18th Parliament · 2nd Session
Mr. Deputy Speaker (Mr. J. J. Clark) took the chair at 10.30 a.m., and read prayers.
– I direct a question to the Prime Minister. In the Australian Broadcasting Commission news service last night reference was made to an admission by the managing director of Electronic industries, Mr. Warner, that he could not obtain petrol from Russia. Mr. Warner is also Minister for Housing in the Liberal party Government in Victoria. I have been unable to fmd in either of the Sydney morning newspapers to-day any report of the statement attributed to Mr. Warner by the Australian Broadcasting Commission news service. Has the Prime Minister any information on this subject?
– I have not seen any report of a statement by Mr. Warner in the morning newspapers. I have not read the newspapers myself, but the Minister for Shipping and Fuel told me this morning that a statement had been made by Mr. Warner and I asked my press secretary to examine the Sydney newspapers to ‘ see whether they contained a report of such a statement. He has told me that he has not been able to find in them any reference to a statement by Mr. Warner.
– Will the Minister representing the Minister for Shipping and Fuel inform the House whether it is a fact that all of the State governments, with the exception of the Victorian Government, are prepared to transfer powers to the Commonwealth to ration petrol supplies effectively? Has the Minister been advised of the attitude of the LiberalCountry party Government of Victoria on this matter? Does he know whether the Victorian Government has really decided upon its attitude towards this subject? Should the Victorian Government not refer power to the Commonwealth, will the farmers and small business people of this -country, ag well as citizens generally, be left to the mercy of the big retail distributors of petrol?
– I was present at theconference of Commonwealth and StateMinisters, held in Canberra last, month when this matter was discussed. In view of what transpired at that conference, and of subsequent events, I think that it is true to say that all States except Victoria are agreeable to refer power tothe Commonwealth to re-introduce petrol rationing. The Queensland Government has already indicated its willingness todo so.
– The Minister has stated previously that the Commonwealth already has that power.
– Whilst that may be so, the position in Victoria is rather confused. As honorable members arc aware, although a Liberal government . is in power in Victoria, the Australian Country party is in Opposition, and a very’ bitter factional fight between the Liberal and Australian Country parties in that State is taking place. According to press statements that I have read, -whilst the Premier of Victoria favours the referring of power to the Commonwealth, some of his Ministers, including Mr. Warner, Minister for Housing, are opposed to that being done. Because Victoria is not agreeable to refer power to the Commonwealth, it is impossible for the Commonwealth to re-introduce petrol rationing throughout Australia. Recently essential users of petrol at Tenterfield in New South Wales were unable to obtain supplies. I am afraid that that will happen in various parts of Australia unless the Commonwealth is enabled to deal effectively with this matter. However, that cannot he done until Victoria falls into line with the other States.
– The Prime Minister in a statement which he made to the House recently said that the consumption of petrol since the abolition of rationing and during the last three-monthly period for which statistics were taken had increased by about 21 per cent. Did the right honorable gentleman endeavour to ascertain the increase of consumption during the first month following the abolition of rationing? Has he ascertained that during that month the consumption of petro] increased only to a small degree ? Has he ascertained the quantity by which consumption increased during the first month after he called the States together and requested them to re-impose rationing? Can he say what quantity of petrol has been distributed in 44-gallon drums throughout Australia as the result of the panic created by the Australian Government? As the annual Australian consumption of petrol is 470,000,000 gallons, does the Prime Minister consider that 3,500,000 gallons is a fair estimate of the increased consumption due to the strike ?
– Some of the honorable member’s figures are astray. I thought that I had made certain things clear when I spoke recently. I said in my letter to the State Premiers - and I do not think that there has been any denial of the statement - that so far as could be ascertained from available figures in the first unrationed month, for part of which the coal strike was in operation, the increase of consumption was 45 per cent. After that, the oil companies, seeing what was happening, instituted some form of control over the distribution of petrol and consumption in the second unrationed month was about 20 per cent, above normal. In the last month it was 17 per cent, or IS per cent, above normal. The honorable member says that an allowance of 3,250,000 gallons was made for the strike. “What I said was that the allowance for added consumption during the strike was approximately 5,250,000 gallons. I think that the exact figure is 5,240,000 gallons.
– I thought that the right honorable gentleman said 3,250,000 gallons.
– I am sorry if I did not make myself clear. Allowing approximately 5,250,000 gallons for the strike, the average increase of petrol sales was 21 per cent, for the three months. It should be remembered also in regard to the strike that although motor transport services were expanded, many business organizations, particularly in New South “Wales and Victoria, were not using their motor lorries and other vehicles, because their establishments were closed down. This reduction of normal consumption to some degree countered increased con sumption in other avenues due to the strike. I repeat that allowing 5,250,000 gallons for the strike, the average increased consumption for the three months was 21 per cent.
– I draw the attention of the Prime Minister to the closing of Stockrington No. 1 colliery to-day because miners are on strike against an order of the local coal authority. Will the right honorable gentleman direct the miners’ leaders to honour their undertaking to uphold the law, which they gave when purging their contempt of the Arbitration Court, and order the striking mine workers to respect the decisions of the coal authority and return to work? Is long-service leave ‘to be suspended, under the terms of the recent award, in respect of miners now on strike at Stockrington No. 1 colliery? Is it a fact, as stated by a Joint Coal Board spokesman, that even if stoppages for the rest of the year are reduced to an absolute minimum, the New South Wales coal output will be the lowest since 1945 and underground coal production the lowest since 1936? Is it also a fact that, owing to low coal production, Australia is importing steel at prices ranging from two to three times as much as the price of Australian-made steel?
– I have not seen any statement about the colliery that the honorable member has mentioned. I gather from his remarks that a local stoppage has occurred as the result of a decision made by the miners’ lodge at that centre. It will be necessary for me to obtain full particulars before I comment upon it, because I am not prepared to accept ex parte statements about what has happened. I shall endeavour to ascertain the facts and will let the honorable member have whatever information I obtain. I understand that the matter of long-service leave has not yet been finally settled by the Coal Industry Tribunal. In regard to the matter of issuing directions to miners’ leaders, I think that the Arbitration Court has made its mind perfectly clear on that matter and I am certain that it will ensure that its instructions are carried out.
– I preface my question to the Prime Minister by reminding the right honorable gentleman that provision was made in the Liquid Fuel (Defence Stocks) Act that was passed by the Parliament during the last sessional period for reserves of petrol to be set aside for use in the event of war. In view of the vital necessity for supplies of coal, also, to be available for that purpose, and for general industrial purposes, will the right honorable gentleman inform the House whether the Government has considered establishing a stock-pile of coal either by encouraging large-scale production from open cuts, or by importation, or both? If not, what is the reason for not doing so?
– The circumstances relating to petrol and coal are quite different. As honorable members know, petrol must be imported into this country. That involves lengthy lines of communication, availability of shipping, and other considerations, including refining capacity. The Haifa refinery has been closed down for some time due to difficulties in Palestine. Having regard to those factors, it is considered that we should maintain a reserve of petrol and aviation spirit for defence purposes. With regard to coal, it would be foolish to close down industries and retard production for the purpose of accumulating a stock-pile when the coal that has been produced can be used immediately for essential purposes. In the interests of the national economy, it is much better that that coal should be used by essential industries. Therefore, it is not proposed to attempt to accumulate a stock-pile of coal and thereby to deny to industry the supplies of coal that are essential to it that would otherwise be available. It must be borne in mind that there are other factors that prevent us from stock-piling. Certain kinds of coal, for example, deteriorates very rapidly. Some coal has been imported from South Africa,but that country has only a very limited quantity available for export. Coal has also been imported from India, but the Indian Government is able to make only limited supplies available to us. Speaking from memory, I think that only 500,000 tons of Indian coal has been allocated to Australia this year by the Indian Government. Approximately 250,000 tons of that quantity has been allotted to Victoria on the application of the Victorian Government. Coal obtained from South Africa and India is very expensive. It has been suggested that coal should be imported from the United Kingdom. That country has very heavy coal commitments. Not only does the United Kingdom require coal for its own industries, but it must also export coal to other countries with which it has made trade agreements so that it may obtain in exchange goods that are absolutely essential for the preservation of the standard of living of the British people. The possibility of stock-piling British coal in large quantities is very limited. We have obtained some coal from the United Kingdom for South Australia, and some Yorkshire coal is on its way to Victoria. I repeat that only limited quantities of coal can be obtained from the United Kingdom.
– There are other coalexporting countries.
