest with the Government, acting on the advice of the Tariff Board, which has been an excellent guide in the past.

The most-favoured-nation idea is merged into this proposal. Great Britain discarded it in 1898. “When Great Britain enjoyed industrial pre-eminence and was so powerful commercially that it could retain its markets overseas with its policy of free trade, it believed in the mostfavourednation arrangement. I am not surprised that the United States of America should believe in that principle to-day. The basic idea of the mostfavourednation clause is that if one country makes a trade agreement with another, it must give similar treatment to all the other signatories to the relevant convention. The United States of America frequently qualified this idea of most-favoured-nation treatment. For example, when it extended mostfavourednation treatment to France, that country demanded the full extent of favorable treatment which the United States of America had given to Great Britain regarding shipping. Consequently, the United States of America inserted an escape clause in the agreement, and made the agreement mean something which was it originally intended.

In 189S, Great Britain abandoned the principle of most-favoured-nation treatment, in favour of preferential trade, in other words, reciprocity. The issue before us to-day is the simple matter of reciprocity or non-discrimination. Reciprocity gives mutual benefit, and allows trade expansion under group or regional schemes. It is best exemplified in the British preferential system which has ;given a lead to the world. Nondiscrimination places a veto on mutual agreement, is destructive of stability, discourages tariff changes, and can create Sud aggravate conditions leading to world ^financial and economic depressions. That St can discourage tariff changes is obvious. A powerful country can utilize the mostfavourednation clause for its own advantage by simply sitting back and allowing other nations more hard-pressed than itself to make concessions, and then “ cashing in “ on them. Consequently, the country with the most powerful resources must win. That is what Will happen in this instance. It occurred when Great Britain still retained the policy of free trade during the last century.

The proposals now under consideration mean the economic disarmament of Australia. Yet, under the provisions of this agreement, customs unions are permitted. A customs union may be defined as a region within which complete freedom of trade exists. A present-day example is Benelux - Belgium, the Netherlands and Luxembourg - where conditions are parallel. Does any member of the Labour party assert that a customs union is possible within the British Empire? Of course it is not! Whilst the idea was advocated by Lord Beaverbrook, he did not allow for the different standards of living which existed at that time within the various parts of the British Empire. Tariffs are the gears or the differentials which separate our mode of life, costs, resources, and currency from those of other nations, and they must be carefully worked out, and made to balance, if they are to function to the economic benefit of both sides. That is what we must watch. This grandiose document states that a customs union may be permitted, but preferences must be abolished so that any arrangement approaching a customs union which the British Empire had during the last 40 years must be abandoned, but minor customs unions will be permitted. The German Zollverein. which operated during the last century, under ancient German monarchies, was a customs union. Other examples are provided by the Australian federal system, the Tinted States of America and Soviet Russia. In each of these countries character, currency and traditions in the economic structure are the same.

I emphasize that the preferential grouping system is best suited for the expansion of trade, and the production of stability, where a group of nations possess varied resources, have a large consumer market, and are concerned in mutual welfare and defence, and agree as a permanent policy on extending trade preference to one another. The British Empire has adopted that arrangement. Smash the British Empire to economic fragments, as these proposals will do, and Australia will be looking for friends in a hard world. The system of preferences affords economic protection. For years, the policy of the Labour party has been one of high protection, amounting almost to prohibition. Older members of the House will recall the strenuous debates which took place on this subject about fifteen years ago, when the Australian Country party, then the “corner “ party, fought for lower tariffs, and the Australian Labour party advocated prohibitory tariffs. The Ottawa Agreement was the medium which achieved proper perspective and preferences, and established a system of protection which has been most beneficial to Australia. I read the following extract from the Economist, on a debate in the House of Commons on the International Trade Organization -

The great power house of the world - with two-thirds of the manufacturers and threequarters of the investments, is now the United States, n nation which achieves no natural equilibrium in its balance of trade, which sells more than it buys and has thus come to present the world with the spectre of a perpetual dollar famine. The belief is widespread that completely free trade, however desirable in principle, is not practicable in a world in which the most powerful economy is naturally inclined to oversell and underbuy.

That must be the result if these proposals are adopted, as the signatories, particularly the United States of America,, hope they will be. The preferential grouping system is not exclusive. The enemies andcritics of the British Empire always pointed to preferential trade as being, something exclusive and selfish. Actually, the reverse was the case. The British Empire led the way out of the financial and economic depression of the early 1,980’s, and Australia was among thifirst of the nations to emerge from the economic morass. As I shall prove with figures, that was largely the result of the reciprocal trading arrangement. The year after the Ottawa Agreement was signed, the United States of America called an international conference on trade and finance. Sixty-six nations attended, but they could not reach an agreement, and the United States of America was the first to withdraw from the conferenme. Yet the Ottawa Agreement proved successful. Far from being a selfish arrangement, it set an example to a perplexed world at that time. T.t contained a provision for the making of bilateral treaties, and we, in Australia, profited greatly on that account. “Without exaggeration, the Ottawa Agreement provided the greatest example of economic reciprocity that history has ever known.

The real importance of British preference is not fully appreciated by those representatives of Australia who attended the recent conferences on trade and employment at Geneva and Havana. As early as 1660, Great Britain passed navigation laws to grant economic aid to its American colonies. From 1660, the preference existed in various forms. As the result of Canada’s requests for preferential treatment, Great Britain abandoned the most-favoured-nation clause. The United States of America and Germany, with the assistance of high protective tariffs, had established themselves as leading industrial nations, but Great Britain adhered to the system which the Australian Labour party is now prepared to abandon. Great Britain adopted a policy of reciprocal trade agreements with the Dominions. In 1906, Canada intro duced legislation to give effect to this policy, and, in 1908, Australia introduced our first Empire preferential policy. Complete reciprocity was achieved in 1932, when a former Prime Minister of Australia, Mr. S. M., now Lord Bruce, and the then Minister for Trade arid Customs, Sir Henry Gullett, were signatories on behalf of Australia of the Ottawa Agreement. That agreement did more than any other factor to enable the world to emerge from the financial and economic depression. This policy of mutual help net a wonderful example to a perplexed world. Here again I can give figures showing the material results that have been achieved. I do not stress the sentimental, but he who does not take pride in the eminence and excellence of Great Bli tain’s- name in trade and commerce is a poor Australian; and when I speak of Britain’s name I include our own, because we are one people. “We should not scrap our existing trade agreements unless we have very good reason for so doing. On the 7th December, 1937, just prior to the departure of the present Leader of the Opposition, the right honorable member for Cowper (Sir Earle Page) and myself for London for the re-writing of the Ottawa Agreement, I gave a review of our trade position in this House, and honorable members may read it in Hansard. I outlined the material benefits that had accrued to this country from the Ottawa Agreement. On the other side of the picture, of course, were the benefits that Great Britain had derived, but I was speaking from the Australian viewpoint. I pointed out that Australian exports to the United Kingdom had increased from 36 per cent, to 49 per cent., and gave a long list of items of which our exports had increased considerably. In the case of barley, for instance, the increase was 270 per cent., cheese 107 per cent., eggs 167 per cent., apples 30J per cent., pears 106f per coat., butter 39i per cent., and leather 126 per cent. There was an increase of 80f per cent, in respect of canned fruits, exports of which are threatened by this proposed agreement. Does any honorable member believe that we can undersell American canned fruits ? For yea,rs, pressure has been put upon Great Britain to modify the preference that it gives- to Australian canned fruits.

Apparently,, the Minister for Post-war Reconstruction has been lulled into the belief that this is not a very important matter, but it must be obvious that if Empire preference is abolished the greatest fruit-canning industry in the Empire, situated, at Shepparton, in Victoria, in the electorate of the honorable member for Indi (Mr. McEwen), will be ruined. Then there is the dried fruits industry which, in Victoria, leads the world in efficiency. That industry too will be threatened by the influx to the British markets of cheaper goods from other countries in which living standards are not so high as they are in Australia, and labour is much cheaper. I have shown how the primary industries of this country benefited under the Ottawa Agreement; our secondary industries also prospered. A. total of 3,238 new factories were built, and employment increased from 452,000 to 535,000, a gain of 83,000. That increase, I emphasize, was not over the lowest level of the depression period, but over that of the most prosperous period before the depression. When honorable members opposite talk glibly about the great progress that Australia made industrially during the World Wai- II., they apparently forget that the foundations of our war industries were largely laid during the period that I have mentioned. Every undertaking that had’ a bearing on defence was watched carefully and fostered. In the years that I have mentioned, production increased by £65.000,000. Bilateral treaties were made with Belgium, France, Czechoslovakia, Poland and Eire, and these treaties did some good. But now they all have to go because the Minister for Postwar Reconstruction, who obviously has little knowledge of this subject, and his host of officials, were gulled into approving this proposal at ‘the Geneva conference, from, which there were some very notable absentees. While the Leader of the Opposition (Mr. Menzies) was speaking, the Prime Minister (Mr. Chifley) interjected that certain obligations were imposed by the Mutual Aid Agreement and by the £1,000,000,000 American loan to Great Britain. That is true, but they are not obligations upon Australia. We are free, and we can set an example. Mr. Churchill showed clearly where Great Britain stood when he spoke in the Blouse of Commons recently. He is not, of course, the Leader of the British Government, but, is it necessary for the Australian Government to follow slavishly everything that is done by other socialist administrations? Great Britain, it is true, has certain obligations under the American loan. The loan has strings attached to it, but some of the conditions imposed are impossible of fulfilment. Great Britain cannot repay. Again, I emphasize that my criticisms of the United Slates of America are only in relation to its economic policy. In the collaboration of the English-speaking peoples lies the only hope for democracy to-day. But, if the British Empire is to exist as an economic group, and is not to be smothered by what can be regarded as an international combine on trust, if the people of Australia are not to be hewers of wood and drawers of water, I say that we must not jettison the economic policy upon which we have largely built up our strength. Australia has not yet signed the proposed agreement ; but I am afraid that the Minister is so compromised that he will have difficulty in avoiding adding his signature. The time has come for a. declaration in this Parliament of our adherence to principles that do not grow old. This preferential, mutually beneficial, reciprocal trade is an edifice built upon foundations skilfully laid. Are we to forsake the hard-won substance of reciprocal trade for the shadow of multilateral treaties? If we do not defend this economic heritage, we shall very soon regret it. The Minister for Works and Housing quoted approving words of this proposed agreement from other parts of the Empire. I shall quote the disapproval of individuals who matter. Field Marshal Smuts, that great South African, and one of the world’s leading statesmen, has said that his Government, like other dominion governments, wants preferences retained until American trade barriers are so reduced that the protection embodied in Imperial preferences becomes unnecessary. Is there any sign today of American tariffs being reduced to this degree? No, and there never will be. The Canadian Minister of Trade and Commerce, Mr. Mackinnon, said -

Canada will not abandon Imperial preference. The loss of trade with Britain would seriously damage Canada’s whole trade structure.

I remind honorable members that Great Britain to-day, impoverished as it may be, still provides the world’s greatest markets. The Governor of Jamaica, Sir John Huggins, made this comment -

Without preferences, the island will become one big poor-house or burial ground.

Rather pessimistic, I agree, but showing fear for the future should the international agreement be given effect. Mr. L. S. Amery, possibly the world’s greatest authority on trade and trade agreements, and a staunch advocate of Empire preference, concludes a most thoughtful article, Non-Discrimination, Customs Union and Preference, which I commend to honorable members, by saying- while grateful for such help as America may, in her own interest, care to give towards our recovery, it must be free from all conditions which make that recovery impossible. On that issue there is, to-day, no room for further pretence or equivocation. Our self -respect, as well as our sheer necessity, demands a clear and unmistakable declaration of British independence.

I repeat what I said at the outset, namely, that this is one of the most revolutionary proposals ever advanced by a socialist government. Unfortunately, not enough members of this Parliament have made a study of Australia’s trade position. We have passed through difficult war years, which have produced considerable chaos. We have been over-loaded with controls. But very shortly we shall have to face the stark reality of our economic position. We see evidence of it to-day in the dollar stringency, and we shall only make the position worse for Australia if the Labour party, which is in power in the Parliament to-day, throws overboard a policy that has been of great benefit over the years. Whether the Government knows it or not, that is what it is doing. If one reads this mumbo jumbo of words and the attached schedules, one cannot help but agree with such an eminent lawyer as the Leader of the Opposition (Mr. Menzies), who has confessed himself perplexed and bewildered by the mass of legal jargon, all the escape conditions, and the “ ifs “, “ buts “, and “ whereases “. Are we wise in abandoning the simple policy that we have had over the years? I suggest that the Government should stay its hand. I agree that it is no use making criticisms unless one has remedies to offer. I say that we should not blindly sign this agreement, because I consider that the wool has been almost literally pulled over the eyes of the Minister by the granting of a microscopic reduction of the United States duty on Australian wool.

The Minister confessed immediately on his return from the trade conference that the agreement was far from complete. I quote from a newspaper report of an interview with him at that time -

Mr. Dedman said the International Trade Organization would particularly help Australia through provisions for further economic development of under-developed countries.

Where are these under-developed countries ? -

A few difficult issues had not been settled whenhe left the conference a fortnight ago. These included conditions in which new preference systems should be allowed–

So the whole foundation of our trade has not been settled yet, but the Minister will, no doubt, put his hand to the treaty after this debate has ended - and the exceptions that should be permitted to the general rule prohibiting countries from putting a limit on the quantity of their imports.

Do honorable members know - the Minister must know - that if Great Britain limits its imports from the United States of America, it must also limit its imports from Australia ? When Britain limited its imports of films from Hollywood it had to place a limitation on imports of films from Australia. We must not allow ourselves to be fooled. Let us adhere to the provisions that exist now - a sound commercial reciprocal policy that has been of great benefit to us.

I exhort the Government not to ratify the agreement. It should urge the convening of an Empire financial and trade conference, as I have suggested over and over again. The Minister may say that such a conference has already been held. But the delegates who attended that conference had the charter of the United States of America in their hands, and they were, therefore, on the defensive. The initiative had been taken by the United States. An Empire financial and trade conference should be called together immediately. Australian Ministers - I do not care how many of them go-should tell the perplexed Prime Minister of Great Britain and Sir Stafford Cripps who has been quoted admiringly in this House, and who is doing hig best to pull Great Britain out of its economic muddle, that Australia wants an Empire agreement for the benefit of Empire countries. I am sure that, if they did so, they would be told that the best course to pursue would be that of adherence tq the principle of the existing Empire preferential policy. Time after time, after the conclusion of the Ottawa Agreement, we tried unsuccessfully to make treaties with the United States of America. Therefore, I urge this Government not to ratify the treaty as it proposes to do. It should call a conference for the purpose of preparing an Empire trade charter which, I am sure, would benefit not only ourselves but also Great Britain and other Empire countries.


– I listened with great interest to the address of the Leader of the Opposition (Mr. Monzies) and to the other speeches, including that of the honorable member for Balaclava. (Mr. White), who was formerly a Minister for Trade and Customs. I glimpsed in his speech an indication of the perplexity felt by all of us in relation to this most revolutionary proposal. There need not be an atom of party politics in this discussion, because this matter involves the whole .trading,’ economic and spiritual welfare of Australia, since all three are bound together. The fact that there are two schools of thought on such a matter is a very good thing in a democratic parliament. The fact that decisions have already been made in relation to the trade agreement is also important inasmuch as it conditions what we may have to say in this House. We on this side of the House have come to a realization that this proposed treaty represents a1” dramatic departure from policy, but we have made such departures in the past for the benefit of the nation.

