House of Representatives
7 December 1950

19th Parliament · 1st Session



Mr. Speak (Eon. Archie Cameron) took the chair at 10.30 a.m., and read prayers.

page 3953

QUESTION

THE PARLIAMENT

Mr HAYLEN:
PARKES, NEW SOUTH WALES

– Oan the Treasurer inform me whether any action has been taken in regard to the payment for overtime worked by parliamentary officers?

Mr FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– I am happy to he able to say that a satisfactory arrangement has been arrived at which will resolve the position that arose due to anomalies in the matter to which the honorable member has referred.

Mr Haylen:

– Will that action be retrospective?

Mr FADDEN:

– Yes, it will be retrospective to the commencement of this session of the Parliament.

Mr BRYSON:
WILLS, VICTORIA

– I direct the attention of the Treasurer to item 3 of General Business on the notice-paper, namely, Constitution Alteration (Prices) Bill 19 50 - second reading. Can the right honorable gentleman inform me whether an. opportunity will be given to the House to debate that measure before the termination of the current sittings? I point out, by way of explanation, that. some weeks ago, the Prime Minister, in answer to a question, promised to allow the Opposition to discuss that bill during the present session. I should ako like to know whether the Government intends to provide an opportunity for the House to consider item 36 of .Government Business, namely, Commonwealth Bank Bill 1950 - Consideration of the Senate’s message No. 26.

Mr FADDEN:

– I have little doubt that if those items are reached in the order in which they appear on the noticepaper, they will be discussed during this session.

page 3953

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Mr WILSON:
STURT, SOUTH AUSTRALIA

– I ask the Minister for Air whether the Government will give immediate consideration to .the establishment of an air defence squadron in South Australia ?

Mr WHITE:
Minister for Air · BALACLAVA, VICTORIA · LP

– There are city squadrons in all the capital cities except Adelaide and Hobart. After speaking at a recruiting rally in Adelaide recently, and after having had conversations with Adelaide people I arrived at the opinion that an air squadron could well be formed in that city. Arrangements have been made to form a fighter squadron in Adelaide of a kind similar to those now operating in Sydney, Melbourne, Brisbane ana: Perth. That is contingent upon the local people being able to supply a full quota of personnel, and I think that they are. Final arrangements are now in the hands of the Department of Defence, but I think that there is little doubt that before long a squadron will be formed in Adelaide.

page 3953

QUESTION

PUBLIC SERVICE

Mr TOM BURKE:
PERTH, WESTERN AUSTRALIA

– I refer the Treasurer to a question that I asked soma days ago regarding pension rights of State officers who were. transferred to the Commonwealth Public Service at federation. I asked the Treasurer then whether the Government could arrange for a review to be made of their case, with a further valuation of their rights, any increase of pension granted to be previded, if possible, before the end- of this Parliament.

Mr FADDEN:
CP

– The honorable member asked that question last Friday.. I immediately arranged to have a reply given expeditiously. Unfortunately, I have not been able to obtain that reply up to the present, but the matter is being investigated and I can assure the honorable member that sympathetic consideration will be given to it. I shall not be able to make a decision or to arrive.- at any conclusion before the House rises this week, but I shall write to the honorable member as soon as I can in connexion with the matter.

Mr BIRD:
BATMAN, VICTORIA

– I ask the Acting. Leader of the House in the temporary absence of the Minister for Supply to say whether it is correct that scientific officers who hare just been appointed to the Department of Supply and who are to proceed to England for training have bad their clothing and equipment allowance reduced from £40, the amount provided in their contract of employment, to £15- In view of the fact that the officers concerned will sail next week, will the right honorable gentleman take up the matter immediately with the Public Service Board!

Mr FADDEN:

– I know nothing about the subject-matter of the honorable gentle- man’s question, but I shall have inquiries made and furnish an early reply to him.

page 3954

QUESTION

CANBERRA

Dr NOTT:

– I ask the Treasurer whether, as next week the Australian Capital Territory will be favoured with a visit by the English cricket team in order to play a match here, he will ask the Prime Minister, on behalf of the Government, to consider the possibility or the advisability, or both, of a halfholiday being granted to members of the Public Service, and also to persons engaged in private enterprise in the terri- tory, so that, they may attend the match?

Mr FADDEN:
CP

– I shall bring the honorable member’s question before the notice of the Prime Minister With a view to having the matter considered.

page 3954

QUESTION

CIVIL AVIATION

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– I preface a question to the Treasurer by pointing put that on the 23rd November I asked the Prime Minister whether he- would ascertain the position in respect of the law case in connexion with the collection of airport dues or air route fees, and furnish the information to me. The Prime Minister said that he would ascertain what the position was from his colleague in: another place. Can the Treasurer say whether that information has been obtained and, if it has, will he furnish it to me and to other honorable members who are interested in the matter?

Mr FADDEN:
CP

– I understand that in reply to the honorable member’s previous question, the Prime Minister replied that the case referred to was sub judice. As it is still sub judice, I am afraid that the information requested by the honorable member cannot be given. However, I shall have the matter examined to see what can be done.

Mr Drakeford:

– That is not the reply that I received.

Mr FADDEN:

– If the honorable member intends to reply to hia own question there is no need for me to reply further to it.

Mr HANDBY:
KINGSTON, SOUTH AUSTRALIA

– Some months ago I directed a series of questions to the Minister for Works and Housing in reference to the progress of work on the West Beach aerodrome. I now ask the Minister whether he oan furnish any further information and can say when we may expect the new aerodrome to be taken into use.

Mr DALY:
GRAYNDLER, NEW SOUTH WALES · ALP

– The main runway at West Beach is practically completed. Work on the other runway, taxi strips and aprons is in progress. 1 believe that the airfield could be taken into use by approximately the middle of 1951, although it would be. some time after that before the new airport would bc usable by scheduled air services. A considerable amount of building has to be completed, and that work has to take its turn with other projects in the vast building programme that has to be completed. However, the progress is reasonably good, and the situation generally is as I have described it.

Mr Drakeford:

– I wish to make a personal explanation. This morning, I made an inquiry of the Treasurer (Mr. Fadden) in relation to a question that I had asked some time ago, and he replied that I had inquired about a matter which was sub judice. Apparently, that information was conveyed to him, but it was wrong. My original question, which was directed to the Prime Minister (Mr. Menzies), related to litigation that had been commenced when I was the Minister for Civil Aviation. I asked the right honorable gentleman whether he would be good enough to obtain that information from the Attorney-General (Senator Spicer) if he, himself, did not have it, and supply it to the House. The Prime Minister’s reply should convince the Treasurer that he was misled when he listened to a whisper in his ear. It was as follows: -

Ag to hig first question I shall obtain from the Attorney-General a statement about the exact position in relation to the litigation that 1 understand to be on foot, and let the honorable member have it.

Mr White:

– Will the honorable member read the next part of the answer, which refers him to me?

Mr Drakeford:

– -I asked two questions, and the Prime Minister said that the second should be referred to the Minister for Civil Aviation (Mr. White). I repeated my first question this morning with the object of obtaining the information that the Prime Minister had promised, on the 23rd November last, to get for me. It is not true to say that I have been inquiring about a matter that is sub judice. The right honorable gentleman said that he would obtain the information for me. Therefore, I considered that I should put the whole matter right. I am not suggesting that the Treasurer wilfully made the statement about the matter being sub judice, but I think that he was influenced by something which was whispered in his ear and which was entirely wrong and unjustified.

Mr Fadden:

– In reply to the honorable member for Maribyrnong (Mr. Drakeford), all I can say is-

Mr SPEAKER:

-Order ! Is the Treasurer making a personal explanation?

Mr Fadden:

– My personal explanation is that I shall bring the matter before the notice of the Prime Minister (Mr. Menzies).

Mr White:

– The honorable member for Maribynong has said-

Mr Rosevear:

– Is the Minister making a personal explanation? A number of personal explanations are apparently being made on the same subject. That is not in order.

Mr SPEAKER:

– Order ! As many as three or four personal explanations have been .made on the same subject in my time. Does the Minister for Civil Aviation claim that he has been misrepresented?

Mr White:

– The honorable member for Maribyrnong said that the Treasurer must have been influenced by something I told him, so that he gave a certain answer.

Mr SPEAKER:

– I did not hear it.

Mr White:

– That is what occurred.

Mr SPEAKER:

– Did the honorable m.ember for Maribyrnong refer to the Minister for Civil Aviation?

Mr Drakeford:

– I did not mention his name.

Mr White:

– But it was implied.

Mr SPEAKER:

– Order ! I ask the honorable member for Maribyrnong whether he made any reference to the Minister for Civil Aviation?

Mr Drakeford:

– I did not mention the Minister by name. All I said was that the Treasurer listened to something which was whispered in his ear.

Mr White:

– Be a man and say who whispered in the Treasurer’s ear.

Mr SPEAKER:

– The honorable member has not yet cleared up the point that I have raised. I want to know whether- he meant the Minister for Civil Aviation.

Mr Drakeford:

– I think that the House saw who whispered in the Treasurer’s ear at that time.

Mr SPEAKER:

– Order ! I call the Minister for Civil Aviation.

Mr White:

– The honorable member for Maribyrnong suffers from an obsession.

Mr SPEAKER:

– Order ! It is not a question of an obsession of the honorable member for Maribyrnong. It is a question of whether the Minister has been misrepresented.

Mr White:

– Yes, I have been misrepresented. The honorable member has asked this question on notice about four times, and he has received replies.

Mr SPEAKER:

– Order ! The Minister is completely out of order. I ask him to resume his seat.

page 3956

QUESTION

UNIVERSITIES

Mr McLEAY:
Minister for Fuel, Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

– Will the Treasurer say whether reports that have appeared in the press in reference to a gift of money by the CommonwealthBank to the University of Sydney are correct? If they are, will he say whether the same assistance willbe given to universities elsewhere in the Commonwealth?

Mr.FADDEN. - The matter raised by the honorable member refers to a detail of management toy the administration of the Commonwealth Bank. However, I can inform him that the Commonwealth Bank makes contributions to all the universities of Australia. The trading banks also make such contributions as that to which the honorable member has referred. I have little doubt that when the centenary of the University of Adelaide arrives, favorable consideration will be given to the making of such a grant by the Commonwealth Bank to that university.

page 3956

QUESTION

MR. C. C. BUDDEN

Mr GORDON ANDERSON:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– Will the Treasurer reconsider his recent decision to refuse to grant an ex gratia payment to the father of Olive Clifford Budden, whose death recently was caused by the bite of a taipan snake in north Queensland, in view of the circumstances of the death and the financial position of the Budden family? That young man lived in my electorate, where his father now lives. He went north with the idea of capturing a taipan snake for presentation to the Commonwealth Serum Laboratories. As honorable members know, he was bitten by the taipan snake that he captured. Before he died he asked that the snake be forwarded to the Commonwealth Serum Laboratories, which was done and, I understand, the snake was used for research work. During the time he was in hospital, and as a result of his death, the family, which is not in favorable circumstances, was involved in an outlay of between £80 and £100. The youth’s father has been unable, for a long time, to engage in any laborious occupation. Will the Treasurer reconsider the matter?

Mr.FADDEN. - Yes, I shall reconsider the matter along the lines suggested by the honorable member, but I understand that every aspect of the case was considered before the previous decision was arrived at.

page 3956

QUESTION

TIN

Mr GILMORE:
LEICHHARDT, QUEENSLAND · CP

– I preface a question to the Minister for National Development by stating that in north Queensland the expansion of the tinmining industry was such that its production increased from 585 tons in 1948 to 941 tons in 1949. The purchasers of tin have combined, and all purchases are now made by 0. T. Lempriere and Company Limited which has a monopoly in that regard because it is the only company in Queensland that possesses a smelter. The company has closed its northern buying and assaying office and the producers are now compelled to sell to local agents, who advance them 50 per cent, of the value of the purchase price. This is insufficient to meet the costs of production. In addition, the producers have to wait for up to three months before they receive the balance of the purchase price. This has the effect of forcing mines out of production. Will the Minister confer with the Queensland Government, in the interests of national development, and have the whole matter investigated with a view to having a smelter built in north Queensland?

Mr CASEY:
Minister for Works and Housing · LP

– The honorable gentleman has been & most consistent and persistent advocate of consideration being given to the problems of the tin-miners in the Herberton district of North Queensland and, as he is probably aware, I have had considerable correspondence on his behalf and on their behalf with O. T. Lempriere and Company Limited and others so as to facilitate the sale of the tin concentrate. One aspect of the matter that has not yet been canvassed is, as the honorable member has suggested, an approach to the Queensland Government and the Mines Department of that State. The Mines Department has a treatment plant, I believe, at Irvinebank, which is not far from Herberton. I shall be glad to ensure that an approach shall be made to the Queensland Government in the direction suggested by the honorable gentleman.

page 3957

QUESTION

COAL

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES

– My question to the Minister for National Development is in reference to the conference that was held in Sydney last Monday, at which a decision was made that top priority should be given to the geological exploration of shallow coal in New South Wales, suitable for open-cut working. Will the right honorable gentleman inform me what progress has been made since that conference towards assembling and obtaining the necessary core drilling machinery for that job? Has a decision yet been made about the first areas to he examined under that scheme?

Mr CASEY:
LP

– No time has been wasted. After the conference that I attended in Sydney last Monday, the officers continued to confer on Tuesday, with the result that two “ first-target “ areas have been selected, one of them being at East Maitland, and the other near Cardiff. Both places are in the vicinity of Newcastle. An officer of the Bureau of Mineral Resources is already in that district, and steps have been taken to examine the matter of right of entry into those two areas. I assure the honorable gentleman that the work will proceed without any delay. I have also been in touch with my officers about the numbers and types of mobile drilling plants that will be required for the work. It will be necessary to import such machinery from the United States of America, and I assure the honorable gentleman that an adequate number of machines of the right type will be obtained as early as possible.

page 3957

QUESTION

WOOL

Mr CLARK:
DARLING, NEW SOUTH WALES

– ‘Will the Minister for Commerce and Agriculture inform me whether it is a fact that the United Kingdom, New Zealand and South Africa have approved the wool stabilization scheme and that its completion is held up by reason of the attitude adopted hy the Australian Government ? What is the reason for the delay on the part of this Government in completing arrangements to enable Australia to participate in that scheme ?

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– The honorable member has not correctly stated the position. Representatives of the governments of Australia, New Zealand and South Africa, and of the growers, met in Melbourne, and decided upon the details of the plan for which they would seek the approval of the United Kingdom Government. The United Kingdom Government has not agreed to a principal point in the plan which relates to the amount of the capital contribution which the Dominions decided to ask it to make. The United Kingdom Government has offered a very much lower capital contribution than was suggested. That,’ and some other important associated points of detail, which refer to the number of directors for the respective countries and the voting strengths of the directors, are still under negotiation. As soon as conclusions have been reached on those points, the matter will be submitted to the wool-growers of Australia for their decision.

Mr KEON:
YARRA, VICTORIA

– During the year I have directed a series of questions to the Minister for Commerce and Agriculture regarding supplies of wool to the Soviet Union and he has informed me that purchases of Australian wool by that country had increased during the last few years from £500,000 to £12,500,000. The Minister also said that he saw no sign of reluctance on the part of graziers to sell their wool to the Soviet Union at the highest prices that they could obtain under the auction system, which they regarded as being sacrosanct.

Mr McEwen:

– I did not say any such thing.

Mr KEON:

– I refer the Minister to the replies that he gave to my questions. In view of the attempts that are being made to assist the United States of America to acquire Australian wool at reasonable prices, for how long will this war-profiteering on the part of Australian graziers, who are held in unutterable contempt hy decent Australians because they are prepared, for 30 pieces of silver, to supply-

Mr SPEAKER:

– Order ! The honorable member is not in order in introducing debatable matter when asking a question.

Mr KEON:

– I ask the Government and representatives of the graziers in this Parliament-

Mr SPEAKER:

– Order ! The honorable member may address his question to a Minister; he cannot address it to graziers’ representatives.

Mr KEON:

– “When does the Minister intend to put a stop to war-profiteering by the graziers, who, provided they get the price they want, are not only willing but also determined, to sell to the Soviet Union wool and sheepskins to clothe our enemies and their allies and thus assist them to kill British, American and Australian troops?

Mr McEWEN:

– First, I utterly deny having made the statement that the honorable member has attempted to put into my mouth. .Secondly, I resent the attack that he has made. upon the graziers, who are conducting an industry of the greatest value to the Australian economy.

Mr SPEAKER:

– Order ! The Minister, in replying to a question, may deal only with matters of public policy and administration.

Mr McEWEN:

– ‘The honorable member’s question disclosed a desire on his part that economic sanctions should be applied against Russia. If that is the policy of the Opposition, I should expect it to be stated by the Leader of the Opposition.

Later:

Mr McEWEN:
CP

– fey leave - Yesterday the honorable member for Maranoa (Mr. Charles Russell) directed to me an important question concerning funds for wool research. The wool contributory charge is levied to meet Australia’s share of Joint Organization expenses, and to assist in wool promotion. The balance of the Wool Research Trust Account as at the 30th June, 1950, was £794,350. Income during the year was £340,970, and expenditure from the fund on research was £341,507. The Wool Industry Fund Trust Account may be used for wool research, or for the wide range of other uses set out in the Wool Industry

Fund Act. At the end of the last financial year the balance to the credit of the. fund was £7,717,58S. - Receipts during the year, which were mainly from interest, were £209,788, and expenditure was £67,783.

Reports on the wool research programme are made each year to the Australian Wool Board and to the Wool Consultative Council. In addition, the chairman of the Australian Wool Board is an active member of the inter-departmental committee which advises the relevant Ministers concerning wool research expenditure. The Commonwealth Scientific and Industrial Research Organization is the major research body, and my colleague, the Minister for National Development (Mr. Casey), can supply full details of the excellent research work that that body is undertaking. Since the Wool Promotion Act was introduced in 1945, shortages of trained staff and materials for essential buildings have prevented the launching of a full scale research programme. However, those difficulties are gradually being overcome, and the results of an expanded programme of research will soon be forthcoming.

I am not satisfied that the results of research are being made available to wool-growers as expeditiously and widely as they might be. Ways and means of strengthening the facilities for sheep and wool extension work throughout the Commonwealth will be explored with the States. Proposals to this end will be favorably considered by the Ministers who administer the Wool Industry’ Fund Trust Account and the Wool Research Trust Account.

page 3958

QUESTION

TRACTORS

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– Will the Minister for National Development tell the House what types of tractors will be imported from the United States of America under the dollar loan scheme, with specific reference to horse-power ratings, wheel or track drives, and diesel or kerosene power units? When will the first shipment of tractors arrive in Australia ? Will the Government have any control over their allocation to the various States ? If not, will representatives of the Department of National Development discuss the matter with the distributors concerned in order to ensure that full consideration shall be given to the requirements of each State ?

Mr CASEY:
LP

– The tractors will be of the four principal types that are manufactured in the United States of America. I do not carry the figures in my head, but I shall be glad to obtain them for the honorable member. Representatives of the Department of National Development and the Department of Trade and Customs have maintained close touch with all dealers and with State governments and instrumentalities. I believe that a very useful first list of requirements has already been compiled. Many import licences have been issued and, in fact, a few tractors have arrived in Australia. I shall obtain further information and shall try to supply it to the honorable member later to-day.

page 3959

QUESTION

SHIPPING

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– I preface my question to the Treasurer by stating that Ministers have said, in reply to questions that have been asked by Government supporters, that the shortage of essential supplies in north Queensland ports in particular has resulted from the lack of adequate shipping space. Is it a fact that the steamer River Mitta was despatched from Sydney to north Queensland ports early in November with empty holds? If so, will the right honorable gentleman ascertain the reason for that action, and determine whether it was a part of a campaign that is being conducted by certain interests with the object of sabotaging the Commonwealth shipping service in order to make it a non-paying concern?

Mr FADDEN:
CP

– I could not think, by any stretch of imagination, that shipowners are endeavouring to sabotage the government shipping line. In fact, in recent months no fewer than four ships have been diverted to the north Queensland trade from other runs. The situation, of course, is still far from satisfactory, as it has been for years. I shall refer the subject-matter of the question to the appropriate Minister in order that a further reply may be given to the honorable member.

page 3959

QUESTION

INTERNATIONAL AFFAIRS

Dr EVATT:
BARTON, NEW SOUTH WALES

– In the temporary absence of the Prime Minister, I remind the Treasurer that the Prime Minister said earlier this week that he would probably make a statement on behalf of the Government about the talks that are in progress in Washington, the situation in Korea, and the general position in relation to the Far East - which, according to the press, has been the subject of close consideration by the Prime Minister of the United Kingdom and the President of the United States of America. Will the Treasurer tell the House when the Prime Minister proposes to make the statement, so that honorable members-may hear the latest f acts in the House instead of waiting for newspaper reports?

Mr FADDEN:
CP

– Unfortunately, the Prime Minister is ill to-day and in consequence will not have an opportunity to make the statement that he desired and intended to make. However, I understand that he will make a statement to-morrow morning if he is in a physical condition to do so. If not, a statement will be made by some one else on his behalf.

page 3959

QUESTION

INDUSTRIAL ARBITRATION

Mr DAVIES:
CUNNINGHAM, NEW SOUTH WALES

– Recently I directed a question to the Minister for Labour and National Service in connexion with the delay in the hearing of a claim by the Amalgamated Engineering Union for marginal rates of pay, and the honorable gentleman promised to examine the matter. Is -he aware that in the meantime that union has been fined £500 for refusing to work overtime, although the ban on overtime was imposed only in order to expedite the hearing of the claim before the court? Is the honorable gentleman also aware that although the claim was made in December, 1948, and has not yet been heard, the union is prepared to wait for other provisions in the award to be dealt with later if the hearing of that portion of their claim which deals with marginal rates is proceeded with ? In view of the reasonableness of this request, will the Minister endeavour to have the claim heard before the court, and thereby avert a disastrous strike in the steel and coal-mining industries ?

Mr HOLT:
Minister for Immigration · HIGGINS, VICTORIA · LP

– An application by the Amalgamated Engineering Union will come before^ the Full Bench of the Commonwealth Arbitration Court on Monday next, and I think that in those circumstances it would be inadvisable for me to canvass the merits of the issues in which the union has found itself involved in recent months. As the honorable gentleman is aware, the union was fined following direct action and the imposition of a ban on the working of overtime. I understand that the overtime ban has now been removed, if not in all, in nearly all establishments in which it was applied. I hope, therefore, that the case for payment of the increased amount of the basic wage will be dealt with on its merits when it comes before the court on Monday. I understand the attitude of the court to be that it desires first to resolve the basic wage aspect before it deals with the claim relating to marginal rates. However, once those difficulties have been cleared out of the way I hope that the court will proceed to hear the claim for marginal rates.

page 3960

QUESTION

BROADCASTING

Mr EGGINS:
LYNE, NEW SOUTH WALES

– Can the PostmasterGeneral advise the House whether any decision has yet been made with respect to the allocation of additional commercial broadcasting licences? I have in mind the need for additional licences in the Manning River district.

Mr ANTHONY:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– It is not intended to grant any additional commercial broadcasting licences in the immediate future. As I indicated on a previous occasion, a thorough investigation is being made of this subject. Australia is bound by certain international conventions with respect to the use of frequencies and consultations have already been held with the New Zealand Government. However the examination will take a considerable time and no additional commercial broadcasting licences will be granted before it is completed.

page 3960

QUESTION

FRESH FRUIT

Mr DUTHIE:
WILMOT, TASMANIA

– Has the Minister for Commerce and Agriculture anything further to report with respect to the small fruits industry in the Derwent Valley in the electorate of Franklin? I raised the matter recently when the growers in that district asked for increases of prices for raspberries and loganberries, which were refused. If such increases cannot be granted, will the Minister consider the provision of a subsidy for the small fruits industry in Tasmania in order to enable growers to meet rising costs of production and at the same time make their fruit available at prices that were recommended by the Fruit Industry Sugar Concession Committee ? The recent hot weather in the south of Tasmania has baked the raspberries on the cane and the growers are in difficult circumstances.

Mr McEWEN:
CP

– Like my colleague, the honorable member for Franklin, who assists me as parliamentary secretary, the honorable member has interested himself on behalf of the growers of berry and other small fruits in Tasmania. The price for berry fruits, either for consumption as fresh fruit or for pulping in Australia, is controlled not by the Australian Government but by the State price-fixing authorities. The prices of those fruits for processing for export are fixed by the Fruit Industry Sugar Concession Committee. I am aware that the price recently decided by the committee is not considered by the industry ,to be adequate. I have been considering this matter and my assistant, the honorable member for Franklin, has been, and still is, investigating the position. I assure the honorable member for Wilmot that if it is possible to do anything for the industry it will be done. It is the desire of the Government to help berry-growers.

page 3960

QUESTION

SUPPLEMENTARY BUDGET

Mr CALWELL:
MELBOURNE, VICTORIA

– Now that the Government’s election budget has been disposed of without an election being held is it the intention of the Treasurer to carry out the promise that was made by the Prime Minister in his broadcast of the 6th October that in the early months of next year the Government will introduce a supplementary budget? If it be the intention of the Treasurer to give effect to the Prime Minister’s promise can he indicate whether the supplementary budget will involve heavy additional .taxation or will give considerable taxation relief?

Mr FADDEN:
CP

– The honorable member for Melbourne has been a member of this House quite long enough to know that the Standing Orders provide that questions relating to government policy have not to be answered; and they will not be answered.

page 3961

QUESTION

NATIONAL OIL PROPRIETARY LIMITED

Dr NOTT:

– I ask the Minister for National Development : To what extent is the Commonwealth a legatee shareholder in National Oil Proprietary Limited, which operates at Glen Davis? What are the accumulated losses of this company ? Who are the other shareholders in the company? Is the Government considering the necessity of closing down the enterprise and so avoiding further losses ? Before taking any final action in this matter, will the Government fully investigate the managerial control of the company during recent years? Is it not a fact that whilst under the control of Mr. John Fell this enterprise was able to meet the keenest overseas competition from world-famous oil corporations to the advantage of this country?

Mr SPEAKER:

-I point out that the honorable member’s question is of such a nature that it should have been placed on the notice-paper.

Mr CASEY:
LP

– I shall endeavour to obtain the figures for which the honorable member has asked. The position of National Oil Proprietary Limited and of other enterprises in which the Commonwealth is interested is constantly under review. Consideration has been given to the position of the National Oil Proprietary Limited during the last twelve months, but no decision has been made concerning this enterprise.

page 3961

QUESTION

SUPERANNUATION

Mr WILSON:

– Can the Treasurer assure the House that the bill to increase Commonwealth superannuation payments will be introduced during this session?

Mr FADDEN:
CP

– Yes.

page 3961

QUESTION

WAR GRATUITY

Mr MULCAHY:
LANG, NEW SOUTH WALES

– In view of the fact that I have received a number of letters from ex-soldiers’ organizations and from constituents asking that the Government be urged to increase by 50 per cent, gratuity payments payable in March of next year because of the devaluation of the Australian currency, I ask the Treasurer what the Government intends to do in connexion with this matter.

Mr FADDEN:
CP

– An appropriate and unequivocable answer was given to a similar question which was asked by the honorable member for Darling yesterday. The matter was also discussed last night, during the debate on the Estimates and I have nothing to add to what was then said.

page 3961

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr DUTHIE:

– I apologize for asking another question, Mr. Speaker, but I am the only member of the Opposition who represents a Tasmanian electorate, and, therefore, I have a considerable amount of work to do. I understand that the closing date for applications for ex-soldier settlement farms under the Commonwealth scheme was the 2nd September last. I ask the Minister for National Development whether the Government will consider an extension of the time within which applications may be lodged in view of the fact that many men have finally decided to take advantage of1 the scheme but cannot have their applications accepted while the existing date operates ? I understand that the period during which applications could be lodged has already been extended once. Perhaps it could be extended again.

Mr CASEY:
LP

– That matter does not come within my purview but I shall regard it as being on the notice-paper and shall refer it to the Minister concerned.

page 3961

QUESTION

HOUSING

Mr WARD:

– The Minister for National Development, in answer to a question he was asked recently, stated that he was satisfied that very few people were having difficulty in securing suitable living accommodation. I have on hand a considerable number of cases of people who are not in the fortunate position of being able to secure accommodation. Since the Minister’s reply I have received a great deal of correspondence from other people whose need of suitable accommodation has not been satisfied. Therefore, will the Minister indicate, because he and his department appear to be in possession of information which is not available to others, some officer of his department to whom these people may be directed so that they may be sent to where the accommodation is available?

Mr CASEY:
LP

– I made no such statement as that referred to by the honorable member for East Sydney. The words sought to be put into my mouth by the honorable member are a grave distortion of the facts. I have said in this House and out of it on countless occasions that the state of the house-building industry in this country reflects the fact that there is a very large gap between supply and demand which the Australian Government in conjunction with the State governments is doing everything in its power to bridge. The building of houses is a State government responsibility. The Australian Government finds the money and assists in a number of other directions which are within its power. The honorable member has referred to the accommodation position in New South Wales, and I suggest that he should get in touch with the State Government concerned and not misquote any more than he can help, Minister’s statements in this House.

Mr Ward:

– I desire to make a personal explanation. I consider that the Minister has deliberately misrepresented my position in this House, together with the question that I raised-

Mr SPEAKER:

– Order! The honorable member must deal with the misrepresentation that he states has been made. His opinion of what the Minister has done is immaterial.

Mr Ward:

– The Minister accused me of having deliberately distorted his reply. I suggest to the Minister, and at the earliest opportunity I shall produce-

Mr SPEAKER:

– Order ! The honorable member must confine himself to the alleged misrepresentation.

Mr WARD:

– I am endeavouring to do that. It is I who was misquoted. I claim that I have quoted correctly the Minister’s reply to me. I say that a perusal of the records of the Parliament, the uncorrected Hansard proofs, will disclose the truth of what I am saying. Moreover, the press records of what the Minister said will disprove what he said just now. If there has been any distortion or lying in this particular instance it has been on the part of the Minister.

Mr Casey:

– I rise to a point of order. Am I in order, Mr. Speaker, in quoting from the records?

Mr SPEAKER:

-If that will clear the matter up, I think that it may be permitted. The Minister should ask for leave of the House to do so.

Mr Casey:

– Then I ask for such leave.

Leave granted.

Mr Rosevear:

– I rise to a point of order, Mr. Speaker.

Mr SPEAKER:

-Order! Leave has been granted to the Minister. The honorable member will resume his seat.

Mr Pollard:

– I rise to a point of order.

Mr SPEAKER:

-Order! I have already called the Minister for Works and Housing (Mr. Casey).

Mr CASEY:

– In reply to a question that was asked-

Mr SPEAKER:

– I hope that the right honorable gentleman is not quoting from the Hansard report of the present, session.

Mr CASEY:

– I am not quoting from Hansard, Mr. Speaker, I am quoting from the Hansard “ flat “.

Mr Rosevear:

– That is the point of order that I want to take.

Mr SPEAKER:

-The right honorable gentleman is not entitled to do that.

Mr CASEY:

– I put it to you with respect, Mr. Speaker, that that is what I was given leave to do.

Mr SPEAKER:

– What does the right honorable member say that he was given leave to do?

Mr CASEY:

– I suggest that the House gave me leave to quote from the record of what I said.

Mr.Rosevear. - I rise to a point of order. I must insist, Mr. Speaker, that you uphold my point, because you yourself also have raised it. The right honorable gentleman proposes to quote from a Hansard “ flat “. You have warned the House on a number of occasions, as have other Speakers of this House, that printed at the top of each Hansard “ flat “ in very heavy type is the statement that it must not be quoted from. I take it that even the permission of the House cannot override that order.

Mr SPEAKER:

– Oder ! I am afraid that I cannot allow a quotation from the Hansard “ flat “ because of the issue raised by the honorable member for Dalley (Mr. Rosevear). The Minister asked for leave to quote from a “ record “, but did not say what the record was. I do not think that the House can override, by the granting of leave, an order which is printed on every “ flat “ that goes out.

Mr CASEY:

– I do not need to quote. WhatI said at the end of a reasonably long reply, in which I went into considerable detail, was that I did not believe that many people were finding it impossible at this time to secure accommodation of some sort. Those were precisely the words that I used, and they should be taken as having been used after quite a long explanation of the situation of which the honorable member for East Sydney, if he is not entirely absorbed by party political motives, should have been aware.

page 3963

LORD HOWE ISLAND

Mr WHITE:
LP

by leave - During ques tion time yesterday the honorable member for West Sydney (Mr. Minogue) asked me whether it was likely that the air service to Lord Howe Island would cease to operate. I replied to him that rationalization had taken place between two companies conducting services from Sydney to Lord Howe Island, and that the service to the islands came under the New South Wales Transport Board. I also said that Qantas Empire Airways Limited had agreed to relinquish its service to the island, but that the island would not suffer on that account, because an adequate number of aircraft would still be servicing it. I also said that the company that would run the service next year was the TransOceanic Airways Proprietary Limited, which had pioneered the service.

Mr Ward:

– That is not correct.

Mr WHITE:

– Yesterday the honorable member for East Sydney (Mr. Ward) interrupted me when I was answering this question by saying, “ That is not true “. He is saying the same thing again now. After I had made a search of the records of the department, I found that in November, 1948, the then Minister for Civil Aviation, Mr. Drakeford, was advised by the Director-General of Civil Aviation that the first air service to Lord Howe Island was operated by TransOceanic Airways Proprietary Limited. That bears out the truth of what I said and the unreliability of what the honorable member for East Sydney said. There I leave the matter.

Honorable members interjecting,

Mr SPEAKER:

– Order ! I hope that the spirit permeating the House this morning is not the Christmas spirit. It sounds more like Guy Fawkes Day. The 5th November has passed and we are looking forward to the 25th December. There should be less conversation in the House.

page 3963

AUTOMATIC TELEPHONE EXCHANGE, PERTH

Reference to Public Works Committee

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

That, in accordance with the provisions of the Commonwealth Public Works’ Committee Act 1913-47, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz: - The erection of an automatic telephone exchange building in Perth, to be known as “ Irwin “ exchange.

page 3963

QUESTION

AUTOMATIC TELEPHONE EXCHANGE, BATHURST

Reference to Public Works Committee

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

That, in accordance with the provisions of the Commonwealth Public Works’ Committee Act 1913-47 the following proposed works be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz: - The erection of an . automatic telephone exchange and carrier building at Bathurst, New South Wales. telephone exchange Building, launceston.

Reference to PublicWorks . Committee.

Motion (by Mr. Casey) - by leave - proposed -

That, in accordance with the provisions of the Commonwealth Public Works’ Committee Act 1913-47 the following proposed works be referred to the Parliamentary Standing Committee on Public Works for investigation and report, viz: - The erection of a building in St. John’s-street, Launceston, for telephone exchange and other purposes.

Mr SPEAKER:

– Order ! The purpose of submitting the proposed works to the committee is to find out things like that.