– That may be so, but there is only a limited quantity of coal available for export. The Victorian Government and other State governments have indicated that they will accumulate stock-piles if sufficient coal can be produced to enable them to do so ; but I point out that there is an ever-increasing demand for coal. At one time 8,000,000 tons of coal a year would have been sufficient to meet our requirements, but the time is fastbeing reached when we shall require 16,000,000 tons a year. The open cuts are being developed to their fullest capacity.
Fatal Accident near Fairbairn Aerodrome.
– In the absence of the Minister for Air, I ask the Prime Minister whether a tragic happening which resulted in the loss of a highly trained pilot and two fighter aircraft occurred near Fairbairn aerodrome yesterday while the aircraft were engaged in formation flying? Is formation flying an extremely dangerous exercise because the risk of collision is great and very great if carried out at night, or continued into cloud, as it was yesterday? Further, is formation flying quite obsolete for operational or other purposes, except, perhaps, as a spectacle to be observed from the ground? If they are facts, will the right honorable gentleman ask the Chief of the Air Staff to issue an order prohibiting formation flying entirely or limiting it to the keeping of formations of not less than two wing spans distance or only to aircraft fitted with an automatic ejector-type seat, which allows the pilot’s canopy to fall away and catapults the pilot clear of the aircraft? Furthermore, will the Prime Minister inquire whether the aircraft that spun in yesterday and could not be approached because of exploding .5 ammunition was about to engage on a gunnery exercise ? If it was not, will he ask Air Marshal Jones to order that live ammunition is not to be loaded unless a gunnery exercise is to be carried out?
– I did receive a report yesterday afternoon about the unfortunate accident that resulted in the death of a young and valuable member of the Royal Australian Air Force. The whole matter is being fully investigated by the properly appointed authorities, and I do not think I should make any comment pending their finding and report to the Minister for Air, who will order a further inquiry should it be necessary. I am not competent to express an opinion on the technical aspects of the honorable member’s question regarding formation flying and the carrying of live ammunition. I do not know whether formation flying is obsolete or not. I shall ask the Minister for Air to examine the honorable member’s question and answer it after he has conferred with Air Marshal Jones.
– I desire to ask the Minister for Repatriation a question about reports of inquiries by the Repatriation Department into the morals of war widows. Have any such inquiries been made by security officers or any other persons? If so, on what authority were they made, and what action was taken? Are any other groups of pensioners subject to such inquiries? Is the attitude of the Government in this matter consistent with its policy of granting pensions to de facto wives?
– Any action taken to investigate the circumstances of the payment of pensions to certain classes of people is taken under a section of the Australian Soldiers’ Repatriation Act. I think it is section 43. Recently a request has been made that the section be removed from the act. It is not the intention of the Government to remove the section. It is in fact, the intention of the Government, through myself, to continue the practice that has been adopted in the past in accordance with the provisions of the act to ensure that there shall be no misappropriation of of funds or payment of money to persons to whom it should not be paid. The cases of war widows and de facto wives are appropriately covered by the act, and no action is contemplated to reverse the situation.
– I direct the attention of the Minister for Information to the elimination of the playing of the theme song, “ Advance Australia Fair “, before the daily news broadcasts from stations operated by the Australian Broadcasting Commission.
– Hear, hear!
– Will the Minister for Information inform the House whether that was done as a result of instructions by the Australian Broadcasting Commission? Has the policy been reversed and is “ Advance Australia Fair “ again to be played immediately prior to the national news broadcasts? Oan the Minister explain why the alteration was made ? It is a mystery to many people.
– As an Australian I am ashamed at the disgraceful interjections that have come from some honorable members opposite, including the honorable member for Parramatta, about the use of the splendid Australiananthem, “ Advance Australia Fair “, as a theme song by the Australian Broadcasting Commission. It is not our national anthem, but it is a good Australian anthem, and this chamber is the last place in which one would expect derisive comments to be made upon its use as the- theme music introducing, the national news broadcasts over the national stations.
– Are members of the Opposition not entitled to their own musical opinions?
– I believe that the objection that has been raised by some member of the Australian Broadcasting Commission, or perhaps the majority of the commission’s members and by some honorable members opposite, was not based on musical grounds at all. “ Advance Australia Fair “ expresses too healthy an Australianism for some people. The commission discontinued for a period the use of the song as the introduction to the national news session and substituted some, abomination that represented nothing. The lame excuse that was given for the substitution was that it saved twenty seconds of time. It was alleged that the new theme music took fifteen seconds to play against 35 seconds required for the playing of what is one of our very splendid Australian anthems.
– I thought that the theme song was based on “ God Bless the Prince of Wales “.
– It certainly was not based on “ God Bless the Leader of the Liberal party”. At any rate, there were so many protests from the Australian public about the substitution that the commission took action on the matter. The chairman of the commission spoke to me privately about it, and asked me what I thought of the music that had been substituted and I told’ him that I considered that the commission should resume using the old tune as quickly as possible.. There was no direction by anybody to the commission about what it. ought to do, but the weight of public opinion forced it to resume the use of the former theme song. The honorable member for Hindmarsh comes from South Australia, which has another good Australian anthem, “ The Song of Australia “, and I hope that some time in the future we shall be able to introduce that song as a. theme song for the benefit of antiAustralians inside and outside of this’ Parliament.
The honorable member for the Northern Territory having ashed a disallowed question,
– The honorable member for the Northern Territory may reframe his question if he will do so in the proper manner.
– I ask. the Minister representing the Minister for Health whether the Minister for Repatriation is chairman of the Hospital Employees Federation; whether the Minister for Repatriation has used his influence, as Minister, among the staffs of military hospitals in an endeavour to force staff members to join that union; what is the honorable member for Eden-Monaro, who is a member of the Canberra Community Hospital Board, and a candidate for reelection to that board to-morrow, doing to protect nurses at. the Canberra Community Hospital from the same undemocratic gestapo tactics?
Question not answered.
– Has the Treasurer seen an article in the Melbourne Herald of yesterday in which the following passageoccurs : -
Federal Opposition members think that’ devaluation of sterling is inevitable.
Can the Treasurer say whether this report: is correct? Is it true that speculation of this sort can cause great harm to the: British Commonwealth in general, and to business interests in particular ?: Will the Treasurer consider issuing a sharp* rebuke to irresponsible newspapers- of thetype of the Melbourne Herald^
– I rise to a point of order. Do I understand, Mr. Deputy Speaker, that the question just asked is in order ? If it is, why was- the question put by the- honorable member for the Northern Territory out of order?’ Both questions contained comment. I understand that the first question was ruled out of order because it contained com: ment about a gestapo. Why has not the second question been ruled out. of order on the ground that it contains comment, on members of the Opposition ?
– . No Minister offered to- answer the rephrased! question asked by the honorable member for the Northern Territory. It is open to Ministers to answer questions or not as they choose. The question of the honorable member for Martin is in order insofar as it relates to the exchange rate for sterling. That part of the question which asks the Treasurer to rebuke the Opposition is entirely out of order. The Treasurer may answer that part of the question which is in order.
– I am still not quite clear which part of the question is in order and which part is not. I have not seen any report in the Melbourne Herald about devaluation of sterling, and I am not aware of any meetings having been held in this House to discuss the subject. Indeed, I was informed this morning that the subject had not been discussed at any party meeting called for the purpose. Nothing is to be gained by discussing the matter further. So far as the Government is concerned, there is nothing to add to the reply that I gave to the honorable member for New England last week.
– I direct a question to the Treasurer. I understand that concrete mixers and brick moulds are exempt from sales tax provided the purchasers certify that they are for use exclusively by a builder or contractor for making concrete for re-sale; or for a primary producer for mixing concrete for work not of a domestic nature. However, if a man purchases a concrete mixer or brick mould for the purpose of building his own house he is compelled to pay sales tax. Will the Treasurer look into this anomaly with a view to granting exemption from sales tax on the items mentioned when purchased by a person for the purpose of building his own home?
– The first case mentioned by the honorable member in hia question would come under the heading of “ aids to manufacture “, which are exempt from sales tax. The interpretation of the provision is & matter for, the Commission of Taxation. If equipment is used by a contractor it is exempt from tax, and I understand that the honorable member wishes this exemption til] to be extended to equipment used by a private person. I shall examine the matter.
– As it is the policy of the Government to export practically all rice produced in Australia, I ask the Minister for Commerce and Agriculture whether any steps have been taken to increase rice production? Are the territories of the Commonwealth still largely dependent upon us for their supplies of rice? Is any rice being exported to Ceylon at present ? In view of the decline in the nutritional value of rice when it is polished, are we exporting polished or unpolished rice?