I have read extensively upon this matter in order to inform my mind and I, too, have found difficulty in getting through the welter of words which surrounds the deliberations of international conferences. But what international conference, in its beginnings, has not been unfortunately surrounded by a welter of words? The facts emerge clearly if one perseveres. I have no greater ability in research than have other honorable members, and I have discovered that there is a distinct link between this agreement and the peaceful future and prosperous survival of Aus: tralia as a democratic nation. First I refer to the fact that the United Nations, in deciding upon the outlawry of wau, also in its wisdom decided that there should be trade agreements, because sordid trade wars have occurred in the past and will occur in the future unless something is done to prevent them. If some group of nations can get together and beat out a pattern, which might be tern:porary insofar as its stability is concerned, but which will lead us a little farther- along the road to mutual understanding instead of towards isolation and hatred, the world will be getting somewhere. The whole purpose of these preliminary trade talks - that is all that they amount to - is an extension of the plan qf the United Nations for peace in our time. It is known that the late President of the United States of America, Mr. Roosevelt, was searching, at the time of his death, for some new formula for the promotion of trade agreements between nations of goodwill in order to replace the old towering tariff walls. The Hawley-Smoot tariff wall was the highest barrier ever erected by the United States of America to shut out other nations. As a counter, the British Empire created the Ottawa Agreement. Both arrangements were useful in their own way, but both were also highly dangerous. They have been superseded as the result of modern belief that tariffs are not the be-all and end-all of international agreements on trade. Rather they are the cause of international estrangements and disagreements.

The Leader of the Opposition has asked us to be realistic and to ensure that, in our idealism, we are not outgeneral led by other countries. That would be a poor attitude to adopt at a confer,ence designed to promote international understanding in relation to either peace or trade. Anything that the socialist government of Great Britain does is subject to criticism by the Opposition, whereas any mistakes that have been made by conservative governments in the past are glorified and sanctified in history. One wonders where this Empire collaboration of which the Opposition talks so much should begin. It should begin with an understanding of Great Britain’s immediate problems and an appreciation of the difficulties of its government arising from those problems. There were manyconferences concerning Empire preference before Australia decided to enter into the general trade agreement at Geneva. Before the recent conference was held, there was implicit in the Mutual Aid Agreement an understanding concerning international trade. The facts are stated in the following quotation from the Commonwealth Office of Education Current Affairs Bulletin on Trade and Tariffs : -

One of the conditions of the original lendlease agreements was that nations should reduce tariff harriers when the war ended.. A condition of the Anglo-American loan in 1945 was a promise by Britain that in future she would support any proposal to - reduce tariff’s. eliminate preferences, end quantitative restrictions on trade, ban trade policies which meant selling goods overseas more cheaply than at home, curb “restrictive business practices”, examine critically any proposals for the bulk buying of primary products by governments.

These promises ran contrary to many of the practices of Britain and the Dominions, but Britain needed the loan, and she agreed to support these principles at any international trade conference.

It has been suggested by honorable members opposite that we have gone holusbolus into this scheme, that we have been won over by the brains of Europe, and that we have not defended our right to many existing trade avenues, but it is significant that the various stabilization schemes mentioned in the course of this debate have been adequately safeguarded despite the threat to the implicit in the quotation I have just read. The sale of Australian sugar overseas, for one thing, has been safeguarded ; but that is only one of the privileges reserved to Australia. The principal feature of the “ Gatt Agreement “, the name given over seas to the General Agreement on Tariffs and Trade, is a general erosion of Empire trade preferences. The Minister has, of course, fairly admitted that there has been a general reduction of the Empire trade preference which Australia at present enjoys, and it does involve a threat to the future of the canned and dried fruits industries, a matter on which I shall have something to say presently. As against that, however, reciprocal reductions in tariff rates have been made by other countries in our favour.

The honorable member for Balaclava, who is an experienced man, carried out the administration of his duties as Minister for Trade and Customs brilliantly when he occupied that position, but, from his contribution to this debate, it would appear that he has fallen into grave error in asserting that the United States of America has made no concessions.

Mr White:

– No real concessions.


-If. the honorable member is willing to qualify his assertion by inserting the word “ comparable “ I shall still disagree with him. The duty on fruit pulps has been reduced by 50 per cent., on wool by 25 per cent., on butter, lamb and beef by 50 per cent., on tennis racquets and other sporting goods by 50. per cent., and on eucalyptus oils by 50 per cent. This has been done by the United States of America. In addition, the duty on British woollen yarns has been reduced by 331/3 per cent., on textile machinery by 50 per cent., on sewing machines by 331/3 per cent., on linoleums by 35 percent., on plate glass by 50 per cent., and by a similar percentage on textiles and textile machinery. The Minister referred to the benefits which will accrue to all countries from the general reduction of trade preferences, and Australia must inevitably share in those benefits. In any event, weare properly safeguarded becauseof the condition inserted in the various agreements which provides for the review of any particular agreement where the implementation of its provisions will result in the extinction or obliteration of a particular industry in any country. These escape clauses are numerous and are varied in their application.

After having erected the highest tariff wall in history, the United States of America has come to the conclusion that the imposition of protective tariffs is not the solution of its trade difficulties. The Leader of the Opposition referred to the present dollar situation, and, although he gave the House a very clear analysis of the present position, in the course of which he pointed out the extent to which preferential tariffs impinge on our national economy, is was unable to supply a practical solution of the present difficulty. He suggested that the immediate solution was increased production, and he quoted certain figures in regard to Australia’s production. He said that the world’s present production, compared with that of 1938 and 1939, showed a considerable decline; but surely any one making such a statement should bear in mind that Europe is down and out, that the wheels of industry are not revolving in Germany, that France is still struggling to restore its industries and to regain its markets, and that Asia is in much the same position. “With regard to the figures which he mentioned, and which he quoted as official statistics, I think that they must be received with considerable doubt, because many of the official statistics issued recently have been very jagged, indeed, not so much the original figures but how they are reported in the press.

Mr Bowden:

– The honorable member apparently does not like the truth.


– On the contrary, I am searching for the truth. I believe that some of the statistics quoted are not sound. For example, recent official statistics in regard to immigration were found to be defective, and if any one can prove to me from the meagre figures available that our production has decreased so woefully, or so “disgracefully” - to use the words of the right honorable gentleman - I shall be surprised.

Mr Hutchinson:

– The statistics quoted come from government sources.


– The point is that statistics in respect of a particular year are extracted from their context, and when presented in that way are definitely misleading. For instance, one has only to recall the statistics released by the Com monwealth .Statistician in regard to housing, following the recent census. Those statistics indicated that there were 30,000 empty houses in New South Wales, but when I telephoned the Bureau of Census and Statistics and inquired the’ location of those houses because I could find tenants for thousands of them I was informed that they were not “ empty “ houses, but were without inmates when the census was taken. Apparently many of the inmates had gone to the pictures on that particular occasion. When statements of that kind are released as “ official statistics “ I feel that I would rather rely on plain facts, more particularly when such an important matter as production is involved.

Consideration of Australia’s production must be approached in an informed manner. The honorable member for Balaclava, who was Minister for Trade and Customs in an earlier government, has become so involved in his own formulas that, he can see no way out. He flashes at all proposals made by the Government, and accuses it of leaving Great, Britain in the Kirch. Because the Attlee Government is Labour, in his view everything that it does is done in the wrong way. He forgets that seventeen nations agreed on the principles embodied in the present proposals. Of course, I admit that there were notable absentees at the International Conference on Trade and Employment, which is inevitable when any proposal for reform is being discussed. We all know that the conservative elements were notable absentees during discussions, in earlier times, of proposals for the social advancement of the nation.

Mr McBride:

– The honorable member would not regard Soviet Russia a conservative power?


– I could apply that description to the Russians with as much truth as I could accuse the honorable member of any brilliance. In my opinion the honorable member for Balaclava made a sincere contribution to the debate, but his views are a little outmoded. Now that we have realized that trade is one of the causes of war we must evolve some new formula. Honorable members on this side of the House do not believe that tariffs should he cut to the bone. Our trade balance with America, like that of many other countries, is enormously to our disadvantage and constitutes a serious difficulty. However, the proposals which we are discussing represent only the beginning of a plan, and it is idle for honorable members to complain of the mass of documents and the welter of words in which that plan is embodied. After all, we are paid £1,500 per annum to read and assimilate matter of that kind. Admittedly, consideration of the documents is impeded by a mass of statistics, but the point which I wish to emphasize is that the principal document, which has been treated in such cavalier fashion in this House, may initiate an era of international co-operation and inaugurate a new way of life, not only for Australians, but also for the peoples of the world. If honorable members are going to fracture their forearms pulling the parish pump, or revert to the status of “ roads and bridges members’”, we shall not get anywhere in this debate. It must be realized that whilst the concessions made by America to Australia at the international trade conferences are not magnanimous, they are real concessions and will open the way to the development of substantial trade in markets which Australia has not tapped before.

While I am dealing with this aspect of the matter I ask honorable members to consider the zeal and ability which must have been exercised by Australia’s representatives in order to bring about a reduction of 25 per cent, in the tariff imposed by the United States on Australian wool. The day the Minister for Post-war Reconstruction departed from this country to attend the conference the Australian newspapers reported that a virtual embargo was to be imposed on Australian wool by the United States of America; but as the result of his efforts the duty on Australian wool entering the United States has been reduced by 25 per cent. This result was accomplished notwithstanding the fact that the wool “ lobby “ in Washington with the exception of the silver “ lobby “ is the strongest, most financial and most influential in the United States of America. In the face of that achieve ment I say that the Minister and his advisers did a splendid job. If the immediate benefits which Australia obtains as the result of their negotiations do not appear to be very great, that is only because the comprehensive plan for the development of world trade is a long-range one. If wo cannot sell meat and butter to the Americans straightway it does not mean that the exclusion of those commodities from the American markets is to be a permanent one. During the war we were encouraged to indulge in the pipe dream that this country was to become the major trading power in the Pacific, but a sober revision of that over-sanguine idea was inevitable. Our experience of the post-war world demonstrates all too dearly that we must fight for any markets which we hope to win. In a resurgent world wherein every country hopes to increase its production and gain a larger share of the world’s trade, it is obvious that we must take concessions where we can get them and deal with friendly countries which are sympathetic to our objectives. The conception of Australia obtaining a large share of the trade with eastern countries is a good one, but we must realize that our efforts are limited by our scanty population of 7,000,000 people. In my view we fell into error when building up our secondary industries, by listening to pleas for protection from every industry that used pressure on members, the Minister, or went running to the Tariff Board, But happily, the genuine, courageous Australian manufacturer got a lot of help from the Australian Labour Governments and helped to create employment and develop the nation.

Mr White:

– Manufacturers had to approach the Tariff Board before any such applications were even considered


– But the repercussions, so far as the Australian Labour party was concerned, were drastic. Nevertheless, the plan originated by the”’ Scullin Government to expand our secondary industries was sound, and had it not been for that plan Australia would not have been able to make the contribution which it did during the recent war. I commend to the honorable member for Balaclava the remarks of Brooke-Popham, who should be known to the honorable member, who is a former airman, on his visit to this country after being in charge of the Air Arm in Malaya. He stated that had it. not been for the secondary industries established in Australia we should not have been able to make any worth-while contribution to the war in the South-West Pacific.

The tragic sequel to the strong and rugged fight that the Australian Government has waged in respect of tariffs is that on many occasions its efforts have been sabotaged by the manufacturers themselves. If the opposition parties want £1,000 for the conduct of a campaign for a “ No “ vote on a referendum, it is forthcoming quickly from the various Chambers of Manufactures. In far too many cases Australian products exported to foreign markets are shoddy and are packed in a floppy manner. We have a lot to learn. We have nurtured our industries by means of tariff protection.

  1. view this problem we are debating as. something more than a battle of tactics between the Government and the Opposition; I regard it as an obligation that must be discharged. It will be, to the advantage of Australia and of every other nation jo promote international trade understanding. At present there is more jealousy and jockeying for position than is warranted, but that is understandable in the present state of world opinion. Whilst these plans are in the incubation stage, such things are bound to occur. Britain feels that the formula outlined and the plans being discussed will result eventually in international agreement with regard to trade reciprocity. There was much to criticize in the preference agreements, and there was a great deal that was wrong in the Ottawa Agreement. I have heard of tariff barriers being lowered and of tariff unions being formed. Although the Ottawa Agreement provided for the grant of concessions to Australian meat producers, before the ink upon it had dried a tremendous and increasing market was created for Argentina products. As the Leader of the Opposition said, a. nation goes where its treasure lies. That is as true to-day as it was in the past. The point I am attempting to make is that this problem must not be approached’ in an atmosphere of pinch-penny party politics. The question of tariffs and of a better international trade- understanding has been the subject of much thought b.y brilliant men led by the late President Roosevelt and o’.hers. If the great American nation has decided that a high tariff wall is of no use to it, what good can such a tariff wall be to a small nation such as Australia with less to protect and more to lose.

The outcome of these two conferences may be an agreement of great benefit t<“> the world. At this stage it is easy to point to what has been won and lost, but the picture is incomplete, as the Minister admits. It will eventually be completed, and by its actions this House can contribute to international understanding, reciprocal trade and the usefulness of human beings engaged in peaceful activities in a.11 parts of the world.

Darling Downs Leader of the Australian Country party

– The motion before the House provides an opportunity to debate what is in effect the report to the Parliament by the Australian representative at the recent Geneva Conference. A further conference was convened in Havana to find a method of implementing the tentative decisions taken and the basic principles approved in Geneva. In the absence of a full report on. the Geneva Conference or of any indication of what took place at Havana, this House is placed at a disadvantage. I protest at the Minister’s action in not giving to this House the information, even though it was of a superficial character, that he gave to caucus recently. The preliminary report of the Geneva conference is already obsolete, but, on the other hand, in the absence even of a tentative indication of what happened at Havana or- of the probable result of these discussions, consideration of this matter at this stage is premature. However, the House is called upon to consider the present situation, which may affect seriously the entire fiscal policy of this country.

The general agreement on tariffs and trade presented by the Minister for Postwar Reconstruction (Mr. Dedman) is one of the latest phases of international economic collaboration. It arises from the long series of international conferences and agreements which have occurred since the establishment of ‘he United Nations organization. It is true that the. Havana conference represents a later phase, but we have had no official information from the Minister who represented Australia there.

Mr Dedman:

– It is still sitting.


– Caucus received an interim report from the Minister, and honorable members on this side of the House were entitled to the same information, even though it was of an incomplete and imperfect nature.

Mr Dedman:

– I did not give a report ont he work at Havana.


– The present debate arises from a ministerial statement that is, paradoxically, out of date as well as premature. We have had the Bretton Woods financial conferences; there have been conferences on food at Hot Springs in America as well as on the continent of Europe. We have signed the International Monetary Agreement and we have associated ourselves in the Bank of Reconstruction and Development and in the Atlantic Charter, to lend-lease under Unrra . We have been parties to the Atlantic Charter, to lend-lease, under the Mutual Aid Agreement and to numerous other international agreements. In fact, international activity in these directions has been so vast during the last few years that many Australian Ministers have found it necessary to remain abroad on an unprecedented scale. Yet, in spite of all this, the international situation is far from encouraging. World recovery is still delayed ; there is unrest and dissatisfaction, and suspicion between nation and nation.

I do not suggest that Australia should not participate in international conferences, or subscribe to international agreements. I do emphasize, however, that we in Australia should not be carried away by a spate of high-sounding, technical words in a long and involved international agreement. Before committing ourselves to any such agreement, we should be sure that it will contribute to the immediate solution of specific national and international economic problems. Otherwise, we might find that we have traded our British birthright for a mess of pottage. We must be particula rly careful to inquire in what way agreements made on behalf of Australia and of the Empire are likely to affect the fiscal policy of this country.

The Minister’s statement dealt with two distinct, but closely related matters - the international trade organization, and the tariff and trade agreement. Both are under the auspices of the United Nations, but they are distinct from each other in that the draft International Trade Organization charter has not yet been fully dealt with by the Havana conference, while the trade agreement is to be regarded as a completed document. The Minister, however, has stated that if changes are made in the draft International Trade Organization charter at Havana, it is proposed that relevant parts of the trade agreement will be amended accordingly, unless the parties to the agreement decide otherwise. As there are eight signatories to the tariff agreement, and 23 to the International Trade Organization charter, the confusion which could arise in an endeavour to interpret the relation of the two agreements might land us in a morass of technical difficulties in the matter of interpretation. This afternoon, we heard the opinion of the Leader of the Opposition, an eminent lawyer, who discussed the complex nature of the agreement. He emphasized the involved nature of the drafting, and pointed out that it was not calculated to make the position clear.