Mr CALWELL:
Melbourne

. -Some time ago the reference to the Public Works Committee of a proposal to construct extensions to the telephone exchange at Lismore, was debated in this House. Lismore is in the electorate of the Postmaster-General (Mr. Anthony). On that occasion the Minister for Works and Housing (Mr. Casey) gave the House some information about the estimated cost of the proposed build- ing. To-day, however, he has not offered us any information about the estimated cost of the proposed works with which his three motions deal. By way of interjection i asked what the cost of these works would be, because i consider that just as the House was entitled to know what amount of money was to be expended on a telephone exchange in the Postmaster-General’s electorate, so is it entitled to know just how much it is estimated will be expended in respect of other proposed works. i wish to know whether any favouritism is being shown, and whether the amount to be expended in one area will be small whilst the amount to be expended in another area may be large.

Mr ANTHONY:
PostmasterGeneral · Richmond · CP

– The object of referring the proposed works to the Public Works Committee, which is an all-party committee, is to enable it to determine whether they are necessary, whether the expenditure involved will be too great, and also various other matters, including whether the amenities for the staff in the proposed buildings will be satisfactory, and whether the traffic to be borne will be adequately catered for. A variety of matters such as I have described are examined and reported upon by the committee. That is its job. It reports to the Parliament after it has taken evidence from departmental engineers and residents of the particular area concerned, covering every aspect of a proposal. As far as the proposed postal works at Lismore are concerned, if the honorable member for Melbourne (Mr. Calwell) had taken the trouble to examine the report of the Public Works Committee in relation to that matter, which was presented to the House yesterday, he would have seen that that committee, which includes members of his own party, reported unanimously that in its opinion that was one of the most urgent works of its kind that required to be done in Australia. It stated that the conditions that it found in Lismore were worse than it had found in any other of its investigations. The committee will make the same kind of investigations in respect of the proposed work at Bathurst, which is in the electorate of the Leader of the Opposition (Mr. Chifley), the proposed work in Perth, which is in the electorate of the honorable member for Perth (Mr. Tom Burke) and also in connexion with the proposed work in Launceston. Those proposed works are in three widely separated parts of the Commonwealth. They all are considered by ray department to be urgent and necessary works that should be submitted to the Public Works Committee, which will, I have no doubt, report on them to the Parliament.

Dr EVATT:
Barton

.- The honorable member for Melbourne (Mr. Calwell) and I have already informed the Minister for Works and Housing (Mr. Casey) that we support the reference of the proposed works to the Public Works Committee. However, I consider that when an honorable member asks a question in the House in relation to the estimated cost of the proposed works, the

House should he given an estimate of the magnitude of the proposal and the expenditure involved. Perhaps the Minister for “Works and Housing will consider giving such information to the House when he replies to the debate.

Mr ROSEVEAR:
Dalley

.- lt seems to me to be “very strange that since the advent to office of this Government the only works, or practically the only works, that have been or are to be referred to the Public Works Committee, are in electorates that are represented by honorable members on the Government side of the House.

Mr Fadden:

– What about the proposed work at Bathurst in the electorate of the Leader of the Opposition (Mr. Chifley) ?

Mr ROSEVEAR:

– I do not say that proposed works referred to the committee are exclusively in electorates represented by honorable members opposite.

Mr Fadden:

– The honorable member did say so.

Mr ROSEVEAR:

– I am sorry if I said so, although I think I said that “ practically the only works “ referred to the committee were in electorates represented by honorable members opposite. I consider that the House ought to know what amount of expenditure is likely to be involved, because it, or any member of it, might wish to take objection to large expenditure in some electorates when smaller expenditure in other electorates might do more towards the efficient working of the postal and telephone services. I have had the experience in my own electorate of the construction of a telephone exchange being commenced and then left half done for about three or four years. I do not think that work on that particular exchange is to be proceeded with now. We are entitled to know what the proposed works are estimated to cost so that we shall be able to debate the .question of whether more important works, involving a smaller expenditure of money, labour and materials than those, proposed by the Minister, might be carried out.

Mr. CASEY (La Trobe- Minister for National Development and Minister for

When I submitted the motions for the reference of the three proposed postal buildings to the Public Works Committee, which I did with considerable brevity in order to save the time of the House, I could have described the proposed works at length, but I refrained from doing so, because I did not. think that honorable gentlemen wanted a long explanation at this stage of the session. The functions of the Public Works Committee are well known to all honorable members. It is a screening, or an investigating body, which examines the projects of an originating department, as they are drafted into a rough plan by officers of the Department of Works and Housing.

Mr Ward:

– Will the Minister give us a rough estimate of the cost?

Mr CASEY:
LP

– If the honorable member for East Sydney (Mr. Ward) will keep quiet, he will find out that such is my intention.

Mr SPEAKER:

– Order ! The Minister has the floor and should be heard in silence.

Mr CASEY:

– The estimated cost of the automatic telephone exchange building in Perth, to be known as the Irwin exchange, as computed in the middle of this year, is £852,000. That estimate does not include exchange equipment.

Mr Spender:

– That exchange is situated in the electorate of Perth, which is represented by a member of the Labour party.

Mr CASEY:

– That is so. An automatic telephone exchange and carrier building is proposed for Bathurst, in New South Wales, which is in the electorate of the Leader of the Opposition (Mr. Chifley). The estimated cost of that construction is £167,600, but that figure may be increased appreciably if various alternatives that have been put forward by the Postmaster-General’s Department and the Department of Works and Housing are accepted by the Public Works Committee. The estimate should be regarded at this stage as a very general figure. I remind honorable,-members that the House is not asked at this juncture to agree to the appropriation of money for those projects. The motions that I have submitted, if approved, will merely give authority for the proposed works to be referred to the Public Works Committee for investigation and report. The Parliament or the Government will not be committed to incur the estimated expenditure. I thought that Opposition members understood that to be . the position. The third project is the erection of a building in Launceston for a telephone exchange and for other purposes. The estimated cost of £657,700 may be considerably exceeded. I could give almost any degree of detail about those projects, but I do not believe that honorable members want it at this stage. I am merely trying to provide some useful, constructive work for the Public Works Committee during the forthcoming recess. That committee consists of members of all the political parties represented in the Parliament. Officers of my department have worked unceasingly during the last 48 hours to provide the necessary data in order that the Public Works Committee may have some work to do. Finally, I inform the House that two of the four buildings for the Postal Department that have been referred to the Public Works Committee in recent times are in electorates of Government supporters, and two in the electorates of Opposition members.

Question resolved in the affirmative.

page 3966

QUESTION

LEAVE TO MAKE STATEMENT NOT GRANTED

Mr SPEAKER:

– Is leave granted?

Opposition Members. - No.

Mr Spender:

– Do not Opposition members wish the committee to be appointed ?

Mr Calwell:

– The Minister may submit the motion at the appropriate time.

Mr SPEAKER:

– Order ! Leave is not granted.

page 3966

INTERNATIONAL MONETARY FUND AGREEMENT

Mr FADDEN:
CP

– I lay on the table the following paper: -

International Monetary Agreements Act - Annual Report on operations of the Act, insofar as they relate to Australia, of the International Monetary Fund Agreement and the International Bank Agreement, for year 1949-50. and move -

That the paper be printed.

Debate (on motion by Dr. Evatt) adjourned.

page 3966

DEFENCE FORCES RETIREMENT BENEFITS BILL 1950

Bill presented by Mr. Fadden, and read a first time.

Second Reading

Mr FADDEN:
Treasurer · McPherson · CP

by leave - I move -

That the bill he now read a second time.

In May, 1948, when the Defence Forces Retirement Benefits Bill designed to establish a scheme for improved retirement benefits for members of the permanent defence forces was introduced into this House, it received the unqualified support of members of the present Government who then occupied the Opposition benches, and the government of the day was commended for bringing forward “ a very welcome piece of legislation “. The main purpose of the bill which I now introduce is to give effect to the Government’s decision to increase pensions and benefits for members and exmembers of the defence forces. At the same time, action is being taken to bring nurses serving permanently in the Army and the Air Force within the provisions of the act. The bill also makes provision for the correction of minor anomalies and the clarification of certain provisions which experience in administering the act has shown to be necessary.

Members of the defence forces are, in the main, retired at comparatively early ages. In the Air Force, the retirement of officers commences at the age of 41, in the Navy at the age of 45, and in the Army at the age of 47. Ratings in the Navy and other ranks in the Army and Air Force become entitled to pension on completion of 20 years’ full-time continuous service after attaining the age of 20 years. In view of these comparatively early retiring ages, pensions a re based on the substantive rank held by the member at the date of his retirement and contain a very substantial government subsidy as compensation to the. person concerned because he is obliged to end his service career while still in the early middle years of his life. However, during their service members are covered for death or invalidity to the extent of the number of units for which they are contributing as at age 60. The Government recently decided to increase the value of the first eight units from £32 10s. to £39. This bill makes provision for the increased payments to those who are already pensioners under the Defence Forces Retirement Benefits Act and for the entitlement to be extended to those who are still contributors. The full increase will be payable to those who are drawing invalidity pensions, where the disability is 60 per cent, or over, and to those who. were retired after serving to age 60. Widows of ex-contributors to the Defence Forces Retirement Benefits Fund will also receive the pro rata increase in their pensions. For those who are retired and pensioned on reaching retiring age for rank before age 60, a proportionate increase, according to age of retirement, will be made.

The increases that have been approved by the Government are an interim measure only, pending the quinquennial examination of the fund which is to be made in 1952, and are in line with the increases approved for application to ex-members of the civil service who were contributors to the Commonwealth Superannuation Fund. Increases are also proposed for certain lump sum benefits that are provided under the act. Members who do not serve long enough to qualify for pension but who, in the case of officers, serve to retiring age and who, in the case of other ranks, complete their engagements, receive a refund of contributions plus a gratuity. This gratuity consists of a fixed sum of £20 or £30 for each year of service, depending on length of service, or one and a half times the amount of contributions made, whichever is the greater. It is proposed that, in the case of members who serve for twelve or more years, the present subsidy of one and a half times the contribution shall be increased to twice the amount of contributions for contributions up to 18s. per fortnight and for contributions made after the completion of twelve years’ service. The increases in lump sum benefits to which I have just referred will apply to contributions made after the date of this bill and will apply to members who retire after the commencement of this legislation.

Honorable members will note from the bill that it is proposed to introduce a scheme of retirement benefits for nurses who are appointed on a career basis to the Army and Air Force nursing services. The provisions will be very similar to those provided for career officers under the act. Retirement pensions will be payable at age 55, the age for retirement of naval captains, colonels and group captains, and will bear the same relation to the pensions of male officers who retire at that age as the pay of nurses bears to the pay of those officers. Invalidity benefits will be provided on the same scale as for male officers. In view of the fact that the scale of contributions increases with age, it is proposed that nurses who are now serving and who have attained the age of 30 years shall be allowed to elect whether or not they shall become contributors.

A further matter that is dealt with in the bill is the scale on which members shall contribute. Generally speaking, members contribute for the number of units appropriate to their daily pay, and if their daily pay is increased they are at present required to take out extra units without receiving any added retirement benefit. Honorable members will recall that the Government recently approved of substantial increases of the rates of pay of the forces. These increases would normally require members to take out two. three, and in some cases, four extra units, the cost of which would be considerable. Having in mind the fact that all pensions are to be increased in the manner to which I referred in the earlier part of my speech, it has been decided that the most satisfactory solution of the problem is to relieve members of the necessity to make extra contributions because of pay increases. The scale of contributions will, therefore, be pegged at the rates appropriate to the pay scales that were in force prior to the recent increases. This will mean that members will be in receipt of increased pay but will not be required to make increased contributions to the fund. As a corollary to this, pensions will remain at the present scale, plus the increases to which I referred earlier.

The bill contains clauses other than those to which I have referred. Generally speaking they relate to points which have arisen since the act came into operation and also, in some cases, refer to minor anomalies which have come to light during the administration of the act. When the original bill was introduced in 1948, because of the varied conditions of service in the Navy, the Army and the Air Force, many of which were of long standing, and because of the impracticability of covering in the bill every possible class of case, a general provision was inserted in clause 87 which enabled regulations to be made to deal with isolated and unusual cases, and, incidentally, any minor changes or variations that were likely to take place in the course of the adjustment of the services to uniform conditions of service. The amendments now proposed result from experience in the administration of the act and follow recommendations that were made by the Defence Forces Retirement Benefits Boards, a body on which each of the three services is represented.

Mr POLLARD:
Lalor

.- The Opposition supports this measure with a great deal of enthusiasm. The case that has been stated by the Treasurer (Mr. Fadden) provides ample justification for giving effect to the bill at the earliest possible moment. I am glad that nurses will be included within the scope of the legislation. I notice that a further review of the benefits that are provided under the principal act will be made after the quinquennial examination of the fund which will be made in 1952. Generally speaking, any measure that improves the conditions of service of men employed in the defence forces, particularly in view of existing circumstances, is amply justified.

Question resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Fadden) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Defence Forces Retirement Benefits Act 1948-1949.

Resolution reported and adopted.

In committee: Consideration resumed.

Bill - by leave - taken as a whole and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 3968

SUPERANNUATION BILL 1950

Bill presented by Mr. Fadden, and read a first time.

Second Reading

Mr FADDEN:
Treasurer · McPherson · CP

by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to implement the Government’s decision, as announced in my budget speech, to increase the value of the first eight units of contributory superannuation pension by 20 per cent, from £32 10s. to £39 each, thereby raising such existing and future pensions by a maximum of £52 per annum to retired officers and £26 per annum to their widows. It had been determined that the next periodical review of the superannuation scheme would not be made until 1952, but a special interim survey was considered desirable in view of the steep increase of the cost of living in the three years that have elapsed since 1947, when the scheme was last examined. The necessity to consider the rate of pension also rose from the decision of the Victorian Government to amend the Victorian superannuation scheme to provide broadly for an increase of 20 per cent, in superannuation pensions from the 1st July, 1950. Before that amendment the Victorian scheme was comparable with the present Commonwealth’s scheme.

The Commonwealth superannuation scheme is compulsory, and former employees of the Commonwealth Public Service and Commonwealth authorities now find that the real value of this form of compulsory saving is considerably less than they thought would be the case during the period of their contributions. The rise of the cost of living is believed to be causing severe hardship to many superannuated officers, particularly those whose life-time savings have rendered them ineligible for social services benefits. The responsibility of the Commonwealth as an employer suggests that the cost of the further increase of benefits as now proposed should be borne by the Commonwealth and not by additional contributions from present and future employees.

The 20 per cent, increase has been limited to the first eight units of pension in view of the fact that the present salary of an adult male officer on the lowest grading in the Public Service carries entitlement to contribute for that number of units. The overall effect will be to increase the Commonwealth’s contribution to the pension from 60 per cent, to 66.7 per cent, for the first eight units. After the first eight units, the proportion contributed by the Commonwealth becomes progressively less until it reaches 62.3 per cent, in the case of the pensioner entitled to the maximum of 26 units. Most officers already superannuated have pensions up to eight units. The majority of adult male officers now serving contribute for eight units or more. Therefore the increase in pension benefits provided in this bill will ,be comparatively of more benefit to present pensioners than to contributors not yet superannuated. The increases provided in the bill offer a reasonable compromise between, on the one hand, alleviation of the position of present pensioners and, on the other hand, the lack of justification for a flat 20 per cent, increase in the superannuation entitlement of the higher salaried officers still serving.

A similar percentage increase proportionate to the increase of the first eight units of pension will be made in respect of contributors to the Provident Account. Contributors to the Provident Account are those who, for medical or other reasons, are ineligible to contribute for pension. On retirement they now receive a lump sum equal to two and a half times the amount of their contributions plus 3 per cent, per annum compound interest thereon.

Mr Calwell:

– Are many officers concerned by the Provident Account?

Mr FADDEN:

– Hot very many. The increases which have been provided in the Victorian superannuation scheme have created an anomalous position in relation to officers who may be transferred from the Victorian to the Commonwealth Public Service since the amendment of the State act in June last.

As the 20 per cent, increase in Victoria was not restricted to the first eight units, an officer so transferred could receive a pension of £39 per annum in respect of all units up to the maximum of 26. In addition, he would receive a 20 per cent, increase on each unit of £39 up to eight units when the present proposed amendment became law. The hill therefore, includes a provision which will ensure that officers transferred from a State Public Service shall not be entitled to any greater benefits than will be payable to other Commonwealth officers. The opportunity has been taken also to delete from the principal act certain miscellaneous sections, the operation of which has been exhausted by reason of the effluxion of time.

It is proposed that the increases shall . operate from and including the 9th November, that being the first superannuation pension pay day in November. This is consistent with the date of commencement of increases of repatriation and social services benefits. It is estimated that the cost of these increases will approximate £325,000 per annum over the next few years. I commend the bill to the favorable consideration of the House.

Debate (on motion by Mr. Calwell) adjourned.

page 3970

LOAN (INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT) BILL 1950

Second Reading. Debate resumed from the 1st December (vide page 3526), on motion by Mr. Fadden -

That the bill be now read a .second time.

Mr TOM BURKE:
Perth

.- The bill proposes to authorize the loan of 100,000,000 dollars from the International Bank for Reconstruction and Development. That bank was established as part of the world economic organization set up under the United Nations. Later, the Chifley Government committed Australia to membership of that organization. The Chifley Government took that action only after it gave the matter the most careful consideration. It believed that the world bank would play a vital part in the whole complex organization of the world by regulating financial relations between nations, including adjustments of currencies and the provision of loans for the purpose of developing backward countries. When the Chifley Government introduced the International Monetary Agreements Bill the Treasurer (Mr. Fadden), who was then in Opposition, supported it only half-heartedly, although in fairness to the right honorable gentleman I admit that finally he agreed that Australia should become a party to the agreement. On that occasion he pointed to certain dangers that might arise.

Mr Fadden:

– And those dangers showed their heads.

Mr TOM BURKE:

– Yes; and the point I now make is that they may show their heads again. The International Bank for Reconstruction and Development is essential for the conduct of international financial relations. However, should any country borrow from it at a time of high prosperity like the present and later be obliged to repay the loan and meet interest commitments at a time when world conditions are not nearly so prosperous, the dangers to which the Treasurer referred would become most menacing. On that occasion the right honorable gentleman said -

Many of its provisions can be interpreted to justify interference with the domestic policy of « country . . .

Later, he said -

Many matters vital to Australia will be decided by the voting strength of interested parties, and Australia will have little influence in the decisions reached.

Invariably, regardless of the source of borrowing, a lender can dictate to a borrower only when the latter is unable to meet the terms and conditions under which the loan is made available. Whilst the Opposition does not intend to oppose this measure it wishes to emphasize the dangers that may arise from borrowing at a time of abnormal world prosperity when it is possible that we shall be obliged to repay this loan at a time of much less prosperity. The Government, no doubt, will apply the loan for which it now seeks authority for the purposes that are set out in the agreement but it may, at the same time, utilize its normal dollar earnings for the purchase of consumer goods. Such a policy could not be justified. It would be detrimental to our economy. However, should the Government take such action, it would bring about a state of affairs in which the dangers to which the right honorable gentleman referred, and which I now emphasize, would become real and menacing.

Australia is now enjoying unprecedented prosperity. Individual incomes are at higher levels than they have ever been previously and we are receiving record high prices for our exports. Indeed, we cannot hope to experience prosperity greater than that which we are now enjoying. Similar conditions exist in the United States of America. In those circumstances we are unable to sell sufficient goods to the United States of America to meet our dollar commitments in respect of goods that we require to purchase from that country. If the level of prosperity in this country and in the United States of America declined to a substantial degree we could not hope to meet either our current dollar commitments or the additional commitments that the Government proposes to undertake under this measure. The Government has intimated that later this loan will he increased to 250,000,000 dollars but in the circumstances I suggest that it should hasten slowly and watch with the utmost care the projects upon which this money iB to be expended. Otherwise, the dangers which the Treasurer envisaged when this agreement was ratified could very easily arise and, consequently, Australia might again be subject to dictation by other countries or, perhaps, by the. International Bank for Reconstruction and Development in respect of not only its international financial commitments but also its normal internal policy.

The Treasurer in his second-reading speech pointed out that Great Britain’s dollar position had improved considerably and he contended that, consequently, the Government could safely undertake the commitment for which it seeks approval under this measure. I urge the Government to exercise the greatest caution in assessing the growth of dollar funds in the sterling pool. In this respect three factors must be examined. The first factor is that as the result of the British Government’s action in devaluing sterling a large balance of legitimate funds has been built up at London. Secondly, the feeling exists throughout the world that in the not far distant future Great Britain will again appreciate sterling. What are the implications that are involved in that proposal? First, funds are invested on short term in London in order to take advantage of the profits on the turn of the exchanges. Secondly, as American exchanges are notoriously more jumpy than are British exchanges, the British market is correspondingly more solid and it may be that in order to avoid day to day fluctuations on the American exchanges, American capital is being held in London. Therefore, the Government should proceed warily if it intends to base its dollar borrowing principally on the growth of London funds. Whilst those balances have been increased to almost a spectacular degree we must remember, having regard to the situation that confronted Great Britain when it effected a. general conversion of sterling into other currencies, that British sterling balances are not large when compared with normal pre-war dollar balances in London.

Stockpiling for defence purposes must also be taken into, consideration in this matter. That factor is increasing the dollar earnings of Australia and the sterling pool and it is building up the dollar balance in London. The essential materials that are being stockpiled vary from wool to base metals and include scores of other commodities. Here are seeds of difficult times should a sudden cessation of prosperity take place. Stockpiling is being undertaken for defence purposes but let us assume that the threat of war moves away as we hope it will do. If that time comes it is quite conceivable that the United States of America will have stockpiled sufficient wool, base metals and other essential commodities’ to provide for its normal requirements for at least twelve months. If such a situation should arise this country will face a real problem. Our dollar earnings must drop sharply because the stockpiles will certainly be used before the American Government or the American people purchase more of the goods involved. The Government should consider these facts before it further pawns Australian credit in order to obtain materials or equipment by the use of loan moneys from the American Government or with the object of obtaining assistance from the world bank. By arrangement with the world bank, this loan has been associated with the purchase of certain specified commodities or with commodities which fall within a group. That is a wrong and humiliating approach to the matter.

I can understand that the world bank should ask for what purpose the money is to be used and that the Government might inform it, for instance, that it was to be used for the development of the Snowy Mountains hydroelectric scheme, but that the world bank should specify that the money shall be used only to finance specific items for that scheme is wrong. That humiliating condition has been imposed on the Government by an organization which represents governments and it should be eliminated from the terms under which the bank lends money. The purposes for which the loan from the world hank is to be used have been set out in a statement which was made by the Treasurer (Mr. Fadden). The statement lists durable capital goods the procurement of finance for the purchase of which might be regarded as a sound proposition for a term such as this if other conditions are satisfied. The Treasurer has told the honorable member for Melbourne (Mr. Calwell) that the Government has made import licences available for the importation of 10,000 tons of newsprint from Canada. This newsprint is valued at £628,456, which is equal to nearly 1,500,000 dollars. I presume that an increased appropriation of dollars will be necessary for the purchase of this newsprint. This seems to bear out the fear of the Opposition that while the materials and the machinery to be imported have been decided in accordance with relatively sound practice a considerable number of dollars are to be used to enable the oversized newspapers of the capital cities to continue their wasteful use of newsprint. There can be no justification for that practice. The Government should give this matter serious consideration before it allows any further extravagance in the purchase of newsprint, which should be husbanded carefully. Dollars should be used only for the purchase of capital goods or for the reduction of overseas commitments. The effective interest rate of 4J per cent, on this loan is very high. I presume that most of this money will have been borrowed from American citizens on the bonds issued by the world bank so that the rate of interest payable in America would determine the rate that the world bank would charge, but this rate of interest is still far higher than those who envisaged the establishment of the world bank .and. the world monetary fund expected it to be. It is an uneconomic rate of interest which should not have to be paid by this country on a loan for these purposes. The Treasurer has been good enough to supply me with a table of all the loans made by the world bank. I find from that table that the rate of interest which Australia will pay is very little less than the rate which has been paid by any other country in the world. Some countries have paid a rate of one-quarter of 1 per cent, higher than Australia has been asked to pay-

Mr Fadden:

– It would have been possible to secure a lower rate if the previous Government had taken advantage of its opportunity to borrow earlier.

Mr TOM BURKE:

– The right honorable gentleman does not know what he is talking about. The Government has been anxious to raise this loan from the world bank and I think that that is why it did not negotiate as firmly as it could have done with a view to obtaining better conditions. The previous Government was not unwilling to borrow from a world organization or from another country if, after all the tests of sound finance had been applied, it was found that a loan was desirable. The previous Government did borrow a relatively small sum from the world monetary fund under the Bretton “Woods Agreement, in order to meet its balance of payments. But it had no intention, and no future Labour government would have any intention of permitting this country to borrow money unless such action could he justified. The procurement of finance by borrowing is the easy way out of a difficulty. In government, as in domestic spheres, it leads to tragedy. As an honorable member said when the world bank was being discussed, the average man who receives high wages for a time because he is working overtime and who borrows to meet his ordinary commitments or even to buy a home or furniture may have to repay what he has borrowed at a time when his wages are lower. “ He may then be unable to meet his commitments. What happens to individuals in that respect can happen to governments.

There has been much propaganda concerning the success of the Prime Minister in raising this loan whilst on his tour overseas. Any Australian government which presented a serious proposition to the world bank could have obtained this loan. Australia is a relatively large contributor to the funds of the bank although it may not contribute a large amount in comparison with the actual contributions of the great nations. An Australian representative is a governor of the bank and another is an executive director on the board. Due largely to fortuitous circumstances, Australia is in as solvent a position as any country in the world so there is no special merit in the Prime Minister’s action in arranging this loan. Arguments which seek to support that point of view are ill-advised propaganda. It is not certain that, from the point of view of the Australian people, it was wise to obtain this loan. Any government that wished to obtain such a loan would have obtained it at least on terms equal to those secured by the Government.

Australia’s dollar income has never yet reached the level of its dollar commitments. If this loan can, immediately or in the future, enable increased dollar earnings to be made it is eminently justified. Under present circumstances international trade is conducted under what are virtually bi-lateral agreements. When world conditions become normal such trade might return to multilateral channels. I shall apply five tests to determine whether the raising of this loan is justified. The first is whether it will enable the Government to meet increased as well as ordinary dollar commitments. The second is whether it will enable Australia to absorb satisfactorily and permanently an increased number of migrants. The third is whether it will enable Australia to make itself more secure from attack or enables it to play its part in the event of a world conflict. The fourth is whether it will enable our development to be more rapid and whether it will expedite the development of hydroelectric power, re-afforestation schemes and so on. The last test, although perhaps it should ;be the first, is whether the loan will allow us to make a greater contribution to the food and clothing supplies of the world. If these tests can be answered satisfactorily, the loan can be justified. The Government is entitled to take a risk on the matter of this loan if the requirements I have mentioned are met.

The hill as presented to Parliament indicates a commitment already entered into by the Government. I believe that is wrong. There is no reason why, as a general rule, -the House should not have been presented with a statement by the Prime Minister or Treasurer in explanation of the reason for the seeking of a dollar loan. That is not possible now, but it is possible and desirable that before the

Parliament is committed to further overseas borrowing, particularly in dollar areas, it should be informed of the reason for the borrowing.

Mr Fadden:

– That was not done before the application was made to the world bank for a loan by the previous Government.

Mr TOM BURKE:

– The circumstances were different. That loan was based on current earnings and current expenditure and was obtained from the fund and not from the bank.

Mr Fadden:

– It was a loan.

Mr TOM BURKE:

– Of course it was, but the balance had to be met. Current earnings and current purchases were known and we had to arrange a balance. It was a short-term loan on commitments due in the United States of America. It was a short-term loan to meet a short-term debt. That is different from a large future commitment in dollars such as is envisaged by this bill. If the Government intends to proceed with its proposed 150,000,000 dollar loan it should bring the proposition to the House and inform honorable members of the projects upon which the money is to be expended. It should also supply us with a review of present and possible future earnings by which the debt can be covered. That is a duty owed by the Government to the Parliament, the people and future governments. These dollar loans must be met at some future date and they cannot be met by borrowing dollars from other countries or the United States. But that is a larger subject for some future debate.

The projected visit to this country of representatives of the International Bank for Reconstruction and Development is a good thing. . I do not object to it at all because I believe that representatives of government organizations should see Australia at first hand to be made fully aware of its developmental possibilities. It is a good thing that they should learn, by personal inspection, how the loan money is to be expended. They will then discover that the money will be expended to the advantage of Australia and ultimately to the advantage of the world. A visit of that kind can do nothing but good. However, during such a visit or during any such future visits, the Australian Government must insist that although the representatives of the world bank may examine projects before they agree to finance them, neither they nor any other overseas delegation can have any say in government policy other than in developmental works or projects for which finance is, at that time, being specifically sought. I leave the matter there and point out to the Government that we see dangers in increasing our commitments in dollar areas when we are not provided with the means of earning dollars. Australian overseas indebtedness is a real danger in time of economic crisis. Our internal debt can always be dealt with, but unless we can sell sufficient goods to overseas countries to pay for our current commitments in loans we shall find ourselves in great difficulties in the future. Before future commitments are entered into the Government should give full consideration to the implications of overseas loans.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Ever since the dollar loan was suggested 1 have held the opinion that the raising of such a loan is wrong. After reading the statement of the Treasurer (Mr. Fadden) I am more convinced than ever that the Government is making a mistake in entering into this contract. I listened carefully to the Treasurer’s speech and I carefully studied his obviously prepared statement. I hope that the Treasurer himself did not prepare it, because it contains some misleading statements. In fact, it presents quite the wrong picture. The Treasurer mentioned the general shortage of dollars, but I venture to suggest that if we calculated the value of the production exported from this country and correlated it to dollar earnings and dollar savings we should see a completely different picture. The Treasurer said that our position has improved because of the spectacular rises in the prices of rubber, tin and wool. It is significant that wool is mentioned last, when actually it is the most important export product of this country. Australia produces no rubber, and only produces a small quantity of tin.

The Treasurer said also that the equipment purchases which may be financed through the loan will be of great importance in improving the production of basicfoodstuffs to meet the needs, not only of our expanding population but also of our traditional markets. Our traditional export markets are largely in the sterling area and it should be remembered that we are not actually being paid for much of our exported products. We are already embarrassed by having too large sterling funds, and, it would appear, we propose to seek a dollar loan for the purpose of further increasing our sterling balance. I suggest that that is wrong and unsound economics. The Treasurer has made several inconsistent statements. In particular I mention that he said that prior to devaluation, gold and dollar settlements had to be made from time to time in the non-dollar countries. What I want to ask is why would the sterling area have to settle in gold and dollars to non-dollar countries when we have plenty of sterling ? This country is well supplied with basic materials and I contend that we can well afford to buy all our dollar requirements.

If we had not got bogged down by controls, currency and otherwise, we should have been in a far better position to help Great Britain both in dollars and in food than we are in at present. Because of the financial regulations and the control of currency we are to-day going cap in hand to the International Bank for Reconstruction and Development. Boiled dawn, the long speech of the Treasurer means that we can now borrow dollars which I suggest that in all justice we should rightfully own. The position is a great improvement upon that of some time ago because then we could not even borrow enough dollars. The improvement in the British gold and dollar reserves has been widely publicized throughout the sterling area. However, it should be remembered that that improvement is largely the result of Marshall aid. I suggest, and, in fact, it has been admitted, that America itself is responsible for the improvement in the dollar balances of the sterling group. But Marshall aid has also been a big factor in the inflation existing in the United States. We should be trying to protect ourselves from the effects of that inflation. There are no signs of the Government taking steps to protect our economy against the inflation which is developing not only in America but also inflation in Great Britain. That will assuredly affect us if we do not do something about it. Australia is one of the few countries that has not received any Marshall aid. It is also one of the very few countries of the world which came out on the credit side of lendlease. We showed a credit balance in this connexion which arose through our feeding of the American troops in our strategic area. In view of these factors I feel it is wrong that we should be asked to pay one of the highest rates of interest charged by the world bank. The honorable member for Perth (Mr. Tom Burke) has mentioned that we are to be charged a higher rate of interest than has been charged to most countries. In all the circumstances, surely we should have been able to get a concessional rate of interest.

Mr Treloar:

– Why?

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Because Australia is in a very strong position. If I am in a strong financial position and I go to a bank and ask for a loan, I can borrow cheaply. If I am in a. weak financial position I must pay a higher rate of interest. Apparently the ordinary financial considerations do not apply to the international sphere. The borrower in a strong position apparently has to pay a higher rate of interest than borrowers who are in a weak position. I suggest that there is no need at all to borrow dollars because by the sale of our produce On the dollar market we can acquire all the dollars that we propose to borrow.

Mr Fadden:

– Does the honorable member suggest that we should repudiate the contracts already existent with the United Kingdom in order to sell on the dollar market ?

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– No. Those contracts are subject to review, and in fact a new meat contract is under consideration. According to the Treasurer’s statement made on the 22nd March, Australia’s net drawings or deficits in the sterling area dollar pool were as follows : -

These figures fluctuate for seasonal and other reasons, but the average annual drawing is 97,000,000 dollars. As the 100,000,000-dollar loan that we are discussing is spread over a period of two years, it would seem that our annual minimum requirements over and above the direct sales which are not considered in this calculation are of the order of 150,000,000 dollars a year.

The beef being exported to England at the present time, if sold on the American market, would earn 75,000,000 dollars a year. If there was a free market in meat I suggest that that sum could be raised to 150,000,000 dollars.

Mr Fadden:

– What about the existing contract with the United Kingdom?

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– If the Government established a free market for our meat it wouldfind that production of meat in Australia would develop and at least we could come to terms with Britain.

Our production of silver, lead and zinc could find a ready market in the dollar area at prices slightly below those now being obtained. At the present time a substantial amount of our silver and lead finds its way to England. I suggest that by the sale of these metals and other metal products to America we could obtain another 40,000,000 dollars annually. That suggests that the increase of our total dollar earnings, over and above our present direct earnings, would be about 190.000,000 dollars a year. That estimate is most conservative and does not take into consideration other goods such as pig meats and minerals that are readily saleable in the United States.

Does any one in his senses borrow money at the top of the loan market, at high rates of interest, when he has plenty of his own? I suggest that the reason why we are short of dollars is because other members of the sterling area are not earning anything like their share of dollars, and so much of our contribution to the dollar earnings of the sterling area has become represented in London by balances that are virtually frozen and that are not interest bearing. These balances, in effect, do not belong to the Government or to the Commonwealth Bank. They are, in effect, security for the deposits of trading banks, which are frozen. As honorable members know, we have more than £600,000,000 to our credit in London as a result of our trading with the sterlying area. In view of this it seems to me to be absurd for us to be entering into a contract with another country to borrow money at high rates of interest, when, as I have shown, we should be able to earn the currency required.