– The Australian Government is not taking any steps directly to increase the production of rice in this country. The Government has left the question, of increased production of that particular product to the good sense of the respective State governments, which are the production authorities inasmuch as they control the major volume of irrigation waters used for rice production. Up to the present, it appears to have been definite policy by the State governments concerned to refrain from increasing rice production. Two reasons exist for that policy. First, rice production requires very large quantities of irrigation water and it is felt that the greater proportion of our limited supplies of irrigation waters could be used more economically for the production of meat, dairy products and fruit. Secondly, and the Government of New South Wales particularly takes this view, it would be unwise to increase the production of rice substantially because of the likelihood that in the years ahead countries which were formerly huge producers of rice will come into their own again and Australia would be left with a surplus for which it would not be able to find a profitable market. We are at present supplying New Guinea’s requirements of rice. I assume that the rice is exported in the condition in which the ordinary Australian householder purchases rice. I cannot say whether it is shipped in a polished, unpolished, semi-soft or semi-hard condition. I shall obtain that information for the honorable member. I am also unable to say whether, at present, rice is being exported to Ceylon. However, it has been our policy to send rice to countries such as Ceylon, Malaya and other Asiatic countries, as, in the main, the United Kingdom Government is responsible for supplying them with foodstuffs. Last year, at the request of the rice producers of Australia we sent a shipment of 4,000 tons of rice to the United Kingdom because the industry is anxious to enter that market again. However, as the United Kingdom Government was anxious to assist the Asiatic countries for which it has some responsibility in relation to the supply with foodstuffs or to assist other governments with which it is directly associated, it directed that some of that rice be exported to those countries.
– I ask the Minister for Repatriation whether sales tax has definitely been removed from motor cars purchased by various categories of exservicemen ?
– It is true that certain categories of ex-servicemen, known as disabled soldiers, and including totally and permanently incapacitated, tubercular, or blinded ex-servicemen, are now able to purchase motor cars free of sales tax. These men are now placed on the same basis as others for whom exemption from sales tax was granted last year.
– I ask for leave to make a short statement on pay and allowances in the armed forces.
– Is leave granted ?
Opposition Members. - No.
Leave not granted.
Prize Monet: Participants
– I desire to ask the Minister for Defence a question.
-Well, go on ; ask it.
– The Minister for Defence is most discourteous. He is talking to an honorable member just behind him.
– Order ! The honorable member must proceed with the question.
– Earlier in the present sessional period I asked the Minister for Defence to give me some details of the allocation of prize money amounting to £4,000,000 among members of the Royal Australian Navy and the Royal Australian Air Force who participated in the capture of enemy vessels during the recent world war. I have not yet received any information from the honorable gentleman on the subject, although more than three months have elapsed since I asked the question. Is the Minister able to tell me now who are eligible to participate in the prize money, and when and how applications should be made? Many persons who served in the armed forces during the war are still asking me for information but I am unable to inform them how the money can be obtained.
– It is true that prize money is available in respect of enemy vessels captured during the war. I am not in a position to say offhand what the amount is. I shall endeavour to obtain the information for which the honorable member has asked.
Formal Motion fob Adjournment.
– I have received from the honorable member for Reid (Mr. Lang) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely -
The need to call to the bar of this House the Governor of the Commonwealth Bank for examination regarding the international monetary position, with particular reference to the dollar crisis, Australia’s international reserves, the price of gold, and international exchange problems generally.
.- I move-
That the House do now adjourn.
– Is the motion supported?
Five honorable members having risen in support of the motion,
– This country is in the midst of a grave economic crisis. It is called a dollar crisis. It is really due to a break-down of international finance. Before the war this country could buy all the American motor cars, fuel, newsprint, machinery and films that it needed. Our only objective was to see that the total imports into Australia balanced our total exports. To-day, all that has changed. Why has it changed’? On paper, we were never more wealthy. Our excess of exports over imports was never greater in our history. We have had record prices for record crops. We have accumulated huge reserves abroad. But what can we buy with those overseas funds? They are virtually already sterilized. Those accumulated funds about which we hear so much are just mere bookkeeping entries in the Bank of England, and that is why we cannot obtain all the liquid fuel that we need. Yet liquid fuel is more essential to this country than coal. In the modern world no country can survive without liquid fuel. Without it our transport system would break down completely, our communications would .be dislocated, our industries would become stagnant, and Australia would no longer he in a position to defend itself. It would be unable to resist aggression. So the present acute shortage of liquid fuel does- not involve merely a return to the horse and buggy. Any country that is without an adequate supply of liquid fuel becomes a straggler amongst the nations. Yet we are told that we Australians must accept the present situation. The reason offered is that the purchase of fuel involves the payment of dollars, and, says the Government, “ We have no dollars “. That is the Government’s defeatist outlook. The position is one of paradox built upon paradox. On balance of trade we ‘have a huge surplus overseas, but the money that we receive for our exports is practically worthless in exchange with other nations. American companies want to sell us their products, but the Government says that we cannot afford to buy them. Of course, those who should be worrying about our supply of dollars are the Americans, not ourselves. But the
Americans are not worrying. Yet the present Government puts up the sign over the doorway of Australia, “ No dollars available”. I emphasize that it is the Government that has adopted that attitude, not the traders of the nation. The Americans are warned off the Australian market. By whom? By the Australian Government. In order to ensure that the Americans do not sell too much to Australia, licences have to be obtained from the Government for imports, and prohibitions have been placed on the import of American goods into this country. That is bad enough, but now additional cuts are to be made in our imports. The present chaos has arisen only since money has become centralized in reserve banks. It is only since governments have established complicated controls over international trade that the traders of one nation have found that they can no longer do business with the traders of another nation. There have been too many controls and too much governmental interference and meddling with business. Under the trader-to-trader basis on which international trade was formerly conducted, the problems of finance sorted themselves out. Under the present government-to-government system international trade is operated, not by businessmen, but by doctors, economists, professors and other experts who could not run a corner grocery store if they owned one. For months we have been trying to get the truth about Australia’s dollar position. The Government has not made a clear, unequivocal statement on the subject. The Parliament has been kept in the dark. Of course, we have been treated to a lot of mumbo-j.umbo on the matter. Dire warnings have been issued, and the Government has implied that a kind of black magic envelopes the subject. But the fact remains that we have not been able to get a straightforward account of the dollar position. When the Prime Minister (Mr. Chifley) speaks on the subject, he is like a witch doctor. He treats the subject as if it is a dark one, and his efforts seem to make it darker, more confusing and more mysterious than ever. It is not sufficient to mutter the dread word “ dollars “, and close the door to all discussion. This country is entitled to a proper business balance-sheet showing exactly where the alleged dollar deficit arises. We are entitled to all the facts on dollar expenditure from sterling sources. This country should know how the Chancellor of the British Exchequer, Sir Stafford Cripps, is treating other countries, and what is the future of our sterling reserves. It is entitled also to know whether, as has been suggested by the American financier, Mr. Bernard Baruch, there is a possibility of such balances being cancelled. That is a nice word to use. Honorable members should be informed whether the United Kingdom delegation to the Washington financial discussions has been fully informed about Australia’s position, whether there is any likelihood of a general devaluation of the pound sterling and how such a policy will effect our exchange position. Those are a few problems about which honorable members should be properly informed if they are to make an intelligent survey of the existing situation. We should know whether Sir Stafford Cripps has plenary power to determine our future international monetary position. We are entitled to know whether any approaches have been made to the International Monetary Fund and what has happened to our contributions to that fund - contributions made in dollars and in gold. Furthermore, we should know what action, if any, is contemplated to exchange any of our sterling balances for dollar advances to finance urgent trade needs. What is the position regarding the clause in the Marshall plan providing for the convertibility of sterling balances into dollars? What is the mystery surrounding our gold exports? Does this country obtain any credit for such exports in the published accounts of our dollar position, or is all the gold sold to the Bank of England to be added to the already over-swollen sterling reserves? What is the attitude of the Commonwealth Bank to the pegging of the price of gold at 35 dollars per fine oz., the price fixed in 1934, when its free market value would have been closer to 100 dollars per fine oz. ? There are many dollar questions to be answered in connexion with petrol. In particular, there is a little matter of £60,000,000 sterling in indirect costs, or incidental expenditure, to be accounted for. All this information is essential if this Parliament is to have a proper perspective on the dollar position. To put it mildly, this House has been humbugged for too long. Two men should be in a position to give the information - the Treasurer and the Governor of the Commonwealth Bank. We have tried to obtain it from the Treasurer month after month, but we have failed. His versions of the situation never square. It may be that the Treasurer is just confused and has lost himself in a maze of theoretical explanations. -It may be that he has been hoodwinked by the casuistry of Sir Stafford Cripps, or that he has been overlooked by the pressure tactics of the experts. All that we want is a simple explanation. Why will not the goods that we export obtain goods in return? We cannot keep our industries going on book entries in the Bank of England. We need fuel and we need machinery. If the Treasurer will not or cannot give us the explanation that we need, we must look to other sources.