In the course of a previous debate, I dealt with the draft International Trade Organization charter, and pointed out the danger to our primary industries which was inherent in some of its terms. From the Minister’s speech, it appears that he is satisfied that the final charter will embrace sufficient safeguards against those dangers. However, I am by no means convinced that his interpretation is correct, and if he is eventually proved wrong the Government will have to accept full responsibility for its failure to protect Australia’s great primary industries.

This leads me to a consideration of the sugar industry, the importance of which need not be emphasized. It is a basic agricultural industry, which, so far as Australia is concerned, is of both national mid international importance. Informed persons in the industry are concerned over several aspects of the charter. While there has been no impairment of Empire preference on sugar, producers are none the less disturbed at the way in which the draft charter has left the way open for an attack upon Empire preference in general. Furthermore, continuation of the embargo upon the importation of sugar, which has existed for more than 30 years, appears to be forbidden under Article 20, Chapter IV., of the re-drafted charter. However, the Minister for Postwar Reconstruction said that, as sugar was included in an international agreement, Chapter VI., and the provisions of Chapter IV.. would not apply. Those engaged in the industry are not so happy about the position, and I understand that their submissions have been placed before the Prime Minister (Mr. Chifley) for his consideration. The Minister should take this opportunity to place the position beyond doubt. This is vital in the interests of the sugar industry itself, and also of the nation.

The International Sugar Agreement provides for export, not import, quotas. There is certainly no provision for nil import quotas, and there is no obligation to prohibit imports. Australia would not be seriously disadvantaged by any attempt to meet the situation by a nil import quota under a new international sugar agreement. In view of the marked decline of sugar exports, it is important that we should be able to use our maximum bargaining power in order to obtain a satisfactory export quota of local sugar when the new international sugar agreement is being negotiated.

Chapter IV. of the draft International Trade Organization Charter should include provisions to permit the continuation of the existing embargo on the importation of sugar. Thi3 embargo should be safeguarded under Chapter IV. of the charter, instead of under Chapter VI., with its commodity agreements, which were not intended to be permanent.

I turn now to Article 27, which is designed to protect the interests of primary industries, including the sugar industry. While the provisions of paragraph 1 (a), of the article apply to the Australian sugar industry, its wording has given rise to doubts as to whether theprotection will continue indefinitely. I should appreciate an assurance on thispoint, because permanent protection isnecessary to the industry. The Minister,, on behalf of the Government, should givethis assurance.

As for the trade agreement, Australia’s main objection is to the reduction of Empire preferences by as much as 30 percent, in some instances. On the credit side, it is provided that certain goodswhich we export will receive similar concessions from the other parties to theagreement. However, we have to ask ourselves what is the position on balance. I believe that we will lose more than we gain as a result of the agreement which the Minister has told us has already been completed. The Minister has indicated that the concessions which Australia hasmade are considered by the Australian Government to be within the capacity of local industry to absorb. I do not know what the primary producers of Australia think about earlier forecasts made by this Government as to the capacity of our various industries. We know that its forecast in relation to the wheat industry was of such a character that consequent restrictions based upon that forecast had disastrous effects upon this country. For the first time in 25 years Australia had to import wheat from Argentina. At the same time it paid some farmers 12s. an acre not to grow wheat. What confidence the primary industries can have in the forecasts of the Government I leave discerning people to assess. According to the Minister the agreement attempts to “ find a way of harmonizing the “interests of those countries with a philosophy of untrammelled private enterprise and those believing in a large measure of government control “. This is akin to endeavouring to reconcile the policies of the Australian Country party and the Liberal party with the socialist policy of the Government now in office. It is like trying to reconcile the conflicting viewpoints of a party that stands for the full blooded individualism of private enterprise with those of a party which stands for full-blooded socialism as practised, by the present Government. It is undeniable that no country with a planned or controlled economy has been able to provide adequately and abundantly for its own people. We have an example of that in Australia to-day where production has declined so seriously that it has been necessary to ration butler and meat. This is the result of a planned and controlled economy. This is in sharp contrast with the free economies of the United States, Canada, South Africa and Belgium which are forging ahead. Their domestic shops are bulging with goods and they are making records exports which the socialist and planned states are using to bolster their own crippled controlled economies. As the Leader of the Opposition (Mr. Menzies) has said, too great an emphasis is placed on distribution and too little on the fostering of production. These international agreements relating to trade describe a form of action to be undertaken with goods when they are produced. The basic necessity of any successful fiscal policy is a. consistent stepping up of production in order that the goods may be produced with which to trade. The Government should deal with first things first, and the best way to facilitate international trade is to concentrate upon the stepping up of production. The British Prime Minister recognized this when he said late last year in the House of Commons -

I must emphasize that the world dollar shortage is fundamentally a problem of underproductivity outside the Western Hemisphere.

According to a recent survey presented to the United Nations Economic and Social Council at Lake Success, the dollar shortage can be eliminated in the long run only by increased production outside the United States and by the willingness of the United States to accept the imports of other countries. The survey concludes that unless action is quickly devised to facilitate increased production of food, a recovery from war destruction and the economic development of under-developed countries will suffer serious setbacks. Obviously, under-production is the greatest bar to free international trade. Our adverse trade balance and consequent shortage of dollars could rapidly be overcome if we exported more goods. We cannot increase our international trade unless we produce the goods with which to trade. Our fundamental problem is to increase internal production. Why waste the taxpayers’ money by sending Ministers on long visits to other countries to discuss trade problems, when, in their absence nothing is done by their departments to arrest the decline of production ? That such a decline is taking place is made evident from the published reports of the Commonwealth Statistician. The Statistician’s figures prove that in 1947 Australia had the lowest recorded number of sheep since 1924, and that there were 15,000,000 fewer sheep in Australia in 1947 than in 1939. These are official figures. If honorable members opposite doubt their accuracy, the Government should appoint a more reliable officer to compile them. I know that these figures will be countered by the statement that there have been severe droughts in Australia since 1924. There have been seasonal droughts; but I challenge any one to bring forward reliable data to prove that droughts have simultaneously occurred all over Australia. Droughts occur in different parts of the country at different times. I took seasonal conditions into account when I selected the period 1924 to 1947. If, during that period, the number of sheep declined by 15,000,000, our wool production declined proportionately. There is no point in claiming that we shall receive £70,000,000 for our wool clip this year. The money value of our wool clip means nothing in that connexion; the quantity of wool produced is the prime consideration. The value of any commodity stated in terms of our inflated currency to-day provides no true comparison with former years. In order to make a true comparison, the monetary aspect must be completely eliminated. The number of dairy cows in Australia declined by 196,000 between 1939 and 1947. Each succeeding year since 1943 has shown a sharp decline. The total number of dairy cows in Australia at present is 4,592,000, compared with more than 5,000,000 some years ago. I come now to the figures with respect to the production of beef cattle which provide a barometer of conditions in our great meat exporting industry. What do these figures reveal?Returns published by the Commonwealth Statistician show that the number of beef cattle decreased from 9,300,000 in 1945 to 9,200,000 in 1946 and 8,835,000 in 1947, -whilst the number of pigs decreased ‘from 1,700,000 in 1944 to’ 1,250,000 in 1947. Returns .published by -the Commonwealth Statistician also show that the total area under crops had decreased in 1947 by nearly 2,500,000 acres .from the area under crops in 1938-39, the last prewar year. In the same period, the area under wheat decreased by 1,174,000 acres.

YARRA, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Last year the wheat industry established a record in respect of both production and .acreage.


– I .shall .accept the Commonwealth Statistician’s figures in preference to those of any other authority; and -if the Vice-President of the Executive Council .(Mr. Scully) quarrels with the figures I have cited his quarrel is not with me hot with the Commonwealth Statistician. Since 3 93S-.3.9, the area under maize has decreased by 64,00.0 acres, the area under hay by 1,2.5.0,000, the area under sugar cane, by 44,00.0 acres, and the area under tobacco by 3,427 acres. Milk production in 1947 was nearly 128,000,000 gallons less than the production in 19,3S-,39, whilst in the ‘ same period butter production decreased by nearly 60,000 tons including a decrease of 7,000 tons compared with butter production in 1946.

Mr Scully:

– The right honorable gentleman himself has “ cooked up “ those figures.


-,I repeat that I have taken these figures from returns published by the Commonwealth Statistician. The. Vice-President of the Executive Council is reflecting upon the integrity of one of the Government’s officers. Since V938-39, the monthly average of factory butter production has fallen by 4,700 tons, the monthly production of beef has decreased from 46,600 tons to 40,500 tons and the monthly production of fresh meat has decreased from 80,500 tons to 74,500 tons. In examining this serious decline’ in the production of primary products, consideration must be given to its effect externally as well as’ internally. For instance, our exports of butter to starving Britain decreased from 120,000 tons in 1939-40 to 50,000 tons in 1946-47’. Let Ministers “ laugh that off “. In the same period, sugar exports were only one- fifth and o.ur Wheat exports were only one-quarter of the exports of ‘those com.modities in 1939-40. Had production in vital primary industries ‘been maintained,, we would have -obtained at least an additional £100,000,000 in respect of our exports of sugar, -whea’t and butter. Further emphasis, if it be necessary, on the importance of increasing production in our rura’l industries was ‘supplied only the other day by a member off ‘the British Food Mission now visiting Australia when he said that ‘ Great Britain could ta:ke 400,000 tons of meat a year from Australian for generations to come. Actually, however, our exports of beef in 1946-47 totalled only 80,500 tons of Which 68,000 tons was sent to Great Britain, whilst our total exports of mutton and lamb were 73,340 tons of Which 69,800 tons were sent to the United Kingdom. An analysis of our export position generally in respect of the period to which I have referred reveals an immense decline in our external trade.

Mr Scully:

– Sufficient shipping is not available to transport 100 per cent, of the commodities available for export.


– We are told that ships cannot be provided to take away orv exports. Why is that? The Leader of the Opposition (Mr. Menzies) gave the reason when he pointed out that: ships are not making a reasonable.turn-around, because the waterfront policy in this country is dictated not by the Government but by a Communist coterie which is runningthis country into the ground; and that fact reflects itself in the serious declineof production in this country as shown, by the figures which I have cited from returns published by the Commonwealth Statistician. When the Government talks, about trade agreements and how it sendsMinisters to various conferences overseas, involving their absence from this country - for months at a time, is not one entitled to ask whether the Government is not. neglecting its responsibilities? Are wenot justified in reminding the Governnent that in this matter charity begins at. home ?

Sitting suspended from 6 t’o S p.m.


– Every one- with any knowledge of our great dairying industry realizes! that dairy herds cannot be established overnight. If our dairy cattle numbered nearly 200,000 fewer in 1947 than in 193.9, the Government should heconcerned. It should cause a serious survey of the. position to be made with a. view t’o» remedial action not only for the internal welfare of Australia but also so that, we shall be able to honour our obligations to provide food for tha starving, people of Great Britain and: Europe. The decline of beef cattle is. also most alarming. The beef export industry is important to ourselves and to the: people overseas who want food. One can imagine how little: beef we should have sent/ overseas* had: it not been for meat rationing in. Australia.


– Order ! The right honorable member’s- time has expired.

Motion (by Mr. Chifley - by leave - agreed to -

That- so much of the Standing Orders be suspended as would; prevent the right honorable member for Darling- Downs (Mr. Fadden) from concluding his speech, without interruption.


– I thank, the Prime Minister. (Mr. Chifley) and honorable members for their, courtesy. The principal commodities exported in smaller, quantities from Australia in 194.6-47 were butter, hams, bacon, pork, currants, fresh apples, wheat, sugar, hides, rabbit and sheep skins, tallow, coal, zinc concentrates, tin ingots and zinc bars and blocks. Despite existing tariff barriers, if we had “the incentive- to produce, we could readily sell* to- the United States of America, tallow, zinc, lead, silver, rabbit skins, mother of pearl, hardwood, railway sleepers, leather; brandy, whisky, lambskin coats and mats and even ink and gelatine. Unfortunately, the incentive to produce is lacking and. the cause is not difficult to. discover. I know that the Prima- Minister anticipates what I am -about to. say. Everybody knows that the hurden of unnecessarily high taxes in this- country is having a disastrous effect on the incentive to produce. Indeed, there- is an economic point beyond which, the taxpayer’ will not produce. Whether that’ attitude is- wise is not relevant to this discussion. The fact, remains that people will not produce,, nor1 will they exert themselves and risk: their capital while taxes are so’ high. The. effect may be. seen in the decline: of production.

Trade- agreements on. an international plane become1 almost completely ineffective if government departments^ are: permitted to exercise complete control over exports and imports- by the. administration of internal laws; Honorable- members know perfectly well’ that the acute dollar position necessitates the imposition of, certain controls and restrictions; in this country.. Consequently, merchants who propose1 to engage in international1 trade must- obtain import licences’ or- export permits, submit to quota restrictions, and abide: by treasury control of dollars and exchange. Because of the doll’ar- position, these powerful barriers to international trade, cannot be eliminated. The- doll’ar position has- -arisen- as the result, of’ the lack of incentive- to- produce. Lack of incentive has- caused! a decline of the production of all those commodities which I have named which should be available for sale to the dollar area. If the Government is not prepared to eliminate these powerful internal restrictions, its bona fides in subscribing to international trade agreements must be suspect.

The position, as I see it, is paradoxical. While taking part in international trade arrangements, Australia is imposing- all possible internal restrictions on production. As I have emphasized, production is declining, people lack the incentive to produce, and restrictions are imposed upon the sale of those goods, that are produced. Ho.w Australia, under such conditions, can fulfil its responsibilities in regard to international trade is beyond my comprehension. Whatever may be said’ in favour of the General Agreement on Tariffs and Trade which we shall be asked to ratify, in the near future, and the elements of which we are discussing this e veiling, it is a simple and undeniable fact that the principle of Empire, trade preferences has -been abandoned. In future> Australia’s trade will be- determined largely by an international organization in which this country, being a small nation, will have comparatively little voice and little representation. In many instances an Empire bloc “will be impossible. If Great Britain is obliged to restrict its imports of tobacco from South Africa to the same degree as it is compelled to restrict its imports of tobacco from the United States of America on account of its internal economy, how will it be able to co-operate with that Dominion in the development of its tobacco trade? The conditions governing the granting of the American loan to Great Britain demand that Great Britain shall give consideration to the importation of American goods. But its economy compels it to restrict as far as possible the value of imports. If Great Britain is obliged to restrict its imports from the United States of America, it must also consider the restriction of its imports from the Dominions. Obviously, the United States of America had much to lose if the international monetary agreements had not been reached, if a loan had not been granted to Great Britain, and if international trade agreements had been signed. When I make that statement I do not overlook the value of the loan to Great Britain, and, thereby, its value to Australia, but honorable members must recognize that every one of those arrangements was, in some respects, an endeavour to overcome the dangerous trend which American post-war export trade was assuming. In 1946, although the United States of America had a huge export trade, only 50 per cent, of its overseas sales were met by foreign purchases. However, the favorable trade balance of the United States that year did not unduly drain foreign countries of their holdings of gold and dollars, principally because of the availability of loans which were granted and gifts which were made by the United States Government. We all know that certain loans were granted and certain gifts were made to various countries on the condition that they traded with A.m erica.

The general pattern of the export trade of the United States of America in 1947 resembled closely the balance of payments in 1946. At the end of 1946 the Export-Import Bank held 900,000,000 dollars of uncommitted funds, and there were 4,000,000,000 dollars in the Inter- national Monetary Fund. These largethough limited funds were expected tomaintain the level of United States exports for some time. Some countriesaccumulated dollars during World War II., but they have steadily dissipated those balances, and the value of newly-mined gold by most countries other than. America is strictly limited. Consequently, . a considerable proportion of American, prosperity is being maintained by the artificial means of overseas loans and gifts. Export trade has been encouraged along these lines, and the condition has been made that the countries concerned’: shall use the loans and gifts for the purpose of trading with the United States of America. America realizes that these artificial means cannot be continued indefinitely. The American nation wasfaced with the problem that within a relatively short period its refusal to accept’ more imports would merely result in its inability to sell and be paid for its export” surplus. In that event, history would repeat itself. Unemployment would become widespread and a partial financial and’ economic depression would follow. The scarcity of American dollars would mean a. surplus of American shipping, tonnage,, because United States ships would be unable to obtain cargoes except thosebasically for that nation’s own consumption. They would look in vain for dollarfreights at intermediate ports, because - there would not be any dollars to pay forell cb foreign port-to-port transport.