In addition to the shortage of dollars that I have mentioned there is also the fact that we are not being paid for our exports. The fact that sterling balances are as high as they are supports that contention, because if that were not the case then the sterling balances would not exist. That factor is one of the main contributing causes of the increase of our price levels. British manufacturers are selling at a loss to the dollar area in order to earn dollars. I mention in particular the Austin motor manufacturing enterprise, which is selling its products to the dollar area at a loss. I notice that there are no correspondingly cheap British goods coming to this country. It follows naturally that the companies which are selling at a loss to the dollar area must make up the difference by charging higher prices for goods exported to non-dollar countries. I do not make that statement as a criticism. It is only common sense for them to do so, but I suggest that it is inflationary to a very high degree.

The Treasurer has spoken of the severe drain on our gold and dollar resources that occurred in 1949, and. of the restrictions that were placed on the dollar purchases of the various countries of the sterling bloc at that time. I suggest that Europe and England are receiving a larger pro rata share of dollars than we are receiving, and I should like the Treasurer to give us some explanation on that point. In view of that fact I suggest that it is unreasonable for us to borrow dollars at this time. The Treasurer has spoken about the increased production that will result from the dollar loan. I suggest that such an increase of production will increase our sterling earnings, a result which is not in our interests at the present time because we are already embarrassed by our sterling earnings. To my mind Australia is strong enough in basic wealth to operate outside the sterling area, as Canada has done. I suggest that with a free exchange and the control of our own currency we should be of far greater help to the United Kingdom than we are now. Sooner or later we must come to the conclusion that we should have control of our own currency, otherwise we shall get into a worse position, and other economic problems about which we hear so much will overtake us. The problems that we already facedemonstrate forcibly the way in which we are drifting.

We have heard a lot about stock-piling. We are selling stocks for piling by other countries and should be getting dollars for them. But we do not obtain dollars for them. We carry on with this same socialist plan that was laid down some time ago which, I suggest, will ultimately spell ruination to - the Empire. The Treasurer stated that when he discussed the dollar loan with the officials of the international bank he found them sympathetic, enlightened, and far-sighted. It is very easy to understand that. Naturally they would be sympathetic because they appreciate more than anybody else, that we are being robbed of the dollars that we should be getting.

Mr Morgan:

– They mesmerized him.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Exactly t Canada and nineteen other countries that were members of the international bank did not think the bank so enlightened. According to the manager of Barclay’s Bank in Canada, they left the international bank because they disagreed with the set-up, which was not in the interests of their own economies. Australia actually is- helping to finance the international bank. The Treasurer stated that inspectors from the bank will be coming out here to look at our security. I suggest that we should be taking a look at the bank rather than that the bank should he sending out inspectors to look at us.

The Treasurer finished his speech by saying that it was decided that the operation of this loan should be started by the private banks and that they should supply dollars for the first goods purchased under it. I suggest that if after the war the banking system had been freed of controls and if we had had a free exchange, we should have had all the dollars that we are to borrow, and we should have been able to import all the goods that we want. In addition, we should have had a surplus of dollars that could have, if necessary, been made available to Britain. I suggest that all this planning is upsetting the natural correctives of our. free order. I realize, just as much as anybody else does, that much of our financial policy is directed to help Britain in its difficulties. There is nobody who wishes to do that more than I do. But we should be careful to ensure that in the process of helping Britain we do not upset and eventually destroy our own economy. Then, we would be less able to help Great Britain because of the fall in the volume of our production, which economic planning is already -causing.

I suggest that the proper way in which to give aid to Great Britain and the sterling area generally is to do what the United States and Canada have been doing for some time past,which is, to make direct gifts to them. I should not be upset if Australia made outright gifts to help the economy of Great Britain because of the difficult times that it is experiencing as a result of Britain’s effort in the last war. However, I strongly object to ruining our own economy in the process of helping Great Britain, and to doing it in such a way that the majority of the people do not understand what is happening and do not know in which direction we are travelling. If we cannot obtain dollars now, how is it expected that we shall obtain them in 1955, when the repayment period begins, and when we shall have to find 7,356,000 dollars a year.

Mr McMahon:

– Our sterling balances in London can be used to repay the dollar loan.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– If our London funds are to be convertible into dollars for the payment of instalments on the loan, why are they not convertible now? Some people seem to think that we can borrow all we like because we shall not have to pay it back anyway. I suggest that that sort of thinking is running right through our economic planning, is ruining our free economy, and is therefore as wrong economically as it is morally.

With a free market in meat we should promote the development of our own meat industry, which is now languishing. Any honorable members who have been in England and have seen the way that our meat product is handled, know how much damage is being done to our meat trade. It does not matter any more what quality of meat we send to England. I have lived in the United States during this dollar shortage and found that meat is so scarce that I did not have any at all while I was there. However, there are plenty of other foods which contain proteins, and I contend that beef is not vitally necessary to a country while it is able to obtain other foods that have a high protein content. I suggest that it would be of advantage to the sterling area if we sold meat for dollars. The resultant earnings would be of such benefit to the sterling area that the loss of meat to Great Britain would not be a serious consideration. Free sales to the dollar area would also give a tremendous fillip to our meat industry.

Points that I have stressed, are, first, that we should buy with our exportable goods the dollars that we need and, secondly, that we should help Britain by direct gifts or by loans at low rates of interest.

Sitting suspended from 12.44 to 2.15 p.m.

Debate (on motion by Mr. O’Connor) adjourned.

page 3977

QUESTION

AUSTRALIAN PRISONERS OF WAR

Debate resumed from the 12th October (vide page 715), on motion by Mr. Menzies -

That the following papers be printed: -

Prisoners of War, 1930-45 -Report of Committee appointed to investigate question of payment of special subsistence allowance, and

Prisoners of War, 1939-45 - Special Subsistence Allowance -Report of Committee and Proposals of the Government - Ministerial Statement.

Mr HAYLEN:
Parkes

.- I move -

That the following words be added to the motion : - “ and that this House expresses its disagreement with the report of the majority of the committee and its agreement with the minority report “.

This subject relates to the report of a committee that was appointed to investigate the payment of a special subsistence allowance to Australian prisoners of war in World War II. in conformity with the promise made by the Prime Minister (Mr. Menzies) when he was the Leader of the Opposition. The committee consisted of Mr. Justice Owen, General Savige and Dr. Fisher. The majority report, which was .presented by Mr. Justice Owen and General Savige, was to the effect that the subsistence allowance be not paid, although no actual recommendation was made. Dr. Fisher, who presented the minority report, favoured the payment of the allowance under certain conditions that would protect the recipients. After having made a careful examination of the two documents, the Labour party believes that the minority report of Dr. Fisher should be adopted by the Government, and I have submitted an amendment with that objective in view. The minority report approves the payment of a subsistence allowance at the rate of 3s. a day to all prisoners of war in all the theatres of conflict.

The recommendations in the minority report are under the following headings : - ( 1 ) Each man should be given three shillings per day for each day that he was a prisoner of war.

  1. If a man lost his life in captivity, then such amount up to the date of his death should lie paid to his next of kin.
  2. Such amounts should be paid to every mim without any distinction of rank.
  3. Such amounts should be free of all taxes and duties whatsoever and should not be liable to be taken in execution of any judgment and should not form part of a bankrupt estate. prior to payment it should not be liable to bc charged or alienated in any way.

Before I examine the relative merits of the case for and against the payment of the subsistence allowance, I shall deal briefly with the history of this subject. The preceding Labour Government did riot approve the payment that I am now advocating on behalf of the Opposition. I recall that such a decision was taken on two occasions, but on the basis that it is better to be right than consistent, I offer no personal apologies for my present submissions. However, I point out that when the proposal for the payment of the subsistence allowance was originally made by the honorable member for Mallee (Mr.

Turnbull), the Chifley Government was in a vastly different position in many ways from that of the present Government. For example, the Labour Government was in the throes of an £80,000,000 rehabilitation scheme for exservicemen, and was husbanding funds for the payment of an amount of £70,000,000 as war gratuity to ex-servicemen. Those two heavy commitments have since been, or are about to be discharged, but they were in respect of all sections of exservicemen and had the first general priority. The policy of the Labour Government at that time was justified. However, it was always the intention of the Labour party eventually to examine the special case of the prisoner of war. I contend that, in those circumstances, the Labour party has not been inconsistent in the matter, but rather has been a victim of circumstances. Furthermore, the Chifley Government intended to adhere to the decision of the United Nations that reparations should not be crippling lest they should precipitate another world war. With the whittling down of that broad decision upon reparations, another factor arises that was not present when the Chifley Government made its decision upon the payment of a subsistence allowance to former prisoners of war. I refer to a statement which, I understand, was made outside the House by the Prime Minister on compensation or reparations. It has a bearing on the source from which the money for the payment of the subsistence allowance should come. I have always considered that, eventually, the Parliaments must consider this great problem of the payment of a subsistence allowance to former prisoners of war.

Mr Gullett:

– It is a pity that the honorable gentleman did not say so before.

Mr HAYLEN:

– The honorable member for Henty (Mr. Gullett), if he remains intelligent long enough to read the reports of the relevant debates in Hansard, will see that I have always been consistent in this matter.

Mr Hulme:

– The Chifley Labour Government did not act in that way.

Mr HAYLEN:

– This intolerable position must now be resolved, yea, or nay. Let the Government decide what it will do. The Labour party has decided what it will do in the matter. It is now up to the Government to make up its mind. It is unfair to the ex-prisoners of war to leave the matter up in the air.

There are honorable members on both sides of the House who have deep feelings on this matter. Surely the discussion of this subject can be on an ascending note, as it were, instead of descending to the depths of party political rancour. I believe that the Menzies Government, when it decided to appoint the committee to make recommendations upon the payment of a subsistence allowance to former prisoners of war, did a very wise and useful thing. As I proceed, I shall analyse the majority report and the minority report. The matter that is now under consideration is whether the majority report or the minority report shall prevail. Let us not conduct post mortems on what we might have done. The question is, does the Government propose to pay a subsistence allowance to former prisoners of war? That is the contest in which we are now engaged and I hope that it will be resolved far above the acrid aroma of party politics. I, personally, desire that the subject be discussed on a non-party plane, and I am sure that the Labour party and the Government share my view. I hope that, in our probings of the matter, we shall not scarify the minds or the hearts of former prisoners of war in this House and throughout the country who have suffered for us, and for democracy, over and above the line of duty.

Turning to the majority report, I find that it keeps meticulously within the terms of reference, and hazards no opinions outside of those decisions that the committee was called upon to make, with one exception, to which I shall refer later. The Prime Minister, when announcing the personnel of the committee, said that, although the terms of reference were of a specific nature, he hoped that the committee would devote attention to the human side of the problem. One of the matters that it was required to examine was whether there was a moral obligation to pay the subsistence allowance. What constitutes a moral obligation ? The moral obligation of one man may appear to be substantially greater than that of another man. It depends upon the ethics of the principle, and by whom it is construed.

The signatories to the majority report were inhibited by the way in which they looked at the subject of the moral obligation. Were they entitled to do so ? If there is no legal basis for the payment, what is the moral and human basis for it? Upon that factor the majority report floundered hopelessly, and I am sure it does not interpret the feelings of the House or of the public.

The majority reports establishes the fact that prisoners of war in all theatres were treated far below the minimum standards of the Geneva Convention of 1923. The signatories to it posed this question -

Did the Enemy Powers fail to fulfil the duties and obligations towards prisoners of war imposed by the Geneva Convention and thereby cause excessive and undue hardships to their captives?

The answer was that the enemy did not observe the terms of that convention. Then a second question was posed -

If so, does a moral responsibility rest upon the Commonwealth Government to make « special monetary payment to those of its servicemen who were subjected to such hardships V

The answer to that question again was *’ No “. The signatories to the majority report discussed their findings in detail, but they could not be drawn away from a close adherence to the terms of reference, although implicit within them was the obligation to observe the human factor over and above the purely legal and material aspects. The examination was most thorough, and there could be no quarrel with the decisions that wen: reached. Then, with dramatic suddenness, the signatories to the majority report appeared to reveal what I had suspected, namely, that they had some preconceived ideas upon the matter. One of the concluding paragraphs of the report, as distinct from the conclusions, was full of vague generalities about reparations, and established the fact that a breach of international law had been committed, but no further progress was made in that direction because of the narrowing terms of reference. But there was a piece of comment that I am at a loss to understand. A paragraph in the majority report reads -

The claim which we are called upon to consider is, when put in bald. terms, that a moral obligation rests upon the Commonwealth to make monetary payment in excess oi that made to the members of its Forces who remained in the field and by those efforts, with those of the forces of the Allied Powers, the defeat of the enemy and the release of its captives were brought about.

That statement was valid and reasonable. But I question the next one -

In our opinion it is impossible to find a just or logical basis for such a claim, and to concede it might set a precedent fraught with possible danger should the nation again become engaged in war.

Will honorable members tell me what that paragraph means? Is it not a scorching and awful condemnation of a prisoner of war, and an insult to every prisoner of war? It is so stupidly beside the point that one can only feel amazed that it should have been written. Distinct from the terms of reference of the committee was an admonition by the Prime Minister that the human factor should be considered. “Where is there evidence of humanity in that paragraph? So much for the majority report. This matter could be pursued into painful scenes, but I do not propose to be guilty of doing that, for the sake of the dignity and the well-being of prisoners of war in this House. “We can ask ourselves a variety of questions on that matter. “Would a man from the hell of Changi think in those terms? “Would an airman who “ bailed out “ of an aircraft over Germany consider that life in a Polish camp for the prisoners of war would put value into his patriotic £1? lt is an intolerable thing, but it must, be mentioned, regardless of whether or not it is unpleasant.

I leave honorable members with those thoughts, and deal with the conclusions of the representatives of the Department of the Army, the Department of the Navy, and the Department of Air, about the payment of a subsistence allowance to former prisoners of war. Honorable members should ask themselves why it was necessary to ask the representatives of those three departments to sit with members of the committee, particularly in view of the fact that the members of it had been specially selected to examine the case for the payment of the subsistence allowance. General Savige is a prominent soldier, Mr. Justice Owen came from a Supreme Court Bench, and Dr.

Fisher had been a prisoner of war. The conclusions that were reached by the representatives of the service departments were astonishing. One of them was to the effect that the payment of the allowance would involve similar payments to all troops for other deficiencies that were not experienced in captivity. Another was that a prisoner of war should not receive more than other soldiers received. These decisions were made independently. The inquiry was not attended by representatives of ex-servicemen’s organizations or members of the public who supported the claim. The only individuals who took the part of the Devil’s advocate in this case were the representatives of the departments of the Army, the Navy, and AiT. I arraign them on the substance of their final conclusion to the effect that, in future, the possibility of such recompense would weaken a soldier’s will to fight? If that is not scandalous, I have never heard scandal in my life. The conclusion was stated in the baldest terms, whereas in the other report it was at least expressed with a certain element of sophistry. If that be the view of the service departments, can there be any wonder that the recruiting campaign has been a shocking fiasco? I have stated merely the gist of the majority report and the minority report because most honorable members have studied them.

The majority report is based upon the view that there is no moral obligation to pay the subsistence allowance, hut that, if anybody likes to try to get the money from the Japs, well and good ! The signatories of the report wash their hands of the whole affair. Dr. Fisher took the line that the suffering and torture of prisoners of war deserved some recompense. I do not agree with that view. I consider the case for the prisoners of war rests on much firmer ground. The obligation to make special recompense for such sufferings rests upon the Department of Repatriation. Was there ever a better proof that disability, in the terms of that obnoxious requirement of the Australian Soldiers’ Repatriation Act, was due to war service? If former prisoners of war are sick, crippled, or incapacitated in any other way, the Department of Repatriation is under an obligation to award them their full rights.

The point on which this issue should be fought is that the payment which the men have claimed is their valid right. They are not seeking any special consideration for the hardships that they suffered. They consider, as does the Opposition, that they are justly entitled to the payment of subsistence allowance apart from any repatriation benefits for which they may be eligible on other grounds. The claim is pressed on that account, not on account of hardships. I pay them the highest tribute within my capacity because they have not emotionalized what might be described, in the crudest terms, a? a sob story, but which, in fact, was one of the most tragic historical incidents of the recent war. Instead of doing so, they have relied decently, cleanly and in a soldierly manner upon their rights as soldiers. That attitude has encouraged me to fight for their cause with all the power at my command.

The majority report of the committee rejected the proposal to pay subsistence allowance. Dr. Fisher declared, in his minority report, that the allowance should be paid, and he gave his reasons for the conclusion that he had reached. Wow we must ask ourselves what we propose to do. Are we going to do something now, or do wo propose to let this matter gradually work itself out and fade, through a series of notice-papers, into a dimly remembered incident? We should make a decision immediately. What amount would be involved in granting the claim? I believe that the total would be between £3,000.000 and £4,000,000. It might be more.

Mr Graham:

– It would be about £6,000,000.

Mr HAYLEN:

– I thank the honorable member for the information. Oan we find that money? The answer, of course, must bc “ Yes “. Let us consider what governments of various political colours have clone in the past with the people’s money. Australia paid £19,000,000 to Unrra for the relief of suffering in Asia and Europe. The hard truth is that a great deal of that money - much more than £6,000,000 - was wasted. [Extension of time granted.] We have been most generous in the payments that we have made to our neighbours and our allies, people who are outside the ambit of our own national family circle. But we have been peculiarly mean and pernickety about making payments to our own people. The gift of £19,000,000 to Unrra was not subject to any conditions in relation to the manner in which it should be expended. Caught up in a resurgence of humanitarian feeling after the end of a major war, we were willing to help everybody ! Therefore, we poured a great deal of money into Asia, and much of it was wasted. I saw something of what happened in Asia, and I reported results of my observations to the House. We propose to expend over £6,000,000 this year on immigration so that we can bring to this country men who are willing to develop and defend it. There seems to be some significance about the recurrence of that sum! The homes that we intend to build for heroes to live in, when built, will have cost £20,000,000. We have to find £18,000,000 for a “ Spender plan “ in Asia. Surely we can provide £6,000,000 for the men who saved us from Asia, regardless of what happened to them in the process, particularly as they have based their claim, not on their suffering but on the tucker they did not get and th-j clothes they did not wear - subsistence in fact - the things by which men live.

Ex-servicemen have repeatedly asked me, “ Why don’t you make the Japs pay, or, for that matter, the Germans and the Italians?” The answer to that question is to be found in the insistence that reparations are a fruitful cause of future wars. That view was accepted by this nation, but the fallacy that underlies it ha3 been blown to pieces by the fact3. The spindles that had been put away for reparations when I visited Japan are whirring to-day in order to capture the market for cheap Japanese cloth. The Japanese have been granted concessions even before the “ soft peace “ treaty has been signed. Surely we can ensure first that they shall pay this debt to Australian prisoners of war. We should have no inhibitions in this matter. I firmly believe that the debt is a debt of honour. Tho assertion that .payment of the subsistence allowance to men who were prisoners of war in World War II. would require the granting of the right to men who were prisoners of war on other occasions is utterly beside the point. Any claim that it would involve payments to prisoners of war of World War I. is absurd. Some honorable members will soon be appealing on behalf of the heroes of Omdurman and the Zulu war, and even perhaps for some survivor of the Crimean campaign. This is a vital and serious matter that affects the nation and its future and it should be argued as such. Wars are hard to win, and they should he paid for to the uttermost farthing so that we shall not lightly engage in other wars.

Has the Government rejected the claim of these men because it has not enough money? Lack of finance is not a valid excuse and it cannot be sustained. If it has no money, why has the Government made £250,000 available as a sort of hardship fund for these men after denying any moral obligation to pay the subsistence allowance? After having adopted the majority report of the committee in spirit, why should the Government sneak in the back way and say, “ It is all very difficult, but here is £250,000”? The gesture is insulting, and the manner of distribution of the fund will involve dangers. Many ex-servicemen who now live in the back blocks and the suburbs would rather die than crawl up those marble steps in order to ask for a handout. We do not want to have any more dole depots in this country. Such money is always hard to disburse and the “ dinkum “ soldier would not get any of it. If we admit an obligation, lm us admit it in full and pay the debt in full. There should be no Shylocks in this matter. Let us be thorough and say either “ Yes “ or “ No “ in reply to the claim. The majority report says “ No “. The minority report says “ Yes “. The only question to be decided is whether we have the money or not, and we have plenty of money. The Government has admitted some obligation by agreeing to pay £250,000 to the men. The Opposition is committed to the cause of the prisoners of war. I speak on behalf of the Labour party on this matter. The debt should be paid in full. We have a moral obligation to do so. The Americans have already given a dollar a day to former prisoners, although the British have not done so. But it does not matter what another nation has done. We must make our own decisions upon such matters. If we rely upon what Great Britain, the United States of America or the Penguin Islands have done, we shall never have enough guts to survive. Let us make a decision on this issue now and adopt the minority recommendation that a subsistence allowance of 3s. a day be paid to all men who were prisoners of war in any theatre of operations during World War II. If we are to do anything for these men, we must do it now.

Mr Nelson:

– I second the motion, and reserve my right to speak later.

Mr FADDEN:
Treasurer · McPherson · CP

– The Labour party manoeuvres itself into an even more difficult and. inconsistent position whenever it makes a move on any matter of major policy. The honorable member for Parkes (Mr. Haylen) was selected to lead this important debate on behalf of the Opposition, no doubt upon the same basis of reasoning and logic as would impel a blind army to appoint a one-eyed leader. The suggestions that he made would lead one to believe that the Labour party was never in power in Australia, particularly at the time .when the claim for the payment of a subsistence allowance to ex-prisoners of war was first made. In fact, a Labour Government was in office when the matter first arose, and at that time the importance of the issue was far less remote than it is now, when ex-servicemen have had time to rehabilitate themselves in civil life. The first representations on behalf of exprisoners of war were made to that Government by supporters of the present Government, who were then in Opposition. Therefore, in order to correct the record and reveal the inconsistency of the Labour party in its new-found love, I direct attention to the fact that, after representations had been made by the present honorable member for Mallee (Mr. Turnbull), the claim for subsistence allowance was considered by the Chifley Government, which decided on the 11th March, 1947, that the payments should not be authorized. On the 25th March, 1947, the honorable member moved the adjournment of the House in order to discuss the subject and, as a result, the claim was again referred to Cabinet which, on the 15th April, 1947, reaffirmed its previous decision. On the following day, the present honorable member for Mallee put this question to the then Prime Minister -

Just before the House adjourned for the Easter recess, the Prime Minister made a statement in connexion with the appointment of an all-party committee to investigate the claim for payment of subsistence to former Australian prisoners of war. Has lie given consideration to the appointment of that committee and its personnel? If so, will he inform the House of his decision?

The report of the answer that was made by the then Prime Minister is as fallows : -

I am not aware of having made any promise about the appointment of any all-party committee.

Mr Turnbull:

– I did not mean that the Prime Minister had promised it.

Mr CHIFLEY:
MACQUARIE, NEW SOUTH WALES

– Since that matter was raised in the House by the honorable member and other honorable members, the Government has given consideration to it. As no fresh facts have emerged, and as no further reasons lui ve been given why the original decision should be departed from, the Government has decided to adhere to it, and the proposal for Iiic appointment of a committee has been injected.

In speaking to the motion for the adjournment of the House submitted by the honorable member for Mallee, the present Prime Minister (Mr. Menzies) said -

Is it not clear that this claim ought not to lie. rejected out of hand, or made the subject nf some routine, departmental consideration? This is a claim which . . . ought to be made the subject of a full, impartial and authoritative investigation, either by a committee of the Parliament or by a committee representing those who, by their military or other experience, are fitted to sit in judgment on the matter.

Therefore, I urge on the Minister and on the Government that they should take this opportunity to establish a full and impartial investigating authority so that all ‘the facts may be examined and a judgment arrived at which is not a cold, mathematical judgment but one which does justice to the enormous human issues involved.

During the term of office of the Chifley Government no further review was made and no additional consideration was given to the matter, as was advocated by the then Leader of the Opposition (Mr. Menzies), who is now Prime Minister. The present Leader of the Opposition (Mr. Chifley), who was then Prime Minister, made it quite clear and definite that the matter was closed, and no further action was taken by the previous Government along the lines that we so strenuously urged.

In the meantime, a general election occurred, as the result of which the present Government assumed office. On the 30th May a special committee was appointed to investigate and report upon the claim made by certain ex-servicemen’s organizations that subsistence allowance should be paid to ex-servicemen who became prisoners of war during World War II. In particular, that committee was asked to recommend, whether, having regard to all the circumstances, it considered that the Government should make any special payment, and, if so, on what conditions. The committee consisted of the Honorable W. F. L. Owen, a justice of the Supreme Court of New South Wales, Lieutenant-General S. G. Savige, and Dr. W. E. Fisher, president of the 8th Division Council and Service Associates. I emphasize that when the terms of reference of the committee were published and the selection of the personnel of the committee was announced, no exservicemen’s organizations made any complaint about either the terms of reference or the fitness of the members of the committee. The committee made a thorough and conscientious examination of all the facts placed before it, and its members subsequently submitted reports. The chairman of the committee, Mr. Justice Owen, and Lieutenant-General Savige submitted a joint majority report, which was laid on the table of the House on the 12th October last. The substance of that majority report was that the Commonwealth was not under any moral obligation to make a special payment to exprisoners of war, and that a special subsistence allowance should not be paid. The Government decided to act on the recommendation contained in the majority report. After all, what would have been the use of appointing a committee to investigate the matter and make a recommendation if the Government had not been prepared to act on the committee’s recommendation? The recommendation of the majority of members of the committee was clear and unequivocal, and, as I have said, the Government decided to accept its recommendation. That was the only practicable decision that the Government could make. However, the Government also considered that there would probably be many cases of special hardship or disability outside those embraced by the terms of reference of the committee. Because we are a sympathetic Administration, we .realized that it was inevitable that special cases of hardship would arise, and we decided to make some provision for such cases. We therefore decided to establish a trust fund to alleviate such cases, and for that purposes we proposed to appropriate the sum of £250,000 to establish a fund to be administered by a board of trustees. The genuine sympathy of the Government for ex-prisoners of war has been shown in the most practical way by the decision to allocate the sum of £250,000 to the trust fund for their benefit.

I point out that when a government appoints a committee to inquire into a particular matter and submit a recommendation, and because of a difference of opinion amongst the members of the committee, a majority report is submitted, it if. customary for the government to accept and to act upon the majority report. Tha fondness that the Opposition is now professing for adopting minority reports is something new. I noticed, incidentally, that the Opposition did not suggest that the minority report of the Commonwealth Arbitration Court bench that considered the recent application for an increase of the basic wage should be accepted in preference to the view of the majority of the members of that bench. Furthermore, I have not seen any evidence of the willingness of members of the Labour party to let the views of the minority prevail when their party is arriving at decisions on matters of national importance. Even when the parliamentary executive of the party has decided in favour of the adoption of a particular course of action, perhaps by a vote of only seven to five, and the controlling executive of the party outside the Parliament has been even more closely divided, members of the Labour party have not hesitated to thrust aside the views of the minority. Of course, all that is forgotten when a matter arises which may be turned to some party political advantage, such as the claim of ex-prisoners of war to a sub- sistence allowance. The attitude then adopted by the Opposition is : “ The minority report should have been accepted because it is in the best interests of the prisoners of war “. This sudden assumption of fondness for the views of minorities contrasts strangely with the internal history of the Labour party itself, and the treatment accorded to members of that party who found themselves in a minority on important issues.

To resume the history of the consideration given by the Government to the claims of ex-prisoners of war for the payment of subsistence allowance, I mention that on the 22nd November a committee of ex-servicemen amongst supporters of the Government considered this matter in the light of the report of the special committee appointed by the Government, and subsequently adopted a resolution, which was conveyed to Cabinet. That resolution is as follows : - “ The Owen Committee “ having found that there was a general failure by both Germany and Japan to treat Australian Servicemen, who became their prisoners, in accordance with the provisions of the International Convention to which these Powers had pledged themselves, and that, as a result, the great majority of the prisoners suffered undue hardships and privations and having decided that the proper principle is that, if compensation is to be made, it should be made by the defaulting Power, the Government Members’ Ex-Servicemen’s Committee recommend to the Cabinet that Australia’s delegates at the Peace Conference he instructed to demand compensation from the defaulting Powers and that such compensation be recovered, either by this means or from expropriation of property of the defaulting Powers be paid to all prisoners, and/or dependants of deceased prisoners-of-war, who suffered as a result of the lawlessness of the defaulting Powers.

I emphasize that that unanimous and well-considered resolution does not suggest in any way that the minority report and recommendations should be accepted by the Government. Cabinet considered the resolution, and decided to instruct Australia’s delegates to the international peace negotiations to seek compensation from both Germany and Japan in respect of the loss and injury suffered by Australian servicemen in consequence of acts committed outside the laws of war. It must be clearly recognized, however, that unless the former captor powers are made to pay, the Government cannot, for reasons already stated by the Prime Minister in the House, accept any responsibility to pay compensation to prisoners of war outside the scope of the special trust fund that has been established. However, if reparations are obtained from Germany and Japan from which compensation can be paid in respect of lawless acts committed against Australian servicemen during the war, the claims of former prisoners of war will be promptly reconsidered by the Government.

I submit that the record of the handling of this matter by the Liberal party and the Australian Country party, both in Opposition and in Government, indicates that they have treated the claims of ex-prisoners of war with sympathy, fairness and discernment. The record of the Government parties contrasts very strongly with that of the Australian Labour party in this respect. As I have already pointed out, when Labour was in office it was most apathetic, if not openly hostile, to the claims of exprisoners of war. Ever since the matter was first raised in 1947 it opposed all efforts made by supporters of the present Government, who were then in Opposition, to have the matter discussed in the House. Indeed, it would not even permit the provisions of the Standing Orders to be invoked to enable the discussion of such matters to take place. The Chifley Government was not even interested in the merits or demerits of the claim of ex-prisoners of war. It was left to this Government to appoint an investigating committee to examine the merits of the case, and I emphasize that, because of the attitude displayed by Labour while it was in office, three years elapsed between the occasion on which the matter was first mentioned in the House, and the appointment of the special committee. The .members of that committee were carefully selected for the task of inquiring, into the matter. I repeat that the personnel chosen were an eminent justice of the Supreme Court of New South Wales, one of the most prominent fighting generals of our time, and a leading and respected representative of the principal association of ex-prisoners of war. As I have already pointed out, two of the three members of that committee, one of whom was the chairman, submitted a majority report, and the Government acted on the recommendations contained in that report. The Labour party, which had never lifted a finger to do anything for ex-prisoners of war,, saw an opportunity to make party political capital out of the disappointment of some of the exservicemen, and has attacked the Government for not having decided to accept the minority report.

The honorable member for Parkes who raised the matter on behalf of the Opposition, gave as an excuse for the inactivity of the previous Labour Government that the financial obligations of that Government were so heavy that it was precluded from treating the ex-prisoners of war as fairly as it might otherwise have done. The honorable gentleman magnified the allegedly heavy financial commitments of the Chifley Government. He said that that Administration had to provide £70,000,000 for the payment of war gratuity, that it provided very substantial funds for Unrra, and that it had to meet a number of other unusually heavy commitments. What are the facts? Has not the obligation to find, and to pay, the £70,000,000 for war gratuity devolved upon the present Government? Not a single penny was provided by Labour to meet that obligation, which must be honoured on the 3rd March next. There is no real excuse for Labour’s apathy towards the just claims of ex-prisoners of war. The honorable gentleman had such a great deal to say about the heavy commitments of the Government that he supported that I feel impelled to direct the attention of the House to the really heavy financial commitments of the present Government, particularly in the matter of defence. The whole programme of defence preparation has had to bc accelerated, and we are now carrying out parts of that programme which would not normally have been implemented for another two years. That acceleration has cast a very heavy financial burden upon the Commonwealth, and more than £133,000,000 will have to be expended on defence during the present financial year. The financial commitments of the present Government are much more serious than were those that confronted the preceding

Labour Government. However, I desire to emphasize that the present Government did not allow financial considerations to prevent it from giving full and just consideration to the claims of exservicemen. The committee that was appointed to consider the claims of ex-prisoners of war was not directed to pay any regard to the effect upon the national finances of the payment of the ex-servicemen’s claims. All the committee was asked to do was to examine the merits of the claim made for special compensation by ex-prisoners of war.

I have placed the record in respect of this matter before the House. That record is clear and unequivocal. The Government set up a committee to inquire into this subject whereas the previous Government refused to do even that. But this Government has not only acted upon the recommendations of that committee but also gone beyond those recommendations by making available a fund of £250,000 for one purpose of meeting cases of hardship that will inevitably arise. The Government intends to go still further in the matter. It will instruct Australia’s representatives at the peace conferences to press strongly Australia’s claim for compensation for injury done as the result of unlawful acts on the part of our enemies in the recent war. Those facts show that the Government conscientiously desires to extract just compensation from those who should pay it. The whole matter boils clown to the fact that whilst this Government has taken practical steps in the interests of ex-prisoners of war, the previous Government steadfastly refused to take any action whatever in that direction.

Debate (on motion by Mr. Graham) adjourned.

page 3986

LOAN (INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT) BILL 1950

Second Reading

Debate resumed (vide page 3977).

Mr O’CONNOR:
Martin

.- Under this measure the Government is seeking authority to raise a loan of 100,000,000 dollars from the International Bank for Reconstruction and Development for certain purposes. The duration of the loan will be 25 years and the rate of interest will be 3£ per cent, per annum plus the customary commission at the rate of 1 per cent. First, I wish to offer some criticism with respect to the proposed rate of interest. When it was made known that the Government had. arranged to obtain this loan, the press of this country endeavoured to give the impression thai the Government had secured the loan on very favorable terms. I point out that the proposed rate of interest does not compare favorably with the rates of interest that Australia is still paying in respect of loans that it raised on the American market during the last twenty years. Those rates of interest range from 31/8 per cent, to 51/2 per cent. Secondly, a survey of the loans that have been made available by the International Bank for Reconstruction and Development shows that it has accorded treatment to other countries more favorable than that which Australia will receive under this transaction. Those facts refute the claim by supporters of the Government that this loan has been obtained on the most favorable terms. The loan is to be used to finance categories of imports as follows: - Tractors and other agricultural equipment, 29,000,000 dollars; industrial crawler tractors and earth-moving equipment, 24,000,000 dollars; locomotives and railcars, including component parts therefor, and ancillary railway equipment 8,000,000 dollars ; mining machinery and equipment, 7,000,000 dollars; plant for development of productive capacity in the following industries : Textile, paper making and paper working, including printing, steel, engineering, building materials, glass making and working, including ceramics, chemical and pharmaceutical, food processing, and boot and shoe, 32,000,000 dollars.