During the depression, when the Premiers plan was before this House, the then Chairman of the Commonwealth Bank, Sir Robert Gibson, waa called to the bar of the Senate for examination. Now this country is faced with another economic crisis. But the powers of the chief executive of the Commonwealth Bank are extraordinarily greater now than they were in 1931. The Governor of the Commonwealth Bank has the economic fate of this nation in his hands. The situation puts me in mind of a very trite quotation. If finance is government, the Governor of the Commonwealth Bank is the government. If he blunders, we can slide headlong into the abyss. The Government has entrusted its protege, Dr. H. C. Coombs, with the drag-net powers of the Commonwealth Bank Act of 1945. He is in a position, to carry into practice the ideas that he formulated in company with the Treasurer and the Minister for Post-war Reconstruction when he was working under them. But the theories that he holds may not be valid. They may not work. What then? Dr. Coombs recently published a 28-page report on the Commonwealth Bank’s policy and operations. He tried to explain the dollar position. All I oan say is that it was a most unsatisfactory explanation, if it can be called an explanation. It was full of generalities, but almost completely devoid of factual information. There was a reference to what he termed “hot money”.
– Order ! The honorable member’s time has expired.
– First, I draw attention to the terms upon which the honorable member for Reid (Mr. Lang) has based his motion -
The need to call to the bar of this House the Governor of the Commonwealth Bank for examination regarding the international monetary position, with particular reference to the dollar crisis, Australia’s international reserves, the price of gold, and international exchange problems generally.
I should have thought that the honorable member would be the last gentleman to draw attention to the previous occasion on which the chief officer of the Commonwealth Bank was called before this Parliament, because that subject is linked with the depression period, in which the honorable member himself played no small part. If honorable members will refer to Hansard for the period from the 23rd April to the 4th June, 1931, they will find in it the statements that were made by Sir Robert Gibson, who was then Chairman of the Commonwealth Bank Board. It was following upon the evidence that was given by Sir Robert Gibson before the Senate that certain legislation, which later became known as the Premiers plan, was introduced. Every honorable member knows the effects of the Premiers plan upon the people of Australia, particularly the workers. The honorable member for Reid himself was in the chair at the conference of Commonwealth and State Ministers at which the Premiers plan was agreed to. I read from page 5 of the report of the conference of Commonwealth and State Ministers held at Melbourne from the 25th May to the 11th June, 1931, just to prove beyond any doubt that the honorable gentleman himself was responsible for the Premiers plan and put the motion in regard to it. I am reading this extract-
– What has that to do with the matter?
– It has this to do with it, that the honorable member for Reid has suggested that the chief officer of the Commonwealth Bank should be brought before the bar of this House to give certain evidence. I am directing attention to the fact that when the chief officer of the Commonwealth Bank, the late Sir Robert Gibson, was on a previous occasion brought before the bar of the Senate to give evidence, the consequence was that a plan was inaugurated to the great disadvantage of the workers of this country.
– That has nothing to do with the matter.
– It has a great deal to do with it. The report reads -
– You were objecting to the flatrate imposition there, and now you want to say that we ought to have the flat-rate here. As acting chairman, I shall put Mr, Hogan’s motion in the form in which it has been amended as we have proceeded. It is -
That, for the guidance of the Legal Sub-Committee, the Conference is of opinion that there should be a reduction of 20 per cent, in all adjustable Government expenditure as compared with the year ending the 30th June, 1930, including all emoluments, wages, salaries, and pensions paid by the Governments, whether fixed by statute or otherwise, such reductions to be equitably effected. Motion agreed to.
So the honorable member for Reid, who was senior Premier in the Commonwealth, was responsible for the introduction of the Premiers plan, which brought untold hardship and misery to the workers of this country, and the plan was a consequence of calling before the Parliament of Australia the then chief officer of the Commonwealth Bank.
– What the Minister says is not true.
– Look at the records.
– That has nothing to do with the issue.
– There is a great difference between the circumstances in which Sir Robert Gibson was called before the bar of the Senate and the circumstances to-day. At that time, it is true, the financial policy of Australia was dominated by the Commonwealth
Bank Board, of which Sir Robert Gibson was chairman, and it is also true that at that time the Australian Parliament had no say whatsoever in the financial policy of Australia. So there was some excuse for calling the then chief officer of the Commonwealth Bank before the Parliament, because it was he and the other appointees to the Commonwealth Bank Board, the representatives of vested interests, who were appointed by honorable gentleman opposite when they were the Government, that decided the financial policy of Australia at that time. It was because of that policy that we were led into the depression. The circumstances to-day are entirely different. There is no reason whatever for calling the chief officer of the Commonwealth Bank before the Parliament to-day, because, as a result of the Commonwealth Bank Act 1945, which was passed by the Parliament, the Commonwealth Bank Board was abolished, and the financial policy of Australia is decided by the government of the day, which is elected by the people of Australia and is responsible to the Parliament and the people. So there is a great difference between the circumstances when Sir Robert Gibson appeared before the bar of the Senate and the circumstances to-day. The honorable member for Reid suggests that the Governor of the Commonwealth Bank should be brought before the bar of - this House, although the circumstances have entirely altered, and altered for the better, in that the Government, not the erstwhile Commonwealth Bank Board is responsible for financial policy. If Opposition members had their way, they would bring back the Commonwealth Bank Board. Then it would be necessary to get a full explanation of the financial position by bringing before the bar of the House the Chairman of the new Commonwealth Bank Board. Opposition members have made that perfectly clear, because, concluding his second-reading speech on the Commonwealth Bank Bill 1945, the Leader of the Opposition (Mr. Menzies) said - . . on behalf of my colleagues, and myself, I desire to make quite clear to the House and to the people that when we on this side of the chamber are returned to office, we shall take prompt steps to restore board control to the Commonwealth Bank … I make that statement publicly, here and now, because it will be well that when the people of Australia come to pass judgment upon this matter, they should know exactly what is the issue, and where we all stand upon it.
There is no need whatever to call any officer of the Commonwealth Bank, the Governor or any other officer, before the bar of the House to explain the financial situation to-day.
– Why not ?
– Because it is the Government of Australia, and the Cabinet elected by the Labour party, that decides the financial policy of the country and how it shall be applied.
Having dealt with the previous occasion on which an official of the Commonwealth Bank was called before the Parliament, which had certain consequences that, in ray opinion, led us into a bad position-
– The Premiers plan was inspired by the then Prime Minister, the right honorable member for Yarra (Mr. Scullin).
– The honorable member for Reid was chairman of the conference when the resolution was passed.
– Nothing of the sort!
– Having dealt with that matter, I now pass to the dollar situation, which also was mentioned by the honorable member for Reid. The dollar situation is quite easy to understand if one takes the trouble to understand it. The plain fact is that Australia earns dollars by the export of goods to the United States of America and other dollar countries. It earns each year from the sale of goods, including gold, which also was mentioned by the honorable member for Reid, an average of £50,000,000 in Australian currency, but when it comes to spending dollars on the goods that Australia requires, the country needs about £70,000,000 worth of dollars in Australian currency. The difference between what we earn and what we spend in the dollar areas has to he made up by drawing on the sterling area reserve of dollars and gold. That is a simple fact. I indicated in a previous debate that last year we had to draw from the sterling area reserve of dollars 174,000,000 dollars and that this year we shall have to draw 72,000,000 dollars.
– By how much did we build up the sterling area reserve of dollars?
– The sterling area reserve is being depleted all the time. I recently gave the figures showing the extent to which it is being depleted. It fell from 500,000,000 dollars in the first quarter of this year to 406,000,000 dollars in the second quarter, and, while the economic conference was sitting in London, it fell to 385,000,000 dollars. The drain has continued since then, but I am not at liberty to divulge the latest figures.
– Are only direct credits taken into account in that reserve, or are indirect credits taken into account? Is any consideration given to indirect credits ?