The huge dollar loan to Great Britain., has been virtually exhausted, and that country is now unable to pay its way tothe extent of hundreds of million poundssterling yearly. These conditions, essentially resulting from Great Britain’ssupreme war effort, gave to the United States of America a powerful ‘lever “with, which to break up Empire preference indirectly, if not directly. As a condition to the granting of the loan, Great Britain was required not to discriminate against the United States of’ America in . favour of imports from other countries. . For the purpose of illustrating the effect of that condition, I have already cited the position regarding South African tobacco. . The scarcity of dollars is reducingAmerican sources of supply, and ‘ these– non-discriminatory provisions are operating to prevent Great Britain from importing alternative similar goods from within the sterling bloc, and more particularly from within the Empire. These restrictive provisions in the American loan agreement comprised the first step towards the effective limitation of Britain’s ability to relieve its dollar shortage by calling upon Empire sources for goods, many of which were subject to Empire, preferential tariffs. The second weakening step has now occurred. In a substantial percentage of cases, British preferences are actually being eliminated. No doubt, insome measure, we are surrendering these valuable rights because of American pressure ; yet, we have a powerful counter argument in favour of Empire countries which, so far as I am aware, has not been pressed. If the United States of America expects to maintain its prosperous export trade, to have a high level of employment, and to receive current payments from abroad, its only course is to continue to increase its imports. An apt simile would be that of a poker game, in which one player eventually wins all the “ chips “, so that if the game is to continue hemust either lend or give to his companions sufficient finance to carry on. That istheposition in which America finds itself today. It has ample resources. It is competing against the very countries that have to pay for their imports from America, and, consequently, unless America increases its own imports, there cannot beafree flow of international trade. It would be fatal for America’s internal economy to adopt the policy of increasing tariffs and imposing other obstacles to the freer flow of goods into the United States. It is historically significant that periods of good business and wide employment in America have always coincided with high levels of imports.The greater the imports, the greater has been the prosperity. Consequently, the successful adoption of the decisions of the conference in relation to tariffs and trade agreements is of vital importance to America, even from the viewpoint of its internal economic conditions. If this argument be correct, then it appears that we should have been permitted to participate in these international trade agreements without sacri ficing Empire preference to the extent that is now proposed.

I emphasize that the criticisms that I have to offer of the United States of America in relation to the International Conference on Trade and Employment and the present state of world affairs are only in respect of the economic policy of that country. The Empire needs all possible co-operation and assistance from the United States of America, but we must not be heedless of the danger of being delivered into the hands of a large monopoly, which could easily happen in view of our present fiscal position. I submit that the Government must give serious consideration to the necessity to arrest the production drift in this country. Every pressure must be exerted towards speeding production, because only by producing more goods can we provide the wherewithal to maintain the stability of both our internal and external economy. Production, too, is the measuring stick for governmental activity, social services, and business prosperity generally. I remind honorable members that the figures that I have quoted in relation to the decline of Australian production are those of the Commonwealth Statistician. They are most alarming to anybody who gives serious attention to them. Not only do they reveal dangerous dissipation in our primary industries, but also they forecast grave dangers to our secondary industries which depend upon primary production for raw materials. Continuity of the supply of raw material is absolutely essential if our secondary industries are to produce the goods required not only for local consumption, but also for export. Undoubtedly there is something wrong “ in the state of Denmark “. Drastic remedies may be necessary to counter our production drift. Too much consideration is given by this Government to distribution and too little to production. If it would give to production one fraction of the consideration that it gives to other less important matters including social services which, in the ultimate, depend upon the productivity of this country, the economic well-being of Australia, both nationally and internationally, would be far better served, and we would be in a much better position to bring influence to bear upon other nations, in ‘the making of trade agreements, thus increasing the benefits that we derive from such undertakings-.

Prime Minister and Treasurer · Macquarie · ALP

Mr. “Speaker—

Mr Lang:

– I rise to order. I do not wish to deny the Prime Minister (Mr. Chifley) the right to speak on this matter, but I draw your attention, Mr. Speaker, to the fa ft that the House is at present discussing, ‘three orders of the day together. The first involves a motion by the Minister for ‘Post-war Reconstruction ; the second a motion by the Minister for Commerce .and Agriculture; and the third ;i motion by the Prime Minister. I submit that if any of these gentlemen speaks in this debate, further discussion will not be possible, for such a speech, being in reply, will .terminate the discussion.! appreciate that the House agreed .earlier to-day that the Leader of the ‘Opposition (Mr. Menzies) should be permitted to discuss the three matters together ; but I should like a ruling as to whether it is possible for any of the three Ministers to address the House without truncating the debate.

Mr SPEAKER (Hon J S Rosevear:

– Technically there is something in the point the honorable member for Reid has raised, but as the House agreed unanimously earlier to-day that three items should be discussed together, I do not think i’. is incumbent upon any honorable member addressing the House to nominate which of these matters he is referring to. Therefore, any honorable member or Minister may speak on any of the three items without necessarily closing the debate upon it and I believe that the Chair would be quite safe in permitting the Prime Minister to proceed. No previous speaker .has declared his intention of speaking to any one of “the three items in particular. It has been a general discussion. The Chair will not regard the debate as being closed if the Prime Minister speaks.

Mr Lang:

– I have no objection to all three Ministers speaking so long as in doing so they will not close the debate.


– It is quite clear in my mind that any honorable member may traverse the whole of the ground covered by the three items. The only reason for the existence of the three items is that, although -they deal largely with .onesubject, they were introduced into theHouse at different times. The honorablemember for Reid may accept my assurance that a -speech by the Prime Ministerwill <not deprive other ‘members :of their right to address the House.

Mr Lang:

– Does that apply to the other Ministers too?


– Yes.


– I thank you for your miling, Mr. Speaker. I should not have risen to speak but for the fact that the -debase seems .to have been confined to .local tissues, with .a total disregard of: the .great world issues that tare involved.. [ want honorable members ‘to take their minds away such ,questions aswhether ships are being turned around as fast as ‘they might he or whether there are110 w ,as many people .employed on primary production as there were before the war. There is an. answer to those questions -and! others like them. .1 say, in passing, .that he great struggle which democracy ishaving to-day to ‘Combat the inroads “of communism is due to the fact that the conservative interests of “the world havefertilized .the -.soil in which communism lias grown over ‘the -centuries. TheLa’bour -party is just as concerned about production as is any other party. It isactuated not so much , bv political ‘motivesits by a desire to satisfy the need of thegreat “.mass of the people of Australia for essential goods and to make the utmost possible contribution to -the welfare of other peoples of the world, many of whom are starving. That is not a political creed ; it is a humanitarian creed. Ourdesire is to do the best we can to assist the world in the difficult -position that itis in to-day.

  1. shall not attempt to discuss all theminor points about local affairs that havebeen raised in this debate. In fact, I had hoped that the debate would give honorable members an opportunity to leave the political alleys alone and to traverse a somewhat higher plane of thought in dealing with world affairs. One has to ‘cast one’s mind back overevents of recent years in order to realizethe source from which the Geneva tradeagreement and other matters which we- are discussing have sprung. I recall the state of .affairs’ in 1941-42, when the people of Great Britain were standing almost alone against the enemies of democracy, as they had been doing from the earliest stages of the war. Some method had ‘to be devised to secure help from the United States of America, and I think the idea developed in the mind of President Roosevelt himself. It had to be something which, to use the vernacular, he -knew -he would be able to “.sell “ to ‘.he American ‘people. Out of this idea grew at various (times the Atlantic Charter and the Mutual Aid Agreement, which resulted in the lendlense activities.

I look back on those days as one who has been closely associated with the affairs of government and I am able to realize the very difficult position in which the “United Kingdom was situated and in which Mr. Churchill, the -then British leader, found himself in fighting for the preservation of his country. Unless the United Kingdom and the Dominions had been able to obtain large quantities of arms and goods from the United States of America and to take advantage of the great industrial, financial, and manpower resources of that country, it is very doubtful whether we- could .have won the .war. Civilization itself .might have been destroyed. The Atlantic Charter, and the Mutual .Aid Agreement, which includes Article VII., all arose from discussions between President Roosevelt, of the United States of America, one of the great men of history, and Mr. Church-ill, who, whatever differences of opinion we may have about his politics, we acknowledge to have been a great war leader. I do not want to take from him any credit that is his due. That is why I had hoped , that this debate would have been kept away from the ordinary petty, political, parish-pump topics which can more suitably be discussed at other times.

I do not believe that Mr. Churchill was ever anxious ,to have Article VII., relating to tariff revision, included in the Mutual Aid Agreement. The book written by Mr. ‘Elliot Roosevelt, son of President Roosevelt, seems to indicate, as do other accounts dealing with the two leaders, That Mr. Churchill was not very keen on any such arrangement, because he realized that Imperial preference could very easily be affected by any contract that provided for the lowering- of tariff barriers throughout the world. He is an experienced politician. He knew that the United States of America had always looked with strong disfavour on Imperial preferences, and he knew also ‘that thi; Dominion of Canada had never been keen on contractual Imperial preference obligations. I think I may thus interpret the utterances of the Prime Minister of Canada, who. has been the leader of that country for a long time, without committing a political libel. I do not say that he did not believe .in some sort of Dr’>ference, but it is evident that he has never been enthusiastic about being ‘bound by contractual obligations.

President. Roosevelt had great political problems in his own country at that time. For a long time, the policy of a great majority of the people df the United States of America had been to “ keep out of Europe “ - not to -engage in any conflict on that continent, either militarily or otherwise. Therefore, President Roosevelt had’ to offer to his people something in return ‘for what was one of the most :generous gestures in history - the provisions of lend-lease under Mutual Aid Agreement. On the other side in .the bargaining we had a great leader in Mr. Churchill, who realized the desperate straits of his country. He knew that the United Kingdom had been selling its foreign securities for the purpose ‘of obtaining credits, and that this reserve was becoming rapidly depleted. Indeed, the United Kingdom had to make its purchases abroad on a cashandcarry ‘basis. Mr. Churchill knew that if this situation continued there could be only one end - that Great Britain could not carry on the war. It was very doubtful at th’at time whether 60 . per cent, of the American people were in favour of participation in a European conflict. Confronted . with these tremendous problems, Mr. Churchill and Mr. Roosevelt agreed to insert in the lend-lease agreement the conditions contained in Article VII., which provided that consideration was to be given after the war to a .general reduction of tariff barriers. ~No doubt Mr. Churchill agreed to that provision reluctantly. At that time Australia was in a most desperate position, and it had no alternative but to join in the undertaking given to the United States by the United Kingdom. At that time the United Kingdom could not help us because physically it was incapable of doing so, and it was only because of the volume of aid supplied by the United States in the form of personnel, aircraft, equipment and services that Australia was not invaded.

Mr Rankin:

– That is nonsense.


– It is all very well for honorable members to say that now, but I think that most of us who have any knowledge of the war in the Pacific realize that Australia came very close to invasion. Indeed, Field Marshal Wavell points out in his despatches, which have just been published, that a large number of aeroplanes were sent to this country at that time which he considered should have gone elsewhere.

Mr White:

– Where did Australia agree to a reduction of tariffs?


– I am simply asserting that Australia was a party to the Mutual Aid Agreement, and in saying that I am merely stating a fact. In the circumstances prevailing at the time the action taken by the Australian Government was completely justified. Of course, if the matter had been left to us, we should not have initiated a conference to discuss the lowering of world tariff barriers, but, as I said previously, we were under an obligation to do so. Morecover, other factors entered into the matter. The United Kingdom desperately needed a reduction of world trade barriers if its economy were to survive in the aftermath of war. The Australian Government realized fully the position of Great Britain, and because of that, and because of our contractual obligation - or, should I say, moral obligation - we agreed to the provisions of Article VII. of the lendlease agreement. In any event, the point of view of some of the other Dominions was opposed to ours. Canada, for example, was most anxious that a conference to discuss Empire trade preference should be convened. It does not matter what honorable members say now about production. At that time responsible people in the United Kingdom, irrespective of their political beliefs, did not believe that Great Britain could survive economically after the war unless it could export more goods into dollar areas. Tariff barriers had to be lowered to enable it to export to countries outside the Empire so as to compensate for the loss of its investments. It must be realized that during the war Great Britain lost a large number of its overseas investments, and was importing 50 per cent, of its imports from “ hard “ currency, or dollar, areas. Furthermore, I think that members of the Government of Great Britain believed that unless the United Kingdom received something similar to the American loan, which was later granted to it, it would not be possible to maintain even the lowered standard of living endured by its people during the war. At that time it was idle to speculate on what Canada or South Africa might do after the war; the plain fact was that unless Great Britain received a loan such as that made to it later, its position would be unthinkable. The terms of the American lo:::i were not ungenerous. Certainly, they contained provisions with regard to ‘ non-discrimination “, a matter which been mentioned by the Leader of the Australian Country party (Mr. Fadden) ; but it must he remembered that the President, the Government of the United States and particularly the Department of State, had to “sell” the AngloAmerican loan to the American Congress. That loan had also to be approved by the United States Senate, which approval could not easily be obtained. I was in Washington with Mr. Clayton, one of the officials whom the President had deputed to secure the passage through Congress of the proposal, on the day members of the Senate cast their vote on the legislation to authorize the loan, and I know that its passage was no easy task. The legislation was not carried on a party vote; indeed, it was carried largely on the votes of senators of the political party which opposed the Government. Had that legislation not been passed, I dread to think- of the position which the United Kingdom would be in to-day, more so when one remembers the tremendous task of rehabilitation’ which confronts that country, and, indeed, the whole of Europe. I go further, and without wishing to arouse any panic or unnecessary anxiety, I say that if the legislation to implement the “ Marshall aid plan “ is not enacted the economic position of Great Britain will be most difficult before the end of the present year.

Honorable members are putting forward many ‘ proposals, but ultimately they will be found to relate one to another. No doubt, the Leader of the Australian Country party believes that he can tell the American public what is good for it, but the fact remains that the public does not always take notice of its own political leaders, and it is much less likely to listen to outside advice. The people of America, like those of any other country, have to be convinced. After all, politics is politics, and presidents cannot continue in office unless they have a majority of parliamentarians to support them. So it is of no use to talk nonsense. The people of the United States of America had to be convinced that something constructive for the world was being done, and the existence of tariff barriers and Empire preference was a. bugbear to them. That sentiment had to be overcome by the United States Government before it could hope to receive support for its proposals in Congress. Australia participated in the International Conference on Trade and Employment for three main reasons. In the first place, we were morally obliged to do so because of Article VII. of the lendlease agreement, and, in any event, we wanted the benefit of the favorable provisions of that article. Secondly, the British Government was convinced that an agreement, such as was eventually reached at the conference, was absolutely essential to its economic existence; and finally we had our own privileges to preserve.

I wish to pay a tribute to the members of the delegation which represented Australia at that conference, and in. particular to the much-maligned public servants, of whom we hear so much criticism from time to time. Approximately twenty of them were engaged on the preparation and presentation of Australia’s case before and during the conference, and they did a magnificent job. Three Ministers were associated with myself in the conduct of negotiations, the Minister for Post-war Reconstruction (Mr. Dedman), the Minister for Commerce and Agriculture (Mr. Pollard), and the Minister for Works and Housing (Mr. Lemmon). We spent many weary days in consultation, although our efforts comprised only a tenth of the contribution made by the departmental officers concerned. I am convinced that our representatives accomplished something really worth while, something at least comparable with the achievement of the British delegation. It was no easy task to assist the United States Government to convince its people that it was justified in doing things for other countries. Australia has suffered no real loss as a result of the agreements or the tariff schedules that will be discussed later. It has played, its part in world affairs and has contributed to the assistance of Great Britain. I hope that honorable members who speak later will take the broad view that it is necessary to take in order to understand the events that led up to the Geneva agreement. I do not propose to discuss the draft charter, but only matters arising from the tariff agreement now being discussed in general terms. I ask honorable members to bear in mind that what is being discussed forms only a part of a great plan which had its origin in the discussions between the late President Roosevelt and Mr. Churchill, and that it is related to the AngloAmerican loan agreement, and is associated with the Marshal plan for the expenditure of vast sums for the relief of other countries. There is a great need for that help to be given. The Leader of the Australian Country party (Mr. Fadden) spoke of production. The fact of the matter is that American production to-day is enormous; it amounts, I understand, to 55 per cent, of the total secondary production of the world. Because the United States sold three times as much as it bought, the .dollars needed to purchase the goods it -produces are not possessed by other countries.