The figures in respect of the last three years show that under normal trading conditions with dollar areas Australia has had a deficit of 20,000,000 dollars annually. That deficit has been financed from the Empire dollar pool. Whilst our dollar commitments have totalled approximately £70,000,000 annually we have been able to earn by trading with dollar areas only approximately 50,000,000 dollars annually. Whilst I agree that this loan will assist materially in the development of our natural resources by enabling us to purchase capital plant and equipment, at the same time it will not directly enable Australia to earn additional dollars. We must consider not only our capacity to earn dollars but also our capacity to earn sufficient dollars to repay this loan and our interest commitments in respect of it. On previous occasions in this chamber I have pointed out that Australia’s capacity to obtain and expand markets in dollar areas is seriously limited. We should have been able to solve our dollar problem long ago if we had been able to increase our sales of wool to dollar areas. However, whilst 60 per cent, of our dollar earnings is derived from the sale of wool, the United States of America has placed a high tariff on wool imports. Therefore the claim that supporters of the Government have made that we shall be enabled to earn additional dollars as the result of this loan is not justified by the facts. Those honorable members say that as the loan will enable us to develop our industrial potential we shall thereby be placed in a better position to earn additional dollars. It must be obvious, however, that those who now enjoy the best markets in dollar areas will not sit idly by and make no attempt to combat any competition from Australia in those areas. Is it argued for one moment that we shall be able to compete with the United States of America in existing dollar areas? I admit that as the result of the development of our industrial potential we shall have a better opportunity to increase our sales to sterling areas; but it is simply ridiculous to say that for the same reason we shall be able to compete successfully with dollar countries for trade within the dollar area. In order to do so Ave must capture markets that are already controlled by the United States of America. All Australian governments have been placed in that dilemma. Wool is our greatest dollar earner, but, as I have already said, America severely restricts the importation of wool. The wool-growing industry in that country has revealed, on various occasions its determination to protect itself from competition from other countries. For instance, the American Senate not long ago attempted to increase the tariff duty on wool imports, and that attempt was defeated only when it was vetoed by the President.

I repeat that the raising of this loan will not enable Australia to earn additional dollars. Further, I fail to see how it will help us to meet our dollar commitments in the future, particularly as in normal circumstances Australia is unable to earn sufficient dollars for that purpose. The only period during which we were able to balance our dollar transactions was during the recent war, and we were enabled to do so only by means of lend-lease. Therefore, by raising this loan we are undertaking commitments that we shall not be able to meet. Increased production is not the answer to this problem. Indeed, at a time when Australia had a surplus of production this country experienced the worst economic . crisis in its history. Those who contend that all that we have to do in order to solve our dollar problem is to produce more goods and sell them, forget that we must first obtain additional dollar markets. The facts that I have given show that it is not practicable for us to do that. That claim is based on hypotheses. I repeat that Australia can sell only a limited quantity of wool and wheat to dollar areas and that American interests will ensure that we shall not. increase our sales of wool to those areas at the expense of the American industry. We must face the fact that our prospects of earning additional dollars in the future are gloomy. I shall sum up by saying that whilst this loan will assist in the development of this country, at the same time we shall not be able to meet our commitments in respect of it, and that will be detrimental to Australia’s economy.

Mr CRAMER:
Bennelong

.- It is amazing that honorable members who have spoken in opposition to this bill to-day have placed emphasis upon all the provisions which do not matter. I cannot understand why they have done that because there is but one purpose in raising this money. That is to obtain capital goods and equipment which will enable us to develop this country which, as all speakers agree, needs development. We have no other way of obtaining this equipment than by means of a dollar loan which will enable us, as my honorable friend has reminded me, to put value back into the fi. It is extraordinary that honorable members of the Opposition who ask the Government to put value back into the £1 should now oppose this most excellent proposal for the development of Australia, although they can find no reason why it should not be approved. The honorable member for Perth (Mr. Tom Burke) did not seem to know whether he was coming or going. He raised certain objections on the one hand, but, on the other hand, he agreed that the Government must borrow the money.

Mr Tom BURKE:

– I did not say that. I said that I was not qualified to decide the matter.

Mr CRAMER:

– The honorable member raised certain objections to the proposal. He seems to have a complex which causes him to fear that the Government will not be able to pay this money back. He seems to consider that at this time of great economic activity, the Government should not undertake the borrowing of this amount. He appears to think that the proposal is a dangerous one. The people of Australia and the members of all the parliaments of Australia must indulge in some courageous and forward thinking if this continent is to be developed. It is incomprehensible to me why a pessimistic attitude should be adopted. Australians have one of the greatest responsibilities of any people in the world. They are a population of just over 8,000,000 people with a vast continent waiting to be developed. Because of its geographical position there is a great responsibility upon the people of this country .to develop it as quickly as possible and that development cannot be effected unless capital goods are secured. It was reported in this morning’s paper that Great Britain is unable to manufacture quickly enough the machinery that is necessary to stabilize power stations throughout England. In addition, the United Kingdom is unable to export the machinery which is needed in Australia and other parts of the world. It is impossible to obtain from the sterling areas the equipment that is required for the development of this country. Consequently it is essential to obtain this loan.

The honorable member for Perth made several other weak points. He suggested that the people should have been consulted before the money was borrowed. He knows quite well that honorable members on this side of the House announced their intention to procure a loan from America prior to the last general election. He knows that the Labour party was chided because it did not itself attempt to get an American loan. The last Government did not do many things that it could have done and it seemed to honorable members on this side of the House that it had let the country down because it would not attempt to obtain dollars. Because the Labour Government did not hustle to arrange a loan from America, not only did it make it more difficult, but it made it more expensive for this Government to obtain that loan. Had the Labour party done what it should hae done some years ago, when capital equipment was needed, and when money was cheap it could have obtained an American loan, but, instead, it left it to this Government to make the attempt when the market was very much worse than it was a couple of years ago. The honorable member for Perth presented a very weak argument.

I observe that the honorable member for Maranoa (Mr. Charles Russell) is not in the House at the moment, but I wish to say that his was the most amazing speech I have ever heard in my short experience in this House. I cannot understand how a man who exhibits a good deal of intelligence in many matters could advocate a course of action which could mean nothing else than cutting adrift from the United Kingdom. “What the honorable member suggested could not be put into effect unless Australia tore up its agreements with regard to trade, defence and other matters with the United Kingdom. He urged that the Government should not borrow this money at all, but that in order to meet our commitments in the dollar area Australia should export, meat or other products which would earn dollars; in other words, that the Government should drift away from the arrangements that it now has with the United Kingdom. Honorable members know that Australia has contributed very largely to the stabilization of the economy of the United Kingdom.

They know that this country made certain sacrifices in order to do that. We made them consciously because it was our duty to the United Kingdom to make them. Surely, after what the United Kingdom did for us, and for civilization during the recent war, it would be a poor thing for this country if it did not collaborate to the greatest possible extent to enable Great Britain to get back on to its economic feet again. But that was the germ of the idea of the honorable member for Maranoa. I consider that that kind of suggestion is despicable. I am extremely astonished that an honorable member should suggest that we should do such a thing. I could understand it, perhaps, if the honorable member argued that the terms of the loan were not good enough or that he objected to the principle of borrowing or that he opposed the loan on the basis that Australia did not need these goods. It is an impossible suggestion that the Government should tear up all its agreements with the British Empire or the United Kingdom, but that is the whole germ of the honorable member’s idea. It is not necessary to be specific in dealing with the honorable member’s remarks, because the whole scheme that he put forward could not be put into effect unless the Government threw overboard its obligations to the United Kingdom.

Honorable members interjecting ,

Mr SPEAKER:

– Order ! The honorable member for Bennelong (Mr. Cramer) has the floor.

Mr CRAMER:

– The arrangement to borrow this money from the United States was discussed by the Prime Minister (Mr. Menzies) with the Prime Minister of England before he finalized the matter. It was with the consent of the Government of the United Kingdom that this arrangement was made. The United Kingdom Government was fully aware of what the Prime Minister proposed to do and it consented to the arrangement.

The honorable member for Martin (Mr. O’Connor) asked whether Australia could obtain sufficient dollars to meet its obligations under this loan. There is a great lack of knowledge in the minds of some honorable members who have discussed this aspect of the matter. There will be no difficulty, through the sources that the Government will be using, in servicing this loan, and others to which this country is committed in the United States of America. There will be no difficulty in servicing this loan with dollars which will be obtained from the source from which the Government has already been servicing the existing 200,000,000 dollar loan.

Mr Tom Burke:

– That is nonsense.

Mr CRAMER:

– It is perfectly right. This is something that I happen to know a little about. Those honorable members who try to relate our trade in goods in specific terms with our dollar commitments do not know what they are talking about, because trade is not the only means by which we can meet our dollar commitments. I should say that from 40 per cent, to 50 per cent, of the 200,000,000 dollars that this country owes to America at the present time have been lent by people who reside in sterling countries. Because Australia exports to the United States or the dollar areas goods of a value which is so much short of our commitments to those areas, one cannot discuss the matter in the specific terms used by the honorable member for Martin. Treasury officials know what the Government is doing in regard to this matter. They would not commit the country to this extent unless it could be foreseen that it could meet its dollar commitments.

Mr Tom Burke:

– Does not the honorable member realize that there is a worldwide dollar shortage?

Mr CRAMER:

– Yes. But does not the honorable member for Perth consider that the world bank is aware of that shortage? Does the honorable member suggest that the bank would have advanced this money if it could not visualize how the Government would repay it? Over the past several years this country has borrowed considerable ‘sums of money in the United States of America. During the last four or five years it refunded between 80,000,000’ and 100,000,000 dollars of old loans. Some of the old loans which this country borrowed from the United States were repatriated. The loans raised on behalf of the City of Brisbane and the Sydney Metropolitan Water Sewerage and Drainage Board were only recently repatriated. They were not converted, they were repatriated through- the dollar pool. This country has lost millions of dollars, in my opinion, because of the way in which it endeavoured to raise finance in the United States of America in days gone by. The Americans wish to’ deal with principals. I congratulate the Prime Minister on going to the United States of America to. negotiate this loan. That is how loans always should be raised in the United States of America. Never at any time previously have they been raised in that way. Previously, the procurement of dollar loans was left in the hands of some Treasury official. As a result, this country suffered.

No effort of a definite nature has been made during the last several years to establish the credit of Australia, in the position that it should occupy in the United States of America. There is a system operating there which I had the opportunity of examining for three months when I was in New York. I found that no effort had been made on a high government level to attempt to break down any antipathies held by United States investors to the securities of Australia. Australia was not rated commensurate with its proper security value for the purpose of raising loans from the people of the United States of America. There is a system of rating authorities in “Wall-street. The greatest and most well known of those authorities is Moodies. That organization issues for the use of the investing public an analysis of the respective values of international investments. The values of these investments are assessed according to the opinion of the financial experts in Moodies. Australia is given a certain rating, and it is upon that rating alone that we are able to raise loans in the United States and to pay interest upon loans so raised. According to Moodies’ rating, Australia is considered to be a certain class of security. “When I was in New York I found that Australia was rated very much below Canada and similar countries. For that reason Australia paid a much higher interest rate on United States loans than it should have paid. Yet no attention at all was given to this aspect of borrowing by the previous Government whose responsibility it was to obtain the Lest possible terms when borrowing in the United States.

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– That was the socialist Government?

Mr CRAMER:

– Yes, the socialist Government. I visited the United States for the purpose of re-funding an 8,500,000-dollar loan for the Sydney County Council, of which at that time I was chairman. Having discovered what was the position in “Wall-street, I went to each of these rating authorities and discussed with them the terms of our proposed loan. I investigated their ideas of Sydney as a security. The Sydney County Council is a part of the City of Sydney, and its security value is dependent upon the security value of Sydney itself. The security of Sydney was rated at a point beyond that of the Commonwealth of Australia. I put forward my arguments to each of the three rating authorities that I visited, and I got security in those organizations above that of the Commonwealth of Australia. The net result was that I was able to borrow 8,500,000 dollars at a lower interest rate than that at which the Commonwealth of Australia could borrow. Moreover, my loan was over-subscribed. The treasury officials who were handling loan matters for the Australian Government made no attempt to do as I did. Had they done so I am sure that there would have been no difficulty in getting Australia’s security rated much higher than it was rated. Instead of borrowing at an interest rate of 3i per cent, per annum or 3£ per cent, per annum, they would have been able to borrow at a rate in the vicinity of 3 per cent, per annum. I am speaking now of the financial affairs of 1946-47.

Mr Curtin:

– At what rate did the honorable gentleman borrow ?

Mr CRAMER:

– Three and one-eighth per cent, per annum.

Conversation being audible,

Mr SPEAKER:

– Order. I ask the House to maintain silence. If I cannot obtain silence by request I shall have to adopt other means.

Mr CRAMER:

– I suggest that the provision of dollars for Australia was the responsibility of the Opposition party when it held office. But it made no effort to ensure that the security of Australia should be properly presented to the investing public of the United States. As a result of that failure a great loss was sustained by this country through having to pay higher rates of interest than were necessary. Indeed, Australia was placed at a great disadvantage compared with other countries of the world. The occasion of the dollar negotiation during the term of office of the previous Government warranted the presence of the then Prime Minister in New York. I know that the Deputy Leader of the Opposition (Dr. Evatt) was there but he was too concerned with other matters to take any part in our financial negotiations. I was in New York when the Deputy Leader of the Opposition was there, and I know that he was too concerned about placing himself in the spotlight on the international stage to worry about trying to put Australia in a better security light with investors. I know that he gave no personal attention whatever to this matter. The work on behalf of the Commonwealth of Australia was handed over to a firm of brokers. That firm knew that it had the work exclusively in its own hands, and dealt with it merely in the ordinary course of business. No special effort was made by any one on behalf of Australia, but I found that by a little effort I was able to influence the great investing public in the United States. This matter prompted my criticism recently when I was discussing another matter and mentioned our present ambassador to the United States.

I know that there is a great investing public in the United States which is most anxious to know what the future holds for this young country. That leads me to what I particularly desire to emphasize. We must not consider only what goods we send to America, or what is our shortage of dollars, we must encourage the investing public in America to invest capital in this country as well as buy goods from us. In that way we can overcome our shortages and secure friends at the same time. Our position in the United States of America would be tremendously improved if the Government would take some action to ensure that the proper security value of Aus tralia is appreciated by the investing public in the United States of America. No doubt American people are more jittery than British people, and for that reason loan securities fluctuate widely in value. When there is a low market the wise heads of London jump in and pick up low-priced securities. Of the 8,500,000-dollar Sydney County Council loan, over 5,000,000 dollars worth of bonds was held by British people in the sterling areas. Therefore, the whole substance of this matter does not appear on its face. I agree that on the face of it this loan is not being obtained at a low interest rate. It is a high interest rate, but Australia came on to the international loan market later than many other countries which had already obtained money from the International Bank for Reconstruction and Development.

Our need for capital equipment is urgent. We need to build up the production of the country if we are to get value back into the £1 and carry out the developmental works needed by this country. Therefore, if ever a commitment was justified and if ever a Prime Minister should be congratulated, this commitment is justified and our Prime Minister should be congratulated for his part in the matter. He concluded his negotiations quickly because he was the Prime Minister and could lay authoritatively in front of the powers that be in the United States the facts relating to Australia. An honorable member said’ that it would be a good thing if the representatives of the bank visited Australia to see for themselves what we have to offer. Let us be proud of our country and let us realize that we have a country that is the finest on God’s earth and that we have the responsibility of developing it. But we cannot develop it unless we get capital material and equipment. That is what this Government is trying to do. It is carrying out a vigorous immigration policy and an active national development programme. There is . a great opportunity for the people to get together with but one objective, that is to develop this country into a strong nation. Borrowing such as this is fundamental if Australia is to develop its resources, and so, instead of ill-informed criticism, there should he a wider appreciation of the factors that led the Government into raising this loan. Honorable members who have criticized this measure are not taking a long-range view, nor do they understand the implications of what they are criticizing.

If the honorable member for Maranoa had realized the implications of what he said he would not have spoken as he did. The Prime Minister should be congratulated about this matter instead of being criticized. It is a good loan, and flowing from it will come great benefit to Australia, as well as increased interest by the United States in Australia. I remind honorable members that we must join hands with the United States and remain in close friendship during the years to come. There is no ground for criticism of this bill, it is the best measure that could have been introduced in the circumstances existing at the present time, and there is no other way in which the Government could have obtained the dollars so greatly needed to buy capital equipment.

Mr MORGAN:
Reid

.- I rise in humility and with some diffidence after having heard the financial genius who has just resumed his seat. It made me feel humble to hear him tell us how he invaded New York and bearded the lions of Wallstreet in their dens and by strenuous efforts got better treatment for the little Sydney County Council than could be obtained for Australia by the best treasury officials of this country. Nevertheless, I regard the international loan of 100,000,000 dollars as the most backward step that this Government has ever taken. It will lead back to the system of international finance which caused the depression of 1929. It was the policy of borrow or bust of those days that placed Australia in pawn to the overseas bondholders. The policy of overseas borrowing reached its peak during the tragic days of the Bruce-Page Government, and was one of the vital factors that caused the depression. When the representatives of the International Bank for Reconstruction and Development visit Australia under the terms of the security, they will arrogate to themselves the right to dictate economic policy to this country. They will be entitled to do that under the terms of the security and also under the terms of the Bretton Woods Agreement. Perhaps they will tell us that we Australians will have to tighten our belts and stew in our own juice as we were told by Sir Otto Niemeyer and Professor Guggenheimer in 1930-31.

Irrespective of the opinions of other people about these representatives visiting Australia, I am not very happy about it. Moreover, the profits from the international bank will pay for their visit, and so actually Australia will be paying for their joyrides here and to other parts of the world. With due respect to the comments of the honorable member for Bennelong (Mr. Cramer), I have more faith in our own local economists, such as the late E. G. Theodore, than I have in overseas experts. If some of the ideas of the late E. G. Theodore had been adopted during the depression, a different story would have been told about those days. Yet the history of the depression is written in terms of overseas bondholders. I congratulate the honorable member for Maranoa (Mr. Charles Russell) on the very fine exposition of finance that he made to the House to-day. Unfortunately, he impaired it somewhat by introducing party politics into it.

Mr FADDEN:
CP

– Apparently the honorable member knows as little about- finance as the honorable member for Maranoa (Mr. Charles Russell) does.

Mr MORGAN:

– At least the honorable member for Maranoa had sufficient courage, when he realized the trend that the Government’s policy was taking through such measures as the iniquitous wool tax grab, to leave the political party that the Treasurer (Mr. Fadden) purports to lead and take his political future in his own hands. His resignation from the Australian Country party is a further sign of the crack-up in the Government’s ranks and of the growing discontent in the rank and file of the Government parties. As far as the leaders cf the Government parties are concerned, the position of their supporters can be expressed by the words “ theirs not to reason why, theirs but to do what they are told to do “.

The Government is not prepared to utilize the services of Australia’s own economists as advisers, as assistants to

Ministers or as members of committees that could help the Government to do a better job. Instead, it prefers to rely on overseas theorists and economists. This country has been exploited and led by the nose in the past by the representatives of overseas finance, who are always one jump ahead of us in the manipulation of money and in the finer points of the financial game. That fact reminds me of the experience of the simple fanner who toils all the year round and who, at the end of the year, has saved up a few pounds that he takes to the country show to buy goods. He is generally met by one of those entrepreneurs who follow country shows round, and! instead of going home with some usable goods in his pocket he generally, gets home with his pockets or bags filled with all sorts of useless trinkets. We are in much the same position in relation to international financiers and entrepreneurs who come here and tell us how to run -our country. We produced about £1,000,000,000 worth of gold in the great era of prosperity in this country that followed the discovery of gold. What became of it? Instead of its being a valuable asset on which we could have founded our economic system, as a result of the financial methods of the time we ended up with £1,000,000,000 worth of overseas debts in its place. That experience is much like the experience of the simple country farmer that I have mentioned.

We are now in the midst of another great era of prosperity, and again we find that overseas enterpreneurs have become very interested in this country. The wiseheads of London, and no doubt the wiseheads of New York, to whom the honorable member for Bennelong (Mr. Cramer) very appropriately referred, are becoming interested in this country now that we have bountiful crops and great quantities of wheat, wool and other primary products that we can sell at the best prices that have ever been obtained in our history. We should be very much on our guard when those people are suddenly taking such an interest in us. I remind honorable members of the classical saying -

Beware of the Greeks when they come bearing gifts.

The former financial policy that placed this country in. pawn to overeas bondholders was directed mainly from London. This dollar loan means that this country will be virtually shackled to the almighty dollar. Formerly Threadneedle-street dictated to us. In future, if we are not careful, Wall-street will dictate to us. The Treasurer’s remarks to the honorable member for Perth (Mr. Tom Burke) during this debate indicate the trend of the Government’s mind in this matter. He said to that honorable member, “ The Chifley Government could have obtained the loan on better terms “. The Labour Government under Mr. Chifley-

Mr SPEAKER:

-Order ! The honorable member shall not refer to the Leader of the Opposition by name.

Mr MORGAN:

– The previous Labour Government was not lured by the so-called attractive terms that were available. It endeavoured to maintain a balanced economy in regard to our overseas financial position by restricting dollar imports while the sterling bloc’s holdings of dollars were at a low ebb. It tried to keep the position in hand and rectified it to some degree, just as the Scullin Government rectified our overseas financial position in the 1930’s by restricting imports by means of the imposition of tariffs. It is high time that the whole position in relation to the national debt of this country was reviewed. That debt has virtually doubled since the beginning of the last war, although, due ,to the policy that was followed by the Labour Government during the war, our war-time loans were entirely internal. In effect, we were taking in each other’s washing. However, the fact remains that the interest bill on our national debt will soon be up to £100,000,000, which is the equivalent of the Australian Government’s total annual expenditure prior to the war. That matter should be given serious consideration by the Government. It should endeavour to reverse the process by which the national economy is being drained of wealth by non-producers, the bond-holders to whom the country is paying toll. Such a condition must have an adverse effect on the whole of our economy and should be rectified, particularly as far as our overseas finances are concerned.

The honorable member for Maranoa very properly pointed out that under this loan we are virtually borrowing dollars in order to earn more sterling, despite the fact that we may not ever be paid the sterling credits that we are accumulating in London. Our London balances now stand at about £600,000,000. We now have an overseas debt, payable in London, of £400,000,000. That means that our actual credit in London is now £200,000,000. Despite the fact that we are in credit, we are paying annually an amount of £12,000,000 in interest on our overseas debts. That is to say, we are, in effect, paying that sum for the privilege of being owed £200,000,000. The whole thing seems to me to be crazy finance and I agree entirely with the opinion of the honorable member for Maranoa in that connexion. It would be a matter of straightforward business for us to rectify the position. There would be nothing immoral in our seeking to resolve the position in London by paying off our £400,000,000 worth of indebtedness with £400,000,000 of our £600,000,000 credit balance. It might even be desirable for us to forgo the remaining credit of £200,000,000 and start all over again. I have in mind the case of a country storekeeper who had a number of customers on his books and discovered that, because they owed him money, they were apt to buy their supplies elsewhere. He decided that it would be good business for him to wipe out the whole of their indebtedness and make a fresh start. He did so, and, as a result, his customers came back to him.

The honorable member for Maranoa pointed out that Britain is forced to sell its cars and other goods in dollar markets at below cost, in order .to earn dollars, and therefore has to recoup itself by charging higher prices in non-dollar markets. Other countries, such as Egypt, which have sterling balances in London, are being treated more favorably than we are. Australia is surely entitled to ask for rectification of the position. Other British Commonwealth nations have, reversed their overseas financial position as a result of the war. South Africa, India and Canada have been able to wipe out their debts to Britain and now have substantial credits in London. The attitude that they have adopted is not regarded as immoral. I submit that Australia has been too generous in relation to our financial position in the British Commonwealth. However, the Opposition can do very little about the matter, because the Government is charged with the responsibility for the nation’s financial affairs, just as it is charged with responsibility for national development and for the conduct of the war in Korea. The loan is a fait accompli. It has been virtually accepted, and I understand that some goods have actually been ordered on account. However, we have been left in the dark about the nature of the dollar goods that are to be purchased with the loan. The House is entitled to have more details about that matter. Anything that we have to say about the goods, the purchase of which is to be financed by the loan, is merely a shot in the dark. We wish to know whether the Government is doing the right thing and buying in the right market. If the necessary details were given to the House honorable members might be able to indicate where many of those capital goods could be purchased in areas other than in the dollar area, and whether they could be manufactured in our own country. The honorable member for Bunnerong-

Mr SPEAKER:

– Order ! There is no such division as “ Bunnerong “.

Mr MORGAN:

– The honorable member for Bennelong knows something about black-outs at Bunnerong. One of the factors that has contributed to such black-outs is that in years gone by a wrong policy was followed in the conduct of that particular instrumentality. Every time somebody on the Sydney County Council wanted a trip overseas a suggestion was made to import equipment. Sometimes some sharp salesman came along from overseas and the council decided to buy plant from him. As a result of that policy, when the war came there was a considerable amount of plant that was required by the Sydney County Council, and that would have prevented the present black-outs from occurring, which was still in Germany. It has since been discovered that much of that equipment could have been manufactured in Australia at plants such as Cockatoo Island Dockyard. The House should be taken more into the Government’s confidence regarding the nature of the capital goods that are to be purchased out of this loan and also about the possibility of obtaining similar goods from within the sterling area, preferably in Britain. Purchase of such goods from Britain would be one way of giving assistance to Britain and of getting some return for the substantial funds that we have there.

Another important aspect of the loan is the interest rate of ii per cent, per annum, which I regard as unduly high in comparison with the general rates of interest that are available now both in Australia and overseas. The rate to be paid consists of 3£ per cent, interest plus a commission of 1 per cent. That commission is the most extraordinary feature of the loan. It will be payable right through the period of repayment of the loan. I thought that such a principle had been abandoned during the first world war, when the Commonwealth Bank made most of our overseas financial arrangements and charged a rate of commission of about 6s. per cent., which was payable only once.

Mr Cramer:

– We do not necessarily lose the amount represented by that commission.

Mr MORGAN:

– Then what becomes of it?

Mr Cramer:

– It will be paid into a stabilizing fund. After all, we are part owners of the International Bank.

Mr MORGAN:

– The honorable member says that it is to be paid into a stabilizing fund, which will exist, 1 assume, to cover the risk involved in the making of loans by the bank to other countries. There is never any doubt that this country will repay its loans but some of the Latin-American countries, which have revolutions from time to time and repudiate their obligations, are in a different category. Australia, which has not had, and is not likely to have, a revolution, is one of the most prosperous and soundest countries economically in the world, yet, apparently, it has to bear the risk that is created by unstable countries. Such a financial burden is most onerous. Why cannot the same principles of finance, which are adopted in everyday business, be applied to international loans? A financial institution that is asked to provide financial accommodation considers the nature of the security and the risks involved, and assesses the rate of interest accordingly. The rate is fairly high on wasting assets such as furniture and buildings,, which are likely to deteriorate over a period. But the resources and assets of Australia, which is probably the most prosperous country and has the brightest future of any country in the world, should entitle it to be granted a loan at a rate of interest lower than per cent. Are honorable members aware that such a rate is almost equivalent to that fixed by the Commonwealth Bank for overdrafts to finance the purchase or construction of homes, and for ordinary business purposes? It is relatively high. Co-operative building societies can arrange finance at 3-J per cent. A representative of British capital came to Australia recently with the object of investing certain moneys in industry, and particularly in real estate. He discovered, to his astonishment, that real estate in .Sydney was showing a net return of approximately 2 per cent., and he was astounded to learn that the rate of interest on the best possible securities - government securities - was between 3 per cent, and 4 per cent. He naturally came to the conclusion that his money should be invested, not in real estate or in industry, but in government loans. The returns would be unearned increment, but the dividend would he collected without the slightest risk. Of course, such an investment would not contribute to the production of the nation.

The interest that is payable on the dollar loan has been determined on the basis of out-of-date methods, and should be reviewed by the Government. Unfortunately, the agreement that is now under consideration may not be reviewed for a. period of ten years. Obviously, the whole agreement has been framed so that the loan will provide a lucrative investment for the contributors to the International Bank for Reconstruction and Development. A much more serious aspect of the agreement is the so-called commitment charge. The Treasurer, in his second-reading speech, made the following statement: -

A commitment charge of J per cent, is payable half-yearly on the amount of loan standing undrawn from time to time. That charge is to accrue from the effective date of the loan until the respective dates on which amounts are withdrawn, that is to say, .up to the times at which we actually make drawings against the loan and from which interest at the agreed rate becomes payable on the amount of such drawings. In’ previous International Bank loans the commitment charge has beer fixed at 14 per cent. The reduction of this charge to ) per cent, was decided upon by the bank only in August last and Australia is the first country to benefit from the reduction.

The commitment rate on loans which, hitherto, had been granted by the International Bank was lj per cent. The decision to reduce the rate to £ per cent, was made in August last, and Australia is the first country to benefit from it. Apparently earlier borrowers from the bank had complained about the commitment charge. Such an impost is new in finance in this country. It may be a part of the technique of “Wallstreet. I again ask why the same simple principles of finance that are used in our business life cannot be adopted for international loans. A builder who is granted an overdraft to enable him to purchase materials and pay his employees does not necessarily withdraw the whole of the amount immediately. Interest is not payable from the day on which the overdraft is made available, but is calculated on the daily balance. Interest on mortgages may be calculated on the daily, weekly or quarterly balances. It is extraordinary that Australia should be required to pay a commitment charge of f per cent, half yearly on the amount of loan standing undrawn from time to time.

Mr McMAHON:
LOWE, NEW SOUTH WALES · LP

– Australia has already drawn 40 per cent, of the loan.

Mr MORGAN:

– Let us suppose that an amount of 40,000,000 dollars has been used for the purchase of capital goods. Australia is paying a commitment charge of J per cent, on the balance of 60,000,000 dollars. Indeed, we are actually paying the interest charge of 4i per cent., plus the commitment charge of % per cent., making a total of 5 per cent on at least a part of the loan. The Treasurer must have been mesmerized when he consented to such an agreement.

The “ wise guys “ and “ wiseheads “ of New York have put something over him. Interest at the rate of 5 per cent, is equivalent to the return that some persons are now deriving on second mortgages on the most risky securities. Apparently the wool has been pulled over the eyes of the Government. The conditions of the loan should be reviewed immediately. If they are typical of the borrowing methods of the Prime Minister (Mr. Menzies) when he is overseas, he should take some of his supporters with him, because they appear to understand financial matters better than he does, and would be able to concentrate on such matters while he was devoting attention to even more important subjects.

The loan has been granted for a period of 25 years. Is that necessary? This is purely a trading agreement. Australia is establishing stockpiles of commodities, and the market is rising. We may be able to repay this loan in a few years, so it should be, not on a longterm but on a short-term basis. The catch, I submit, is that the financiers do not want such loans to be repaid. They prefer them to continue in perpetuity, like the loans on railways and other government instrumentalities, on which interest has been paid for 50 years. I venture to say that the present loan will never be repaid, because it is a lucrative investment for financial interests, who will get a substantial rake-off from the high rate of interest. Australia has established vast credits in London, and may establish vast dollar credits .in New York from the sale of its wool and other commodities. But if we ask or offer to repay a loan with our sterling balances we are told, “No, there is a contractual obligation “. They can pay us when they like, but they do not want us to repay with our credit balances the loans that they have granted to us.

I realize that criticism of this loan will not receive much publicity. The Government has well and truly muzzled the press on this matter as a result of ensuring for newspaper proprietors substantial supplies of newsprint by making available dollars, not necessarily from this loan, but from other sources, which could have been used for the purchase of capital goods. I forecast that the press will not criticize this loan because the Government has appeased the proprietors. But I emphasize that this policy of borrowing is false and shortsighted. The conditions applicable to the loan are out of date, and posterity will judge this Government for its action in placing this country in bondage to overseas financiers. The generation for whom we are supposed to be developing this country is more likely to curse than to bless this Government for having borrowed this money. Each new-born child already inherits a load of indebtedness of hundreds of pounds, and this loan will increase that burden.

Mr MCMAHON:
Lowe

.- I do not propose to traverse all the arguments in favour of this loan, as they have been set out clearly in the second-reading speech of the Treasurer (Mr. Fadden). I refer those people who are interested in the problem of the industrial development of backward countries to a publication of the International Labour Office in 1944 on world economic development, and I shall state the thesis of that booklet, because I think that it should be known to the House. It completely destroys every argument that has been submitted by the Opposition against the loan. Opposition members try, somewhat foolishly, to create the impression that if we borrow, we inevitably drift into penury and liquidation. The publication of the International Labour Office states: -

The general thesis which emerges from this study is that economic development of new areas brings both opportunities and dangers to existing industrial areas, but that it is definitely possible, by policies of mutual co-operation and intelligent adaption, to make the advantages far outweigh the disadvantages.

The equipping of industrially less advanced areas could help to provide a great new frontier of economic expansion.

The Government believes, and I think that it is correct, that the advantages of the loan now under consideration far outweigh the disadvantage of it. Obviously there are some disadvantages or potential disadvantages, but if we on this side of the chamber were always to look at the horrible side of life and think of pitfalls instead of advantages, we would be adopting exactly the same policy as the socialists adopted in this country for eight years. That policy is one of hesitation, ‘because the dangers in front may be immense and perhaps insuperable. The reasons for this loan were put forward by the honorable member for Evans (Mr. Osborne) a few days ago. He made it clear that, based on figures for 1930-31, industrial output per man-hour in Australia had hardly increased during the last twenty years. Consequently, the conditions- of the people have not greatly improved. Output per man-hour in the United States of America has increased by more than 70 per cent, during that period. The honorable gentleman produced comparable figures for England, New Zealand and the Scandinavian countries. The general tenor of his argument was that we in this country had not matched the progress of our democratic contemporaries. It became apparent to the Government that something was wrong, and the first preliminary investigation showed that the lack of progress was due to the fact that our industries were not being mechanized with sufficient rapidity. There were bottlenecks in the industrial machine, and the Government set about the very reasonable task of eliminating them. That was the first instalment of a progressive programme to allow us to achieve our full industrial potential. What attitude has been adopted by the socialists towards that policy? They have always opposed concrete suggestions put forward by the Government for progress, and they have not varied their policy on this occasion. The honorable member for Perth (Mr. Tom Burke) and other members of the Opposition have criticized the Government with hesitant voices and have asked whether it is not time to put value back into the £1. That is the one straw that they have with which to beat the Government over the head. Whenever the Government attempts to deal with this problem, they damn its proposals. I remind them, however, that the production of coal has increased during the regime of this Government far more than it increased during any comparable period of the Labour party’s regime. The Opposition has never had the courage to examine any of the Government’s propositions honestly and say, “ This is a sensible, business-like proposal and we shall give it our blessing “. Instead, it has opposed the Government’s plans in such a way as to almost hamstring and shackle the community. If honorable members want to be driven back on their haunches and reminded of their misdemeanours, I refer them to the attitude that they adopted towards the anti-Communist legislation. The Communists have seriously hampered production in Australia in recent years. Yet the Opposition protected them for six months ! That is only one example of the obstructive behaviour of the Labour party. It has rejected every sensible, concrete proposal that the Government has made. In the same spirit of carping criticism, it has condemned the dollar loan.