– -Every factor that we are entitled to consider is taken into account.
– Who gives the entitlement?
– If the right honorable gentleman can suggest any single item that has been neglected in making up the balance between Australia and the dollar area or the sterling area, I should like to know it. It is useless to talk generalities about some item having been missed.
– We do not know the position to-day and the Minister does not know it.
– The position is quite clear. We get credit in dollars for all the goods that we sell to the dollar area and the gold that we sell to the United Kingdom. The total credit for the whole of our sales to the dollar area and the sales of gold amounts to about £50,000,000 a year in Australian currency, but we require about £70,000,000 a year in Australian currency to buy the things that we need from the dollar area. We are in the position of having to go to the United Kingdom, which manages the sterling area reserve of dollars, and say, “We require a few more dollars than we earn. Will you give them to us ? “ So far we have been given all we require, although not so much as we should like.
– We are entitled to it, surely when Great Britain owes us £450^000,000.
– That is an entirely different position. It is true, of course, that arguments can be adduced to the effect that we should be able to get large quantities of dollars from the United Kingdom. On the other hand, of course, there is this to be said, that we are keen to get this credit in the United Kingdom because that country is our best market. If we did not sell goods to the United Kingdom - and it is the selling of these goods that enables us to develop our sterling credits in London - where would we sell them? We should probably be unable to sell them in the United States of America, certainly not for dollars.
– To what goods is the Minister referring?
– I am referring particularly to food items such as wheat and wool.
– Does the Minister claim that there is not a world market for wheat at present?
– I am not claiming that there is not a world market for some commodities, but it would not be possible for us to sell wheat and meat to the United States of America. I remind honorable members that when the Minister for Commerce and Agriculture (Mr. Pollard) attempted to sell a small quantity of butter to the United States of America he was confronted ‘-with many difficulties. That emphasizes the basic cause of the dollar shortage problem throughout the world, which concerns not only the countries of the British Commonwealth of Nations but also every other country in the world. It has arisen because the United States of America is such a wealthy country, so far as natural resources are concerned, and because the techniques and methods of production in that country have advanced to such a stage that there is no need for its people to obtain commodities from any other country in the world. On the other hand other countries must obtain certain types of goods from the United States of America.
– Do not the Americans want zinc and rubber?
– They do not really need rubber. The United States of America developed huge synthetic rubber plants during the war and could now, at a pinch, do without any natural rubber at all. Legislation in the United States compels manufacturers in that country to use specified proportions of synthetic and natural rubber. That should make the difficulty of the dollar problem quite clear to honorable members. The need of the people of the United States of America to buy goods from other countries- is not nearly so great as is the need of other countries to obtain commodities from the United States of America. When speaking on this subject the other day, I explained that the conference in London had decided on a certain course of action. The present crisis is not the first crisis in relation to dollar problems. In fact it can be said to be the fourth of such crises. The first dollar shortage crisis occurred immediately after the war. That was met by a loan from the United States of America to the United Kingdom. The second crisis, which could be called the convertibility crisis, was overcome by certain action that adjusted the situation for the time being. At a later stage a critical situation again developed; it was met by the introduction of the European recovery programme. We are now facing the fourth crisis. No individual in the world has yet been able to provide a solution of this problem, the basis of which is the disbalance of the productive capacity of the United States of America compared with the production of other countries of the world. I consider that there are two ways in which the problem could at least be alleviated. One is the reduction of tariffs in the United States of America to enable the freer inflow of goods from other countries. The greatest contribution that that country could make to the economic prosperity of the world to-day would be to abolish all of its tariffs. Of course that would be very difficult to do because certain vested interests in the United States of America would lobby against such action being approved by Congress. I do not know whether it would be practicable for the United States to adopt that course.
– Would there be a reciprocal arrangement?
– No. We are dealing with the free flow of goods into the United States of America, which would help to alleviate the present position. The second way in which the problem could be alleviated would be by the private investors in the United States of America adopting the technique of investors in the United Kingdom who were in a comparable position up to the end of the last century, and, indeed, up to the outbreak of World War I.
– That would make the position very difficult.
– I do not agree with the honorable member for Reid. At that time, although the United Kingdom occupied the dominant economic position in the world, there was no difficulty about currency. The people of all countries could sell goods to whatever country they chose, change the money received into sterling, and subsequently change that sterling into the currency of any other country in the world. We want to get back to that position if at all possible. The world was then able to enjoy a system of that kind, free of limitations with relation to particular currencies. It was able to enjoy that pattern of trade because investors in the United Kingdom were able to send their money to any other country in the world, and whenever there was a disbalance of trade in any country it was counteracted by the investment policy of the United Kingdom. I am not referring to government policy.
– Order! The Minister’s time has expired.
– If ad it not been for the extraordinary speech of the Minister for Post-war Reconstruction (Mr. Dedman) I should not have spoken to this motion. The Minister has told us that it is perfectly simple to understand why Australia cannot obtain a sufficiently large allotment of dollars to permit, this country to obtain adequate petrol and other fuel requirements in order to carry on its work and produce food to enable the starving people of Great Britain to be sustained at a reasonable standard of living. Through its blind folly this Government has failed to understand Australian requirements. It has failed almost continuously to realize that it should be watching the interests of the people of this country, not preaching the doctrinaire socialism that it has constantly advocated. The Minister referred to the direct exports of gold from Australia to the United States of America, for which we receive dollar credits, based on a guaranteed purchasing price of 35 dollars per oz. That is one grip over credits for exports from. Australia given us in dollars by Great Britain and the sterling areas. The Minister went on to point out that before the war there was no difficulty regarding the convertibility of currencies. He said that if we accumulated sterling balances in London we could, if we so desired, convert them into dollars and buy what we needed from the United States of America. Under the existing system, our sterling balances in London are, as the honorable member for Reid (Mr. Lang) has pointed out, frozen. In those circumstances, one would think that this Government would at least have preserved for us the raw material content in the exports of manufactured goods from the United Kingdom to the United States of America to which we are obviously entitled. A duty has always been levied upon imports of wool textiles and manufactured goods into the United States of America. At one time the duty upon imported textiles was based upon a charge of 35 cents per lb. in respect of the clean, scoured content of the wool. There was also an ad valorem duty upon the manufactured content of the cloth. Surely Australia is entitled to be credited with the dollars representing the raw content of textiles that are manufactured in Britain from Australian wool and exported to the United States of America. I remind the House that on the Minister’s own admis-‘ sion the dollar requirements of Australia amount to £70,000,000 a year. Our direct exports to the United States of America earn for us £50,000,000 a year. Therefore, our dollar deficit is £20,000,000 a year. If we were given the credit to which we are justly and legitimately entitled for the raw content of the goods manufactured from Australian raw materials that are exported from Britain to the dollar area, we should go a long way towards bridging the gap of £20,000,000 between our dollar requirements and our dollar earning. Wool and metals are exported from Australia to the sterling area, made into manufactured goods and re-exported to the dollar areas. If we were given credit for the raw content of those manufactured goods there would be no need for a huge staff of petrol ration officials in Australia because we should not be starved of petrol and oil.
The Minister for Post-war Reconstruction has suggested two means by which our dollar difficulties can be overcome. I remind the House that the dollar problem is not a problem with which we shall be faced decades ahead. It is with us now, and will cause stagnation and suffering in this country. The first “ Dedmanic “ suggestion is that there should be a reduction of American tariffs. Having said that, in the next breath the honorable gentleman contradicted what he had said at Havana and stated that other countries should not be required to make reciprocal tariff reductions. There will be a great chance of persuading the American Congress to agree to a reduction of American tariffs if other countries do not offer to reciprocate ! The Minister has suggested that there should be a departure from the terms of the charter of the International Trade Organization, which he praised so lavishly in this House upon his return from one of his Cook’s tours to Havana. The second solution of the problem that has been suggested by the Minister is that American private investors should be induced to invest their savings in sterling area countries, especially Australia and New Zealand. I advise the honorable gentleman to read a book written by Hazlitt, the American economist, entitled Will Dollars Save the World f I also urge him to read the reports of some of the conferences that took place at Bermuda between members of the United States of America Congress and members of Empire parliaments. It has been stated frankly that American private investors have no intention whatever to invest in socialistrun countries unless they are assured’ that they will derive a reasonable return from their investments and that the industries in which they wish to invest will not he nationalized or treated in the same way as many industries have been treated in Australia and the United Kingdom. When the socialist governments of Australia and Great Britain are prepared’ to play clean cricket with American private investors, no doubt those investors will do what the private investors of Britain - the capitalists whom this socialistic Minister now praises - did in the past, that is, invest in countries overseas. The British investors did that because they knew that their capital was secure. American investors will not lend their money to bushrangers, robbers, thieves and “ socializers “. I remind the Minister for Post-war Reconstruction that, for example, the loss of £25,000,000 in respect of the ground nuts scheme in Tanganyika is not the kind of socialistic experiment that will encourage private investors to invest in countries with socialist governments. Our troubles cannot be cured in the ways that have been suggested by the Minister. It would take years to persuade the Americans to reduce their tariffs or to induce American private investors to repose confidence in this Socialist Government. The remedy is for our Ministers, especially the Minister for Post-war Reconstruction and the Prime Minister, when they go overseas, to forget their foreign descent or their international outlook and to remember what many of those whose forebears have lived in Australia for many years remember, that is, that with Australians Australia must come first and other nations of the world afterwards. When the Ministers of this Government attend conferences they must fight for the interests of Australia and forget their socialist doctrines and internationalism. The interests of Australia should be their first consideration.