Mr Rankin:

– Tell us the story of Bretton Woods.


– If I were to deal with these matters point by point in their proper sequence I should need to detain the House for hours.

I did not intend to speak on this subject until I heard some of the speeches made bv honorable members which dealt solely with local issues. We may talk of our personal problems, but it should be realized that the future welfare of the masses of the people of this and other countries is to a large extent wrapped up in the solution of the world economic problem. Australia can play only a small part; it can only show complete willingness to do all it can do to help. It is all very well to scoff at theorists and idealists, but many ideas of great benefit to the world were conceived by people with ideals.

The fact that there seems to be an almost insurmountable barrier to overcome is no reason why those who lead nations should not attempt to surmount it. I realize the present situation of the United Kingdom probably as well as any one in Australia, and I know the extent of the economic assistance that is needed from the United States of America. I have an appreciation of the great difficulties confronting those who govern the United States, which is a country in which there are many conflicting in ter reyts and many pressure groups. Human nature being what it is, there is much difficulty in obtaining approval to measures such as the Anglo-American loan agreement and the Marshall plan. In this world one cannot take all and give nothing. Australia has not given very much materially, although wo have contributed a great deal through the industry and ability of our representatives at international conferences.

The Minister for Post-war Reconstruction (Mr. Dedman), who is steeped in this matter, will deal in detail with the various points that have been raised. I rose because I felt that the great issues should be brought to the notice of those people who seem only to be concerned because the turn-round of ships in Brisbane, for instance, is not as- quick as it might be. Those troubles are occurring throughout the world, which is in a restless, troubled and uneasy state. The least that we can do as a Parliament and as leaders of the people is to give a lead and present to the people what we believe to be a balanced view, even though it may ultimately prove to have been entirely wrong. The Leader of the Opposition talked of multilateral agreements, We only won the war because we entered into such agreements. If ever there was a great multilateral agreement, it was that which existed between the allied nations during the war.


– The Prime Minister (Mr. Chifley) has surveyed the events leading up to the discussions that resulted in the draft agreement at present before the House. The right honorable gentleman’s remarks were partly a plea to debate the subject on a high plane and partly a criticism of honorable members on this side of the House because they had applied themselves to some of the details contained in the draft agreement and had remarked on their possible effects. We on this side of the chamber are fully aware of the events that led up to the proposals now being considered. We appreciate fully the high principles that actuated those responsible for those proposals and realize that Australia must play its full part in any negotiations for the rehabilitation of international trade. In order to play our part properly, it is essential that wc should apply our minds to ensuring that the provisions of any agreement arrived at are such as to enable Australia to provide for its own rehabilitation so that it is in the best possible position to play a major part in world affairs. We should be doing a disservice to the high principle’s underlying these negotiations if we assented to provisions that, because of their operation on the Australian economy,’ hampered our development and hindered us in our desire to become an important factor in world affairs. I contend, therefore, that in this debate we must apply ourselves to any provisions that we believe will hamper Australian development or react unfavorably on the Australian economy. It is on that basis that I propose to address the House.

During the discussion on the original draft charter, I dealt particularly with its effect on the sugar industry. I stated that the economy of the industry might be said to rest upon four pillars, each one of which was seriously menaced by some of the provisions of the charter. Now that we have before us a revised agreement, it is natural that I should apply myself to those four main principles, in order to see whether the dangers which existed in the former draft have been avoided. In some respects, the revised agreement is a considerable improvement. One of the main supports of our sugar industry, as of all primary industries, is Imperial preference. In the statement which the Minister for Post-war Reconstruction made to the House in November last he said -

The effect of Article 16 of the draft charter is to preserve intact the existing British preferential system. There is no obligation anywhere in the draft charter to reduce or eliminate any margin of preference except by agreement of all the parties concerned.

I am very happy to see that the Imperial preference which the sugar industry has enjoyed for so many years has not been affected by the present agreement; but I am fully aware of the fact that this happy state of affairs is due, not to any protective provisions in the agreement itself, butto the fact that the “United States of America has granted .such a large measure of protection to its own sugar industry that it could not, in honour, demand that Imperial preference on British colonial or dominion sugar should be interfered with. Therefore, I cannot accept the statement of the Minister that the agreement, as it stands, preserves intact the British preferential system. One has only to realize that the proposals before us provide for the reduction of duties on certain items, and for the partial elimination of the British preferential system, particularly in regard to fruit, to understand that the agreement does not, in fact, preserve the preferential system. Article 16 of the agreement deals with preferences, and paragraph 2 is as follows : -

The provisions of paragraph 1 of this Article shall not require the elimination, except as provided in Article 17, of any preferences in respect of import duties or charges. . . .

Then we must turn to Article 17 in order to see what is meant. Article 17, shorn of its formal verbiage and padding, and applied to the matter under discussion, contains the following relevant passage : -

Each member shall, upon the request of the Organization, enter into and carry out with such other Member or Members as the Organization may specify, negotiations directed to the substantial reduction of tariffs and other charges on imports and exports and to the elimination of the preferences referred to in paragraph 2 of Article 16 on a reciprocal and mutually advantageous basis.

Is that not plain enough ? It says that every member “shall” enter into, and carry out, negotiations directed to the elimination of preferences. There are some qualifying clauses, not one of which has the effect of modifying the direct mandate. In fact, one provides that no margin of preference shall be increased. Does Article 17 preserve intact the preferential system? There can be only one answer to that. Taking it in conjunction with the fact that the fruit industry has already lost some measure of Imperial preference, it must be conceded that the agreement, if adopted, will lead, eventually, to the total elimination of Imperial preferences.

Mr White:

– The Minister misled the House about Article 17.


– Well, I have read the article, and honorable members may judge for themselves. If the Government, ns the result of its negotiations with other countries, has arrived at the conclusion that, in order to assist Great Britain, and to develop Australian industry, it is necessary to forgo, in part, the system of Imperial preferences, let it say so. Industry in this country would then know where it stood. There is no excuse for the Minister reporting to the House that the agreement as it stands does not affect Imperial preferences.

Discussing the embargo on the importation of sugar in relation to the international sugar agreement, the Minister for Post-war Reconstruction said - lt will be noted that sugar is subject to an international agreement, and, consequently, comes under the provisions of Chapter VI. The import embargo and other devices used to protect sugar are, therefore, not called into question by the draft charter.

The inclusion in that statement about the import embargo in relation to the international agreement, and the use of that word “ therefore “ suggests to me that the Minister believed that these two factors were bound together. It was because of that belief in his mind that he’ said that the import embargo and other devices were not called into question by the draft charter. I wish I could accept that statement, but I cannot do so. This matter is of the utmost importance to the sugar industry, which, in turn, is of great importance to Australia, particularly in relation to the development of the north. On no account must the embargo be removed.

Let us see what happens to it under Article 20., which deals with the general elimination of quantitative restrictions. Paragraph 1 says -

  1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences, or other measures, shall be instituted or maintained by any Member on the importation of any product of any other Member country or on the exportation or sale for export of any product destined for any other Member country.

That is exactly what we are doing. We are prohibiting the importation into Australia of the products of other countries. There follow certain qualifications to that direct statement, none of which affect the Australian embargo. It would appear therefore, that under Article 20, the embargo on the importation of sugar into Australia is definitely and directly menaced. At the commencement of the trade discussions last year I was informed by one of the senior officials that that paragraph of Article 20 meant the eventual wiping out of the embargo. It may be contended that there is an escape provision which will enable us to overcome the effect of Article 20 and I believe it was to that provision the Minister referred when he contended that the embargo will not be called into question. The “ escape “ provision is contained in Article 43 which provides general exceptions to Chapter IV. Let us see whether it provides the escape from the danger involved in the provisions of the previous Article. Article 43 reads -

Subject to the requirement– and here again is one of the qualifications which must be read very carefully - that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Chapter shall be construed to prevent the adoption or enforcement by any number of measures :

  1. undertaken in pursuance of obligations under inter-governmental commodity agreements concluded in accordance with the provisions of Chapter VI ;

The Minister believes that the wording of that provision would enable us to bring the embargo under the provisions of the International Sugar Agreement and so enable us to get away from the provisions of the charter. Can we honestly contend that our action in preventing the entry of sugar into Australia is not an arbitrary or unjustifiable discrimination between countries in which the same conditions prevail ? We may have some difficulty in doing so. There can he no doubt that the embargo on the importation of sugar into Australia constitutes a restriction on international trade and there is no disguise about it. On this ground it is doubtful whether Article 43 provides the escape from the provisions dealing with quantitative restrictions. Allowing that point to pass, let us turn to Chapter VI. as the result of operation of which the Minister believes the embargo will not be called into question. Chapter VI. deals with inter-governmental commodity agreements in general. Articles 52 to 57 deal with various preliminaries, such as definitions of commodities, objectives of inter-governmental commodity agreements, commodity studies and commodity conferences. Article 58 defines the types of agreement, and it is upon that Article that the safety of the embargo may rest. Article 58 reads -

  1. For the purposes of this Chapter, there shall be recognized two classes of intergovernmental agreements -

    1. commodity control agreements as defined in this article; and
    2. other inter-governmental commodity agreements.

Which, I believe, would include the International Sugar Agreement. Paragraph 2 provides -

Subject to the provisions of paragraph 5 ot this Article, a commodity control agreement is a inter -governmental agreement which involves -

the regulation of production or the quantitative control of exports or imports of a primary commodity and which has the purpose or might have the effect of reducing, or preventing an increase in, the production of, or trade in, that commodity ;

That definition, in some respects, accurately describes our embargo. The first requirement of a commodity control agreement is that it shall be an intergovernmental agreement before it can come within the scope of this definition. The embargo on the importation of sugar into Australia is not an intergovernmental agreement within the terms of this charter. That is where the protection the Minister believes to be afforded to the embargo falls down. The embargo is purely a domestic matter. It cannot be related at present to the International Sugar Agreement, because it did not come into the discussions that preceded the making of that agreement in 1937, nor was it endorsed in that agreement. If it is desired to provide for the retention of the embargo under this article, the first requirement is to bring the embargo within the scope of the charter by making it an inter-governmental commodity agreement. That would take it right out of the realm of domestic politics and throw it into the arena of world politics, which may be a very foolish move. Let us consider what such a course might mean to the industry. Tt is well known that immediately world sugar affairs approach normal it will be necessary for. Australia to submit a case to an international conference for the retention of its present place as a. sugar exporting country. As honorable members know, as the result of the 1937 conference, Australia is entitled to a quota in the world markets of 400,000 tons. Undoubtedly, at the next conference, Australia will be faced with a bitter fight to retain, much less to increase, that quota. If this article remains as it is, the industry will also be faced with the necessity for putting up a fight to retain the principle of the embargo against countries which will not be disposed lightly to grant, that right. To rely on this article and this charter for the protection of an embargo of such importance to the Australian sugar industry is entirely unwise. I strongly recommend to the Government that it give further consideration to this matter. I believe that the opinion expressed by the Minister in his statement arose from a lack of appreciation of all the factors involved. He would be well advised to provide more definitely and radically for the protection of the embargo under Chapter IV. and not under Chapter VI., which obviously contains articles of a temporary nature designed to tide over the years until world conditions return to normal. We find right throughout that chapter references to normal market forces and action to prevent widespread and undue hardship. Such references indicate that the framers of that chapter do not regard it as a permanent part of the charter ; and that is another reason why we should not look for .protection to any great degree to that quarter so far as the maintenance of the sugar embargo is concerned. Another aspect is the guaranteed price in respect of home consumption prices for commodities. This applies directly to many other primary industries. The charter as drafted originally seemed to present a definite menace to our policy of providing home consumption prices higher than the export prices in order to ensure retention of our standard of living. Now, however, a provision has been written into the new draft which appears to cover that point satisfactorily. I refer to Article 27, which provides -

A system for the stabilization of the domestic price or of the return to domestic producers of a primary commodity, independently of the movements of export prices, which results at times in the sale of the product for export at a price lower than the comparable price charged for the like product’ to buyers in the domestic market . . .

The article further provides that that provision would not involve a subsidy in respect of exportation in the meaning of paragraph I. In other words, it endorses that policy. Other than expressing pleasure at the provision of that safeguard, my only comment is that several words in the article tend to a degree to break down its value. I refer to the words “ at times “ in the passage reading “ which results at times in the sale of the product for export . . .”. Those words imply that the paragraph will apply only in the event of movements of the export price above, or below, the home-consumption price. So far as sugar and other -commodities are concerned, we must realize that the export price will almost always be below the home-consumption price. Therefore, I recommend that the words “ at times “ in Article 27 be deleted in order to make water-tight the protection afforded under that, article.

Finally, I note that the Minister in his statement when dealing with the probable results of this International Trade Agreement, said -

In short, if the draft agreement is accepted by the governments concerned, it should make a significant contribution to a solution of the problems created by the world-wide shortage of dollars. It should materially assist the United Kingdom in its economic difficulties and thus help to maintain international purchasing power, ami above nil it holds out the prospect of greatly increasing our earnings of foreign exchange by extending the range of our export opportunities, especially in the United States, thus paving the way for the further expansion and development of Australian primary and secondary industries.

Of course, if the agreement has that result, it will be a very fine thing; but the comment I desire to make is this: Until such time as definite and positive action is taken to develop our potential productive resources, it is merely beating the air to talk about how this agreement will provide us with opportunities to increase our exports. At present, we cannot supply our own people with the goods they need. It is useless to talk about the possibilities of increasing our exports until such action is taken to ensure that we can take advantage of those opportunities. That is the problem confronting the Government. We must first develop production to a sufficient degree to meet the demands of our own people; then, we can afford to talk about opportunities presented under this agreement in respect of overseas trade.


.- The honorable member for Capricornia (Mr. Davidson) dealt with the charter of the International Trade Organization, and, more extensively, with the safeguards which he contended should be provided in order to protect the sugar industry. Every honorable member desires to see the great sugar industry in northern Queensland maintained and developed. However, no’ absolute safeguard can be given to any industry in any country. We may desire to retain the existing Empire trade preferences to which urgent attention has been drawn; but when one of the parties to the old agreement is unable, or unwilling, to maintain the margin of preference it is, to use thu honorable member’s own words, “ merely beating the air “ to demand in this chamber, or anywhere else, that Australia’s representatives- shall hold to the British margin of preference. The simple irrefutable fact is that Great Britain, weakened by the tremendous struggle through which it has gone, the ,-great assets which it accumulated over the years, had to sacrifice in order to prosecute the recent war and must now find wider markets than the Dominions can provide. Great Britain must strive to obtain markets everywhere throughout the world, because it is now obliged to build up an export trade far in excess of the highest volume which it achieved pre-war. Prior to the recent war, the standard of living of all the people of Great Britain was not very high, although for many sections the standard of living was good. At the same time, however, for many sections, including those people living in the depressed coal areas, the standard of living of the British people was far from good. In order to restore even its pre-war standard of living, Great Britain must capture far wider markets than countries within the British Commonwealth of Nations can provide. Thus, by sheer force of circumstances, Great Britain is obliged to scale down existing Empire trade preferences, in order to enter new markets.