I shall not traverse the main lines of the Government’s arguments in favour of the loan, because they were dealt with adequately by the Treasurer. However, I shall deal with some of the criticisms that were expressed by the honorable member for Maranoa (Mr. Charles Russell) for whom I have considerable respect because of the independence of his views, though not because of their logical quality. The honorable member said that he could see no justification for the loan because our London funds were increasing and, therefore, borrowing was wrong and unnecessary. In fact, the honorable member confused two different concepts. I do not wish to point out his error in a didactic fashion, but he failed to recognize the distinction between the international balance of payments and the international balance of trade. The international balance of payments covers the total payments for all reasons and all causes. The international balance of trade covers only trading items, such as commodities and items on invisible account.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– All I said was that wo should buy our dollars with our products. There was no confusion.

Mr McMAHON:

– If the honorable member will listen, he will learn that the procedure which he suggests is impracticable. Our international balance of payments last year disclosed a deficit. The publication which the honorable member showed to me yesterday contained - the statement that the balance of payments on current account - that is, on trading accounts - was adverse in 1949-50 by £35,000,000. That was a deficit on our ordinary trading account. Yet we had a very substantial credit in our international balance of payments. I do not want to discuss this matter in great detail, but I mention it because the honorable member was dealing with a medium which, I think, he did not thoroughly understand. Our credits have been built up, as the Commonwealth Bank estimated recently, by about £200,000,000 of hot money and also by money that has been brought into the country for the purposes of capital development. Furthermore, every immigrant brings a little capital with him. Those funds, not the funds that we are earning by the sale of our trading commodities, have permitted us to establish substantial balances abroad. I mention these facts to the honorable member because he has indicated in the past more than a little interest in financial problems, and I should like to help him by pointing out the distinction between the two different items that I have mentioned.

The honorable gentleman also discussed another subject, which was dealt with more adequately than I can deal with it by the honorable member for Bennelong (Mr. Cramer), who said that, if the arguments of the honorable member for Maranoa were accepted, we should have to repudiate our contracts with Great Britain. I remind the honorable gentleman that we live in a British Empire bloc and that most of our trading is carried on within that bloc.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Which contracts would we have to repudiate?

Mr McMAHON:

– The honorable member advocates that there should be a complete freeing of trade.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– I said that there should be a freeing of the meat trade. The Government is about to enter into a new contract with the United Kingdom for the purchase of Australian meat over a period of fifteen years.

Mr McMAHON:

– The honorable member advocated the repudiation of our contracts in no uncertain terms.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– I did not do anything of the sort. I said .that the Government should not conclude a fifteen years’ contract with a socialist government.

Mr MCMAHON:

– The indirect implication of that statement was that Australia should never have concluded an; contracts with the socialist government of the United Kingdom in the past. 1 remind the honorable gentleman again that we live within the British Empire. We are proud of that fact, and the more we can ally ourselves with our British kinsfolk the more will I and my colleagues be pleased. There are two important blocs in the world from Australia’s point of view. One is the Empire bloc, within which we must foster trade to the best of our ability, and the other is the dollar bloc. The dollar bloc is independent and self-contained, and so is the Empire bloc.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– “What about Canada ?

Mr DEPUTY SPEAKER (Mr Ryan:
FLINDERS, VICTORIA

– Order! The honorable member for “Maranoa must refrain from interjecting.

Mr McMAHON:

– The important point is that we should not in any circumstances break or loosen our ties with the United Kingdom. On the contrary, we should exert ourselves to the utmost in order to ensure that our trading relationships with Great Britain shall be strengthened to the maximum possible degree.

I turn now to the arguments that were stated on behalf of the Opposition in a most logical and temperate fashion by the honorable member for Perth. The honorable gentleman spoke in a hesitant manner which indicated that he was espousing a cause in which he had little heart and even less faith. However, his first argument was identical with the argument that was advanced on behalf of the Government. He said that the loan would be justified only if it achieved certain objectives. The reason why the Government negotiated the loan was that it wanted to achieve the objectives that were stated by the honorable member. The objectives that he mentioned were a steadily increasing population, sound defence organization, and progressive national development. The loan was obtained for the primary purpose of destroying the bottlenecks that have been impeding our progress towards those objectives. However, the honorable gentleman’s argument was marred by one unfortunate error. He said that he did not think that we could increase our dollar earnings as a result of obtaining the loan. The fact is that we did not borrow the money for that purpose. We borrowed it so that we could become independent of the dollar market. The funds will be used to increase Australia’s productive capacity so that we can become independent of dollar sources if possible. We have been compelled to borrow dollars only because the production of Western Europe and Great Britain was substantially reduced during the war and has not yet returned to normal levels. Consequently, for the present, we have been compelled to turn to another market in order to purchase machinery, implements and other basic commodities. I hope that this will be only a temporary phase and that sooner or later we shall return to Empire trade and Empire preference and will be able to get most of the heavy equipment that we require from British or continental countries.

The honorable member for Perth also said that the dollar problem could not be solved by borrowing. He said that, if we increased our overseas indebtedness, we should be likely to have trouble if export prices fell. I shall correct that statement. Australia will not encounter any very substantial problems whatever may happen because, as I have pointed out, it belongs to the sterling bloc. We pay all our dollar earnings into London funds, and we draw our dollar requirements from that source. If our dollar sales should fall, we should still be able to draw on the London dollar funds in order to pay our interest bill. As the honorable member must know, the London dollar funds and gold balances are building up very substantially. They have increased during the last year by over 300 per cent.

Mr Ward:

– Only as a result of the European recovery programme of the United States.

Mr McMAHON:

– I do not know about that, hut we shall soon he able to increase our dollar commitments and draw more substantial sums of dollars than formerly from the London funds. Therefore, I contend that a logical analysis proves that the argument of the honorable member for Perth is completely invalid. We do. not depend entirely upon our dollar earnings to finance the loan. In any event, the combined dollar earnings of Australia and Great Britain are becoming so substantial that there is every reasonable prospect that the loan can be financed without difficulty.

Another point to which I direct attention is of special interest to members of the Australian Country party. Australia can look forward to an era of high dollar earnings because the production of wool in the United States has fallen by 50 or 60 per cent, during the last ten years. The demand for wool in the United States is increasing as the national income increases, and that demand, in the circumstances that I have stated, must be met more from Australian production than from American production. Therefore we have every reason to hope that there will not be a great fall of the price of wool in the future. The demand for wool, on the basis of last year’s figures, will be sustained and prices will remain much higher than they have been until the last year or two. The prospects of honorable members and others who own wool-producing properties are good, and consequently the prospects of the country as a whole are equally good.

Considerable confusion has arisen over another suggestion by the honorable member for Perth. He said that the acceptance of the dollar loan involved the risk of economic dictatorship. In other words, the honorable gentleman and his colleagues fear that, if Australia should fall into arrears with its repayments, Wall-street will exert some influence upon our internal economy and bring us within the control of the United States. They have suggested that the United States may send experts to this country to inquire into local conditions. The truth is that the International Bank for Reconstruction and Development has no right to send its officials to Australia on any such mission. The Australian Government can invite the bank to send its advisers here, and if the bank considers it desirable to do so, it can send them. The position is set out clearly in the second-reading speech made by the Treasurer, in the course of which he stated -

The International Bank is willing in principle to participate during the next five years in the financing of the Australian developmental programme. The president of the bank has offered, if the Government so desires, to send officials of the bank to Australia to gain a closer knowledge of our developmental programmes, and to consider with us to what extent bank participation may, in all the circumstances, be necessary and justified.

So this idea of economic hegemony and dictatorship is quite wrong. We have the right to seek consultations with, and obtain advice from, the bank’s experts, but it is a matter for our Government to determine whether it will accept or reject that advice.

Finally, I shall deal with the interest rate on the loan. I do not agree with the honorable member for Bennelong, who said that the interest rate to be charged for the loan is unduly high. I do not think that a lower interest rate could have been obtained on such a loan.

Mr Cramer:

– The interest rate could have been lower.

Mr McMAHON:
LOWE, NEW SOUTH WALES · LP

– I do not think so. I was in New York in 1946 when the Australian Government was trying to float a loan, which was underwritten by Morgan and Company, the well known Wall-street and international brokers. Despite all the efforts of the brokers to “ push “ the loan, only, a comparatively few subscriptions were obtained, and the stocks had to be sold at about 80 dollars each. The plain fact was that Australia could not obtain money in Wall-street, or in any other dollar market. We should bear that in mind in considering the terms of the loan granted by the International Bank. What is the use of viewing this loan in any other way? We needed the money and the International Bank was prepared to provide it at a reasonable rate of interest.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Why was India able to obtain a loan from the bank at an interest rate of only 3J per cent?

Mr McMAHON:
LOWE, NEW SOUTH WALES · LP

– No loans have been granted by the International Bank on terms comparable with those of the loan granted to Australia, including the period for repayment, at a lower rate of interest. The loan obtained by the Australian Government from the bank provided for a similar rate of interest to that charged for loans made to other countries, with the exception of one loan that was granted to Brazil and two loans that were made to Mexico.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– What about the loan to India ?

Mr McMAHON:

– I cannot interrupt my argument any further at this stage to deal with that matter. I said that the interest rate charged by the bank on the loan made to Australia is the same as that charged by the International Bank on other loans of comparable duration and embodying similar terms. Actually, the International Bank is charging interest of only 31/4 per cent., and an additional charge of 1 per cent, is made for commission, which is similar to the charge made by any bank for its services in arranging a loan. For the reasons that I have stated, the actual interest rate of 31/4 per cent, must be regarded as satisfactory. The charge of 1 per cent, that is made for commission is credited to the resources of the International Bank, and since Australia, in common with other democratic nations, is a shareholder in that bank we shall ultimately reap the benefit of the aggregate commission collected by the bank. The bank is obliged to charge commission for loans that it arranges in order to build up its reserves, but when those reserves become sufficiently high, the commission charge will be discontinued.

I want to make it perfectly clear that the honorable member for Martin (Mr. O’Connor), the honorable member for Maranoa and other honorable gentlemen who have criticized the rate of interest charged by the bank as being too high are mistaken. Furthermore, such criticism is grossly misleading. I did not rise to take part in the debate merely to justify or to explain the Government policy. I . believe that policy to be in the best interests of the country. I consider that the need for Australia to obtain such a loan was made abundantly clear to the House by the honorable member for Evans when he said that production in this country per man-hour compared with that of the United States of America, New Zealand and Scandinavian countries has not shown any substantial increase according to the 1930-32 statistics. If we want to have adequate industrial development and to keep pace with our democratic contemporaries, we must eliminate some of the bad bottlenecks in our industrial production. The raising of the loan from the International Bank will enable Australia to purchase much of the necessary machinery to stimulate production, and so eliminate the present bottle-necks. I compliment the Prime Minister (Mr. Menzies), on his outstanding success in obtaining the loan on such favorable terms, and I commend the bill.

Debate (on motion by Mr. Keon) adjourned.

page 4001

TARIFF PROPOSALS 1950

Customs Tariff Amendment (No. 4)

In Committee of Ways and Means:

Mr McBRIDE:
Minister for Defence · Wakefield · LP

.- I move-

That the Schedule to the Customs Tariff 1933-1950, be amended as hereinafter set out, and that on and after the eighth day of December, One thousand nine hundred and fifty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1950 as so amended. That, without prejudice to the generality of paragraph (1.) of these Proposals, the GovernorGeneral may, from time to time by Proclamation declare that, from a time and date specified in the Proclamation, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of a British or foreign country specified in that Proclamation. That any Proclamation issued in accordance with paragraph (2.) of these Proposals may, from time to time, be revoked or varied by a further Proclamation, and upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be, the application of the Intermediate Tariff to the goods specified in the Proclamation so varied, shall be varied accordingly. That in these Proposals, unless the contrary intention appears - " Proclamation " means a Proclamation by the Governor-General, or the person for the time being administering the government of the Commonwealth,' acting with the advice of the Federal Executive Council, and published in the *Commonwealth of Australia Gazette ;* " the Intermediate Tariff " means the rates of duty set out in the Schedule to these Proposals, in the column headed " Intermediate Tariff ", in respect of goods in relation to which the expression is used.

The proposals that I have just tabled cover two main groups of tariff amendments. The first group comprises those which result from the acceptance by the Government of recommendations made by the Tariff Board in the following reports : -

Hypodermic Syringes,

Gloves,

Secateurs,

Axes, Adzes, Hatchets and Sledge Hammers,

Coal and Stone Drilling Machines,

Phenol,

Carpenters’ Claw Hammers and Engineers’ Hammers,

Cane Cutting Knives,

Tinsmiths’ Snips, and

Chrome Chemicals

Of those ten reports, which will be tabled in the House later to-day, six will be available for immediate circulation to honorable members, and arrangements have been made for the Librarian to hold a copy of each of the other four reports for perusal by honorable members pending receipt of printed copies. Three of the proposed amendments are for increased duties, whilst the fourth, which relates to phenol, proposes duties which are the sum of the existing customs tariff and primage duties. The remainder of this group proposes reductions in the existing duties. The remaining group consists of amendments which are intended to remove from the items concerned the possibility of anomalous interpretations and to facilitate administration. No variations are proposed in the duties on those items.

In addition, the value of passengers’ furniture and household goods which may be admitted free of duty under tariff item 409(a) has been raised from £125 to £400. This is considered to be more in keeping with present-day values. Collectors have, in the past, taken a liberal view of values, but scrupulous passengers object to subscribing to a declaration that their furniture and household goods do not exceed a value of £125. Persons with more flexible consciences have thus been placed at some advantage. The handling on disembarkation of the large numbers of new Australians arriving in Australia will be greatly facilitated if the limit of value is sufficiently high to cover the average passenger. A perusal of the summary of alterations circulated to honorable members will indicate the exact extent of the proposed alterations.

Progress reported.

page 4004

TARIFF BOARD

Reports on Items.

Mr McBRIDE:
LP

– I lay on the table reports of the Tariff Board on the following items: -

Axes, Adzes, Hatchets and Sledge Hammers

Cane Cutting Knives

Carpenters’ Claw Hammers and Engineers’ Hammers

Chrome Chemicals

Coal and Stone Drilling Machines

Gloves, N.E.I., including Mittens.

Hypodermic Syringes

Phenol

Secateurs

Tinsmiths’ Snips

page 4004

LOAN (INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT) BILL 1950

Second Reading

Debate resumed (vide page 4001).

Mr KEON:
Yarra

.- Before discussing the desirability or otherwise of this measure, which is, after all, inevitable, because it merely seeks to ratify a loan contract that has already been made by the Government, I think that we should examine the use that the Government is making of the additional dollars that it has obtained under the loan. We obtain dollars from the sale of such of our exports as are sold in dollar areas, and, in addition, we also obtain dollars under the loan with which this measure deals. Prior to the floating of that loan, Australia purchased a great deal of heavy equipment, such as tractors and agricultural machinery, from the dollars that it earned. However, I understand, from answers furnished by Ministers to questions asked in this chamber, that machinery, such as that which was previously purchased from dollar sources and paid for from the sale of Australian products to dollar countries, is now being purchased from the dollar loan. It follows, therefore, that dollars received for the sale of our goods overseas are now available for the purchase of many goods that could not previously have been purchased. One of the largest dollar purchases that has been made since the lean was granted is newsprint. Apparently the Government floated the dollar loan not solely for the purposes set out by the Treasurer in the course of his second-reading speech, but also for that of using the dollars for certain political purposes. Honorable gentlemen opposite have referred to the vital importance of the dollar loan in enabling Australia to purchase tractors and machinery for developmental purposes, hut I have been rather amused by the reaction of the Government to the pressure applied to it by the newspaper barons of Australia to obtain more imported newsprint for them. In fact, 1,500,000 dollars have already been allocated for the purchase of newsprint from dollar sources. Do honorable gentlemen opposite imagine that the publication of the additional tripe that we see in the Sunday newspapers and, generally speaking, in the press nowadays, such as the pages devoted to glamour advertisements for women and so on, will assist the development of the country? I was amazed that the Government should have the effrontery to allocate money for such a wasteful purpose as the publication of additional tripe in the newspapers, the only result of which will be to increase the profits made by the newspaper proprietors. Of course, we all know why the Government decided to make such a large quantity of dollars available to the newspaper barons. Prior to the loan being obtained, the present Government was regularly castigated in the editorial columns and in the leading articles of every newspaper in Australia. The newspapers were continually referring to the allegedly vital necessity of revaluing the £1. At that time every newspaper in this country was plugging for revaluation. Having regard to the conspicuous silence on the part of those newspapers about revaluation since the Government made available 1,500,000 dollars for the importation of additional newsprint, will any supporter of the Government say that it did not strike a bargain with the newspapers in this matter? Will any one of them deny that the newspaper barons agreed to cease their campaign for revaluation provided the Government made available additional dollars for the importation of additional newsprint?

Mr White:

– The honorable member’s imagination is disordered.

Mr KEON:

– The imagination of any honorable member who sits face to face with the Minister for Air (Mr. White) might well become disordered. I invite the Minister to explain how the provision of 1,500,000 dollars for the importation of additional newsprint will contribute to the development of the country. Not long ago Mr. Packer, who is chairman of directors of Consolidated Press Limited, declared that the newspapers required additional newsprint because their present supplies were insufficient to enable them to tell the people the news. I have in my hand a newspaper that consists of 52 pages, but all the real news that it contains could be printed on two pages. The rest of its contents consists of advertisements and tripy articles of the kind that are featured in the press of this country. Yet, supporters of the Government say that it is justified in making available 1,500,000 dollars for the importation of additional newsprint from dollar areas. The facts disclose a crying scandal. It is obvious that the Government entered into a sordid bargain with the newspapers and agreed to grant them that concession provided they shut up about revaluation. Until the Government gives some explanation of the matter, the people will undoubtedly come to the conclusion that I have drawn on the facts that are available to me.

Mr Casey:

– I rise to order. No provision is made in this measure for the importation of newsprint.

Mr SPEAKER:

– Order ! The Chair must allow reasonable latitude in the debate on the second reading of a measure, the purpose of which is to authorize the borrowing of money.

Mr Casey:

– With great respect, Mr. Speaker, I submit that as no provision is made under the measure for the importation of newsprint, the honorable member’s remarks are not relevant to the question before the Chair.

Mr SPEAKER:

– If what the honorable member is saying is not a fact, the Minister for National Development (Mr. Casey) will have an opportunity to refute his statements.

Mr KEON:

– Having disclosed the sordid bargain that the Government has entered into with the newspapers, I can quite understand the agitation now being displayed by the Minister for National Development. He is aware that whilst portion of this dollar loan is to be used for the purchase of developmental equipment a great deal of such equipment was previously purchased with dollars that the Government made available from its normal dollar earnings. Now that such equipment will be paid for from this loan, the proportion of dollars that was previously made available from normal dollar earnings for that purpose is now to be made available for the purchase of newsprint from dollar areas. The Minister is illogical when he contends that expenditure from normal dollar earnings is not in any way related to proposed expenditure from this loan. The Government’s dollar balance-sheet must be considered as a whole. The fact is that the Government is now making available 1,500,000 dollars from its normal dollar earnings for the purchase of additional newsprint from dollar areas. Whether such provision is made from this loan or from other dollar funds is beside the point. When I asked the Treasurer (Mr. Fadden) a question on this matter some time ago he placed his hand over hi3 heart and said, in effect, that so long as he remained Treasurer the newspaper barons would not be allotted dollars for the purchase of additional newsprint.

Mr Fadden:

– I should like to know when I ever made that statement.

Mr KEON:

– The Treasurer will find that he is reported in Hansard as having made it in reply to a question that I addressed to him.

Mr Fadden:

– I did not make any statement of that kind.

Mr KEON:

– Now that the newspaper barons have obtained an additional allocation of dollars for the purchase of newsprint, does the Treasurer intend to resign? Of course not. It was he who made the bargain with the newspapers to provide additional dollars for the purchase of newsprint provided that they ceased their campaign for revaluation.

The honorable member for Maranoa (Mr. Charles Russell) suggested that as an alternative to the raising of this loan the Government should set out to earn more dollars from the United States of America. That suggestion has merit in respect of the sale of wool, because while we are prepared to force the United States of America to compete with the Soviet Union in the open market for Australian wool and to allow the Soviet Union to bid up the price which, of course, the United States of America will be obliged to pay - while we are prepared to trade on the basis of profiteering in the sale of war materiel - there is no reason why we should not be able to increase our dollar earnings from the sale of wool to the United States of America. Despite the denial of the Minister for Commerce and Agriculture (Mr. McEwen) this morning that he had said that he found no reluctance on the part of graziers’ associations to sell wool to Russia at peak prices, when I asked him the following question-

Mr SPEAKER:

– Order! The honorable member will not be in order in quoting from Hansard reports of debates in the current session.

Mr KEON:

– On page 4463 of Hansard the Minister is reported as having said in answer to a question-

Mr SPEAKER:

– Order !

Mr KEON:

– I shall not quote from Hansard. The Minister said he saw no sign of reluctance on the part of graziers to sell their wool to the Soviet Union at the highest possible prices that they could obtain for it.

The honorable member for Lowe (Mr. McMahon) said that the International Bank for Reconstruction and Development was formed in order to provide financial assistance by way of loans to backward countries; and he appeared to glory in the fact that the Government by applying for a loan from the bank hari proclaimed to the world that Australia is a backward country. He quoted from the charter of the bank in order to show that it was established to help backward countries, and he gloried in the fact that this Government was prepared to brand

Australia as a backward country. Unfortunately, this measure simply confirms a fait accompli because this money has already been borrowed and the Parliament can do nothing about the matter. However, I condemn the Government for throwing Australia into the hands of the pawnbrokers. Before it arranged for this loan to be made, it should have consulted the Parliament. If it had done so, honorable members would have had an opportunity to convince the people that the transaction should not be proceeded with and that instead of placing Australia in pledge to the pawnbrokers our first consideration should be to maintain our economic independence as a nation. The Opposition is most concerned that Australia should maintain its economic independence. Obviously, when one borrows money one gives an opportunity to the lender to dictate one’s financial policy. That is what happened during the depression when the Niemeyers and Guggenheimers were enabled to force the government of the day to cut salaries and social services in this country. If as the result of a fall of prices for our exports we should become unable to earn sufficient dollars to repay this loan, the International Bank for Reconstruction and Development will be given an opportunity to dictate the Government’s internal financial policy. The Government should not proceed with this loan if for no other reason than that in the event of another depression occuring in this country, ft will give an opportunity to those from whom we borrow to attempt to call the tune. I do not wish to see Australia placed in that position, and I should certainly resist any attempt by outside interests to dictate Australia’s internal policy.

The honorable member for Maranoa uncloaked the fact that the propaganda of members of the Australian Country party contradicts their actions in the Parliament. So far as socialism is concerned the honorable member for Maranoa appears to be the only honest member on the other side of the chamber. I do not support his advocacy of free marke’ts, but I admit that he has been consistent in his statements in that respect, whereas his former colleagues in the Australian Country party have been most inconsistent. At the same time, I support his contention that if goods that Australia has supplied to Great Britain and which Great Britain has resold for dollars were taken into account, this country would very nearly bridge its present dollar gap. I applaud the policy of the Chifley Government of giving the fullest support possible to Great Britain to help that country to meet its economic difficulties. If there was any flaw in that policy at all it was that it erred on the side of generosity. The British Board of Trade and the controllers of British industry do not worry much about sentiment and do not talk much about Empire when they engage in business transactions. They drive as hard a bargain as they possibly can. Perhaps, we are too trusting in our trade dealings with Great Britain. However, the policy that the Chifley Government implemented in order to help that country out of its economic difficulties has proved to be successful, because today Great Britain instead of having a dollar deficit has accumulated a reserve of 1,068,000,000 dollars. Great Britain has .been enabled to do that and is now independent of Marshall aid partly as the result of the assistance that Australia gave to it. For that reason, the suggestion that the honorable member for Maranoa made should be taken into consideration by the Government before it proceeds further to use this loan money. If it took into account Australia’s normal dollar earnings and the value in dollars of goods that Australia exports to Great Britain for sterling and which Great Britain sells for dollars, this country could very nearly close its dollar gap and would not need to raise loans of this kind and thus place the future of this nation in pawn to overseas moneylenders. Despite its talk about socialism, bureaucracy and government interference with trade, this Government does not seem to be able to avoid bureaucracy and interference with the primary producers and those who export goods. Instead of realizing that it is time to recast its financial policy because of the much more f avorable position that Great Britain finds itself in, this Government has carried out a policy that was laid down under an entirely different set of circumstances. A dollar loan would be entirely unnecessary if the suggestions put forward by the honorable member for Maranoa were carried out.

The honorable member for Lowe suggested that there would be no difficulty in obtaining dollars to pay back the loan because it would only be necessary to obtain funds for this purpose from the dollar pool. If Australia can do that in five years’ time why can it not obtain dollars from that source now? If dollars will be available in London to pay interest they should be available for other purposes. If the honorable member for Lowe is right the Government has taken a very unwise step in borrowing this amount. However, it is now not possible to avoid borrowing the money as the Government has committed us so that it seems as though this country will be committed to a financial policy which may spell disaster to its economic future. I regret that the Government has not shown more Australian spirit and has not given a little more attention to the interests of Australia instead of to those of other countries. Above all I regret that although the Government is quite prepared to pledge Australia to the pawnbroker overseas it will make 1,500,000 dollars availabale for the purchase of newsprint, the procurement of which is entirely unnecessary at the present time. The Government’s bona fides are wide open to question in relation to that matter. How can we have any confidence in the Government’s use of this loan in view of the fact that 1,500,000 dollars will be devoted to the purchase of newsprint in the face of declarations by the Treasurer that under no circumstances would dollars be expended on that commodity? The Opposition has no confidence in the way in which the Government will administer this loan. The procurement of the loan was a wrong action. Having acted wrongly it seems as though the Government will administer the loan so that any benefits will go to the newspaper barons and other importers of luxury goods who are willing to use their influence in the interests of the Government instead of in the interests of the people of Australia.

I regret that the Treasurer apparently had so little grasp of the financial position in Australia and overseas as to seek this dollar loan. I regret also that, having, contracted to accept the loan, he will not. ensure that it is administered in theinterests of the people of this country.

Mr EGGINS:
Lyne

.- The’ honorable member for Yarra (Mr. Keon)’ has made an extraordinary contribution! to this debate. His remarks are typical of what one would expect to hear on theYarra bank. The honorable member might be regarded as a counterblast to the honorable member for East Sydney (Mr. Ward). The speeches of thehonorable members on the socialist sideof the House constitute an apology for theomission of the previous Government torecognize the need for the development of Australia although that necessity waspointed out to them time after time by honorable members who are now sitting; on this side of the chamber. If honorable members of the Opposition had faced this responsibility three years ago and’ arranged a loan abroad and so made it possible to bring into this country capital goods which would have enabled itsdevelopment to proceed we should not now be facing the difficulties which confront us, and there would not be any need to cry out for the restoration of value to the- £1. The need for greater production isurgent and the Government is to be congratulated upon making these arrangements with the International Bank promptly. “Why has the Government arranged this loan ? Why has it had to go tothe International Bank to arrange for the supply of dollars? Simply because the capital goods required by this country are not available elsewhere. Unsuccessful efforts have been made in the past to obtain these goods from non-dollar areas and there is therefore no alternative but to obtain this loan if this country is to progress.. If it were possible to obtain from sterling countries the goods that will be purchased with this loan honorable members would not be discussing this matter at present. Before any goods are purchased from dollar areas with this money it will be ascertained that they are not available from sterling areas.

The contributions which honorable members of the Opposition have made to this debate clearly indicate that they fail to appreciate the need for the development of this country. They want Australia to remain pegged down as they kept it pegged down under eight years of socialism. In failing to appreciate this point they fail to recognize the nationwide need for development in the interests of the defence, immigration and production generally. Unless we can obtain the goods that will enable us to increase production this country will not be able to fulfil its obligations. I am surprised that honorable members of the Opposition who were responsible for the introduction of the 40- hour week fail to appreciate this real opportunity to make that 40-hour week work economically and successfully as it could be made to work by the introduction of modern capital equipment. If this country is to remain without the modern plant and equipment that is available in countries such as the United States of America there is little possibility of our witnessing its effective development under the 40-hour week. The system will break down as it always has done under socialist control. I speak with some knowledge of this country’s requirements of essential machinery. During the past few weeks honorable members have spoken on the need for greater transport facilities in Australia. All honorable members claimed to be anxious to see the development of a more up to date road system in this country. Yet, now that the Government has brought forward a proposal to make possible the procurement by local government organizations and main roads organizations of the modern earth-moving equipment and machinery required for such work the Opposition has opposed that proposal. There is not a shire council or a country road authority in Australia that is not asking for the release of dollars to obtain heavy equipment to carry out its work. Yet, now that the Government has faced up to its responsibility and has endeavoured to arrange for such equipment to be obtained the Labour party has opposed those efforts in every possible way.

The interest rate on the loan is very satisfactory in view of the conditions prevailing throughout this country. Providing that the Government borrows wisely and obtains the goods that Australia needs, a wise borrowing policy is not only essential but very desirable. Australia is facing the gravest responsibility, possibly, that any nation has faced in regard to its immigration policy. How can we accept all these new people unless we equip our industries with capital goods? Wherever it is possible to obtain capital goods from sterling countries they have been obtained and will be obtained but in all countries there is a rush to prepare for defence and whereas, twelve months ago, further supplies of goods may have been obtainable from sterling countries, those countries are now experiencing great difficulty even in meeting the requirements of their own defence programmes. If the Labour Government had faced this responsibility two years ago many of the items that Australia needs could have been brought here at lower rates and more readily than they can be brought here at present. I am sure that the people of Australia realize that not only is this loan necessary but that the Labour party must be criticized for its failure to face up to its responsibility to obtain the money when it was in office.

Reference has been made from time to time to the productive capacity of this country, but I feel that it is necessary to make further reference to this subject. That this country is very inefficient in comparison with other countries is due to the fact that it is not correctly and efficiently equipped with modern capital equipment. Since before the war, Canada has increased its man-hour production by approximately 30 per cent. In that period Australia has increased its man-hour production by only 3 per cent. I do not believe that there is any difference between the desire of the Australian people and that of the Canadian people to do their best for their countries. If the people are wisely led by those who call themselves their leaders they will do their best. I could compare Australia with America but I prefer to compare it with Canada because both countries are members of the British Commonwealth and therefore, perhaps, more comparable. The difference in the production per man-hour between Australia and Canada explains why this country is so short of its main commodities and is so unable to do the work which could be done if it were properly equipped.

The honorable member for Yarra spoke about the increased allocation for newsprint and other commodities. These aspects of the matter have been brought into this debate by honorable members of the Opposition only in order to defend themselves against accusations of past failures. They know that the earning capacity of this country in terms of dollars is increasing month by month because of the prices prevailing for our exportable commodities, some of which are sold in dollar areas. They also know that because of our increasing dollarearning capacity it would be a sound business proposition to make this loan. The dollar loan is planned to meet urgent requirements, and I congratulate the Prime Minister and the members of the Government on the effort that they have made to obtain so early in their term of office this urgently needed loan.

Australia’s great need is to have its power resources developed. The lack of development of those resources is causing the troubles from which the people of Sydney and of the country areas are now suffering. I refer to the constant electricity black-outs and the difficulty in obtaining domestic and industrial power. This loan will give the Government an opportunity to develop the generation of electricity throughout the country by making possible the purchase of the necessary capital equipment for new power stations. Moreover, it is necessary to have a constant and large output of power for defence production purposes. In view of the international situation, our power production should be increased as quickly as possible. That Australia has been granted such a large loan is a great compliment from the people of the dollar areas. The American soldiers, during the last war, arrived in this country very suddenly. They came in our time of need. I remind honorable members opposite, after hearing them talk about Wallstreet and Washington having a possible bad influence on this country, that at a time of great crisis when we were facing invasion they were very quick to call upon the Americans for aid. And the Americans responded promptly. When they arrived in Australia they discovered how inefficient were our productive methods. Every honorable member in this House had an opportunity on numerous occasions, during the presence of the United States forces in Australia, to meet the most highly qualified American technicians and industrial experts who expressed opinions about our failure to make the best use of our natural resources. When they saw this country they realized its vast possibilities and no doubt the experiences of the Americans during the war have had a profound influence upon the success of this loan.

Australia compares in size with the United States. All the problems now facing us were faced and overcome by America in the early days of its development. For instance, we have now the problem of absorbing hundreds of thousands of immigrants. We also have the problem of expanding industry and making the best use of our power - resources. America faced and overcame such problems. We should follow that country’s lead and obtain all possible assistance from abroad in order to supply ourselves with capital goods to accelerate our developmental programme.

Mr Calwell:

– The United States did not borrow from outside its own borders during its early developmental stages.

Mr EGGINS:

– If the history of the United States is studied, it will be found that that country got considerable assistance from abroad during its early developmental stages. When a certain degree of development is reached a country no longer needs outside assistance. But we have not yet reached that stage. We were proceeding reasonably well until the last war completely changed our outlook and our responsibilities in the Pacific. Our role in international affairs changed so suddenly that we did not have time to strengthen our economy out of our own resources to suit our changed conditions. Therefore, we must look to others to help us. I submit that the Government, in raising this loan, acted with commendable wisdom and promptitude. This loan will allow us to obtain very quickly our muchneeded capital equipment.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Is not the money half spent now ?

Mr EGGINS:

– Half of the loan may be committed, but many years of service will be given to this country by the equipment which will be purchased with the balance of the money. There is an urgent need for capital equipment and developmental work to enable us to cope with recurring devastating floods. For many years, particularly during the last three years, great quantities of a variety of products have been destroyed and natural resources lost because of great floods. Almost the entire area of my electorate has been inundated on two occasions during the last two years and there has been a tremendous loss of production. Moreover, the homes of many people have been destroyed or damaged. A responsibility lies squarely upon the Government to deal with the flood menace. Honorable members cannot stand by and see almost every year a great deal of our most fertile country disappear into the ocean because we have not introduced methods of flood control. There can be no question about the national advantage of flood control, because vast areas which could produce great quantities of primary products will bc kept in production continuously if we had some means of controlling floods. “What I have said of my electorate can also be said of other parts of New South Wales, Queensland, Victoria and other States. Therefore, there is a great national responsibility resting upon the Australian Government to introduce quickly a flood control system. The question whether we can meet that responsibility is too puerile to need an answer. Any activity such as I suggest which has as its purpose the increasing of production is not only an investment but is also a necessity if we are to feed ami clothe a greater population.