.- The honorable member for New England (Mr. Abbott), for the first minute of his speech, threatened to be coherent, but, after that, when he was solving the dollar problem for us, and telling us, incidentally, that Scots are foreigners, he became very confused. The fundamentals of the position in which Australia is to-day with respect to its need for dollars were touched’ upon by the Minis ter for Post-war Reconstruction (Mr. Dedman) when he stated that the world’s dollar problem is caused by the unbalance between the enormous volume of American exports and the volume of American imports. The honorable member for New England has stated that American investors ari concerned at the nature of governments in the United Kingdom and Australia and hence are not investing in the sterling area. That statement does not square with the volume of American investment that is occurring in the parts of the British Empire in which American investors consider that they will receive a reasonable return for their investments. Investment has nothing to do with the nature of governments. As a matter of cold fact, the volume of American investment in British enterprises now is far greater than it was in 1939. That in itself constitutes an aggravation of the dollar crisis for Great Britain, because it will have to pay the interest on those American investments by means of exports.
There are four factors involved in the dollar crisis. The first is the unbalance between American exports and imports. That was aggravated by the war but has been modified by the generous American policy of making gifts. The Australian Country party, if the honorable member for New England spoke for it, which I can hardly believe, has changed its attitude in the last three years. When the United States of America was making gifts in the immediate post-war years, at the stage when it had made gifts amounting to 8,000,000,000 dollars to the rest of the world, thereby solving the dollar crisis of that time because other countries did not have to pay for imports from the United States of America with goods of their own, the right honorable member for Cowper (Sir Earle Page) rose to his feet in this chamber and advocated a policy of rigid imperial preference. That policy would lock the Australian economy entirely within the sterling area. This morning the honorable member for New England, in the one coherent thread in his statement, criticized the way in which the Australian Government had tied Australia to the sterling area, and suggested that we should have redirected many of our exports with a view to earning dollars.
I am not disputing that he has a case for that contention. I merely say to honorable members opposite that the right honorable member for Cowper found it convenient to pretend that he thought that there was going to be a lowering of world tariff barriers as a result of the Havana conference when he stated in this House, with full Australian Country party support, that he advocated a rigid policy of imperial preference. The point that must be frankly faced, is that some sacrifices are being made by Australia for reasons of high policy. The fundamental changes that have occurred in the economic position of Britain in the decade since 1939 have nothing whatever to do with the political colour of any particular British government. Before the war Britain received £230,000,000 sterling worth of goods from overseas investments which, at to-day’s values, would represent about £500.000,000 worth. It received these goods literally for nothing because they represented interest on investments that Britain had accumulated abroad for a century. It was a conservative government in Great Britain which, quite rightly in view of the exigencies of the war, sold up, for instance, £700,000,000 worth of British investments in the United States. That £700,000,000 worth of factories and other equipment was handed over to United States interests as payment for arms. It is childish to pretend, therefore, that the diminished volume of imports from the United States that Great Britain can now finance as a result of its sale of those interests has anything to do with the conservatism of Mr. Churchill or the socialism of Mr. Attlee. It has only to do with what Britain was forced to do to finance its war effort. During and immediately after the war there was no dollar crisis because the United States sustained the British economy to the extent of one billion dollars worth of food a year, for nothing. After the war, when that aid was suddenly discontinued, the British Government was labouring under the impact of two crises that had nothing to do with the political complexion of tha government in office. The first crisis was that Britain was no longer receiving that American aid, which was cut off before Britain’s industries could be reconverted to peace-time production in order to finance Britain’s imports. The second crisis was that Britain suddenly had to assume great obligations in Europe. After all, it is costing Britain £S00,000,000 worth of dollars a year to occupy Germany. That means, in effect that food that Britain either earns with its exports or obtains on credit from this country has had to be diverted to the occupied territory. In fact, to a large degree, the British occupation policy in Germany is based on the provision of food to the Germans.
– I think that the honorable member has added a nought to his figure of British occupation costs.
– No, I have given the cost of the occupation at least in the first two years.
– I think that the figure should be £80,000,000, not £800,000,000.
– If I have been inaccurate in that respect I apologize to the House, but the point I am making is that at the time when direct aid to Britain from America ceased, Britain suddenly had increased obligations imposed on the British larder, because of the responsibility to contribute to the feeding of the German people and the British occupation forces in Germany. Criticism has. been directed at the policy of maintaining a sterling balance in London. Australia has a sterling balance of £451,000,000 in London, the accumulation of which arose from the fact that we have given Great Britain that amount of credit. I disagree with the statement of the Minister for Post-war Reconstruction that we ought to be grateful to Great Britain for taking that volume of our goods, because Great Britain is our best market. The point is that in a world where there is a seller’s market, it has been essential, to British economy that Great Britain should be sustained by such credit. In the long run it is essential to Australia’s economy that Great Britain should be so sustained. At the present time such sustenance on the part of Australia involves a sacrifice for us. The Leader of the Australian Country party (Mr. Fadden) may argue that we could gain dollars by selling zinc direct to the United States instead of exporting it to London, whence it may be re-exported to the United States. The honorable member for New England may argue that we could be getting a greater rake-off in dollars if we sold wool direct to the United States. He has not proved conclusively to me, and did not attempt to prove to the House, that the £20,000,000 gap between our dollar earnings and our annual withdrawals from the dollar pool could be gained in that way. We are getting £70,000,000 worth of dollars a year from Great Britain and our exports are earning £50,000,000 worth of dollars. The honorable member did not prove conclusively that the direct sale to the United States of wool now sent to Great Britain and manufactured into goods there would have itself bridged that £20,000,000 gap. Mr. Abbott. - I referred to the raw content of woollen goods manufactured in Great Britain and exported to the United States. The honorable member should not twist what I said.
– I am not twisting what the honorable member said. He argued that if these re-exports from Great Britain had been sold by us direct to the United States they could have earned for us £20)000,000 worth of dollars to bridge our dollar gap, but he advanced nothing to prove his statement. He left his assertion to stand on its own. In any event the particular category of goods is not important. It is purely the matter of the gap of £20,000,000 worth of dollars that we are discussing. The point is that, even if we have to make dollar sacrifices to do so, there is a strong case for our sustaining the British economy at the present time, because the British economy is, in some respects, being distorted for reasons of high policy to sustain certain parts of Europe. It is deplorable to hear from honorable members opposite this perpetual pretence that the socialist Government in Great Britain has caused the present economic crisis in that country.
Mr. ACTING DEPUTY SPEAKER (Mr. Burke). - Order! The honorable member’s time has expired.
– I am deeply indebted to the Minister for Post-war Reconstruction (Mr. Dedman) for his contribution to this debate. I was elected to this Parliament fifteen years ago, and in that time
I have heard member after member of the Labour party declare that the antisocialist parties were responsible for the Premiers plan. This morning the Minister has said that the honorable member for Reid (Mr. Lang) was responsible for that plan. He quoted official documents not only to show that the honorable member for Reid was responsible for the plan, but also to show that that honorable member had presided at a conference in 1930 at which the plan was decided upon. My recollection of these documents is that the people who presided over that conference were the Minister’s predecessors in the Scullin Ministry.
– What became of the Lang plan ?
– I do not, know by what means an Australian government of a Labour complexion abdicates its right to preside over a conference of State Premiers. I am also under a great debt of gratitude to the Minister for his statement that Dr. Coombs does not control the Commonwealth Bank.
– I said nothing of the kind.