The honorable member for Capricornia and other honorable members opposite who have spoken in this debate paid tribute to the benefits achieved at Ottawa in 1932. Some features of the Ottawa Agreement were very good; those features are plainly visible. However, on the debit side, unfavorable features of that agreement were not easily discernible. We know that trade preferences were extended to Dominion producers on the United Kingdom market, and that manufacturers in Great Britain and other Dominion countries obtained a generous measure of preference. However, we know now that when those preferences were mutually arranged under the Ottawa Agreement, nations outside the British Commonwealth of Nations were obliged to make their own pacts, bilateral or multilateral, in order to offset their loss of markets in Empire countries. Whilst it is true that Empire trade benefited from the Ottawa Agreement, we are unable accurately to assess the degree to which world trade was contracted as the result of that agreement. Professor Shann, a great Australian economist, who accompanied the Australian delegation to the Ottawa conference, on his return to Australia very clearly drew attention to the fact that, although Great Britain would reap some immediate benefits from the agreement, it had made great sacrifices by entering into it. In a lecture delivered at the University of Western Australia on the 8th November, 1942, he said -

They are likely, indeed they are certain, to jeopardize Britain’s -trade and investments with foreigners. And do not forget that nearly 70 per cent, of Britain’s overseas trade is with foreigners. If Britain refuses to buy from them, they are less likely to buy from British exporters or to pay dividends and interest to British investors.

That was true then, but it is truer to-day, if that is possible, because Britain, owing to the circumstances referred to by the Prime Minister, has had to divest itself of its tremendous overseas investments. Now, the balance lias sharply swung against it, and it has either been forced to agree to or it has willingly accepted a scaling down of Empire preference. References to the International Trade Organization are a little beside the point, because the main subject of this debate is the agreements reached with other countries. The charter of the International Trade Organization has not emerged as a final document from the negotiations. Until we have the report on the proceedings at Havana, we cannot say in what ways thedraft charter has been modified, or otherwise altered. Therefore) our main concern to-night is the agreements between?, the sixteen or seventeen nations ontariffs that were concluded at Geneva. That brings to the forefront the question whether multilateral or bilateral trade agreements are most to be desired. I was surprised to hear the Loader of the Opposition say that he very strongly favours the system of bilateral agreements that characterized world trade between the two world wars and culminated in the vicious depression years and the years that followed them which were little better. A bilateral agreement means that two nations agree to trade on certain terms. Such an agreement, of course, has an impact on other nations. Inevitably they, as history proves, in order to safeguard their interest, in their turn, make bilateral agreements with other countries. The bilateral agreements between Empire countries that accompanied the signing of the Ottawa Agreement were followed by all sorts of agreements between other countries in retaliation, and the previously circumscribed trade of the world was further .restricted. The only answer is in a system of multilateral agreements under which benefits will flow to all signatories. That is infinitely better than a system of bilateral agreements which invite retaliation. The right honorable gentleman went on to say that the socialist theories of socialist governments had brought the International Trade Organization into being, but, strangely, just previously, be had said that the most earnest and ardent advocate of the organization was the former Secretary of State in the United States of America, Mr. Cordell Hull. We and members of the general public who study these matters know that the two statements cannot be reconciled. The United States of America is strongly in favour of the agreement, but its people are the most strongly individualist in the world. America is a country where private enterprise flourishes most strongly. The Government of the United States of America sponsored the ideas behind the’ proposals now under consideration because it had been brought home to it that a policy of higher tariffs can only result in the erection of trade barriers, which leave no one better off, because one trade barrier cancels out the other, with the result that international trade virtually ceases. The right honorable member also said that discriminatory bargains between Great Britain and Australia were to their advantage. So they are temporarily, but if they are an advantage to them they must be a disadvantage to other nations with which the two parties formerly traded. So the result must be retaliation and a lessening of the volume of international trade. The right honorable gentleman also compared production and the volume of goods exported from Australia in 1946-47 with production and exports in a previous year, but it is idle to do that without indicating the circumstances. What caused the reduction of production and exports in 1946-47? According to the Leader of the Opposition and the Leader of the Australian Country party, the Australian Government was responsible. We thought that drought had something to do with the decline, but they ascribed the entire responsibility to the Government. Logically they must also ascribe to the Government responsibility for the bumper wheat crop this season. Their arguments are plainly dishonest and also foolish, because the answer stares them in the face and is manifest to all the Australian people. The Leader of the Opposition described the situation to-day as “ the United States of America versus the rest of the world “. That slogan has become fairly common, but the honorable member for Balaclava (Mr. White) described the situation more faithfully when he said that the hope of the world rests primarily with the United States of America. That summing up is more accurate than the statement that the United States of America to-day is a challenge to the rest of the world.

According to the Leader of the Opposition, the dollar shortage occurred because the United States of America bought too little and sold too much. Taking a long-term view, that statement is strictly accurate. From a short-term view, it would create still greater hardship. Those countries which have been devastated by war require such vast quantities of American goods that the people of the United States of America must still be denied some of the products of their industry, and submit to a continuation of rationing and high taxes, in order to meet the dire needs of others. The dollar shortage has arisen because the devastated countries of Europe, and war damaged Britain, cannot supply goods in exchange for their requirements’ from America. If the United States of America were to demand to-morrow that all its exports should be covered by imports, the world in its present condition could not supply the goods which the American people would desire. When Americans realize that they can enjoy a much higher standard of living if they import freely from other countries, they will no longer accept payment in gold, which lies in idleness in vaults under guard, but will seek payment in goods. Taking the short-term view, the United States of America is required, not because it so desires, but because the urgent need of the world demands it, to make available a considerable proportion of its production to the people of other countries. In these circumstances, the loan to Great Britain was granted.

The loan is of greater magnitude than any loan which had been previously granted in peace-time by one country to another. Some of the conditions governing the loan are most generous, and a few are irksome. Had the “ convertibility “ clause not been included in the conditions, a great deal of the trouble which has arisen would have been avoided. But, as the Prime Minister pointed out, the American Government had to convince Congress of the necessity for granting this assistance, and consequently, had to impose some conditions in order that Congress would agree to the proposal. The Marshall plan has been launched in similar circumstances. ‘ Some persons may be critical of Congress because of its unwillingness to pass the appropriations for the Marshal] plan. Let us consider the position. If this Parliament were asked to tax our own people in order to pay for our surplus goods exported to the starving people of other countries, I suggest that an outcry would be raised against the proposal. Yet, that is -what we ask America to do. According to the Leader of the Australian Country party, that is the fundamental duty of the people of the United States of America. I merely say that it will be necessary for them to take that action, and also for the people of Australia to take a more realistic view of the world situation, and realize that we, too, must play our part in helping to feed the starving peoples of the world and repair the devastation caused by World War II.

When,’ however, the Australian Government joins with the governments of other nations in a world trade organization, in which tariff agreements will he reached mutually instead of being arrived at individually, it is criticized and vilified. Its critics declare that, by becoming a signatory to these international agreements, the Government will sacrifice the best interests of the people of Australia. Tariff barriers have been a real cause of physical wars. In the circumstances, it is desirable, because of the unsettled state of the world to-day, and in the interests of the future of mankind, that the nations should reach an agreement mutually upon tariffs. It is idle to say that Australia need not participate in these world agreements, but can pursue its own tariff policy. Every other nation could also erect its own tariff barriers. The stronger a nation is, the more successfully it can pursue an anarchist individualist policy. The solution of the problem is for the Australian Government to participate as it has done, willingly, readily, and very capably in the international trade organization.

I shall refer only briefly to the terms of the trade agreement which has emerged from the discussions at Geneva. When we’ last discussed the charter, I stated that the negotiations had not progressed to the point where we could visualize a completed agreement. That statement may still be true, but I am gratified to note one pleasing development. While the discussions are still in progress, the nations are mutually discussing the tariff barriers which each have erected in the past. Under the proposed agreement, Australia may lose in the British market some of the advantages that it gained in the course of years. No honorable member can forecast with certainty whether we shall lose, and, if so, the extent of that loss, because, as the result of Great Britain’s position at the present time, Australia might have lost, in any event, the preference that it now enjoys in the British market. However, there is a vast number of people throughout the world with whom Australia can, and must, trade, if we are to sell our products, not only now, but also in the future.

The Leader of the Australian Country party (Mr. Fadden) declared that the scarcity of production is the cause of tariff barriers. In actual fact the reverse is the case. When production is at its peak, every country erects its own tariff barriers, in an endeavour to save its home producers from the competition of imported goods. Therefore, we should now lay the foundations of an international organization within which we can mutually agree on tariff and trade arrangements. Admittedly, all kinds of escape provisions have been included in the agreement, and they might tend to nullify some of the other provisions; but the simple truth is that today the nations could not, and probably should not, reach an agreement if each was tied down strictly and finally to some specified line of procedure. On thing is certain. Even if all the provisions of the charter were made secure, the organization would break asunder in the first economic trouble which beset the world. Therefore, even if it were possible to prevail upon the nations to agree to definite provisions, that procedure should not be adopted. The organization could not be established to-day unless the agreement contained provisions ensuring that if the charter reacted harshly upon some countries, it could seek redress. In the words of the Minister for Post-war Reconstruction (Mr. Dedman), the proposed agreement now before us is merely a basis for discussion, and we hope that from that discussion will emerge decisions based on mutual understanding rather than individual agreements, which in the past have not only wrecked world trade but have also destroyed world amity. I believe that the Government has done well in world trade discussions. Reports that have seeped into this country from the rest of the world show clearly that the Minister for Post-war Reconstruction, who was ‘ Australia’s delegate to the international trade conference, played a vital part in the establishment of this organization. Knowing that, one must view with distrust the reports that have appeared in the Australian press concerning the activities of the Minister and the Australian delegation generally. I have had occasion to refer to this matter before. Australian representatives have made a name not only for themselves, but also for their country in the councils of the world; yet, their work has been ridiculed and written down by the Australian press as it has been on this occasion. The Australian press reported that the Minister for Post-war Reconstruction and his “ bureaucratic team “ were finding conditions in Havana not exactly to their liking. By adopting this ridiculous and unseemly method of reporting and neglecting their true mission our great daily newspapers have done far more harm to themselves and to their cause than to this Government. The Australian Government has played a substantial part in all types of international organizations. Its representatives have gained honour for themselves and credit for their country. I believe that in this charter and in the agreements on international trade that are to be made under it we shall have a sound basis for world understanding which undoubtedly will be a vital factor in promoting the welfare and well being of mankind, and in assisting to end the cruel and wasteful wars that have far too frequently been thrust upon us.


.- To-night the Prime Minister (Mr. Chifley) made a plea to honorable members to keep this debate on the highest plane, and to regard the world picture as a whole, whilst bearing in mind particularly the need of Great Britain for the maximum assistance at this crucial moment. The right honorable gentleman asked us to eschew party politics and devote ourselves to a ‘ consideration of the vital principles involved in the proposal now before the House. This plea comes rather inappropriately from the right honorable gentleman in view of the fact that a few months ago we on this side of the chamber unsuccessfully urged him to refrain from dividing this nation by introducing a bill for the nationalization of private banks and thus damaging the effort that was being made, and should be made, by every British dominion to assist the United Kingdom by increasing the production of goods for the Empire pool. I suggest that the Prime Minister should sometimes heed his own advice.

I, too, trust, that this debate will be kept on the highest possible plane. Great Britain is on the rocks, and it is our duty as a part of the British Empire and as a country that will go down with Great Britain should that country fall, to do everything we can to avert the disaster that threatens. I am not convinced that the proposed agreements that the Minister for Post-war Reconstruction (Mr. Dedman) has brought back from Geneva and Havana, will assist us in that regard. The honorable member for Capricornia (Mr. Davidson) truly said that we can best assist Great Britain by bringing our economic strength to its maximum. We can increase that strength in several ways. First, the people of this country will have to do a little more work than they are doing at present. We shall have to work just as hard as the people of Great Britain are working to produce commodities suitable for export to dollar areas. The dollar pool is an Empire pool and when the dollar reserves of the United Kingdom are exhausted - they are down now to £600,000,000 and at the present rate of depletion they will vanish not many months hence - our dollar reserves also will be gone. In that event, Great Britain will have to meet its dollar area purchases by direct payments, and Australia will be in. a similar position. Therefore, we are as one with the people of the United Kingdom in the dollar crisis that is upon us. It has been suggested that, the -proposed trade charter will do something now, or in the near future, to solve our present economic problems. The Prime Minister has told us why the agreement has been formulated. It is the result of pressure by the United States of America. I pay tribute to. America as a great and gallant partner in World War II., but we too did our bit in the war, and if any nation can be described as the saviour of civilization, it is Great Britain. In these circumstances, if any bouquets are to be thrown, I remind honorable members that they are as equally deserved by one as by the other. Article VII. of the Mutual Aid Agreement provided for a review at the end of the war of the system of Empire trade preferences upon which the prosperity of many of our primary industries is founded. The Prime Minister said that that was a bargain, and the Minister for Post-war Reconstruction, with nineteen public servants and other advisers, went to Geneva to see what Australia’s contribution to the bargain might be. I do not subscribe to the view that the Minister attended the conference for the purpose of sacrificing Australian industries; but I do believe that the agreement that he has brought back will, in the long run, have the effect of sacrificing some Australian industries and preventing the development of others. The proposed agreement is most complex and I doubt whether even a King’s Counsel could give a clear opinion upon it after a week’s study. Each article is qualified by some other article, and that article, in turn, is qualified by some other provision. It is a most difficult document for laymen and legal men alike to understand. It was written by the combined economists of the world, and, in many provisions, it was not intended to be clear. However, one thing stands out like a shining light all through the document. It is the fact that the system of Empire preferences is to go and that alterations of the customs barriers between nations as at the date of implementation of the agreement will not be permitted. This fact leads me to a peculiar situation. I find myself in agreement with the Associated Chambers of Manufactures of Australia, a rare occurrence. About two weeks ago, Mr. Latham Withall, an executive of that organization, who went to the Geneva conference as an observer on behalf of our manufacturing industries, made the following statements in an address to the Institute of Industrial Management in Sydney: -

In the simplest terms the nett effect of the Geneva agreement and tariff schedules was to reduce and freeze tariffs in general, to reduce a considerable number of Empire preferences, and to provide that no new preferences be granted and no new tariffs imposed. The tariff and preference reductions evolved at Geneva, are the thin end of the wedge. They reveal] a dangerous weakening of the preferential system and a willingness to surrender the solid substance of Empire co-operation for a. flitting; will-o’-the-wisp.

That is the point of view of the Australian manufacturers. I shall state theview which I hold as a representative of ai primary industry. In brief, it is that this agreement is likely to strike a body-blow at. some of our most important primary industries.

What beneficial effect does Empire preference have upon our primary industries ? Those which benefit are the butter, rice, egg, processed milk, honey, apple, dried and canned fruits, wine, beef, and sugar industries. The products of all of these industries enjoy preference on the British market. Of course it is true, as the Minister for Post-war Reconstruction will probably claim, that very few tariff alterations were agreed upon at the Geneva conference in respect of those industries. The only changes appear to have been the removal of the 3s. per cwt. British preferential duty on apples, the reduction of the duty on dried fruits from 10s. rid. per cwt. to 8s. 6d. per cwt., and a reduction of the rate applied to canned fruits from 15 per cent, ad valorem to 12 per cent, ad valorem. Therefore, at the moment there does not appear to have been any major alteration of preferences. However, this is a long-distance plan. It is not intended to effect a revolution in the fiscal policies of nations. It is a multilateral agreement, and if the United States of America, which is the main driving force behind it, has its way, the charter will become fully effective when the markets of the world are oversupplied with primary products. That will he the time when the United States of America will demand entry to new markets in order to dispose of products which cannot be sold on its usual markets.

The value of Empire preferences to Australia is evident only when there are surpluses and other nations try to compete for the sale of their goods in markets usually reserved for Australian products. The Geneva conference was called at a most appropriate time for the interests opposed to Empire preferences because today we have no difficulty in finding outlets for our surplus products. We do not need preference for our butter, wheat, dried fruits, canned goods or meat, because we are being urged to export more than we can produce. However, there was a time, a few years ago - and such a time will come again, because history repeats itself - when we were glad to have preference for our goods on the United Kingdom market. When that condition recurs, the preferences which are to be done away with under the Geneva agreement will be very sorely missed by the Australian producers who have’ been dependent upon them in the past.