I welcome the proposed visit of representatives from the International Bank for Reconstruction and Development. I welcome the appearance in this country of any men of authority and knowledge v/ho may be able to help us. In a vast country like Australia we need all the help and assistance that can be given by such people. There is no need for any honorable member to doubt the real purpose of this proposed visit, because the International Bank for Reconstruction and Development recognizes the possibilities of Australia and the soundness of the country for investment purposes. A good deal has been said about our London balances and our trade in the sterling area. The London balances may appear to be high at the present time, but during the last three years Australia has had more favorable seasonable conditions than it has ever before experienced. Consequently the volume of our exportable surplus of primary products has been above normal. Because of this and because of the demand for our products we have accumulated large balances. At present our great primary industries - sheep-raising, cattle-raising, dairying and so on - are producing at maximum capacity ; but a sudden change of weather or fortune might cause our export industries to dwindle and our London funds to melt away. While we are passing through good times such as at present prevail, we should develop our country to the maximum so that our production may continue to be reasonably good in the bad years which may be ahead. Moreover, we must increase our production because migrants are constantly arriving and they must be fed and clothed. Again, we must contribute to the requirements of the people overseas because of their need for food and our need of income from an export trade.

The second-reading speech delivered by the Treasurer covered this proposal as fully as possible and indicated to the country the reasons for this action by the Government. It indicated statesmanlike action on the part of the Prime Minister and the Treasurer in achieving their objectives in the face of greater difficulties than have beset any other Australian government. This debate is a clear indication that the Government has engaged in this proposal in good faith and is fulfilling an urgent national need which the Labour Government failed to appreciate. Now honorable members opposite try to draw red herrings across the trail because they realize that they failed whereas this Government has succeeded. I say to them that at present they are playing on a sticky wicket.

Mr HAYLEN:
Parkes

.- The probing and critical analysis of the dollar loan made by the honorable member for Lyne (Mr. Eggins) has brought me to my feet. I am an amateur in this matter, but I have had some experience as a member of this House and know the part that money must play in the development of this country. I have not much money, and I am not an expert in relation to money matters. In fact there are not very many experts on such matters. However, it has been borne in upon me by my observations and by my attention to the speeches that have been made in this debate that members of the Australian Country party, more than any one else, have the dollar dithers completely and are entranced by the magic mirage of dollars tumbling into the farms in the form of mechanized goods, new harvesters and utensils of all sorts that I am not permitted to mention and which I therefore shall not allude to. Their attitude is so utterly ridiculous and their statements are so far f rom the truth that the only way in which they should be answered is in a whimsical way. The amount to be borrowed under the loan is small, as the Treasurer (Mr. Fadden) well knows, and he must feel embarrassed by the enthusiasm of the support that he has received from members of the Opposition generally and in particular of the advice given by the Australian Country party on how to spend it. The opinions expressed by those honorable members are far from what the Treasurer himself believes, according to his second-reading speech. Honorable members opposite have talked about being saved by Uncle Sam. They have, in effect, cried, “Wall-street for ever ! “ Their statements are utter and ridiculous nonsense. George Bernard Shaw once said -

I dare not have any disciples, because should I take off my shirt they will divest themselves of their trousers.

That is what the Australian Country party has done, in a political sense, today. They have stripped themselves naked and have rushed, towards the American eagle crying, “ Take us and all we have “. For what ? For a paltry loan that is to come out of a fund that we ourselves have subsidized. Have any of those honorable members really any knowledge of this fund, although they have had so much to say about the loan that we are to draw from it ? They havespoken about our great statesmanlike Prime Minister (Mr. Menzies) who casually, almost nonchalantly, during a tour abroad, decided to borrow some money. I know that physicists say, and it has been proven in this House and elsewhere, that there is no such thing as one beer. Similarly there is no such thing as one borrowing for a persistent borrower, because one loan is followed by another. Shakespeare said -

Neither a borrower nor a lender be.

That advice has not yet been usefully superseded. We can come to more logical conclusions about this loan than the nonsensical ideas advanced by honorable members opposite to the effect that we have saved the world by borrowing some money and that the Government that they support has done some’thing that the Labour party refused to do when it was in office. The Labour Government did not raise any loans overseas for the simple reason that under its rule the country was solvent. The Labour Government kept the country solvent without external borrowing. In spite of all the nonsense talked by the Treasurer about how he inherited an empty treasury, we were able to assist Britain by making large cash grants to it, and we were able to run the business of the country without having to borrow any money overseas. Let us analyse this loan of 100,000,000 dollars. It is a minor amount of money. The honorable member for Maranoa (Mr. Charles Russell) has challenged the Government to say whether it is half exhausted already. But everybody on the other side of the House is playing mumchance about that matter, because everybody knows it is true that the loan is already half exhausted. Honorable members opposite will not succeed in making ‘the Labour party or the people believe that the Government has found a magical formula for getting this country out of its production difficulties. The point about this loan is that it comes from a fund that the previous Labour Government helped to establish. The Inter- national Monetary Fund and its corollary the International Bank for Reconstruction and Development were established as part of the United Nations plan for rehabilitation. Two of the members of the Australian Country party in this House voted against the Australian legislation in respect of our participation in those funds. One of those individuals is now a senator and the other has gone into the political limbo where all good members of the Australian Country party eventually go. He has shuffled off this political mortal coil. We contributed £62,000,000 to the International Bank.

Mr Tom Burke:

– We have contributed £125,000,000 altogether to both funds.

Mr HAYLEN:

– That is so. But according to the honorable member for Lyne we should thank the inspectors of the International Bank for their readiness to come out here in connexion with a loan to us of 100,000,000 dollars at a rate of interest that is 4 per cent. The Japs get their dollars for nothing!

Mr Eggins:

– That is nonsense!

Mr HAYLEN:

– It is not nonsense. The Japanese are receiving aid for nothing. They are not paying anything. In fact they are getting £1,000,000 a day from America for rehabilitation. Who is to repay that money that is being given to Japan ? If it is not to be the American taxpayers or the United Nations, who is it to be? I am not an economist, but I know that an expert once said that if all the economists in the world were laid end to end they would not reach a satisfactory conclusion. I agree with that view entirely. It applies with equal force to the Australian Country party.

Having regard to our contributions to both of those international funds we have a valid reason to go to the International Bank and say that we want some money, if it is the view of the Government that that course should be followed. The view that the Labour Government adopted in relation to these international funds could be expressed in the words “ Keep out and wait a while “. We believed that perhaps the economic planning that was in operation during the war and the sound financial methods that we had followed, would enable us to keep out of the hands of the international Shylocks. But if it is necessary to borrow money from the International Bank, there is nothing wrong with borrowing it, but when honorable members opposite dramatize the whole thing-

Mr Failes:

– That is what the honorable member for Parkes it trying to do.

Mr HAYLEN:

– The debate will become a concert when the honorable member for Lawson (Mr. Failes) speaks on the measure. When it was agreed to establish the International Bank it was decided that only countries that were in a state of fundamental disequilibrium could borrow money from the bank. Does the Government contend that this country, which has to cream off the careering profits from its primary industries, is in a state of fundamental disequilibrium? Of course this country is not in any such state, but there is plenty of fundamental disequilibrium on the benches opposite. I resent most bitterly the crawling supine attitude that has been adopted in regard to our borrowing of this money from the International Bank. Does the Government have to go crawling abroad for money? If the Treasurer, and the Prime Minister who smiled his way into 100,000,000 dollars, think that it is good for the Government to do so, all right. But because we are borrowing from this bank are we to go round like the honorable member for Lyne and say that we are still in existence as a nation because the Americans came to our aid in the last war. Of course they did ! But it was not the men from Wall-street who came to our aid then. It was the American people. What is more, it was a two-way bet. The honorable member for Lyne surely will not suggest that we did not contribute anything to the common war effort of the Allies in the Pacific. The sort of inverted patriotism displayed by the honorable member for Lyne makes me feel like vomiting. It just shows how much realism there is among the Government’s supporters. What is going to be done for us with this loan ? In this House we have the greatest explorer of the century, the Minister for National Development (Mr. Casey). Every day in this House he tells us that he is exploring every aspect of development. He even told us with infinite and ineffable delight that he was exploring the life history of the rabbit. I oan tell him, whatever he may be exploring now, that because of constitutional limitations he cannot expend very much of this money on development within the States, because the States have their own plans. However, as far as I can see, the Treasurer is still being very tight with the States as far as dollar allocations are concerned.

Mr Leslie:

Mr. Leslie interjecting,

Mr HAYLEN:

– The honorable member for Moore may get a bulldozer and an automatic milker through this loan and may be able to see that his constituents set themselves up for the rest of their days.’ But I am interested in the future of this country and I contest the argument that it is good business to borrow all the time. Honorable members opposite cannot sell us that idea. This is another case in which honorable members opposite are the victims of their own election propaganda. The amateur propagandists of the Government parties tootled around the country saying that they were going to get Australia a dollar loan. Well, they have got it. Let them be careful that they are not stuck with it and have to get another one.

The honorable member for Maranoa raised a sore subject when he asked where the money from this loan would go. Honorable members opposite dare not admit the fact that the Government has already got through a lot of this loan money, and that it was money that they were not certain that they even needed. Of course they will say that the money will be used to provide the equipment necessary for national development that we were unable to buy because of the dollar shortage. But if the Government is true to its promises most of the equipment will go to private enterprise.

We know that our two dollar funds are juggled. One of these funds consists of the dollars that we earn and the other consists of the dollars that we have borrowed. Where are the schedules and statistics which show which fund is being milked for various purposes? The honorable member for Yarra (Mr. Keon) in his brilliant speech asked whether certain things were being done. He is not the only person to raise the matter. The newspapers have carried stories about it and it is common corner gossip in New South Wales that these funds are being tickled one way or another by the simple expedient of disguising the use to which the loan funds are being put. It is the old trick of the thimble and the pea. There it is and there it isn’t. There has been a juxtaposition of these reserves. Dollars from the loan are being allocated for pur pores for which they should not be allocated, but the dollar earnings fund is being manipulated to disguise die fact. Is it not fair that we should know exactly what the Government is doing with the dollars that belong to the people of this country ?

I do not think that there is anything patriotic, or magnificent in an economic sense, in our dumping of Great Britain at this time. We are leaving that country stuck with the responsibility of solving the dollar problem and solve it Great Britain will. If the Government had waited a little longer we might have been able to win our way to economic prosperity without resorting to an overseas loan. Some honorable members opposite have talked about the loan as if it were a great gift to us from America and they have made humble obeisance before at the feet of the Chase National Bank. Honorable members opposite even wish us to thank those followers of SiT Otto Niemeyer who are to come to this country from the International Bank to study our development and to see whether the security is here to insure the repayment of the loan. If it is not here those bankers should be arraigned for lending money without collateral. If I know bankers, then I am sure that those international bankers knew how sound this country was before they let us have one penny, because banking is the toughest game in the world. We have heard one member of the Australian Country party saying that we should certainly have those bankers come here to have a look at our country, and of course at the back of his mind is the thought that we shall perhaps be able to get some money from them. The honorable member for Lyne referred to the recent floods and to the fact that dollars will be used to repair flood damage and to replace equipment that was destroyed. The northern part of New South “Wales has had a terrible time, and I hope that dollars will be made available to help that part of the country. The Treasurer would be the first to admit that neither a government nor a person can go on borrowing all the time. It is necessary to balance the budget, whether it is the budget of a country or the budget of a home. It is no feat of legerdemain to borrow money. Borrowing money is something that people and governments do in an emergency.

The Department of Immigration requires dollars, and it should have them. It does not object to spending dollars on equipment and amenities that will make life easier for people in the bush. It is bringing people into the country on hard terms to work with us, to help us to develop our country, and to assist us in our defence. But I object to the Minister for National Development talking lightly about all the money that he intends to expend. He has prepared for that expenditure by enlarging his suite of offices in this building. Then we had his talk about exploring our resources. Let us be factual about how much the Australian Government can do to develop this country. It can only develop it with the co-operation of the States, and if the policy of honorable members opposite is the same as it has been in the past, they will resent any interference with the power of the States. They have indicated that attitude in referendum after referendum. So the Government should be careful that its dream of planning everything with the aid of an immeasurable flow of dollars, and of making this a land flowing with milk and honey, does not end up with Australia becoming a land flowing with boloney and nothing else. There is no need to apologize in a supine and snivelling way for obtaining dollars from any banking organization in any part of the world, because the Government has a supremely strong asset in this nation. If second collateral is required, there is an amount of £62,000,000 in the International Monetary Fund. Further security is provided by an aggregate “amount of £135,000,000. Why, then, does the Government snivel about the loan that it has obtained? At best, it is a good deal, but Government supporters regard it as the salvation of everything. Too much vapid nonsense has been talked about this subject.

Government Supporters. - Hear, hear !

Mr HAYLEN:

– Members of the Liberal party and of the Australian Country party will excuse me for saying that all the vapid nonsense has already been spoken. My speech may be regarded as a form of corrective treatment for what has taken place, and I suppose that Government supporters do not like it, I do not believe that this loan is even good business. I should have preferred the Government to tackle the problem in the homely old way, as the previous Treasurer, Mr. Chifley, would have done. He had some old-fashioned ideas. He suggested, for instance, that a nation should live within its income. I hear a Government supporter interjecting and I remind him that the right honorable gentleman also has some oldfashioned ideas about good manners. This loan is nothing miraculous. I concede that the Government obtained a mandate from the people at the last general election to borrow abroad. ! advise it to treat the loan warily. Easy money soon goes, and, if I may say so without giving offence, a fool and his money are soon parted.

Mr CALWELL:
Melbourne

.- This bill, of course, is in accordance with the traditional policy of the reactionary political forces in this country - a policy of borrow, boom and burst. We have seen it happen repeatedly in the course of our history, and one does not need to be a keen student of political economics or of finance to realize how much misery a policy of borrowing has brought upon Australia in other days. Reference has been made to the development of the United States of America. That country developed rapidly without very much assistance from overseas moneylenders. The great American Republic was not built upon loans that were floated in other countries, and Australia has no need at the present time to indulge in borrowing overseas.

Mr Eggins:

– How shall we obtain essential equipment if we do not raise a dollar loan?

Mr CALWELL:

– I shall deal with that matter, because most of the equipment that the Government proposes to obtain with money from the loan can be manufactured in Great Britain, Canada and Australia.

Mr Eggins:

– Nonsense.

Mr CALWELL:

– I shall supply the honorable member for Lyne (Mr. Eggins) with ample evidence of that fact. If he will not accept my word, perhaps he will believe Mr. Latham Withall, the president of the Associated Chambers of Manufactures of Australia. That gentleman despatches a circular letter monthly to me and to all important people. He knows that he needs to circulate his ideas, particularly among members of the Parliament. We members of the Labour party can understand and appreciate the truth of his submissions. In a circular letter dated the 13th September last, Mr. Withall is quite unequivocal about the subject of obtaining capital equipment from the dollar area. Yet he is not a. supporter or a friend of the Labour party. He did his utmost to destroy us at the last general election. He has written in the circular letter of the 13th September last the following comments under the heading of, “InternationalBank 41/2 per cent. Loan”: -

Ministers appear to compete with each other in apologizing for the dollar loan. The mountain of tractors and equipment to come out of it rose higher and higher with each speech. Apparently there is to be at least one crawler tractor for every Government employee.

He concluded as follows: -

The actual truth of the matter is that 90 per cent, of Australia’s real requirements of heavy equipment can be supplied by Australian industry and its counterpart in Great Britain. The remainder from the United States and Canada was procurable under the sterling pool arrangement.

Australian manufacturers are opposed to this loan. Mr. Withall is the president of the whole of the Associated Chambers of Manufactures of Australia. He has his head-quarters in Canberra.

Mr Casey:

– It does not necessarily follow that he is the voice of the manufacturers of Australia.

Mr CALWELL:

– If the federal president of the Liberal party makes a statement upon a subject, he speaks for all the members of the Liberal party.

Mr Casey:

– That is not a good analogy.

Mr CALWELL:

– If I may be permitted to digress, I mention that the federal president of the Liberal party spoke in favour of a 56-hour working week, and that statement implies that every member of the Liberal party in favour of it.

Mr Casey:

– Nonsense!

Mr CALWELL:

– I believe that the president of the Associated Chambers of Manufactures of Australia is the voice of the whole of the manufacturers of Australia. Let us examine the equipment that the Government proposes to purchase with the loan. The broad categories were Haven by the Treasurer. (Mr. Fadden) in his second-reading speech, and Government supporters should be able to recognize whether some or all of that equipment can be manufactured in Australia. The list is as follows: -

Tractors and other agricultural equipment.

Industrial crawler tractors and earth-moving equipment.

Locomotives and rail cars (including component parts therefor) and ancillary railway equipment.

Mining machinery and equipment.

Plant for development of productive capacity in the following industries: -

Textile.

Paper making and paper working, including printing.

Steel.

Engineering.

Building materials.

Glass making and working, including ceramics.

Chemical and pharmaceutical.

Food processing.

Boot and shoe.

Agricultural equipment, with the excep tion of tractors, has been manufactured in Australia for many years. This country has a big export market for its agricultural machinery. I admit that industrial crawler tractors and earth-moving equipment have not yet been manufactured in Australia, but they constitute a part of the 10 per cent, of our requirements which, according to Mr. Withall, must be obtained from outside this country. Australia nas been making its own railway equipment for many years, and can continue to do so;

Mr Casey:

– Diesel locomotives will he imported.

Mr CALWELL:

– They can be made in England. Have- we not obtained’ them from England before? The State Railways departments, have placed orders for diesel trains in that country. Our mines have been equipped with machinery that has- been manufactured in England. I should like to know whether the reference of the Treasurer to mining machinery and equipment includes earth-moving machinery ?

Mr Casey:

– It is equipment for the coal-mining industry.

Mr CALWELL:

– I believe that the Government may have some justification for importing machinery and equipment for. the coal-mining industry. The Treasurer stated’ that the loan will be used for the development of productive capacity in certain industries. He used a lot of words in his speech to say a few simple things. Plant will be obtained for the textile, industry. We have always secured such requirements from Great Britain. I do not think that machinery for the textile industry has ever been imported from the United States of America. Plant will be purchased for paper-making and paper working. It has always been obtained from England in the past. Some equipment for the steel industry has been obtained from the United States of America in the past, but I remind the House that the Chifley Labour Government made arrangements- with the great steel mills- of Pittsburgh to obtain, and provided the necessary dollars for,, the equipment required foi: the cold steel plant to be erected’ at Port Kembla.

Mr Casey:

– A part of the- loan will be used- to> pay for- that equipment.

Mr CALWELL:

– The Chifley Government made the’ dollars available for those purchases at the time.

Mr Casey:

– The. equipment is being imported only now.

Mr CALWELL:

– I do not know what the Government has done with the dollars that- were left it by the Chifley Government. Plant will, be imported to make, building materials. Cannot, such plant be obtained’ from. England or from our own manufacturers ? Equipment will also be- purchased for glass making and working, including ceramics, the chemical and pharmaceutical industries and food, processing.. I. anr astonished to find that equipment is to be purchased for the boot and. shoe industry. Australians have made a great deal’ of the plant that has been1 required in the past for- the boot, and shoe industry. The industry, if it worked! three shifts a day, could probably supply the requirements of the local market, and of all the people in all the islands off our coast. The Trea-surer and his. advisers should consider the possibility of arranging for Australian industries’ to work three shifts a day,, if necessary, in preference to expending valuable dollars on new equipment.. Many of the textile mills use the same machines- for two or three shifts a day. Could not other industries adopt that practice?

The Government ils pledging our credit abroad unnecessarily in arranging for the 100,000,000 dollar loan. The honorable member for Lowe (Mr. McMahon) said that Australia is- not paying any more for its loan than India is paying for its loan. Perhaps the short-term loan for India for seven years at 3£ per cent., including commission, will be just as- dear for India as the 4£ per cent, loan, repayable- in 25 years, will be for Australia. I am not concerned at the moment with the economics of the matter. What I am concerned1 about is that India has obtained better terms than has Australia. We are paying an additional 1 per cent, commission, because we and other solvent countries have to pay a high rate of interest in order- to guarantiee the International Bank for Reconstruction andDevelopment against the loans it makes to some countries which will ultimately default. Australia is treated as a backward country in being, granted assistance, and- is charged a high rate of interest, although it provides the best security, in order that some of the other ventures of the International Bank shall not fall as a loss on1 it.

The speech of the Treasurer occupied a considerable time, but he did not say very much in it. It was an apology for a policy that evokes hostility in the minds of most Australians. . One plank of the platform of the Labour party is, “No more overseas borrowings “. We have had enough of that policy in the past. Our railway systems were financed with loans that were raised in London and New York. The amount of money that has been paid in interest upon those railways is probably three times the amount of the original loans, but our capital indebtedness remains. The loan under consideration will add 100,000,000 dollars to our overseas indebtedness. Strangely enough, this Government does contrary things. The Secretary of the Treasury informed me, in a letter, that the Government authorized the repatriation of two loans which fell due in New York in the early part of this year. One was for an amount of 5,900,000 dollars for the Metropolitan Water, Sewerage and Drainage Board of Sydney, and the other was for 3,200,000 dollars for the Brisbane City Council. A total of 9,100,000 dollars was repatriated in the first six months of the year, yet a few months later the Government placed this country in pawn in the United States of America for another 100,000,000 dollars.

Mr Casey:

– The dollar loans that were repatriated bore a high rate of interest.

Mr CALWELL:

– I know the story, and I am aware that the interest that is payable on the loan under consideration is higher than any of the rates that are payable on any governmental loans that are current in New York, with the exception of a loan at 5 per cent, which falls due on the 15th July, 1952. The interest rates on five loans are 3£ per cent, or 3-J per cent. It should be our duty to extricate ourselves from the hands of overseas bondholders, and the Chifley Government, in pursuance of that policy, did not raise one penny by way .of loan overseas during its term of office. Australia raised £1,000,000,000 internally to maintain our war effort and at the same time repatriated £117,000,000 of our indebtedness abroad.

Mr CALWELL:

– Before the suspension of the sitting I observed that there was no necessity for this 100,000,000 dollar loan, and I cited, as evidence in support of my opinion, the views of Mr. Latham Withall, the director of the Associated Chambers of Manufactures of Australia. He stated in a newsletter which he issued on Wednesday, the 13th September last, that 90 per cent, of the material to be purchased with the proceeds of the loan could be made in Australia, in Great Britain, or in Canada, under the soft currency agreement. I do not know why the Government rushed into this transaction. I believe that the honorable member for Maranoa (Mr. Charles Russell) expressed the views of the Australian Country party on this subject very adequately.

Mr Fadden:

– I am sure that he did not.

Mr CALWELL:

– I believe that he did. I do not think that the honorable member left the Australian Country party; I think that the Australian Country party left him. He expressed the views of the representatives of free enterprise, who say that there is no need for us to become involved in big loan transactions of this sort. In other circumstances, the Australian Country party would be opposed to the loan, but now it must support the Treasurer, who used a series of specious arguments to support his contention that the loan will be a necessary contribution tothe development of Australia. The honorable member for Maranoa actually supported the actions of the Chifley Government.

Mr Fadden:

– The honorable member said first that he had supported the Australian Country party.

Mr CALWELL:

– I said that he expressed the real view of the Australian Country party. It is the Treasurer, not the honorable member for Maranoa, who is the renegade to the traditions and the policy of that party. The Chifley Government wanted to help Great Britain,, and it did so by donating £45,000,000 of Australia’s frozen assets in London and by various other acts. It did not injure the economy of Great Britain by raising a loan in competition with it. We left the dollars that were in the United States for Great Britain if it wanted to borrow them.

The honorable member for Maranoa rightly argued against the policy of raising additional overseas loans. His attitude, like the attitude of the Chifley Goverment, is more realistic and helpful to Great Britain than is the attitude of this Government. I cannot see how the borrowing of 100,000,000 dollars can- help Great Britain. Yet this Government has committed Australia to the loan, without reference to the Parliament, by its action in expending some of the money in advance. It has harmed Great Britain by committing Australia to an annual expenditure of 7,356,000 dollars, which will be payable from the Empire dollar pool, from 1950 to 1975. That will not help Great Britain to recover, or even to survive. The Government, in fact, has thrown an additional burden unnecessarily upon the British people. For the reasons that have been stated by Mr. Withall, by the honorable member for Maranoa, by the honorable member for Yarra (Mr. Keon) and by the honorable member for Perth (Mr. Tom Burke), the Government cannot justify the raising of the loan or the expenditure of the dollars. Its approach to this subject has been brutal. The Treasurer has merely thrown the bill upon the table and said, in effect, “ You have to pass it anyhow, because we have already spent 40 per cent, of the loan “. The Treasurer does not openly admit that 40 per cent, of the amount of the loan has been expended, but he said in his second-reading speech -

Up to the 17th November this year loan licences to a total value of £A.11.200,000 or 25,000,000 dollars had been authorized and importers to whom licences have been granted have been advised to place firm orders for the good9 without delay.

In other words, 25 per cent, of the loan bad been hypothecated at that date. Since then, probably, an additional 15 per cent, has been hypothecated even though the Parliament has not yet approved of the raising of the loan. I cannot imagine any way of treating a parliament more contemptuously than that.

The policy of the Lyons Government and other anti-Labour governments of the past waa moulded upon the slogan, “ Tune in to Britain”. But this Government does not tune in to Great Britain any longer. It is not worried about the Empire dollar pool or the interests of the British Commonwealth as a whole. I wonder why it has changed its attitude. Has it done so because the Britain of to-day is- a greater and better nation than was the Great Britain of pre-war days? Great Britain to-day, under a socialist Government, undoubtedly is a better nation than it was, but this reactionary Government could not be expected to cooperate with it as the Chifley Government did from the time of the accession to power of the Attlee Government until we, unfortunately, were temporarily defeated on the 30th December last.

Mr Casey:

– Hear, hear!

Mr CALWELL:

– “ Temporarily “ is right.

Mr Fadden:

– It is like temporary death.

Mr CALWELL:

– The right honorable gentleman has been dead politically for a long time, and has been only temporarily revived.

He will not survive the effects of his latest action in inviting advisers of the International Bank for Reconstruction and Development to come to Australia. There is no doubt that they will come here. They will come here as Sir Otto Niemeyer and Professor Gregory, alias Guggenheimer, did in the ‘thirties. They will come in the role of bailiffs to look the country over. They will not be interested in the development of Australia. They will come here to make sure that the interests of the foreign bondholders are protected and preserved. They will not be concerned about helping this country to develop as every honorable member wants it to develop. They will come here to look at the collateral security for the 100,000,000 dollar loan that they will have made to us. I repeat that the bill was thrown contemptuously on the table and that we have been committed, whether we like it or not, by the action that the Prime Minister took, without any parliamentary authority, when he approached the people in Wall-street-

Mr Grayden:

– The International Bank ‘for Reconstruction and Development !

Mr CALWELL:

– It is the :same thing. The president of the bank is connected with Wa’ll-street, and Wall-street has the final voice in all these matters. Wall-street runs Washington, as other big financial groups .run governments everywhere.

The net drawings upon the dollar pool are an important consideration. ‘ In 1946-47, ‘according to the information that was given to the House by the Treasurer on the 2-nd March last, Australia drew 544000:000 dollars from the dollar pool. In 1947-48 it drew 164,000,000 dollars, and in 194S-49 it drew 73,000,000 dollars. The fact that we shall have to meet interest and repayment charges upon the loan will increase our drawings upon the pool. What the honorable member for Maranoa said about trying to increase the sales of our primary products in .the United States of America was very sound. Australia is not being credited with the full amount of contributions that it actually makes to the dollar pool, because large quantities of our goods are sent to Great Britain and are resold by Great Britain for dollars. In fact, the Chifley Government had to investigate certain leakages which were occurring when Australian wool was shipped to Holland and Belgium and was then re-directed, without having been removed from the ships, to buyers who paid dollars for it to Holland and Belgium. That wool should have been earning dollars for Australia. The British Board of Trade co-operated in those investigations and we were able to overcome some of the difficulties. However, we have never been fully credited with all the contributions that we have made to the resuscitation of British industry and the re-establishement of Great Britain as a first-class commercial power.

The action of this Government will help neither the British Commonwealth as a whole nor Australia in particular. The history books of this country will record that it was the Menzies-Fadden Government which reversed the process that had been inaugurated by the Chifley Government for the repatriation of our overseas debts from New York and London. This Government has pledged the credit of Australia once more in the pawn -shops of New York, and I do not think that any red-blooded Australian will be prepared to support that action. For all the reasons that I have stated, and for others which I could state, I oppose the bill. I have curtailed my remarks, because I know that other honorable members want to take part in the debate.

Government Supporters. - Hear,, hear !

Mr CALWELL:

– I know that .supporters of the Government are always glad, for reasons that are best known tothemselves, when I end a speech. I am certain that the spirit of Australia does not support the policy of overseas borrowing at this stage of our .development, even if only 3 per cent, of our national incomeis required for interest and repayment purposes, compared with 41 per cent, in 1930-31 and 23 per cent, in 1938-39. We ought to start standing on our own feet and become more and moreselfsufficient. We should be able toorganize our economy so that we can get from the surplus wealth that we producethe funds that we need to provide capital equipment and other goods that are essential to the continued development of Australia as a great country. We shall become great only if we become more and more self-reliant. We cannot becomegreat if we become more and more reliant upon the. money-lenders of London and New York.

Mr CASEY:
Minister for National Development and Minister for Works and Housing · La Trobe · LP

.- Whenever a debate develops in this chamber on ameasure that is not directly politically controversial, one must wait until a few speeches have been made in order tohave impressed upon one’s mind the attitude that the Opposition proposes to adopt towards it. As this debate has developed, it has gradually become apparent, from the speeches of the honorable member for Melbourne (Mr. Calwell) and the honorable member for Perth (Mr. Tom Burke), who have acted as the spokesmen for their party, that the Opposition objects to this measure. The honorable member for Melbourne declared that the policy of borrowing dollars from the United States of America at this stage, or presumably at any other stage in the Australian story, was wrong.

Mr Calwell:

– That is right.

Mr CASEY:

– I remind the honorable gentleman that very little more than a year ago the present Leader of the Opposition (Mr. Chifley), the Treasurer of the day, borrowed 20,000,000 dollars from the International Monetary Fund. That transaction, of course, was a dollar loan in the ordinary sense. The money merely happened to be. borrowed from another authority than that from which this Government proposes to borrow 100,000,000 dollars. When the right honorable gentleman announced that loan to the Parliament in October, 1949, he prophesied that it would not be the last dollar loan to be raised by Australia. He said, in fact, that there was an extreme likelihood of additional dollar loans becoming necessary in the relatively near future. The right honorable gentleman, who unfortunately is absent from the chamber at present, was an accurate prophet on that occasion. The march of events has made the raising of an additional dollar loan necessary for the development of Australia. It may be asked, -therefore, why should we Australians, a free and independent people, be obliged to borrow dollars to sustain our economy? The fact is that the democratic world has become much too dependent on American production. Of course, such a situation is wrong, but it is the accumulated result of many years.

The present Government inherited from the previous Administration a most unsettled and unbalanced economy. In the five years that have elapsed since the war our secondary industries have developed at a very much greater rate than has the production capacity of our primary industries. In other words, we cannot provide sufficient power, coal, iron and steel, timber and all the other basic materials for them. No effort was made by the previous Government to improve the supply of those raw materials. The consequence is that our economy has become completely disorganized, and that is the situation that the present Government inherited. Nevertheless, we have carried on and expanded the national immigration policy. We have insisted on continuing the effort to double the Australian population in as short a time as possible.

However, it must be abundantly clear to every one who is aware of the facts that it is necessary for us to restore the equilibrium of our economy. That means that we must get an increasing quantity of coal, iron and steel, timber and all the other basic materials that are necessary for a balanced economy. We have only a small population, 8,000,000 in number, and we occupy a great land. We are very short of power. We are power-hungry and power-starved. We are very short of coal. The production of ° coal is 3,000,000 tons a year less than we need. We are also short of other basic commodities. The first thing to do is to restore the balance of our economy, and in order to do that we must obtain a vastly increased output of basic materials. To that task the present Government has dedicated itself.

The first necessity that confronted the present Government was to make an assessment of the deficiencies of our economy. The Department of National Development has been engaged since December, 1949, on that task. Within a fortnight of our attaining office I directed the expert officials of my department to make an assessment of our lack of essential commodities. The task 1 set them was to complete a schedule of the goods, machinery and equipment for the upper and lower limits of our basic development during the next five years. That was a big task, when we consider the magnitude of the inquiries involved. It has involved the most searching inquiries into the conduct of industry cif all binds in Australia. Fortunately, a relatively large number of expert officers was available to carry out that survey. The consequence was that within eight or nine months it was possible for us to supply a detailed list of the requirements of our developmental programme for the next five years to the Prime Minister (Mr. Menzies) on the eve of his departure overseas to seek financial assistance.

Our list of necessities fell into various categories. The first category related to goods produced, or likely to be produced in Australia. The next category concerned goods produced in the United Kingdom and those which could be obtainable from soft-currency countries. The third category consisted of those goods and machines which had to he obtained, under existing circumstances, in the United States of. America. The tabulation showed that we should be obliged to obtain from the United States of America $50,000,000 worth of goods and machinery for our developmental programme for the next five years, that is for the period 1950-55. That was the purpose of the loan that the Prime Minister, by the exercise of his very considerable skill, was able to negotiate for us in the United States of America. To our great delight he obtained the loan, which will be sufficient to finance the first two years of our developmental programme, which will cost 100,000,000 dollars. We hope that that loan will be followed by a further loan of 150,000,000 dollars, which should suffice for the three remaining years of the programme.

As honorable members are aware the equipment that we need so badly and which we propose to purchase with the loan money is in five main categories. They are - (1) tractors and agricultural equipment; (2) tractors and trawler tractors for industrial purposes unrelated to primary production; (3) locomotive equipment; (4) mining machinery, and (5) equipment and machinery for secondary industries in its more important aspects. The compilation of each of those categories required many months of hard work and imaginative ‘analysis by a number of highly qualified officers. Thanks to the efficient manner in which they discharged their task, we are now in course of issuing dollar import licenses for the importation of those goods and machinery. I am pleased to be able to say that about one-third of the dollar loan has already been hypothecated by the issue of import licences. Of those five categories, the first is likely to absorb about one-quarter of the dollar loan, that is to say, about $25,000,000. Industrial crawler tractors will probably absorb about a similar amount, because we are short of those machines, which are not manufactured in this country. However, I hope that during the next few years they will be manufactured in this country. We need 1,000 crawler tractors to fulfil the requirements of some aspects of primary produc- tion, but they are required more particularly for industrial use, and for use by governmental instrumentalities on public works of various kinds.

Mr Duthie:

– What is preventing their manufacture in Australia?