– I do not think that the Minister ever knows what he says. He should have two Hansards to record his conflicting utterances. What the honorable gentleman said was that the policy of the Commonwealth Bank is determined by the Commonwealth Treasurer.
– I said no such thing!
– He also said that that policy was in accordance with the policy laid down by the Labour party.
– I said that it was in accordance with the financial policy of this country.
– The financial policy of this country to-day is the financial policy of the Labour party alone.
– That is right!
– This policy problem is a most interesting one. Yesterday I received an answer from the Treasurer (Mr. Chifley) regarding financial policy. As that information is official it ought to be factual and truthful. I asked my question in order to bring up to date figures which were given to me in reply to a similar question that I asked about a year ago. According to the reply I received, our imports from dollar areas last year were valued at nearly £54,000,000, representing £41,500,000 from the United States of America, nearly £12,000,000 from Canada, and £375,000 from all other dollar areas. Another important fact concerning dollars is that of our total imports from dollar areas, oils, fats and waxes, which include petrol and lubricants, accounted for under £6,000,000, so that for that period of twelve months our payments under that heading was 11 per cent, of our total dollar commitments.
– It is the biggest single item of those imports.
– No. According to the reply furnished to me by the Treasurer, imports of metals and machinery from dollar areas during that period were valued at £21,500,000. In addition, imports of apparel and textiles were valued at £2,500,000 compared with imports valued at £16,000,000 for the preceding year, and imports of tobacco were valued at £3,500,000. In 1948-49 Australia’s exports to the United States of America were valued at approximately £32,300,000, our exports to Canada at approximately £8,500,000 and our exports to other dollar areas at approximately £1,500,000. I recognize that those sums do not include certain payments such as payments in respect of interest and debt commitments due at New York. Incidentally, I remind honorable members opposite that Mr. Theodore, when he was Premier of Queensland, floated in the United States of America loans on which Australia has to pay the highest rate of interest it has ever paid for overseas loans ; and that debt is still not paid. I understand that Mr. Theodore was Commonwealth Treasurer at the time when the Premiers plan was agreed to. The total value of the exports which I ‘have indicated exceeds £40,000,000, whilst our interest bill payable in New York does not amount to very many millions. The year before last we expended in the United States of America £900,000 on travel and £1,400,000 on royalties in respect of motion pictures. On the latter item we could effect a considerable saving by changing over to British-produced motion pictures.
The question before the Chair is whether the Governor of the Commonwealth Bank ought to be brought to the bar of the House for questioning by honorable members. I should be quite happy to see him brought here, because I should like to ask him a few questions, as I should like to ask a few questions of the Treasurer, who is the real head of the Commonwealth Bank. Until we get some better method of controlling the Commonwealth Bank than we now have, I do not think that our position will be altogether secure.
– The honorable member is against controls.
– I have always been opposed to dictatorships, and the present control of the Commonwealth Bank is a dictatorship. The Government abolished the Commonwealth Bank Board and placed the bank under the nominal control of one man. We know that that man is responsible to the Treasurer. The proposal that the Governor of the Commonwealth Bank should be brought to the bar of the Parliament is important. We have certain financial difficulties ahead. Whether the Prime Minister is hoping to get out of office before they arise I do not know ; but I do know that there is a lot to be explained by the Government with regard to dollars. The information which the Treasurer gave to me yesterday on the subject of dollars calls for more explanation than I had ever hoped I should have reason to demand. Members of the Government can talk as much as they like about the dollar problem:. The real trouble is that we are not offering goods at prices which other countries are prepared to pay for them. That fact was made very clear yesterday by Mr. Black, the president of the International Bank for Reconstruction and Development, when he delivered what I took to be something in the nature of an ultimatum to certain governments in the sterling area, including the Australian Government, because the sins of those governments which he enumerated are very well laid to the charge of this Government. He referred to increasing coats of production and the serious impact of costs of social services upon the budgets of certain sterling countries. No country in the sterling area has so much to answer for in that respect as has the Australian Government, unless, perhaps, it is the Government of New Zealand. I notice that the Treasurer i» making a note. It is time that he told the Parliament whether he agrees, or disagrees, with Mr. Black’s statement.
– The honorable member’s time has expired.
– I thought that the question before the House was whether the Governor of the Commonwealth Bank should be called to the bar of the House to explain certain matters enumerated in the motion moved hy the honorable member for Reid (Mr. Lang), including an examination regarding the international monetary position with particular reference to the dollar crisis, Australia’s international reserves, the price of gold and international exchange problems generally. Some of those matters relate to the International Monetary Fund, whilst others relate to matters discussed at the “Washington conference. As a governor of the International Monetary Fund and also of the International Bank for Reconstruction and Development, I am probably as well informed on the work of those organizations and with respect to their views and probable decisions as is anybody else. I say that solely to indicate that I have an opportunity to be kept fully informed of the work of those organizations. Mr. McFarlane, who was formerly Secretary of the Treasury, is a director of the International Monetary Fund and also of the International Bank for Reconstruction and Development. I wish to emphasize one point. I gathered from the remarks of the honorable member for Barker (Mr. Archie Cameron) that he applauded the statement by Mr. Black, the present chairman of the International Monetary Fund, that certain social services provided in some sterling countries are too costly. The honorable member implied that in that respect Mr. Black “pointed the bone” at Australia and also at the Government of the United Kingdom. I suggest that the honorable member should have a word with members of his own party about that subject because they have been invited to go to the country and tell the people that they propose to reduce social services benefits, but, strange to say, I have seen advertisements sponsored by representatives of the Opposition in which it is offering to increase certain social services benefits. The honorable member should have a heart-to-heart talk with his colleagues about that matter. With respect to social services in Great Britain, not long ago Mr. Churchill had the opportunity to move a motion of censure of the Government in the House of Commons, and he almost threatened to do so, following the announcement by Mr. Aneurin Bevan of the provision of additional social services benefits, but I noticed that the Opposition parties in Great Britain ran away from that issue at the crucial moment. I guarantee that at the next British general elections the British Conservative parties will not threaten to reduce any of the social services now enjoyed by the British people. I also draw attention to the fact that President Truman, who was elected despite considerable opposition and the greatest optimism on the part of the hostile American press, made it clear not long ago that he himself stood for increased social security for the American people. Mr. Black, or any one else who advocates a reduction of the social service standards now enjoyed throughout the world, is welcome to put that on his election banner. I come now to the other point raised by the honorable member for Reid. I can easily understand the feelings of the man in the street in this country who, having ample money ‘ of his own and knowing of our substantial balances overseas, finds that he is still unable to buy goods from the United States of America or other hardcurrency countries - such as Portugal, Belgium, or Switzerland. The simple answer, of course, is that, although the man himself has the necessary money, and this country has substantial funds in London, it is not the right kind of money. It is not the sort of money that will enable him to buy the things that he wants from hard currency areas. On some islands, the currency is seashells and all kinds of goods can he bought with seashells : but that does not mean that a person from one of those islands can go to New York and buy even a pack of cigarettes with seashells.
– It was possible to do that with Australian currency before.
– No. The practice in the past, as any former Treasurer of this country will agree, ha3 been to buy dollars from the Bank of England. We did not send our money to America, Switzerland, or any other hard currency area. The Bank of England had plenty of dollars, and was able to sell dollars for sterling and meet dollar debts in other countries. I repeat that, although we may have plenty of money in this country and ample overseas reserves, it is not the right sort of money. It is not money that the American business man will accept for his goods. That is just as true of the English £1, the franc, the lira, the kroner and other world currencies.
– What about the Swiss franc ?
– There again is an anomaly. Dollars are at a discount in Switzerland. Switzerland, and to a certain degree Belgium and some Middle East countries, including Persia, will not accept dollars.
– How does the right honorable gentleman explain that in relation to Belgium ?
– I am afraid that I should have to occupy more than the time allotted to me in this discussion to explain that to honorable members. Belgium at present is able to earn all the dollars that it requires through sales of Belgian goods to the United States of America. It has been able to build up substantial reserves of dollars. That is true also of Russia, which, until recently, when America refused to supply in return the goods that Russia required, was able to earn substantial dollar payments by exporting manganese and chrome to the United States of America. The matter is too complicated to be dealt with briefly. Nothing could be gained by having Dr. Coombs called to the bar of the House.
– Would that not be desirable in the interests of the public?