One major Australian industry which will not be protected under the Geneva agreement is the sugar industry, which was mentioned by the honorable member for Capricornia. This industry is of tremendous importance in our economy. The Prime Minister has said that we should not deal with local issues, but this industry supports 200,000 people in northern New South Wales and in Queensland. Over £30,000,000 is invested in cane farms, and over £20,000,000 in sugar mills and subsidiary factories, in which 90,000 employees are engaged. Thi.i great industry depends for its security on an import embargo, by means of which the home-consumption price of sugar in artificially maintained. Sugar exported from Australia is subsidized by the homeconsumption price. Thus, two separate price levels are maintained. Australian sugar benefits from a British preferential tariff of £3 15s. a ton. Representative* of the sugar industry are very gravely concerned at the outcome of the Geneva conference. The industry sent a representative to Geneva. Mr. Watson represented the Colonial .Sugar Refining Company Limited.

Mr Dedman:

– The honorable member means that the Government arranged for him to go there.


– He was the representative

Mr Dedman:

– The honorable member said that the sugar industry sent him. That is not true. The Government arranged for him to go to Geneva, which is an entirely different matter.


– I shall not quibble about words. At any rate, Mr. Watson is an officer of the Colonial Sugar Refining Company Limited. He represents that organization in London. If the Government arranged for him to go to Geneva, I am only too pleased to give the Government any credit that the Minister desires. The fact is that the industry was represented at Geneva, and my point is that the Colonial Sugar Refining Company Limited is the organization which sells Australia’s sugar to the world. It represents the Queensland Government and other bodies overseas and, with its very efficient commercial organization, it actually effects the sales of our sugar. It has been most seriously concerned by the arrangements made at Geneva. I do not desire to treat this matter as a contentious one, but I should like the Minister to reply to some of the matters which I propose to mention when he speaks in the debate.

I am not a spokesman for the Colonial Sugar Refining Company Limited, but I do speak for my constituents, many of whom are dependent upon the sugar industry for their livelihood. Hundreds of sugar-growers in my constituency consign their sugar to the Colonial Sugar Refining Company Limited, and they have a high regard for the integrity and efficiency of the company. The company wrote to the Minister for Post-war Reconstruction on the 8th December, 1947, stating -

Whilst we appreciate the fact that Empire preference on sugar has not been reduced, we deprecate the way in which the draft charter leaves the Empire preference open to attack at any time. Several aspects of the charter are causing us grave concern.

The letter goes on to enunciate the matters causing concern. The company received no satisfactory reply to its letter, and on the 28th January last it wrote to me, informing me that it had previously addressed a communication to the Minister, and stating -

Press reports state that the Minister has decided to allow a full dress debate on the agreements reached at the International Trade Organization conference. Some improvements were effected in the agreement at Geneva-

I pause here to give credit to the Minister and his officers, because I believe that they did make an effort to have inserted in the agreement “ escape “ provisions, particularly in regard to the sugar industry. However, I point out that the Australian sugar industry is the only one in the world that is conducted entirely by white labour. The letter goes on to state -

There are several aspects of the charter in its present form under discussion at Havana which cause us considerable concern.

I trust that the Minister is listening to what I am saying, because at the moment I am stating not my own view, but that of :he Colonial Sugar Refining Company Limited.

Mr Dedman:

– All those letters were placed before me.


– 1 am now placing their contents before the House as the parliamentary representative of people who are particularly affected by the agreement which we are discussing. If the Minister did consider the letter to which I am referring, the fact remains that he made no satisfactory reply to it, otherwise I should not have received the letter from which I am quoting. It proceeds -

The company directed a further memorandum dated 5th December to the Government and to the leader of the delegation at Havana. Enclosed is a copy of the memorandum to the Prime Minister. You are free to make any use you think desirable of the information in this or in the earlier memorandum.

It is obvious that at that stage the company had reached a stalemate in its correspondence with the Government. About 400,000 tons of Australian sugar are consumed locally, and in normal times a similar quantity is exported, although the present export does not attain to those proportions. Unless the present preferential duty in respect of sugar is maintained, there is grave danger that the industry will not survive. That would result, of course, in the desolation of many areas in northern Queens land which depend entirely on sugargrowing for their existence.

I ask the following specific questions of the Minister, and I request him to reply to them during his speech: Is it a fact that Article 17 of the Geneva draft agreement remained unaltered at Havana, including its title which contained the words “ elimination of preference “ ? Did the leader of the United States delegation at Havana say, in the course of a statement to the press, that Empire preference was to be completely dissolved? Is the export of Australian sugar prohibited by Article 27 of the agreement? Is it a fact that Article 27, which was intended as an “ escape “ provision is not worded so as to provide a clear and unambiguous release from the provisions of the preceding clause? Does the Minister realize that if the “ escape “ provision is not effective, the only alternative open to Australian sugar-growers and manufacturers is to endeavour to negotiate another international agreement? That, of course, would ‘ be quite unsatisfactory, because under the terms of Chapter VI. of the charter any such agreement could be of only temporary duration, and would place the sugar trade under the complete control of international market operators. The result of any such agreement would be that Australian sugar could not compete fairly with sugar grown by countries which employ colored native labour. The embargo on the importation of sugar into Australia has been embodied in legislation for more than 30 years. It is a fact that continuation of that embargo is specifically forbidden by Article 20 of the draft charter, in respect of which no “ escape “ provision is provided?

Mr Dedman:

– Would the honorable member like the United States of America to be free to impose an embargo on the entry of Australian wool to that country?


– I am putting specific questions to the Minister, and he can reply to them later as he thinks fit.

Mr Dedman:

– I am making an interjection now.


– Although this may be a joking matter to the Minister, it is no joking matter to people whose life savings are invested in the industry.

Mr Dedman:

– I am not joking; I made a sensible interjection, and the honorable member can answer it if he wishes.


– Order ! Since the honorable member for Richmond (Mr. Anthony) shows no disposition to answer the Minister’s question, he must desist from making any further comment.


– I request the Minister to reply in the course of his speech to the questions which I have put to him, and in the absence of any such reply I shall assume that the statements in those questions are correct. How*ewer, I am not challenging . the Minister at this stage. He may be able ito show to the satisfaction of the House -and of the people engaged in this industry that the document will provide the necessary protection. Howev,er, I have read the draft carefully,

In regard to matters other than sugar involved in the charter, I do not propose to labour the points of view expressed by the Leader of the Opposition (Mr. Menzies) and the Leader of the Australian Country party (Mr. Fadden). There is no doubt that Great Britain is in a parlous state. The latest issue of the London Economist says that in a few months’ time the Old Country will be facing bankruptcy, that it has sold the Argentine railways for an eighteen months’ supply of beef, and that it is like an improvident person who, having spent all the money he had in the bank, is now beginning to pawn the household effects and furniture. A good deal of the discredit for that state of affairs is placed by that journal squarely on the shoulders of the Labour Government at present in control of Great Britain. The article refers to the manner in which the American loan was squandered and to the lack of foresight in not guarding against the fate that inevitably overtakes a country that is living beyond its means. We all know that Great Britain had to sell its investments in various parts of the world in order to pay for munitions, but at thesame time there has been grave mismanagement. However, I do not propose to dilate upon that now. We know that help is needed, and that the best way in which this country can help is not by reducing hours of work, but by the people, instead of offering advice and sympathy, taking off their coats and going to work, just as the people of Great Britainwill have to do, in order to increase our exports to dollar areas and expand our food production.

This matter is linked with the Government’s failure to deal adequately with the dollar situation as it affects Australia, but I do not propose to dwell upon that now. This draft charter will need to have many amendments made to it at Havana before it will be acceptable to the manufacturers of this country, and before it will be of any benefit to Great Britain or be acceptable to those engaged in Australia’s primary industries, who depend on the Empire preferential system for their security and sustenance.

Debate (on motion of Mr. Thompson) adjourned.

page 268


Was 1 Pensions - Saws - Royal Australian Air Force: Deferred Pay

Motion (by Mr. Dedman) proposed -

Hint the House do now adjourn.


. - Following representations that I made on behalf of Mr. Joseph R. Olliffe, a resident in my constituency, I received an extraordinary letter from the Repatriation Department. It is a perfect example of “ bumbledom “. In general, the department has done fine work, but letters of this kind serve only to detract from the reputation it has earned. I propose to read extracts from the letter so that honorable members may know the way in which an ex-digger has been treated. I do not say that every exserviceman who makes representations similar to these is treated in the same manner, but I do say that this unfortunate man has been treated cruelly.

The letter is dated the 26th February, 1948, and is the last of a series of letters which passed between myself and the Minister forRepatriation, starting in September, 1947. The Minister acknowledges my personal representations of the 18th December, on behalf of Mr.. Olliffe, and says that he has completed his inquiries regarding the case. He quotes his letter to me of the 30th September, in which he mentioned that Mr. Olliffe had made application for a review of his pension on the grounds that his condition had become worse. The letter goes on -

He was medically examined, and on the 27th August, 1946, his application for increase was refused, and he was advised accordingly.

On 9th September, 1946, Mr. Olliffe exercised his right of appeal to the Assessment Appeal Tribunal against the decision of my department in refusing his application for an increase in pension, but that body, after giving full consideration to all the available evidence, disallowed the appeal on the 15th November, 1946.

A further application was made by Mr. Olliffe on the 23rd January, 1947– that is about two months after the appeal was disallowed - to have his pension reviewed on the grounds that his condition had retrogressed, and, after he had been medically examined, the Repatriation Board assessed the incapacity arising from his war caused disability at 40 per cent., and accordingly increased his pension to that rate as from the 23rd January, 1947.

Mr. Olliffe was apparently dissatisfied with this assessment as he lodged a further appeal to the Assessment Appeal Tribunal. The appeal was heard on the 24th June, 1947– that is five months after he was granted an increase to 40 per cent. - and the Tribunal reduced the assessment to 20 per cent, rate as from the 10th July, 1947.

It said, in effect, that in five months his condition had improved and it had decided to reduce his pension to the 20 per cent. rate. The letter continued -

On the 15th August, 1947, the Sydney branch office of the Commission received an application from the Legal Service Bureau on behalf of Mr. Olliffe in which it was claimed that the incapacity arising from his warcaused disability had worsened since his appeal was heard by the Assessment Appeal Tribunal on the 24th June,1947.

Following this application, Mr. Olliffe was medically examined on the 13th November, 1947,and on the 24th November, 1947, the Repatriation Board, having regard to medical opinion and all otheravailable evidence, assessed the member’s incapacity at 40 per cent.

One month after the rate was reduced from 40 per cent, to 20 per cent, it was restored to 40 per cent. This is an extra ordinary state of affairs. The man appeals; the rate is increased to 40 per cent. ; he considers that is not sufficient ; he is examined less than five months afterwards, when the rate is reduced to 20 per cent.; he appeals again, and one month after the rate is increased to 40 per cent. The Minister has the temerity to say in the concluding paragraph of his letter-

In view of the above you will appreciate that Mr. Olliffe’s case has been given every consideration by my department, and his statement about the treatment he has received is not warranted. .

If a man who is entitled to a pension based on a 40 per cent, disability is treated in this manner, I cannot accept the statement that his complaint that he has not received proper treatment is unjustified. This man has been subjected to cruel treatment. Obviously, the man is entitled to a 40 per cent, pension, but he has had his pension increased, then reduced, and finally brought back to 40 per cent. He claims that his disability is worth much more than 40 per cent. The department fixed it eventually at 40 per cent., and because he had the temerity to seek redress, it was decided to teach him a lesson. The officials said, in effect, “ This fellow is making too much of a nuisance of himself “ and they cut him down to a 20 per cent, disability. Then he said, “ This is pretty tough. If I can get back to 40 per cent, it will be all right”; and their reply, substantially, was, “All right,w e will give you your 40 per cent., but if you complain again your pension will be cut again.” In spite of all this, the Minister wrote that the statement of the man was not in accordance with facts. A letter of that kind should never have been sent ,mt by the department. It is a perfect example of “ bumbledom “ at work within an otherwise efficient department. I say nothing as to whether pensions are adequate, though I have my own opinion on that, and I believe something should be done about them. My immediate point is that no man should have been subjected to an experience of the kind I have described. The Minister should ensure that when an applicant for a pension appeals against a decision he should not be subjected to pin-pricking. All applicants should have the right to appeal and, if their cases warrant it, they should be granted an increase of pension. They should not be liable to be “ run u round “ by the department simply because they appeal against a departmental decision.

Minister for Repatriation · Bass · ALP

– I know something about’ the ease which the honorable member for “Wentworth (Mr. Harrison) has mentioned. The letter to which he referred was signed by me, and I take full responsibility, for it. It is usual for the honorable member for Wentworth to distort matters which he places before the House, and he has followed that practice on this occasion. The fact is that this ex-serviceman appealed against the department’s assessment of his disability under which he was awarded a 20 per cent, pension. In accordance with custom, his appeal was heard by the State board, which increased his pension to 40 per cent. The applicant still believed that he was not being justly treated, and appealed to the Assessment Appeal Tribunal. The honorable member for Wentworth has himself been a Minister, so he knows that the Assessment Appeal Tribunal is an independent body established by Parliament. It is because the honorable member must know, this that I say that he distorted the facts. The board consists of a chairman, and two medical men appointed to deal with the particular case being heard at the time, This independent body decided that the State board had over-assessed the man’s’ disability, and reduced his pension to 20 per cent. This decision had nothing whatever to do with the department which, as the honorable mem ber himself admitted, is an efficient organization. The man has not been “ run around “ by the department, as the honorable member suggested. Of his own volition he appealed to the Assessment Appeal Tribunal, which reduced his pension. The commission had nothing whatever to do with it. Once the tribunal has made its decision, the department has no option but to give effect to it.


– But his pension has been increased again.


– That was another step. The honorable member claimed that the man had been run around “ by the department. As a matter of fact, he did the running around himself. After his pension was reduced by the Assessment Appeal Tribunal, he made representations to the honorable member for Wentworth, who, in turn, made representations to me. I examined the case, and the man was further medically examined by our own departmental officers. They said that, on the evidence relating to the period of five months since the pension had been reduced, there was justification for increasing the pension to 40 per cent.

Mr Harrison:

– But they made it retrospective.


– The honorable member knows that these cases cannot be decided overnight. There are thousands of them. It is costing the Commonwealth something like £18,000,000 a year for pensions. Many of those who are in receipt of pensions are dissatisfied, and have lodged appeals. Others who have been refused pensions have also appealed. The honorable member for Wentworth claimed that the department, out of pique, and actuated by vindictiveness, said, in effect, “ We will teach this man a lesson for running around “. Nothing of that kind happened. Every case is examined by the department as soon as possible, and, on the medical evidence produced, the pension in this instance was reassessed at 40 per cent. That rate is now being paid. Because these inquiries cannot be dealt with in a short time, retrospective payment is made to the date of the application. Although the applicant has a period of waiting and anxiety after he has submitted his case, he is recompensed by .the retrospectivity of the payment. No injustice has been done to the ex-serviceman to whom the honorable member for Wentworth has referred. He has been given evenhanded justice, based on the medical evidence adduced. His pension was reduced, not by the Repatriation Commission, but on the recommendation of an independent body established by the Parliament to examine the cases of ex-servicemen who are dissatisfied with the’ decision of the commission. In some instances, after examination by the commission, pensions are increased. In this instance, the exserviceman’s pension was reduced. I have no apology to make for this decision, which is fair and reasonable, and is in consonance with the normal practice followed by the department.


.- 1 have received a letter from Mount Poster Timber Proprietary Limited, the directors of which are residents of my electorate. The letter points out that a serious position exists in connexion with the supply of circular saws. It states-

It is impossible to purchase a circular saw of any description in Tasmania or Victoria at present, and we presume that this applies to other States, the reason being that the importation of American plates (from which the saws are cut) has been cut out owing to the dollar position, whilst England is two years behind in their supply.

There are hundreds of saw-millers on the waiting list for saws, praying that the saws in present use will last until fresh supplies are available.