Mr CASEY:

– Nothing at all. We are negotiating at present with three or four industrial groups which will, I hope, in the next three or four years manufacture those tractors in this country. The fact remains that at the moment we need about 450 crawler tractors of from 450 horse-power to 750 horse-power, which is the present power limit of crawler tractors. At present the only source of supply of those machines is the United’ States of America. Of course, we hope that within the next few years Great Britain will be able to produce tractors of the larger size, but our information is that no such tractors will be produced there, for at least two years. In the meantime we must rely on our only source of supply, which is the United States of America. By an arrangement of which I informed the House about nine months ago, we have already obtained some hundreds of those tractors, and their supply will continue. If we had not obtained those tractors, our great developmental works, such as irrigation, water conservation, and the development of open-cut coal mines, could not proceed at all, or could proceed only at an unsatisfactory pace, which would be unhealthy in our present state of economic unbalance.

The importation of railway locomotives is necessary in order to overcome the present crippling deficiency of our railway transport, and locomotives are one of the mo3t important of the five categories that I have mentioned. Most of the locomotives imported will be diesel electric locomotives. Diesel electric traction has become a marked factor in the transportation system of the United States of America during the last few years. In fact, the United States of America originated that form of traction, and has developed it far more than has any other country. Because of Australia’s lack of water, and the fact that our great black coal deposits are all located in the eastern coastal parts of Australia, we are in particular need of locomotives of this type.

They do not need coal or water. They are capable of a high speed, and their maintenance costs are much lower than those of steam locomotives. In short, Australia has a “ natural “ use for these locomotives. We aim, ultimately, to manufacture diesel electric locomotives in this country, and are, in fact, already preparing to to so. Some part of the dollar loan will be devoted to the importation of machinery that will enable us to manufacture those engines in Australia in hundreds, in order to enable us to change over from steam to diesel electric traction. Of course, the completion of that process will require some time. However, in the meantime, we are importing, thanks again to the dollar loan, a number of completely manufactured diesel electric locomotives that will be ready to go into immediate use. The Government of Victoria is importing about, eleven of those locomotives.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– No; it is importing eighteen of them.

Mr CASEY:

– The number may have increased to eighteen by now. The Commonwealth Railways will receive about eighteen, and the New South Wales Railway authorities are negotiating for the purchase of twenty diesel locomotives. They are huge locomotives, and possess from 1,500 horse-power to 1,600 horsepower.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Cannot such locomotives be obtained in Great Britain?

Mr CASEY:

– Yes, certain types can be obtained in that country. However, as the result of our extensive inquiries abroad, I am reluctantly compelled to inform the House that the United States of America, which has had a great deal more experience of the manufacture of those locomotives than has the United Kingdom, is the only country that can supply them. Of course, it is true that they can be made in Great Britain, hut I greatly regret that we cannot obtain them from that country.

Mr Tom Burke:

– Did the Government inquire about the date on which it could obtain delivery of the locomotives from the United States of America?

Mr Fadden:

– The early date of delivery of American locomotives was one of the advantages of obtaining them from that country.

Mr CASEY:

– As the Treasurer (Mr. Fadden) has stated, we can obtain them from the United States of America much earlier than from any other country, and time is now pressing very heavily upon us.

The supply of railway locomotives is intimately connected with the local coal situation. We are endeavouring, with all the speed that we can muster, to obtain more coal in this country to fulfil our present requirements and the still greater requirements entailed in our developmental policy. All honorable gentlemen probably realize that the quickest method of obtaining coal is by exploiting open- « cut mines. It so happens that New South Wales is very short of railway locomotives at present. In discussions that 1 had with the New South Wales railway authorities a few days ago, I was informed that 75 per cent, of the disabilities suffered by them is due to the shortage of locomotives. At present 200,000 tons of coal are lying at grass, and cannot be moved because sufficient railway transport is not available to do so. Unless we can assist the New South Wales Government to improve its railway transport very much within the next few months, it is estimated that by the end of 1951 the quantity of coal at grass may amount to 1,000,000 tons. In other words, although we show promise of being able to solve our deficiency of coal by exploiting deposits by the open-cut method, the final solution of the problem will depend upon the provision of railway traction to move the coal. That means that more locomotives must be provided. In our judgment, and in that of the New South Wales Government, we must import diesel electric locomotives. For that reason the New South Wales Government is negotiating for the delivery of twenty of those huge locomotives. That is not the end of the matter. The importation of eighteen of those locomotives for use by the Commonwealth Railways, and twenty for use by the New South Wales Railways, represents only the beginning of the use of diesel electric traction in Australia.

I can well .believe that before we get through with this problem we shall have hundreds of diesel electric locomotives running in Australia to the advantage of this- country in point of time and from a financial viewpoint. Nearly’ but not quite all, of the mining equipment that wild be financed from this loan will be coal-mining equipment for the purpose of mechanizing underground mines and also 1’aTge-scale equipment to enable us to win coal much more quickly by “the open-cut method, principally in New South Wales.

The fifth category of imports that will be financed from this loan consists of equipment for the purpose of mechanizing a fairly wide range of secondary industries. AB of this loan will be hypothecated only for the purpose of obtaining equipment » that cannot be obtained from any source other than the United .States of America within a comparable period of time. It will be equipment that cannot be made in Australia or that we cannot procure from Great Britain or from any other soft currency country. Only on those conditions will permits be issued for the importation of equipment to be financed from this loan. That provision will completely safeguard Australian industry. The only bar to- that is the factor of timing. It may bc possible to obtain equipment on notice of one year or two years from soft currency countries, but we shall be able to obtain the equipment that we require from, the United States of ‘America within two or three months. In those circumstances, because of the time factor, dollars wiE be allocated only for equipment that falls within that category.

Mr Keon:

– Tell us about newsprint.

Mr CASEY:

– When 1 the honorable member for Yarra (Mr. Keon) was speaking; I ventured to interject in order to correct certain remarks that he made. Although the honorable member may have chosen his words most carefully and although an examination of the report of his speech may show that word for word what he said was correct, the fact remains that he made it appear that a part of this dollar loan would be used to finance the importation of newsprint. That is quite incorrect. He was speaking on a measure the object of which is to authorize the raising of a dollar loan, and he conveyed the impression to honorable members and to persons who may have been listening in to the debate that a part of this loan would be used to purchase newsprint. 1 assure^ the House that that is not correct. This 100,000,000 dollar loan will ‘be hypothecated entirely for developmental equipment and no part of it will be used for the purchase of consumer goods. Any consumer goods that we may be obliged to import from dollar sources, such as tinplate and a part of our requirements of newsprint, will be financed from Australia’s normal dollar earnings from the sale of exports to the United .States or by dollars that we receive from the general British dollar pool. I again assure the House that not one ounce of newsprint will be purchased with any part of this loan.

At the 24th November last licences had been issued for the importation of equipment estimated to cost 35,000,000 dollars. That means that over one-third of this loan has already been hypothecated. Availability is another important factor in this matter. . With re-armament programmes under way in the United States of America almost everything of basic importance is becoming harder and harder to obtain from that country which has already been obliged to impose more and more controls, particularly in respect of basic materials made from steel and the like. As it may become increasingly more difficult to obtain such materials, the Government has impressed upon Australian industries which require developmental equipment the importance of lodging their applications for import permits as soon as possible so that such applications may be screened and checks may be made to ascertain whether the equipment required can he obtained from Great Britain or other soft currency countries. The sooner those applications are lodged the sooner will such examinations be completed. However, the market is tightening all the time and, accordingly, it is expected that the whole of this loan will be hypothecated - as I hope it will be - within the next six months. This loan is being raised on the basis that it will meet our requirements for at least two years. However, time is catching up with us and the availability of the materials that we require is the most important consideration. Therefore, we shall be well advised to place all our orders within the next six months at the least.

Although I could discuss many other aspects of this measure I do not intend to speak at much greater length. Mention has been made of the rate of interest, which is to be 4£ per cent, per annum. That will be the total rate of interest including commission at the rate of 1 per cent, that is payable to the issuing authority and is payable by all borrowers from the International Bank for Reconstruction and Development. The Loan Council agreed to that rate of interest. The transaction had to be carried out expeditiously and while the Prime Minister was in Washington, the Treasurer consulted all of the members of the Loan Council, who include several State Labour Premiers, and they unanimously agreed to accept the interest rate that is proposed.

Mr Fadden:

– That was before the agreement was signed.

Mr CASEY:

– Yes. The honorable member for Melbourne asked how this loan could help Great Britain. His speech was not up to his usual standard. Although he has a flair for selfexpression and usually his expression is interesting, which is not universal, on this occasion he gave the impression that he had an uphill task and that he was not putting his heart into the job. The honorable member is a man of intelligence and he wishes his own country well. He has enough knowledge of the basic necessities that this country requires. He knows that Australia cannot get on without this dollar loan unless we, more or less, stop in our tracks. It is not an exaggeration to say that we could not maintain our present rate of immigration unless we obtained this 100,000,000 dollar loan. Probably we shall require to borrow more dollars. It is useless merely to induce individuals to come to Australia as immigrants unless we can so arrange our economy as to give those men and women reasonable opportunities to make a decent living in this country. Our economy is such that we cannot absorb 200,000 people annually from overseas unless Ave obtain the basic developmental equipment that we require to broaden the base of our economy and thus enable our expanding primary and secondary industries to keep going. This loan is essential to Australia’s future. Wot less than three years ago I went on record in the press in making that point with reasoned arguments and I have never heard those arguments countered except in a polemical way from a party political platform. The honorable member for Melbourne departed from his normal practice and avoided the logical implications that arise from our economy. He suggested, in effect, that Great Britain would be vastly dismayed by “the Australian Government’s action in turning away from that country and looking to the United States of America to supply its requirements. The British Chancellor of the Exchequer informed the Prime Minister during the latter’s ‘* visit to Great Britain that the British Government was heartily in accord with this Government’s proposal Co negotiate a dollar loan and he advised the right honorable gentleman to proceed with that proposal because Great Britain could not even begin to supply development equipment of the kind that the United States of America has developed to a degree that has not been emulated bv any other country. The day of the pick and shovel has gone. Australia i3 now in the second stage of its pioneering period. This is the day of the bulldozer and the test-tube. Therefore, we must obtain developmental equipment from whatever source we are’ able to do so expeditiously. I wish that we could make it in this country or obtain it from Great Britain, or from other soft currency countries, because I believe that our present dependence upon American production is unhealthy. Great Britain welcomes our success in obtaining this loan. It will enable us to produce more primary products more quickly because one-quarter’ of the loan will be used to finance the importation of equipment, including tractors,’ for primary production.

One wonders why the Opposition Is opposed to this loan, because the Leader of the Opposition (Mr. Chifley) forecast that action of this kind would be necessary. In fact, his government started the business of borrowing dollars when it raised a loan of 20,000,000 dollars. If Labour had, unfortunately, remained in office it would have continued its attempts to borrow dollars. [Extension of time granted.] I do not think that I have stated the Opposition’s attitude unfairly, particularly when Labour, when it was in office, viewed the raising of dollar loans with favour. This loan will enable us to expand and develop our resources much more quickly than we could if we did not have the chance of obtaining it. I can only regard Labour’s opposition to this measure as a manifestation of one of the unpleasant features of the party political system under which it is assumed that the Opposition must oppose everything that the Government proposes. Such an approach to important national problems is wrong but, unfortunately, that is what happens almost invariably. Either Labour is opposing this measure for party political expediency or the members of the Opposition are a lot of little Australians without sufficient faith and confidence in Australia to realize that we must take risks, other than military risks, if we are to develop this country and expand our economy in such a way as will enable us to have a more than ordinary chance of holding it. That is not an unfair criticism of the Opposition. We have no tools to develop Australia. Our population is small, and as a nation we are still in the pioneering stage. Although I could say a great deal more about the measure I shall conclude by noting the words of Churchill, “Give us the tools and we will finish the job “.

Mr WARD:
East Sydney

.- At the outset of my remarks I wish to put the Minister for National Development (Mr. Casey) right with respect to Labour’s attitude towards this measure. He distorted the facts when he said that the Labour Government approved of the policy of borrowing overseas. On the contrary, Labour, during its period of office, not only discontinued that policy which had proved to be so detrimental to Australia, but also considerably reduced Australia’s indebtedness to both the United States of America and the United Kingdom. It is quite true that the

Labour Government secured, not. a loan, as the Minister for National Development has described’ it, in order to deceive the people, but an advance from the International Monetary Fund. In order to meet a crisis which had arisen in regard to the balance of payments between the United Kingdom and the United States of America the bloc known as the sterling bloc was obliged to cut dollar commitments by 20 per cent. In order to pay certain dollar commitments which this country had entered into for equipment from America the Government was obliged to secure an advance, not a loan, from the International Monetary Fund. Under the monetary agreement, Australia had the right to secure advances from that quarter. There is a difference between the present proposal of the Government and what the Labour Government did on that occasion. It is not sufficient to consult the Loan Council in regard to overseas borrowing. The Loan Council was never constituted as an authority to negotiate overseas loans. The people who should be consulted in regard to overseas borrowing are the members of the Commonwealth Parliament.. It is rather a peculiar position that the Parliament is being consulted on this matter only after 40 per cent, of the loan has been expended. Consequently, the Opposition has no alternative but to allow this measure to become law because the commitment has already been entered into by the Government. I suggest that unless the Government wants to run into real trouble in future the Commonwealth Parliament, particularly the Opposition, should be consulted before any more overseas loans are secured in America or elsewhere.

The Minister for National Development said that this would not be the last of the dollar loans. Therefore, I come to the point that was raised by the honorable member for Maranoa (Mr. Charles Russell) and other honorable members, that by returning to this policy of overseas borrowing, Australia will find it is always easy to spend borrowed money, but when the matter of repayment arises tremendous difficulties might be encountered. . Even on this one loan of 100,000,000 dollars, which is not a tremendous amount having regard to the normal expenditure in this country, after 1955 when we shall have to start to repay the loan, the Government will be committed to the payment of over 7,000,000 dollars a year. The Government will probably have obtained other dollar loans during the intervening period, and if there were a collapse of commodity prices overseas this country could be faced with serious difficulties. An individual never borrows unless he is compelled to do so. He recognizes that when he is free of debt he has a greater measure of independence. As is the case with individuals, so is it with nations. Therefore, the heavier our overseas indebtedness the less independent this country can be of external pressure.

The term “ International Bank “ is a misnomer. It is only “ international “ by virtue of the fact that there is a number of countries which have contributed to the capital of the bank. The real control is exercised by the United States of America. It is a Wall-street control. There were in this country a great number of people who opposed the ratification by Australia of the International Monetary Agreement, because they considered that it would eventually prove to be to the detriment of this country. Unfortunately, now that an anti-Labour Government is in power, that is proving to be the case. The declared purpose of the International Bank was not that of assisting countries whose circumstances were the same as those in which Australia finds itself. The International Bank was established to permit the more fortunately placed nations, by their contributions and the guaranteeing of loans, to help countries which had been devastated by war to carry out a programme of reconstruction and to help industrially backward countries to improve their economy. Nobody would argue that Australia could qualify for assistance from the International Bank by coming within those categories.

Some of the work that the International Bank was established to carry out has been neglected by that organization and left to countries such as Australia to do by making contributions to various funds. Under the Spender plan, of which honorable members have heard so much, the Australian community is committed to the expenditure of £18,000,000. What for? To assist the backward countries of the South Asia area. That is the purpose for which, so it is said, the International Bank was established. The Australian community is asked to undertake the very work that the International Bank was established to perform, and to do it by way of gift - not by way of a loan upon which interest is payable. Australia is to provide its commodities because that is what is involved in the Spender plan. There is no transfer of money in the real sense. There is the shipment of goods. Therefore Australia is to give this assistance by supplying the machinery, equipment and other materials to these areas to the value of £18,000,000. On the other hand, in order to proceed with our own development, we are being asked to return to the policy of borrowing overseas.

The Minister has argued that the specific purposes for which this loan can be used are written into the agreement. That is perfectly true; but it is only sheer evasion to say that some of these dollars will not be used for the purchase of consumable goods including newsprint. Here is the test of the real position. Has there been an increase of the importation of newsprint into this country since this loan was negotiated? That there has been such an increase has been admitted in reply to a question that was asked by the honorable member for Melbourne (Mr. Calwell). The newspaper proprietors, who exercise great influence over the Government, were able to compel it to approve of the importation of an additional 10,000 tons of newsprint. From what quarter will the dollars be found for that purpose? Such a purchase requires the expenditure of additional dollars, and if those dollars are taken out of what the Minister for National Development argues is the ordinary dollar pool, there will be fé*ei dollars in that pool for the importation of other goods or equipment. The Minister has spoken of the crawler tractors and farm machinery that are required. If approval had not been given to the importation of another 10,000 tons of newsprint more dollars would have been obtainable from normal sources for the purchase of this essential equipment. It is only a quibble on the part of the Government to say that the money for the purchase of the 10,000 additional tons of newsprint will not be drawn from this dollar loan.

It might be argued with a great deal of merit that some advantage is to be derived from a dollar loan if it is used for the specific purpose of obtaining essential equipment which cannot be readily obtained elsewhere and which is urgently necessary for public works. But (he public will be disturbed to know that the Government will use a part of this loan for the importation of consumable foods. The honorable member for Maranoa was quite right when he said that if Australia were free from all overseas contracts or commitments and were able to sell its commodities wherever it wished we should not be short of dollars. That is obvious. Under various existing contracts and under some which the Government proposes to enter into, Australia is sending and will send overseas - to the United Kingdom in particular - a great quantity of goods which will not be paid for immediately but which will merely add to our sterling credit overseas. No goods will be obtained for some time at least in return for those exports because, at the moment, the United Kingdom is unable to supply goods in return for what Australia is sending to that country. The honorable member for Maranoa was correct when he said that Australia would have a surplus of dollars, if its goods were sold to the best advantage wherever possible. Whether or not that would be a correct policy is a matter that I shall not discus this evening, I remember that when the previous Government was dealing with the International Monetary Agreement many people in this country believed that that agreement was only a means whereby Wall-street could nominate the various countries of the world and tie them to the economic policy of the United States of America.

What work will the representatives of the International Bank do in the course of their visit to this country? What particular type of investigation will they undertake? The answer to that question is quite evident to everybody. Does anybody imagine that the International Bank would make an advance to Australia unless it knew that this was a solvent country and that its advance was adequately secured? Its representatives already know that and it is quite evident that they are coming here to ensure that the policy of the bank shall be carried out by the Government. As a country borrows more and more dollars it becomes tied more and more to the policy of Wallstreet. Not only is an exorbitant rate of interest to be paid on this loan, having regard to the advances that have been made to other countries, but Australia has been asked, as a solvent nation, to add 1 per cent, to the rate of interest payable in order to make up for the deficiencies of the bad borrowers - the bad debtors of the International Bank. Yet the Government has endeavoured to convince us that this loan has been obtained under very good conditions.

Is not this the very worst time to enter into a dollar loan? In actual fact, it is not dollars that will be received as the result of this loan. Dollars will be credited to us as a book entry, but it is American goods that we require. In view of that fact, is this not the worst time in the history of the world to be obtaining dollar ‘loans? A war programme is in full swing in the United States of America. Prices are soaring. The inflationary spiral has probably reached a greater height in that country than in any other part of the world. So full value will not be received for the dollars expended. If the exchange rate had been unpegged Australia would have been in a much more favorable position than it is in regard to dollar purchases. If members of the Australian Country party had been anxious to obtain farm machinery from America they would have supported the Government’s proposal to readjust the exchange rate because if Australian currency was to reach a proper level, the 100,000,000 dollars would buymore tractors and farm machinery from America than it will buy at the moment. The honorable member for Lowe (Mr. McMahon) argued that the present ia a good time to buy in America. Everybody must know that prices in that country are soaring; The Americans have decided to> advance Australia, a certain number of dollars-. They say,. “ We shall advance you dollars but you have to buy our goods at. the inflated, prices prevailing, in America “. Strangely enough, though when the Americans want to buy Australian wool the Government proposes to, enter into an agreement with the purchasers in order that they may buy at a lower price than they would have to pay if they purchased it in the open market. This Government, in my opinion, is selling out the interests of Australia. It is not protecting the interests of the Australian community. But I assure honorable members that this is only the commencement of the implementation of its policy.

I was rather amused at the audacity of the Treasurer (Mr. Fadden) who in his second-reading speech made a great deal’ of play of the fact that Australia will be able to pay the interest and discharge the principal of the loan in accordance with the terms of the agreement. He said that that was because in recent years our overseas indebtedness bad been reduced and that we were committed to much less for interest than had been the case for many years. I assure the right honorable gentleman that Australia is in that fortunate position only because a Labour Government took over the administration at a critical time in our history and departed from the policy of the present Government parties of borrowing overseas. Even though the result of Labour’s policy has been so satisfactory, this Government wants to place the country in the same parlous position that it was in through overseas borrowing before the Labour Government’s administration. It is evident that we have not received a good deal in these loan negotiations. On that point I refer the House to the terms of two other loans granted by the International Bank for Reconstruction and Development. The details of those loans show that Australia has definitely not made a good bargain as the result of the Prime Minister’s negotiations. Loans were recently made to Ethiopia and Turkey by the International Bank for Reconstruction and Development. It cannot be argued that as borrowers Ethiopia and Turkey, are as good propositions as is Australia. Yet we find that the International Bank, for Reconstruction and Development, made a loan to Ethiopia for twenty years at, 3, per cent, plus 1 per cent, commission,.

Mr McMAHON:
LOWE, NEW SOUTH WALES · LP

– On what date was that loan made ?

Mr WARD:

– That loan was granted on the 13th September, I950: On the 19th October, 195.0, the International Bank for Reconstruction and Development granted a loan to Turkey for fifteen years at 2 per cent. plus. 1 per cent, commission. That, shows quite conclusively that both Turkey and Ethiopia have received more favorable treatment at the hands of the International Bank for Reconstruction and Development than has Australia. The Opposition warns the Government that, there is a real danger in the resumption of the policy of overseas borrowing. Mr. Eugene Black, the president, of the International Bank, was vice-president or president of the Chase National Bank in America. He is a well-known figure, in Wall-street and he has already attempted to interfere in the internal politics of Australia and other countries. Not long ago he made a statement in which he directed attention to what he regarded as the too liberal policy on social benefits adopted by certain countries. It is quite obvious that when he made that statement he was referring to New Zealand and Australia. Those two countries at that time were administered by Labour governments which had introduced the most advanced social legislation in the world. Mr. Eugene Black has made many other’ significant statements. Tt is a fact that the International Bank for Reconstruction and Development is under the domination of Wall-street. When it wanted to influence the course of international trade, it sent, without invitation, a message to the trade confernce being held in the south of England to try to influence the adoption of a policy which would benefit the Walt-street financial group. ‘

In conclusion, I say that if the Government wants to avoid any serious complications in the future, instead of merely taking matters like this to the Loan Council, the Government should take them to the right people who are the members of the Australian Parliament. Therefore, I suggest to the Treasurer that he should regard the procedure followed in concluding this loan as being a departure from the proper practice, and that in the future he should at the outset consult the Parliament.

Mr FADDEN:
Treasurer · Mcpherson · CP

in reply - The honorable member for East Sydney (Mr. Ward) said that the Government should take this Parliament into its confidence in any future loan negotiations. Hearing that, one would think that the honorable member had never been associated with a governing party for eight years, and had not been a member of the Government that obtained a loan of 20,000,000 dollars from the International Monetary Fund without consulting this Parliament. The previous Government, after negotiating for that loan merely asked the Parliament to ratify its action as has been done in this case. There is not much that I can add to my second-reading speech on this matter. The field was well and extensively covered then, and the Parliament was given all the information in the possession of the Government about this important and advantageous loan negotiation. However, I desire to deal with the points raised hy the honorable member for Perth (Mr. Tom Burke), who opened this debate on behalf of the Opposition. He said that the loan will be justified if it increased our dollar earnings. I think it has been conclusively proved by the speech of the Minister for National Development (Mr. Casey) that this loan will increase our dollar earnings. The Minister detailed the capital goods that we could buy with these loan moneys. The previous Government failed to purchase such good9 and thus retarded the development of the country and impeded its ultimate dollar-earning capacity. It allowed our capital equipment to become run down to a disastrous degree. That has been reflected in the lowered productivity of industry. It is therefore essential, in the interests of Australia and of the British Empire, of which we are an integral part, that we shall have much more capital equipment. The equipment which is in such short supply in Australia can be obtained only by the expenditure of dollars.

I direct the attention of honorable members to the categories of goods that will be obtained by means of the dollar loan. One class embraces tractors and other agricultural equipment. Will any honorable member opposite say that this country does- not need that sort of equipment for the production of foodstuffs and general basic essentials? Moreover, the immigration policy that we inherited from the previous Government, and which we are very happy to maintain and expand, depends upon our increased production of basic necessities. Can any one say that earth-moving equipment is not necessary to develop Australia and to increase production, or that locomotives and rail cars, including component parts thereof and ancillary railway equipment, are not essential to bring our railways up to date? Lack of maintenance and repair work, due to war-time conditions, have caused our railways to become inefficient. The basis of our industrial life is efficient and expeditious transport. The equipment necessary to bring our railway systems up to date can only be obtained from dollar sources. We need dollars to purchase equipment for our mining industry, which has played a large part iri the development of Australia in the past and will play a larger part in its future development. Dollars from the loan will also be expended on certain manufacturing industries, for example the textile industry and the paper-making and printing industry. The categories embraced by this loan speak for themselves.

Mr Ward:

– What about the 10,000 tons of newsprint?

Mr FADDEN:

– I shall deal with that in my own time and way. The honorable member for Perth also said that the loan would be justified if it enabled Australia to increase its population. That was one of the most important reasons that actuated the International Bank for Reconstruction and Development in making the loan to Australia. That is, the national development which will naturally increase our population. The honorable member for Perth further said that the loan would be justified if it assisted our defence plans. Obviously it will do that if it assists in our national development and encourages a vigorous immigration policy. The honorable member also said that if it helps to develop the country more rapidly it will be justified. Obviously it will help to develop the country more rapidly. Therefore, every condition specified by the honorable mem!ber on behalf of the Opposition is fulfilled. The whole crux of the matter is that the loan is indispensable for the purchase of goods which will help us to achieve the requisite development and proper peopling of this country and, as a consequence, enable us to have an adequate and sensible defence. The honorable member went on to say that he saw dangers in borrowing in a time of prosperity and possibly having to repay the loan when times might be bad. The honorable member for East Sydney also used that argument, but what are the facts? Repayment of .the loan will be spread over twenty years, beginning in 1955. As we shall have no repayment commitments until 1955 the period of utilization of the loan will be 25 years. Is it not certain that there will be fluctuations in world economic conditions in that period? Have any of the youth of this country such a pessimistic view of our future that they would have any doubts about our future productivity and our future economic advancement enabling us to carry cut our obligations, not only in the proper utilization of the loan but also in regard to its repayment, without placing any strain on our general economy? Repayment of interest and principal will amount to 7,356,000 dollars annually. Surely it is within our capacity to meet such a commitment. Surely we have not undertaken something that this partly developed and underpopulated country, which will increase both its development and its population in the years to come, will not be able to manage. If such a view be held, the sooner we give this country back to the aborigines and apologize for the state that it is in, the better will it be for ourselves.

Honorable members opposite contend that the interest rate on the loan is too high, and complain that it includes a 1 per cent, commission. As I pointed out in my second-reading speech, the commission charge that we are to pay will be devoted to the building up of the reserves of the International Bank, of which Australia is itself a shareholder, and, consequently, is a participant in proportion, in the general reserve fund into which the commission will be paid. The interest rate is not the only factor to be taken into account in connexion with the raising of any loan. The Government fully explored every source of dollar borrowing before it made an approach to the International Bank. Before that approach was made no dollar loan could bc obtained on anything like the same terms and conditions as those on which we have obtained this one.

Honorable members opposite have also claimed that the bank mission which will come to Australia because it has faith in this country and recognizes that, having regard to its economic circumstances and general conditions, it is a fit subject for a maximum loan and for maximum consideration from the International Bank, will be the same kind of political mission as the Niemeyer mission was when it came to this country in the early 1930*8, after having been invited to do so by a Labour government.

Opposition Members. - No !

Mr FADDEN:
CP

– That cannot be denied. It was the same Labour government which embraced and carried out the recommendations of the Niemeyer mission in respect of this country’s financial affairs.

Mr Tom Burke:

– That is not true.

Mr FADDEN:

– Honorable members opposite have said that the International Bank should not” be free to dictate government policy. Nothing would be more impossible. The articles of agreement of the International Bank debar the bank and its officers from interfering in the political affairs of any member country. The honorable member for Perth said that imports of consumer goods from North America should not be expanded by a country merely because it has obtained an International Bank loan. The articles of the loan agreement .also assert that this loan shall be available only to -finance the purchase of capital goods and equipment. That point has been made .crystal clear in our agreement with the bank. m The conditions -attached to the loan can be seen and interpreted by any one. They provide that the loan may not be used to purchase -consumer goods. Import licences for consumer goods from the dollar area are dealt with .under the ordinary dollar budget and are issued only for essential goods that are not available from easy currency sources of supply.

A great deal has been made of a contention that a part of this loan will be diverted in some’ way or other to payment for imports of newsprint. I shall now make to the House an unequivocal statement regarding dollar expenditure on newsprint. The dollars that have been borrowed under this loan are to be available only for the purchase of essential capital plant and machinery that are not procurable from non-dollar sources. Australia’s requirements of dollar raw materials and other essential goods that are not eligible for purchase by means of loan finance will, therefore, continue to be met, as they were met during the administration of the previous Government, by virtue of agreements that were entered into at the economic conferences of nations of the British Commonwealth that have been held since 1947. The Government shares the view that was expressed by the honorable member for Perth (Mr. Tom Burke) that the recent increase of the gold and dollar reserves of the sterling area does not at present justify any general relaxation of dollar import restrictions. Dollar imports outside the loan will, therefore, continue to be limited to essential items not available in adequate quantities- from non-dollar sources. The licences authorized for the import of Canadian newsprint were granted only after full consideration of the world supply position, and the quantities licensed represent only the marginal requirements of the industry after taking up the tonnage available from sterling and easy currency sources. The newsprint industry has not been treated with any preference with regard to its quota of participation in the general dollar budget.

It is just humbug for honorable members opposite to say that newsprint ‘has been allowed, or is likely to be allowed, to be a strain upon the dollar loan. The importation of newsprint has nothing to do with the loan. I repeat with emphasis that the loan is intended to be applied and the International Bank has seen to it that it will be applied, entirely for the importation of capital goods for the proper development, defence and peopling of Australia.

I now turn to the criticisms that were voiced by the honorable member for Maranoa (Mr. Charles Russell), and the embracing campaign that the Opposition has carried out in this present session. First honorable members opposite embraced the wool-growers. Then they embraced ex-service personnel who are to receive war gratuities next year. Then they embraced the prisoners of war. Now -they have embraced the honorable member for Maranoa. They have embraced him because his policy and his specious arguments suit them, because they consider that he has made a detrimental charge against the Government’s loan proposals. The honorable member for Maranoa said that the loan is unnecessary because we should be able to earn enough dollars by selling commodities to America direct.

Mr Calwell:

– What is wrong with that?

Mr FADDEN:

– Of course there is nothing wrong with it if we wish to repudiate the need to be in a British Empire and all it stands for. There is no halfway attitude and no sitting on the fence in relation to our membership of the British Commonwealth. We are either an important integral part of that Commonwealth or we. are not. One of the reasons why this Government was able to make a satisfactory and expeditious loan arrangement during the Prime Minister’s visit abroad would be of the integrity of the Australian nation and the way in which it has met its obligations; it has not repudiated any agreement, contract or coven-ant that it has ever entered into. The position is that if we wished to repudiate our contracts with the United Kingdom, which for more than a century has been our best customer for our export goods, and deal direct with America because such a policy would have immediate advantages to us in respect of dollars, we could do so. But is any Australian willing to rise in this chamber and advocate that we should repudiate the long-term and satisfactory, agreements that we entered into with the United Kingdom, in times of adversity, and so throw over our old customer in order to embrace a new customer for the sake of dollars? That is the plain fact.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– I rise to order 1 The Treasurer has implied that I have advocated the breaking of long-standing agreements and contracts with the United Kingdom.

Mr SPEAKER:

– Order ! The honoris bie gentleman has not risen to a point of order. Apparently he intends to claim that he has been misrepresented.

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– Yes, I have been misrepresented.

Mr SPEAKER:

– Order ! The honorable gentleman must wait until the Treasurer has finished his speech and I shall then hear his personal explanation.

Mr FADDEN:

– Because of the sensitive nature of the honorable member for Maranoa, I shall put the matter to him in this way : In order to achieve his basic objective of earning enough dollars to obviate the raising of a dollar loan by selling our commodities direct to America, should we repudiate our definite contracts with the United Kingdom Government?

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

– No.

Mr FADDEN:

– Does the honorable gentleman mean that we should divert to the United States of America and sell for dollars the commodities that we sell for sterling to the United Kingdom and the remainder of the sterling area? Should we overlook the fact that the United Kingdom is a stable market and has been so as long as Australia has been an exporting country, whereas the United States of America was itself a large exporting nation long before Australia had reached any stature at all, and is not nearly so certain and stable a market for Australian commodities as Britain is ? That is the position that has to be faced. The honorable member said that we should earn dollars by exporting direct to the United -States of America certain commodities, particularly meat and metals. Let me analyse that contention. The Government has constantly in mind the need for increasing our dollar earnings. Looking ahead a few years we note that there is every possibility that cur exports to the dollar area will expand as the American population grows, and because of shortages in America’s production of basic commodities. This longterm prospect is one of the main justifications for the dollar loan. Moreover, because of the loan, we shall have a better chance than we had before of realizing this long-term expansion of our dollar, earnings. For the immediate future, however, a policy of wholesale diversion of exports to the dollar area needs to be studied carefully, if we wish to remain part and parcel of the British Commonwealth of Nations. The United States of America was at one time a market for relatively small quantities of Australian meat, but that trade dried up during the early depression years and has not been regained. Since the war some attempts have been made by exporters to resume the trade, but they were on an experimental basis only, and did not go beyond that stage. Whilst there is probably ground for believing that some beef, lamb and small quantities of mutton could be sold in the United States it would be hazardous to rely on that country to buy any appreciable quantity of them. Since 1939, Australian beef, mutton and lamb have been sold to the United Kingdom under long-term contracts entered into before the dollar loan was negotiated. At the present moment negotiations for a new longterm contract that were started by the former Government, are in progress. The Queensland Government, as the honorable member for Maranoa knows, long before this Government took office negotiated a fifteen-year contract with the United Kingdom in respect of beef supplies. The United Kingdom is our best and largest market for as far ahead as we can see, and it is likely to remain our most stable market for meat. It would not be in our own interests to break a contract, or fail to make a new contract, with the United Kingdom when the prospects for the sale of our meat in the United States of America are so uncertain.