– No. I repeat that the answer to the question why we cannot buy American goods is that we have not the right sort of money to buy them. That is true of all the easy currency countries. The honorable member for Barker dealt with exports and imports, but he did not refer to the invisible expenditure that has to be met. For instance, the Canadian Finance Minister, Mr. Abbott, has pointed out that the great influx of American capital into Canada means that substantial dividends have to be paid out of Canada to the United States of America. I do not suggest that American investments in Canada Lave not helped its development, but they mean that, in this dollar crisis, Canada has to pay out large sums of money to the United States of America in dividends. Remittances to the United States of America from shows such as “Annie get Your Gun”, “Oklahoma” or films, are not of great significance. These are amenities. Man cannot live by bread alone. He must have something else to make life liveable. However, although items of invisible expenditure may be small in themselves they probably aggregate 90,000,000 or 100,000,000 dollars annually. Then there are boot machines and other machines imported from the United States of America and operated under licence. All these things mean that it is necessary to export much more than we import to make up the deficit. I shall endeavour to answer some points that have been raised by honorable members more fully during the budget debate.
– Order! The right honorable gentleman’s time has expired.
.- There are many reasons why I consider that the proposal of the honorable member for Reid (Mr. Lang) has merit. I remember the morning when Sir Robert Gibson, then Chairman of the Commonwealth Bank Board, was brought tQ the bar of the Senate and was asked questions by honorable senators. Dr. Coombs and the Treasurer (Mr. Chifley) are codictators of Australian finance.- As Governor of the Commonwealth Bank,
Dr. Coombs has great power over the welfare and happiness of the people of this country and over its destinies. His only superior is the Treasurer. There are many reasons why Dr. Coombs should be called to the bar of this House. I wish to correct one statement made by the Minister for Post-war Reconstruction (Mr. Dedman) in his attempt to be historical. He should be sure of his facts; his misstatement has already been corrected by the honorable member for Barker (Mr. Archie Cameron), but again I draw attention to the fact that it was a Labour government that opposed the Premiers plan, which was supported by all political parties. The Premiers plan, involving all States, was propounded as the result of the failure of the Scullin Government to find a way out of the financial depression. In 1930-31, unemployment in this country was 24.13 per cent. In the following financial year it reached 30.7 per cent. Not until the Premiers plan had been formulated and the Scullin Government swept from office did unemployment figures begin to decline. Honorable members opposite, including the Minister for Transport (Mr. Ward), have constantly reiterated that the great depression which occurred in this country in the ‘thirties had something to do with the non-socialist parties. Every one, of course, knows that it was a worldwide depression that began in the United States of- America because of the isolationist trade policy adopted by that country which caused unemployment to rise to very high levels. After the socialist Government had been got rid of in Australia in 1931 unemployment in this country began to decline. Statistics issued’ by the League of Nations at that time show that Australia made a more rapid recovery from the effects of the depression than did most countries. As this Parliament is shortly coming to a close, it is only right that the facts relating to the depression should be made clear to the people. The depth of the depression was reached when a Labour government was in office. Undoubtedly, to-day the United States is enjoying the greatest share of world trade, but we must remember that during the war Great Britain lost 70 per cent. of its export trade while the export trade of the United States was trebled. During the war British factories were smashed by enemy action, it lost 230,000 men in battle and 100,000 persons in the blitz and its trade was disorganized. Great Britain had to sell its investments abroad in order to pay for munitions and food at a time when it and the Dominions stood alone against the Nazi forces. There should be a different outlook on Great Britain’s plight to-day. Great Britain owes no moral debt to any nation. Its position has been made more difficult by the great credits which have been built up in Great Britain by countries like Egypt, India and Australia. Every effort should be made to find a way out of its difficulties. This is no new experience for Britain. After the Napoleonic war Great Britain was overshadowed by allies of greater man-power. A similar state of affairs has existed since the termination of World War II. This Government has not made a proper approach to the problems that confront the British Commonwealth. It sent the Minister for Post-war Reconstruction and an army of bureaucrats, including Dr. Coombs, to Geneva, to negotiate an agreement on tariffs and trade. On paper the proposals may have seemed excellent. They appeared to solve all the difficulties of nations and individuals, and they were swallowed whole by the Minister and his advisers. After some months the honorable gentleman and his advisers went to Havana. Subsequently, Australia became a signatory to the Havana Charter which sabotages Empire preferential trade. The honorable member for Fremantle (Mr. Beazley) has said that Empire preferential trade would have shut out America, or words to that effect. It would not have done so. Under the reciprocal Empire trade arrangements that operated before and after the signing of the Ottawa Agreement a great volume of trade circulated within the British Empire. Provision had also been made therein for trade treaties with foreign countries; hut to-day that and the protectionist policy of the Labour Government have been placed in jeopardy. This Government has adopted a policy of restriction and still further restriction. We cannot obtain from the United States the petrol, the tractor parts and the capital .equipment needed by our primary and secondary industries. An examination of the customs figures shows that there are many items, apart from petrol, for which dollars are needed. Petrol imports account for only £A.6,000,000 per annum. Our total annual imports from dollar countries amount in value to £A.53, 000,000, including £6,750,000 for motor vehicles and chassis, £3,250,000 for timber and £3,000,000 for textiles, particularly those made of cotton. In earlier years Australia grew more than 20,000 bales of cotton. Now, the crop has dropped to fewer than 1,000 bales. This Government has allowed the Australian cotton industry to wilt. A large area in central Queensland, which was formerly developed for the growing of cotton is now going out of production. The trade aspect of Australia’s economy has been grossly neglected ‘by this Government, because during the war, when it had to spend money lavishly, it did not have the foresight to consider these things.
I exhort the Government to heed the requests of the honorable member for Reid. It is true that we may not get all we hope for from the Governor of the Commonwealth Bank, but that is no reason why he should not be called to the bar of the House to give us the benefit of his advice. Let the’ Government give us an opportunity to question him on this important matter. To-day the Government is adopting a policy of restriction piled on restriction. Capital equipment needed for our development is being needlessly denied us. For a time after the conclusion of World War I., Germany had no gold. It was in debt to the world and ,in addition had to meet heavy payments for reparations. Notwithstanding those handicaps Germany was able to expand its trade and so strengthen itself as to challenge and almost defeat the world a few years later. It is true that’ the methods it adopted were not orthodox. In some instances they were dishonest. Germany reverted to the system of bilateral agreements which had been followed by Empire countries. That system has been abandoned by this
Government in favour of the multilateral agreement system. Under the latter system, in order to reach a trade agreement with a country favorable to us we have to agree to yield certain concessions to other countries. This system brings about undesirable “ repercussions without improving our trade position. The real wealth of any country consists not in its currency holdings but in its production. The Government should re-examine the whole position of our international trade in order that it may formulate a policy which will enable Australia’s development to proceed. Last month I was in the north-west of “Western Australia where our great cattle stations are located. I was shocked to find that that region is being de-populated because of neglect on the part of this Government and that, as a result, splendid opportunities for supplying increased quantities of beef to the hungry peoples of the world are being lost. The Government should re-examine its policy in relation to trade and international finance. Let it call the Opposition .parties into conference and see if some Setter effort cannot be made to meet this problem.
-Order! The honorable member’s time has expired.
Question resolved in the negative.
House adjourned at 12.43 p.m.
The following answers to questions were circulated: -
HOLLYWOOD Repatriation General
asked the Minister, for Repatriation, upon notice -
– The answers to the honorable member’s questions are as follows: -
Shipping: CLEARANCE op Cargoes
D - On. the 7th September, the honorable member for Franklin (Mr. Falkinder) asked the following question : -
Will the Minister for Trade and Customs have an investigation made into the excessive delays occasioned by the Department of Trade and Customs in the slow clearance of cargoes from overseas and interstate ships in Australian ports to the firms to which the goods are consigned?
The Minister for Trade and Customs has supplied the following information : -
A survey over the last two months in the States of Kew South Wales and Victoria has disclosed that the maximum delay in clearing any cargo through the customs has been three days, and the average maximum delay has been slightly under two days. Customs officers at the main ports work overtime in order to keep delay in clearance of cargoes to a minimum. I might add that the statement that the Department of Trade and Customs is to blame for delays in clearance of cargoes is frequently a popular and convenient excuse for neglect on the part of others concerned. Apparently it’ is not generally realized that the clearance of goods requires action also from shipping companies, consignees and. customs agents. Complaints made .by importers as to delays in clearing their goods have been investigated and, almost invariably, the fault has been proved to lie with themselves or their agents.
Cite as: Australia, House of Representatives, Debates, 16 September 1949, viewed 22 October 2017, <http://historichansard.net/hofreps/1949/19490916_reps_18_204/>.