The company has a sawmill in Tasmania, which produces an average of 35,000 super, feet of timber a week, or approximately 1,500,000 super, feet per annum. All this timber is sent to Sydney, Melbourne, or Adelaide, according to the shipping space available. The company states that it has received from the mill manager an urgent telegram stating that a crack has developed in the main breakingdown saw. If the saw becomes useless the mill will be closed, and 1,500,000 super, feet of timber per annum, so urgently required for house-building, will be lost. In addition, the crew, who have been gathered together over many years, will be dispersed, and it will be impossible to re-assemble them. The Minister for

Repatriation (Mr. Barnard), who is in charge of the House, will, as a Tasmanian, be fully aware of the importance of the Tasmanian timber industry, and I urge him to bring this matter to the notice of the Minister for Trade and Customs (Senator Courtice) and the Minister for Works and Housing (Mr. Lemmon). Whilst it is not for me to criticize decisions affecting the dollar position, I must point out that certain imports from the United States of America are not rationed, and, in view of the importance of these saws to the continuance of the Australian timber industry, a permit for the importation of the requisite plates should be given. I ask the Government to give the matter its urgent consideration.

During the last two and a half years, I have repeatedly referred in this House to the promulgation ir 1945 of a retrospective pay regulation covering a number of officers of the Royal Australian Air Force. Under this regulation, certain deductions of deferred pay were made over a period of four years. The effect of this regulation was to involve these men in the loss of many hundreds of pounds. Most of the men concerned were flying instructors who were asked to join the Royal Australian Air Force in that capacity. Several of them were killed in the course of their duty. Those who served throughout the war had to suffer deductions of pay throughout the whole period of their service. This filching of pay of ex-servicemen is most inequitable. No employer but the Government would dream of doing such a thing. The men took their case to the Supreme Court of New South Wales, and were successful in obtaining a verdict in their favour. Subsequently, the matter was taken by the Commonwealth on appeal to the High Court, and although the High Court gave a judgment in favour of the Commonwealth, the judges in their decision made scathing comments on the moral right of the Commonwealth to make such a demand. Since then, I, and other honorable members, have quoted excerpts from the judgment. The Attorney-General (Dr. Evatt) assured me that, in spite of the decision, the Government had decided to - make an ex gratia payment to the men. That assurance was given to me nearly a year ago, but no payments have yet been made. It is high time that this injustice was remedied. I understand that the Attorney-General is prepared to make payment to some of the men, but refuses it to others. All of the men should receive the pay, which is their just right, and payment should be made promptly. It should not have been necessary for me to raise this matter again. I have not said anything about it during the last six months, believing that payment had been effected. I was amazed to be told recently by a pilot engaged by one of the airways companies in flying between capital cities that no payment had yet been made. Undoubtedly, the decision to withhold payment was made by some ray office official and approved by War Cabinet, and was not a decision of the Government. This injustice should be promptly remedied.

Question resolved in the affirmative.

page 272


The following papers were presented : -

Commonwealth Disposals Commission - Third Annual Report, for year ended 31st August, 11)4”.

Commonwealth Public Service Act - Appointment - Department of Post-war Reconstruction - F. H. Williamson.

United Nations Conference on Trade and Employment - Memorandum showing alteration of Tariff Duties (in substitution for the Paper tabled on the 18t/i November, 1947).

House adjourned at 10.46 p.m.

page 272


The following answers to questions were circulated: -

Northern Territory: Pastoral Leases

Mr Blain:

n asked the Minister for the Interior, upon notice–

  1. When does the Government intend to throw open for selection in the Northern Territory areas of land which several years ago were resumed from existing pastoral leases?

    1. When does the Government intend to allow application to he made for suitable areas of vacant Crown lands as pastoral leases?
    2. In all future sales of Government town lands in the Northern Territory, will he extend to the licensed auctioneers of the Northern Territory the right to conduct the sales instead of having the sales conducted by » government official ?
Mr Johnson:

n. - The answers to the honorable member’s questions are as follows : -

  1. The Administrator on 23rd April, 1947, and 19th February, 1.948, made available for pastoral leasing certain resumed lands. It is proposed to make other resumed lands available for pastoral leasing within the next few months.
  2. Lands are being made available for pastoral leasing as soon as suitable areas have been examined. Lands have been made available for pastoral leasing on 23rd April, l!>47, 30th October, 1947, 4th December, 1947, and 19th February, 194.8. It is proposed to make further area’s available at an early date.
  3. The Administrator lias power to authorize any person to conduct sales by auction under the provisions of the Crown Lands Ordinance 10.31-1946. It has been the practice for many year.-! to conduct auctions of Crown lands by a government official. It is not proposed to vary this practice.

Civil Aviation : Stocktaking at Aerodromes ; Aerodrome at Warracknabeal.

Mr Turnbull:

asked the Minister for Civil Aviation, upon notice -

  1. Is it a fact that the latest stocktakings nf stores at Mascot and Archerfield aerodromes occurred in 1940 and 1941 respectively?
  2. If so. what is the cause of such delay, and what measures have been instituted to provide a greater degree of control?
Mr Drakeford:

d. - The answers to the honorable member’s questions are as follows : -

  1. No. The ‘latest stocktakings carried out at Archerfield and Mascot were in October, 1947, and ..January, 1948, respectively.
  2. Sec answer to question No. 1.
Mr Chifley:

– On the 26th November last, the honorable member for Wimmera (Mr. Turnbull) asked a question concerning the availability for sale by the Government of certain land adjoining the alcohol distillery at Warracknabeal. Further to my verbal promise, an inspection was carried out by the Department of

Civil Aviation as to the suitability of this area as the site for an aerodrome. It was reported by the Minister for Civil Aviation that upon examination it was considered to be unsuitable for such a purpose. Accordingly the land was offered for sale - and sold by auction on the 5th February last.


Mr Fadden:

n asked the Minister for Commerce and Agriculture, upon notice -

  1. Did he receive from Mr. J. G. Crawford, of the Division of Agricultural Economics, a cost survey report on the dairying industry ?
  2. If- so, what were the recommendations contained in the report?
  3. Were the recommendations adopted by the Government?
  4. Will he make copies of the report available to honorable members?
Mr Pollard:

– The answers to the right honorable gentleman’s questions are as follows : -

  1. A cost survey report on the dairying industry has been received from the Joint Dairying Industry Advisory Committee. Mr. J. G. Crawford is chairman of this committee. 2 and 3. The Prime Minister in October, 1947, announced the decisions of the Commonwealth Government.
  2. Yes.

Australian Prisoners or “War.

Mr Rankin:

n asked the Prime Minister, upon notice -

  1. Is it a. fact, as stated in a Sydney weekly newspaper of the 14th February, that a secret report was made by a panel of prisoner of war doctors relating to the damage to health suffered by Eighth Division and other Australian Imperial Force men who were imprisoned by the Japanese in Malaya and elsewhere?
  2. If so, when was this report made and what action was taken in connexion therewith?
  3. Will he table this report in Parliament; if not, why not?
  4. Is it a fact that the Legion of ExServicemen and Women lodged a claim in respect of servicemen who had been tortured by the Japanese ?
  5. If so, what action has been taken in connexion with this claim? (I. Docs the Government intend to press the prisoner of war claims for reparations?
  6. If so, what is the nature of the action it proposes to take ?

Mi Chifley. - Inquiries will be made and the information will be supplied to the honorable member as soon as possible.

Prices Control: Subsidies

Dame Enid Lyons:

asked the Prime Minister, upon notice -

  1. Is there a difference of opinion in the views being expressed by the Treasury and by the Prices Branch concerning the continuance of price subsidies?
  2. Will the Government disclose details of the method of liquidation of subsidy now reported to be in operation, indicating what goods ave still the subject of subsidy, and the period during which the subsidy will remain in operation, either in whole or in part?
  3. Does the gradual withdrawal of subsidies, announced recently by the Minister for Trade and Customs, mean that the Government no longer requires the proposed referendum power over prices, which the Minister for Labour and National Service declared last year would make clear the Commonwealth’s right to pay subsidies for the maintenance of reasonable prices?
Mr Chifley:

– The answers to the honorable member’s questions are as follows : -

  1. Policy in relation to price stabilization is under continual review by the Government.
  2. In any case where subsidy has been removed the method of liquidation has been determined by reference to all the factors relating to the particular commodity. Goods and services still receiving benefit of Price Stabilization subsidies include tea, potatoes, whole milk, butter, cheese, wool, cotton, yarns, textiles, apparel’, pelts and goatskins, coal, fertilizers, and certain interstate shipping rates.
  3. No.

Commonwealth Government Securities

Mr Fadden:

n asked the Treasurer, upon notice -

  1. What was the exact nature of the increase in Commonwealth Government securities of £19,831,795 mentioned by the AuditorGeneral as being held by the Commonwealth Bank at the -30th June, 1947?
  2. What particular amount of such increase (if any) represented subscriptions to Commonwealth loans during 1940-47?
Mr Chifley:

– The answers to the right honorable gentleman’s questions are a3 follows: - 1 and 2. Approximately £12,000,000 was invested in Commonwealth securities by the Commonwealth Bank in London and in Australia to provide funds to pay off the holders of Commonwealth securities in London in respect of which options of redemption had been exercised by the Government. The balance of nearly £8,000,000 represents the net purchase of securities from the trading banks in Australia less net retirement of treasury-bills held by the Commonwealth Bank.

Paper Production

Mr White:

e asked the Treasurer, upon notice -

  1. What quantity of paper manufactured by the Burnie paper mills was used by the Federal Government in 1943?
  2. What is the present tonnage?
  3. In view of the fact that, by Government direction, certain periodicals have to cut their allocations of paper from the above and other sources, could a survey be made of government printing and publications with a view to eliminating surplus production and cutting down any waste?
Mr Chifley:

– The answers to the honorable member’s questions are as follows: - 1 and 2. It is not practicable to answer these questions without considerable investigation of the records of several departments. The shortage of staff in the Government Printing Offices and offices of the Commonwealth Stores Supply and Tender Board precludes such an investigation being made.

  1. All departments were asked in November last to effect economies in the use of paper and in particular were directed that no order be issued for the printing of any publication until the approval of the Inter-departmental Publications Committee assisting the Department of the Treasury has been obtained. Economies and restrictions in the use of paper are being actively pursued by that committee and the Treasury.

MAKIN War Risks Insurance Trust Account.

Mr Bowden:

n asked the Treasurer, upon notice -

  1. What is the balance in the Marine War Risks Insurance Trust Account at the latest available date?
  2. What is the estimated amount which will be required to meet all outstanding claims against this account?
  3. When did the acceptance of insurance risks against this fund cease, and what was the amount of risk in respect of cargoes in transit?
  4. What action, if any, is proposed regarding

    1. the closure of this trust account, and
    2. the disposal of the cash balance of the fund?
Mr Chifley:

y. - The answers to the honorable member’s questions are as follows : -

  1. £4,070,38(1.
  2. £10,000.
  3. September, 1940. The amount of risk foi argo in transit at that time is not known.
  4. The matter is receiving consideration.

War Damage Fund

Mr Bernard Corser:

r asked the Treasurer, upon notice -

  1. What was the balance in the War Damage Fund at the 31st December, 1947?
  2. What were (a) the estimated value of property, and ((*) the estimated extent of damage, under claims notified to the commission at that date, in respect of which a contingent liability existed?
Mr Chifley:

– The information is being obtained and a reply will be furnished as soon as possible.

Bretton Woods Agreement.

Mr Chifley:

y. - On the 9th October last, the right honorable the leader of the Australian Country party, asked the following questions : -

As it is impossible to obtain any information from the budget papers, the Estimates, or any other source, in regard to the manner in which the Government intends to finance its obligations under the Bretton Woods ‘Agreement, as a member of the International Bank, E ask the Prime Minister whether he will make a statement disclosing the extent of the Government’s liability in .this matter, and the manner in which it proposes to provide the necessary funds, even if the intention is to draw upon resources of the Commonwealth Bank?

I now supply the following information : -

Under the articles of agreement of the International Monetary Fund, Australia was required to pay to the fund the full amount of its subscription equal to £62,012,267. This obligation has been met as follows: -

The above figures are subject to minor adjustments upon final determination of Australia’s net official holdings of gold and

United States dollars as at the 12th September, 1948. Amounts (i) and (ii) above were paid from loan fund under authority of the International Monetary Agreements Act 1947. The security issued in respect of (iii) was issued under section 7 International Monetary Agreements Act 1947.

Payments due to the International Bank for Reconstruction and Development amounted to £12,396,213, representing 20 per cent, of Australia’s total subscription to the bank. This obligation has been met as follows: -

Amounts under (i) and (ii) above were also paid from loan fund. The security in respect of (iii) was issued under section 7, International Monetary Agreements Act 1947.

Land Sales Control.

Mr Chifley:

y. - On the 20th February, the honorable member for Parramatta (Mr. Beale) asked a question regarding an order, exempting from control under the National Security (Economic Organization) Regulations, all sales of land by the New South Wales Co-operative Community Advancement Society. The position is that this society buys land and erects houses thereon for its members. The price paid for any land purchased by the advancement society is subject to full control and any subsequent re-sale to members must be on the basis of no profit to the advancement society. I am not sure whether there are any other societies operating on the same basis, but if there are, and it can be established that the vendor of the land cannot make a profit, I see no reason why similar bodies should not be granted an exemption from the regulations. “ Burke’s Dash to Carpentaria “ ; Publication.

Mr Chifley:

– On the 20th February, the honorable member for Batman (Mr.

Brennan) asked a question concerning the application made to the Commonwealth Literary Fund by Mr. J. S. Weatherston for assistance in connexion with the publication of his manuscript on and Burke and Wills expedition. I have made inquiries in regard to this case and have ascertained that an application was submitted to the Advisory Board of the fund by Mr. Weatherston, but as the board was not favorable to sponsorship the matter did not come before the committee of the fund. The manuscript was read by two members of the Advisory Board who reported that the work of Mr. Weatherston represented a valuable compilation of all available data relating to the Burke and Wills expedition and that it should be preserved. The board considered, however, that the manuscript needed much editorial revision and that it was not suitable for publication in the form as submitted to the fund. For the reasons stated the board rejected the application. It also expressed the opinion that, in view of the very difficult position in the publishing industry at the time, the prospects of obtaining early publication of a book of this nature, even if revised, were not favorable.

Income Tax : Arrears.

Mr Chifley:

y. - On the 19th February, the right honorable the leader of the Australian Country party (Mr. Fadden) asked the amount of tax outstanding at the 31st December last comparable with the figure of £57,000,000 shown in the Auditor-General’s report as outstanding at 30th June, 1947. I have since ascertained that the figure as at the 31st December was £42,000,000 approximately.

Commonwealth Boards

Mr Hamilton:

n asked the Prime Minister, upon notice -

  1. How many Commonwealth boards are in existence at the present time?
  2. What is the title and function of each ?
  3. Is he in a position to state the amount it is estimated these boards will cost the taxpayer in the current financial year?
  4. How many Commonwealth boards were functioning last financial year, and what was the total cost of each ?

Mr.Chifley. - The answers to the honorable members questions are as follows : -

  1. . One hundred and twenty-five. This figure, and the details given in answer toquestions 2, 3 and 4 excludes reference to the following: -

Public Service Board.

Council for ‘Scientific and Industrial Research.

Naval Board.

Military Board.

Air Board.

Defence Committee.

Joint Intelligence Committee (Defence). Contracts Board (Department of Supply and Shipping).

Repatriation Boards. 2, 3 and 4-

*Soldiers’ Children’s Education Board.

*Purchaseand Contracts Board.

*AssistingRepatriation Commission.

Registration Boards established under the Australian Capital Territory Ordinances for the registration of Medical Practitioners, &c. (Department of the Interior ) .

In respect of the Reinstatement Committees, Central and Local Reference Boards in coalmining areas, and Central and Local Trades Dilution Committees (see page 6) each local area, or State committee is included in the abovefigure as a separate body.

Answers to questions 2, 3, and 4 are appended.

In addition to the details given above the following information is furnished in respect of bodies which were functioning in the year 1946-47 and which are no longer in existence : -

Cite as: Australia, House of Representatives, Debates, 26 February 1948, viewed 22 October 2017, <>.