I turn now to the possibility of selling dried fruits to the United States of America. Dried fruits are sold under contract to the United Kingdom with provision for sales to Canada. There is no market for Australian dried fruits in the United States of America because that country is itself a very big producer of dried fruits. So far as the possibility of selling sugar to the United States of America is concerned, I point out that that commodity is sold under contract between the Queensland Government and the United Kingdom Government. There is little prospect of selling Australian sugar in the United States of America, which obtains its sugar mainly from Cuba. Fairly substantial quantities are, however, being sold to Canada by arrangement with the United Kingdom, as a dollar-earning measure.

The export surplus of butter is sold under a long-term contract to the United Kingdom. There may be a market for Australian butter in the United States of America, and provision is made in the contract with the United Kingdom for a free quota of 5,000 tons of butter for export to other countries. At present, it is not possible to market Australian butter in the United States of America, because the government of that country has accumulated large stocks of that commodity under its “ price-support “ programme, and the importation of foreign butter is not permitted. If we could sell for dollars butter and other primary products which are in short supply in the world, we should have more dollars. That is obvious. But the only conditions under which we can divert the supplies is by repudiating our contracts, because we have entered into definite contracts with the United Kingdom for a prescribed period. We cannot honour our agreement with the United Kingdom and sell the same commodity for dollars in other countries.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Mr POLLARD:
Lalor

.- It was not my intention to speak on this bill, but I feel obliged to correct some of the false impressions that may have been created by the manner in which the Treasurer (Mr. Fadden) noisily misrepresented the activities of the preceding Labour Government in dealing with the dollar problem. The right honorable gentleman knows that the dollar crisis was so desperate for the members of the sterling bloc two or three years ago that it became essential for each of them to come to an agreement with the United Kingdom Government in respect of the demands that they would make upon that pool. The Chifley Labour Government, being prepared to play its part in assisting the United Kingdom in a period of desperate financial crisis, agreed to take certain definite steps to conserve dollar expenditure by the Commonwealth.

Mr Fadden:

– I acknowledge that to be a fact.

Mr McBride:

– Why is the honorable member for Lalor apologizing ?

Mr POLLARD:

– I have not been obliged to apologize to the Minister for Defence (Mr. McBride) in the past, and I do not expect to be obliged to apologize to him in the future. I am stating facts, because the position has been completely avoided by Government speakers. The dollar crisis was exceedingly grave about two years ago, and the Chifley Labour Government adopted the proper policy of appointing a sub-committee of Cabinet to recommend means by which dollar expenditure might be conserved. Rather than impose any severe hardships an the people or prevent the importation of essential capital equipment, the Government discriminated between dollars allocated for essential goods and less essential requirements.

Mr Fadden:

– That policy has been continued.

Mr POLLARD:

– I point out to the Treasurer, if I may be permitted to do so without interruption, that since those steps were taken, the overall dollar situation of the British Commonwealth of Nations has improved considerably, and particularly during the last six months. Indeed, the improvement is so marked that it may he said with confidence that the United Kingdom has passed through the crisis in which it was involved, and, to that degree, the necessity for conserving dollars has been reduced. Added to that is the fact that our own dollar earnings are substantially greater than they were two or three years ago. It is not true to say, as the ‘Treasurer did, that severe hardships were inflicted upon the people of Australia by the restrictions imposed by the Chifley Government on dollar expenditure.

Mr McBRIDE:
WAKEFIELD, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1954

– The Chifley Government could not obtain sufficient petrol to permit the abolition of liquid fuel rationing.

Mr POLLARD:

– Be a gentleman. The Minister is supposed to have been bred in the purple. Allow me to proceed without interruption. I realize that I am getting under the Minister’s skin-

The CHAIRMAN (Mr. Adermann).Order! I ask the honorable member to ignore interjections and proceed with his speech.

Mr POLLARD:

– The Treasurer pointed out, in effect if not in words, that the preceding Labour Government had refused to make dollars available for mining equipment.

Mr Fadden:

– I did not say that.

Mr POLLARD:

– Do not interrupt.

Mr Fadden:

– The honorable member addresses me, and when I reply, he tells me not to interrupt.

Mr POLLARD:

– Well, do not interrupt. If we had a good Chairman, he would stop the Treasurer from interrupting.

Mr Fadden:

– That remark is a reflection on the Chair.

The CHAIRMAN:

– Order! I ask the honorable member again to proceed with his speech.

Mr POLLARD:

– The right honorable gentleman knows-

The CHAIRMAN:

– Order ! The honorable member must address the Chair, and interjections must cease.

Mr POLLARD:

– I was addressing you, Mr. Chairman. I used the words, “ the right honorable gentleman knows “. May I be allowed to say that? I was addressing the right honorable gentleman through you, Mr. Chairman.

The CHAIRMAN:

– Order ! Will the honorable gentleman get on with- his speech ?

Mr POLLARD:

– The right honorable gentleman knows, if he will peruse the schedule of the dollars allocated during the period the Chifley Labour Government was in office, that as fast as coal-hewing machinery was required by the Joint Coal Board, the necessary dollars were made available, and the import licences were issued. That Administration did not refuse at any time to allocate dollars for the purchase of such machinery. Those are facts, and it is futile for the Treasurer to try to lead the people to believe that the Chifley Government imposed restrictions upon the importation of coal-hewing and coal-handling machinery from dollar sources. The right honorable gentleman should also know, if he has perused the dollar schedule, that allocations were made to permit the Broken Hill Proprietary Company Limited to import equipment for its tinplate strip mill. The Treasurer must also know, if he has perused the dollar schedule, that all the dollars required for the purchase of earthmoving machinery were made available and that no substantial restrictions were placed upon the importation of agricultural tractors.

Mr Failes:

– Do not bring up that matter !

Mr POLLARD:

– When I mention agricultural tractors, I immediately get a bite from a member of the Australian Country party. What are the facts regarding the importation of agricultural tractors ?

Mr Failes:

– We know them only too well.

Mr POLLARD:

– I shall tell the honorable member for Lawson (Mr. Failes) something that he does not know. Many import licences were issued, and some American manufacturers could not supply the orders for agricultural tractors.

I can. give the names, if necessary, of a number of firms that applied’ for licences to import hundreds of tractors. It was found, on- investigation,, that some of the principal manufacturers in., the United States of America could’ not fulfil those orders. The honorable member for Lawson, does not realize that, when the importation of agricultural tractors from the United States of America was curtailed, such machines- were becoming available from manufacturers in the United Kingdom.. I remind the committee that the Treasurer expressed’ mock concern for the people of Great “Britain this evening. Agricultural tractors were becoming available from the United Kingdom, Germany, Italy and France at the time to which I have referred. It is futile for a farmer to tell me in one breath that he is prepared to assist our own kith and kin in Great Britain, and in the next breath to say that he is not prepared to use agricultural tractors manufactured in that country.

Dollars were invariably made available for the purchase of earth-moving equipment, diesel- tractors and specialized implements for capital construction, and for the chemicals required for the manufacture of fertilizers, particularly sulphate of ammonia. The Chifley Labour Government frankly told the tobacco companies in this country that in order to keep within the dollar allocation they must either curtail tobacco imports, or reduce the quality. The preceding Government also told the newspaper magnates that, in order to prevent the curtailment of the importation of capital goods, dollars would not be provided for additional quantities of newsprint, and that such requirements must be obtained from sterling sources. The present Government, having raised a big dollar loan, finds itself in a position to permit the importation of newsprint from the dollar area. I do not take exception to a government legitimately raising loans for essential purposes, but this Government in an endeavour to justify the loan under consideration, has submitted to the chamber a case based on false premises, and has made an accusation against the preceding Labour Administration, also based on false premises, and I object strongly to those tactics. I felt that it was incumbent upon me. to point out. the facta, and to throw the lie- back into, the face of the Treasurer-.

The CHAIRMAN:

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

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

:. - I did’ not wish to make any remarks on this bill, but the lawless remarks of the honorable member for Lalor (Mr. Pollard) bring me to my feet. I shall cite one thing that is of great importance. It was mentioned by the Minister for National Development (Mr. Casey), but the honorable member for Lalor did not refer to it in his speech. I happen to, have; a particular knowledge of the subject of diesel electric locomotives. Victoria required eighteen, New South Wales twenty, and the Commonwealth eleven of them. All of them were most important for the transport of fuel and various basic commodities. The former Treasurer, Mr. Chifley, did his best to obtain dollars with which to purchase those locomotives, but the funds were not available, and they had to be sacrificed.

Mr Pollard:

– Does, the honorable member deny-

The CHAIRMAN:

– Order ! I ask the honorable member for Lalor to refrain from interjecting. He objected to interruptions during his speech.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I did not interrupt the honorable, member for Lalor and I have no intention of allowing him to make a second speech now. He concluded his remarks by saying that, he threw the lie back into the face of the Treasurer (Mr. Fadden). I throw his lie back in his face. If he does not like it, he can rise and ask that my remarks be withdrawn. Other things besides diesel electric locomotives were not procurable from the dollar area some time ago. We know that the previous Government did its best to provide dollars for essential requirements and that, at that time, it could not get more than 20,000,000 dollar advances, which were the same as a loan. Of course, it would have accepted a loan if it had been able to obtain one.

Mr Calwell:

– No ; we rejected a loan.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– It is all very well to say that.

Mr Fadden:

– The honorable, member for Melbourne (Mr. Calwell.) does not know the position.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– From my experience as a Minister in the Government of Victoria, I know what the Australian Government was trying to do at thai time. Opposition members may have since altered their opinions. It is futile- for the honorable member for Melbourne (Mr. Calwell) to interject to the effect that the preceding Labour Government rejected a loan. It accepted the 20,000^000 dollar advances, which were the same as a loan. The situation has now altered. The present Government has raised a dollar loan, and. six valuable hours: have been wasted to-day by Opposition members criticizing such a policy. Yet, they did not even have the guts to vote against the second reading.

Mr TOM BURKE:
Perth

.- I should not have risen to speak but for the excesses of the honorable member for Chisholm (Mr. Kent Hughes). The fact is, as the Opposition has pointed out, that the raising of loans at a time when we might well meet our commitments from revenue sources involves grave risks. There was no reason for the excesses in which the honorable member for Chisholm indulged. The honorable member for Lalor (Mr. Pollard) merely said that the Treasurer (Mr. Fadden) had been extravagant in his speech in reply to the second-reading debate and had accused the Chifley Government of having applied its dollar policy harshly.

Mr Fadden:

– I did not do anything of the sort.

Mr TOM BURKE:

– I understood that the right honorable gentleman belaboured the Chifley Government for what he described as its excessively harsh policy in relation to dollar allocations. That impression was gained by all other honorable members who heard the speech. The honorable member for Lalor pointed out that the Chifley Government had not been harsh. I understand that the report on diesel electric locomotives was to the effect that such equipment was available from British sources.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– That was not so.

Mr Pollard:

– It was available, and the honorable member knows that it was.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– No.

The CHAIRMAN:

– Order !

Mr TOM BURKE:

– However, the report suggested that American locomotives were more suited to Australian conditions than were British locomotives. Our purpose has been to point out that, when the dollar loan is used for the purposes for which it is to be raised, other dollar earnings should not be diverted for the purchase of consumer goods. . That has been the whole burden of the Opposition argument, which has not been answered. The Treasurer has said that restrictions upon the use of dollar earnings have not been relaxed, but he has also said that an amount of nearly 1,250,000 dollars has been alloted for the purchase of extra supplies of newsprint.

Mr Fadden:

– But there have been other adjustments of the dollar budget.

Mr TOM BURKE:

– Yes, but a great deal of explanation will be required to convince the Parliament and the people that the swollen metropolitan newspapers need additional supplies of dollar newsprint. They can obtain newsprint from sterling sources, but such paper is expensive. The Treasurer has not endeavoured to reply to the charge that we have made. Instead he has belaboured the Chifley Government. Every speech made by a member of the Opposition in the general debate was based on the argument that current dollar earnings should not be used to buy consumer goods. The Treasurer certainly should not lend himself to a policy of expending additional dollars for newsprint at the expense of sacrificing more urgent requirements or of incurring a debt with the’ International Bank for Reconstruction and Development or any other overseas institution. The statements that members of the Opposition have made have been completely justified throughout this discussion. /Ir. POLLARD (Lalor) [9.48].- The honorable member for Chisholm (Mr. Kent Hughes) was righteously indignant with me for having said that I threw the lie back at the Treasurer (Mr. Fadden). Then he said. that he threw my lie back at me.

The CHAIRMAN:

– Order! The honorable member should not use such unparliamentary terms in the future.

Mr POLLARD:

– What I said was that the Chifley Government had not placed any serious embargoes on the importation of capital goods from dollar sources unless the goods could be obtained in the sterling area. The honorable member for Chisholm knows very well that diesel locomotives are manufactured in the United Kingdom. He should admit that to be a fact, if he is manly enough to do so, and apologize for throwing the lie back at me. He also knows that diesel locomotives are manufactured in some of the continental soft currency countries. It is true, of course, that the experts who advised the honorable member when he was Minister in charge of railways in Victoria, did not like the English or continental locomotives as well as they liked the American locomotives. They v, ere somewhat like many farmers who prefer American agricultural tractors to English and continental machines. Those persons, who profess to be eager to help the people of the United Kingdom and the British Commonwealth generally, would be prepared to purchase their equipment from dollar areas rather than put themselves to any inconvenience. However, the Chifley Government rigidly insisted that trade should go to the sterling areas whenever possible, even at the expense of some sacrifice and inconvenience. It is of uo use for the honorable member for Chisholm to tell me that English and continental diesel locomotives are not used to pull both passenger and goods trains. He knows that they are used for such work, and so I throw his lie back at him.

Mr. KENT HUGHES (Chisholm) [9.50J. - This debate is becoming really funny. The honorable member for Lalor (Mr. Pollard) does not know of the arrangements that were made between the Government of Victoria and the Chifley Government. The honorable member for East Sydney (Mr. Ward) knows much more than, he does about this subject, and I am sure that that honorable gentleman will support me when I tell the honorablemember for Lalor that the Government of Victoria and the Chifley Government agreed between themselves to share equally the expense of sending a Commonwealth expert overseas to investigatethe possibility of purchasing, not diesel locomotives, but diesel electric locomotivesin Great Britain. At that time, Great Britain had only two of those locomotives in operation. They were then in their teething stage and were causing a great deal of trouble, which I believe has not yet been fully overcome. As a result of the report of the expert, both the Commonwealth authorities and the Victorian authorities decided that the expenditure of large sums of money on the purchase of diesel electric locomotives from sterling areas would be totally unjustified. That is the true story. The present Leader of the Opposition (Mr. Chifley), who was then the Prime Minister, said in the first place that he was very sorry that he could not let the Victorian Government have dollars for the purchase of American locomotives and he asked us to try to buy the equipment from sterling sources. We made the attempt, with the result that I have stated. Great Britain had not been able to concentrate on the manufacture of such equipment during the war, and therefore it was lagging behind the United States of America in that respect. Perhaps the honorable member for Lalor will admit now that I have some knowledge of this subject and that he knows very little about it.

Mr TRELOAR:
Gwydir

.- The honorable member for Lalor (Mr. Pollard) is ill-informed, not only about diesel electric locomotives, but also about other matters. He said that farmers had not co-operated by buying sterling tractors. He has overlooked the fact that many farmers have large machines, which they could not replace even if they wanted to do so, and that sterling tractors are not big enough or strong enough to pull such heavy equipment. I mention that fact for the benefit of the honorable gentleman.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 4039

PRINTING COMMITTEE

Mr WILSON:

– I present the second report of the Printing Committee.

Report read by the Clerk, and - by leave - adopted.

page 4039

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate : -

Without requests -

Customs Tariff Bill (No. 3) 1950. Excise Tariff Bill 1050.

Without amendment -

Egg Export Control Bill 1950.

page 4039

STATES GRANTS (ADMINISTRATION OF CONTROLS REIMBURSEMENT) BILL 1950

Second Reading

Debate resumed from the 1st December (vide p “e 3527), on motion by Mr. Fadden -

That thi. till be now rend a second time.

Mr. TC Id BURKE (Perth) [9.57].- The Opposition does not oppose this bill, which provides for the continuance of a practice that was instituted some years ago when the Chifley Government was in power. However, we direct attention to the fact that the problem of rising prices :3 becoming increasingly serious and must be faced squarely by the Government. The State Prices Ministers have almost insuperable obstacles to surmount, and we believe that this Government must accept responsibility for prices control br-fore long. It will have to do so, not o: only because the States cannot do the work effectively, but also because the consequences of mismanagement or ineffective control affect the economy of the whole nation. The Government has a malor responsibility which it cannot avoid and which it will not be allowed to forget.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 4039

LIFE INSURANCE BILL 1950

Second Reading

Debate resumed from the 5th December (vide page 3633), on motion by Mr. Fadden -

That the bill be now read a second time.

Dr EVATT:
Deputy Leader of the Opposition · Barton

.- This bill proposes to amend section 19 of the Life Insurance Act 1945. Under that act the Insurance Commissioner may refuse registration to any life insurance company on his absolute discretion. The purpose of the bill is to restrict the power of the commissioner to refuse registration to a, limited number of grounds, which are set out in clause 3 of the bill. They may be summarized by saying that registration may be refused if the application made by a company for registration is not in accordance with the provisions of the act; if a company appears likely to be unable to discharge its liabilities, or unlikely to be able to comply with the relevant provisions of the act ; if the name of a company so closely resembles the name of a company already registered that it is likely to deceive; and if a company proposes to carry on some form of business other than insurance which may be contrary to the public interest. The Opposition regards those proposals as an improvement on the existing law, and supports the bill.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 4039

STATES GRANTS (IMPORTED HOUSES) BILL 1950

Second Reading

Debate resumed from, the 1st December (vide page 3532), on motion by Mr. Casey -

That the bill be now read a second time.

Mr WARD:
East Sydney

.- Since the Opposition is anxious to do everything possible to provide houses for Australian citizens, it does not raise any objection to the passage of this measure.

At the same time I think that some attention should be directed to the probable effect of the Government’s proposals, so that house-hungry Australian citizens will not be unduly excited into the belief that they have a prospect of obtaining a prefabricated house at; an early date. Even if all the houses mentioned in the second-reading speech made by the Minister for “Works and Housing (Mr. Casey) were imported within the next twelve months, the number of houses available in this country would still be far short of those needed to meet our normal requirements, quite apart from the increased number of houses required to accommodate immigrants. I do not know what the Government can do to expedite the importation of prefabricated houses, but unless it displays a great deal more energy and efficiency in this direction than it has displayed in a number of other matters I fear that we cannot hope for any early improvement of the situation. The Minister mentioned that approximately 13,000 houses are on order, and that the Government has an option to purchase an additional 6,000 houses. Even if all those houses were delivered to Australia and erected they would not be sufficient, according to the statistics supplied by the Minister himself, to meet more than a minute fraction of our annual requirements. I think that the honorable gentler man should desist from making statements that are inaccurate and calculated to mislead people into believing that housing accommodation will shortly be provided for them.

If immigration continues at its present volume we shall still be 30,000 houses short of our normal annual requirements. Apparently, the Minister completely overlooks the tragedy of the many thousands of Australian-born citizens and those who have made this their land by adoption, who are still without houses. That is apparent from several statements that he has made recently, including a statement that he made in answer to a question that I asked him during the last few days. According to the press report of the Minister’s reply, the honorable gentleman stated that there are not many people without houses at present.

Mr Casey:

– That is not true.

Mr WARD:

– I am quoting from & newspaper report.

Mr Casey:

– That is not borne out by the Hansard report.

Mr WARD:

– I have had an opportunity to peruse the Hansard report, and the only substantial difference between the Hansard report of the Tight honorable gentleman’s remarks and the press report is that the Hansard version attributes to the Minister the addition of the words “ of a sort “.

Mr SPEAKER:

– The honorable gentleman is infringing the Standing Orders, which provide that members shall not refer to debates that have taken place during the current session.

Mr WARD:

– I shall not refer to the matter again. I merely say that if the Minister’s contention is that there is sufficient accommodation available for every one who requires it, he is completely out of touch with facts and is unaware of the housing situation. In Victoria and New South Wales, the two States to which reference has been made recently, the State housing authorities admit that they are unable to provide even emergency accommodation for those who are seeking it. There are in all capital cities hundreds of married couples who have had to separate and break up their families because no accommodation of any kindcan be provided for them.

When the war ended in 1945 a housing authority declared that Australia needed an additional 300,000 houses, and that estimate did not have regard to any slum clearance plans. Therefore, although this measure will make some small contribution towards solving the problem of the deficiency of houses in Australia, it will be only a drop in the ocean. Whilst the Opposition supports the measure, I impress upon the Government the need to develop other plans which will more speedily make homes available for the Australian people. If the Government cannot convince us that it has plans to achieve that purpose, then it should review the present intake of immigrants to this country in order to ensure that our present housing difficulties, which are tremendous, shall not be aggravated by bringing large numbers of additional people to this country.

Mr CRAMER:
Bennelong

.- Before the measure is passed, I direct the attention of the Government to one factor of which the Minister for Works and Housing (Mr. Casey)’ is probably already aware. However, I make no apology for mentioning the matter, because I believe that it is one of considerable importance. 1 refer to the possibility of manufacturing prefabricated houses in Australia. In various parts of Australia, particularly in northern parts of New South Wales, we already have large numbers of skilled tradesmen who could manufacture prefabricated houses from the great natural supplies of raw material available. I have in mind such places as Lismore, where large supplies of building timber and other sources of raw material are available. In many other parts of Australia ample supplies of raw materials for the manufacture of bricks, tiles, and iron and steel products are already available in close proximity to. considerable numbers of skilled building ‘tradesmen. Whilst the Government’s proposal is an excellent expedient to assist in overcoming the present shortage of houses, it is had in principle to have to. depend on overseas countries to manufacture houses for us. Although I could say a great deal about this matter, the hour is late and I shall not detain the House any longer.

Mr CALWELL:
Melbourne

.- The problem of housing is one of. the greatest that confronts us to-day. We are building houses at a certain rate, but that, rate is not sufficient to meet even current needs. The object of the bill is to authorize the importation of 30,000 houses, and the agreement made between the Commonwealth and the States provides; for the payment of a subsidy of £300 on each prefabricated house imported to Australia. It will probably be found that because of inflated and increasing costs of building materials and labour, the1 Commonwealth will have to susidize every house to the- amount of £300. We are increasing our population at the: rate of approximately 250^000 a year. That great increase includes the surplus of arrivals over departures, and the natural increase of our own people. Whilst the addition of so many people to our population is of very great national value, it intensifies many of the problems that already confront us. The new arrivals in this country must be housed, and the local government authorities, who constitute the third parliamentary system in this country, must be brought into co-operation with the Commonwealth and State governments in order to increase the building of houses in Australia. What the honorable member for Bennelong. (Mr. Cramer) has said is quite true. I know that many building tradesmen, who work very hard during the week, also work at week-ends in order to build houses for themselves. That is the only way in which they can provide accommodation for their families. lt is going on all over Australia. Housing accommodation must be provided for the old Australians as well as for the new Australians. My fear is that we may not have sufficient labour available to build the foundations for the prefabricated houses.

Mr Casey:

– We are bringing in migrant labour to do a lot of that work.

Mr CALWELL:

– I realize that, and I commend the purpose of this bill. I understand from Sir John Storey, the chairman of the Immigration Planning Council, whom I had the -pleasure of appointing’ to that position when I was Minister for Immigration, and who has just returned from a trip abroad, that there are many skilled tradesmen in Northern Italy who are anxious to come to Australia as immigrants. They propose, under an arrangement, with builders in Northern Italy, to erect large numbers of prefabricated houses in this country. I know that the provision of labour for on-site work in connexion with the erection of prefabricated houses is a great headache to any one concerned in pro*viding houses for people to-day. Whilst we owe a duty to new Australians to provide housing accommodation for them, the. conditions under which many old Australians’ are living are quite deplorable. I realize that for a long time critics of our immigration policy have contended that the continued inflow of immigrants to this country is aggravating the shortage of houses for Australianborn citizens. However, as I said last night, if I were still occupying the position of Minister for Immigration I should continue to bring people to this country at the present time.

Mr SPEAKER:

-Order ! The bill is not concerned with immigration policy, but relates to the provision of a subsidy to States on the importation of prefabricated houses.

Mr CALWELL:

– I realize that, Mr. Speaker, but the allegation has been made that the introduction of immigrants is worsening the existing shortage of houses and is denying to old Australians houses that they believe to be rightfully their own. That is the problem that we must steadily confront, and it is idle for us to attempt to minimize it. Of course, the entry of immigrants to this country has nothing to do with the fact that at the end of the recent war the number of houses available for our own people was hopelessly inadequate. We should have had, in any event, to embark on a vast national housing scheme. The problem of providing sufficient houses is always with us. If we had not brought a single immigrant to this country it would have remained with us for the next ten years.

Whilst I do not accuse the Government of not doing its best to encourage the building of houses. I say that it is not doing enough. As members of the National Parliament we all must take our share nf responsibility for the present inadequate housing situation, We must do much more than we are doing. The importation of 13,000 prefabricated houses will not solve the problem. The honorable member for East Sydney (Mr. Ward) mentioned recently that a family of ten old Australians were living in a garage in his electorate. He was asked by a representative of a Sydney newspaper to give the address of these people so that a news photographer could take photographs of the unfortunate people in order to publicize their plight. The information was supplied, but, of course, the newspapers were not interested, and no publicity was given to the matter. I could cite instances of many people in the electorate that I represent who are living under conditions that are absolutely intolerable. Undoubtedly, one way in which we may really contribute to a solution of the problem is to import, as quickly as possible, large numbers of ‘ prefabricated houses. All young people who marry should be provided with prefabricated houses. Many families now have only one child each, and are living in groups of six adults and children in one room. That is like living in a cage, and it is barbarous.

I do not say that the Minister for Works and Housing is not doing his best to overcome our shortage of houses, but I emphasize that what we are doing at present is not good enough. We must provide better and faster means of providing prefabricated houses. I do not know whether the Minister can obtain the services of sufficient ships to import an adequate number of prefabricated houses. If he can obtain more ships, let him get them now, because time is running against us. If we are involved in another global war we shall not be able to obtain ships to transport houses to this country. Widespread concern exists about what can be done in that respect. The need for additional houses in Canberra is most urgent.

Mr SPEAKER:

-Order ! The measure relates only to the provision of imported houses in the States.

Mr CALWELL:

– In any event, I should like to say that the birth-rate in Canberra is as high as that in Cairo - 42 per 1,000 of the population.

Mr CASEY:
Minister for National Development and Minister for Works and Housing · La Trobe · LP

in reply - I should like to inform the honorable member for Bennelong (Mr. Cramer) that I have had a survey made of the local prefabricated houses manufacturing industry. That industry has a capacity of from 16,000 to 18,000 houses a year, but its actual production at present is at the rate of from 6,000 to 7,000 houses a year. Approximately 40 manufacturers were covered by the survey and they reported that the fact that the industry was working at only one-third of its capacity was due to shortages of labour and materials. In fact, that is one of the reasons why the Government is importing prefabricated houses.

Mr Cramer:

– The Minister is referring to manufacturers who are operating in the capital cities. I had in mind manufacturers in large country towns.

Mr CASEY:

– I appreciate the honorable member’s point. I hope to be able to -encourage the expansion of the industry in remote centres. By importing these prefabricated houses we are, in effect, importing man-hours and materials. I admit that it is an artificial process, and I hope that we shall continue it only until the local industry can meet the local demand.

The honorable member for Melbourne (Mr. Calwell) made a temperate and constructive speech. I assure him that the Government is embracing every opportunity to make erection contracts with contractors that will entail the latter providing immigrant labour from overseas. The Government has already made a number of contracts of that kind and is negotiating further contracts. Such contracts will cover the on-site work and the actual erection of the houses, and practically no demand will be made on the available work force in this country for those purposes.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 4043

SERVICES TRUST FUNDS BILL 1950

Second Reading

Debate resumed from the 5th December (vide page 3634), on motion by Mr. Francis (through Mr. McBride) -

That the bill be now read a second time.

Mr POLLARD:
Lalor

.- The Opposition supports this measure, the object of which is to rectify certain anomalies. I hope that a fate will not befall the Services Canteens Trust Fund similar to that which has befallen many other trust funds due to the fact that trust moneys have been held for too long a period. That has happened in respect of many trust funds, particularly funds that have been controlled by State governments. In many instances, trust funds have been held long after the persons for whose benefit they were established had died. I hope that the Services Canteens Trust Fund will be administered even generously in order to ensure that the persons whom it is intended to benefit will actually benefit from it.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I should like to say a few words about the administration of the Services Canteens Trust Fund. I hold in my hand three forms that must be supplied to the authority that controls the fund in respect of applications for educational awards. On the front page of each form appears the warning that parents, guardians or principals of schools must fill in the form in detail. Honorable members will agree that these forms are a public servant’s dream. In respect of an application for an educational award from the fund, parents, guardians, and principals of schools are obliged to fill in, first, a form that is the equivalent of an income tax return; secondly, a form that consists of two pages; and, thirdly, a form that consists of four pages. Applicants must produce all receipts and disclose the value of their assets practically down to their false teeth. I understand that under a measure that was dealt with earlier the tariff duty on secateurs was reduced. Perhaps the Minister for Defence (Mr. McBride) could use some of those instruments to cut through some of the red tape that is associated with the administration of these trust funds.

Mr MCBRIDE:
Minister for Defence · Wakefield · LP

– I appreciate the support that honorable members generally have given to this .measure. I assure the honorable member for Lalor (Mr. Pollard) and the honorable member for Chisholm (Mr. Kent Hughes) that the points that they have raised will be referred to the authorities that control these trust funds.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 4044

WOOL (CONTRIBUTORY CHARGE) BILL (No. U) 1950

Second Reading

Debate resumed from the 5th December (vide page 3635), on motion by Mr. MoEwen -

That the hill be now read a second time.

Mr POLLARD:
Lalor

– I have examined this measure and have thoroughly perused the second-reading speech that the Minister for Commerce and Agriculture (Mr. McEwen) made in relation to it. I should like him to explain why it has been necessary to introduce the measure- Perhaps he will say that he explained the bill thoroughly in his second-reading speech. However, the bill seeks to amend a measure that was introduced only a few months’ ago, and I have no doubt that when the Minister introduced that measure he was well advised concerning its provisions. Therefore, it is difficult to understand why, in so short a period, anomalies have become apparent and have made it necessary to introduce this bill. I .should also like to know who made the representations that have resulted in the introduction of this bill. The main amendment proposed to be effected under the bill is to exempt skin wool from the contributory charge. Is it seriously suggested that persons who sell ;sheep for slaughter, or persons who subsequently sell the wool from the skins of such sheep will not reap a substantial advantage under this amendment? If it is admitted that they will reap a substantial advantage, surely they should pay the levy. The Minister has said that because no scheme is yet in operation, and because it would be difficult to trace the original wool-owner, skin wool should be exempted from the 7£ per cent. levy. I frankly admit that it would be difficult to trace the person who was the original owner in the truest sense of the term, but because of the benefits that are likely to accrue to both the original owner and the subsequent buyer there is no justification for the exemption of skin wool from the levy. Even if great administrative difficulties have to be surmounted in order to refund the T per cent, to the person to whom it is due, I still contend that there is no justification for the proposed exemption. The original owner obtains some benefit .and should be prepared to take the risk that the levy will not be refunded to him. Let us ^assume that thelevy is to operate as it was intended to operate under the original measure, and that a fellmonger and butcher buys sheep from a wool-grower. The butcher knows when he buys the sheep from the grower that when he .subsequently fellmongers the wool and .submits it to .auction he will “have to pay the levy. That fact is taken into consideration by him in fixing the price which he pays for the sheep. On the basis of the argument advanced by the Minister on that point, the grower will have in fact paid the levy necessary to finance the scheme at that stage, although not on an official basis. The levy is not actually imposed until the fellmonger has sold the wool. If noscheme is adopted it would, I admit, be difficult to trace the original owner of the sheep and -refund to him the Ti per cent, levy; but I remind the Minister that it is impossible completely to eliminate the anomalous effect of any legislation. An assumed benefit will accrue to the grower and to the fellmonger because in fixing the purchase price the fellmonger would take into consideration the amount of the levy that will become payable on the skinwool. The very fact that the Minister has proposed this exemption indicatesthat he is uncertain whether the ‘scheme will operate as contemplated by the Government.

What will be the position of the original owner of the wool if the scheme operates? Will the exemption of skin wool be continued ? If it were so,, a shocking anomaly would be created, because the person who fellmongered the wool would be a beneficiary under the scheme and would also enjoy the benefits of a reserve floor price for the wool and all the other benefits which accrue under a scheme which is still in an embryonicstage. Is it proposed that this exemption is to operate only until a decision hasbeen made about the scheme, or is it intended to continue the exemption after the scheme has been brought into operation? It is outrageous to suggest that the fellmonger should be exempted from: the levy if the scheme is put into operation. Fellmongered wool has alreadyreached very large proportions and is likely to increase in volume ,as the years go by. I should like the Minister to clear up these points and to indicate what new facts have been brought to light since the legislation was passed by lie Parliament and what representations by the fellmongering industry influenced him to amend legislation which was passed by the Parliament only a few months ago.

Mr TURNBULL:
Wimmera

– The honorable member for Lalor (Mr. Pollard) should know exactly what the position is. What occurred when the honorable member- for Lalor was Minister for Commerce and Agriculture has to same degree influenced the present Minister (Mr. McEwen) to introduce this measure. Sheep men all over Australia know that certain money collected by the Labour Government could not be paid back to its rightful owners because the Labour Government was unable to trace them. The Minister has profited by .the mistakes of the Labour Government. He is well aware that if this amending legislation is not passed similar difficulties will arise. He has not only now announced that skin wool will be exempted from the 7£ per cent. levy. That announcement was made by him a long time ago, as the honorable member for Lalor well knows. The purpose of this bill is to validate that decision. T cannot see any logic in the case presented by the honorable member who does not desire skin-wool to be exempted. If such wool is not exempted a section of the woolgrowers will lose a fairly large amount of money. This Government has pledged itself to ensure that that shall not occur. We believe that for all moneys taken from a wool-grower or primary producer a certificate should be issued showing the amount and that a poll of primary producers should be held before any action is taken by the Government to institute a scheme which affects the products of their labours. Wool-growers have not forgotten that when the honorable member for Lalor was Minister for Commerce and Agriculture they lost between £7,000,000 and £9,000,000 because he ‘had neglected to safeguard their interests. The present Minister is profiting by the mistakes that were made by his predecessor and is honouring the Government’s promise to protect the : wool-growers

Mr McEWEN:
Minister for Commerce and Agriculture · Murray · CP

in reply - I thank the honorable member for Mallee (Mr. Turnbull) for the ‘explanation that he has made of certain reasons why the Government has introduced this amending legislation. As the honorable member has stated, it is for the purpose of seeing that no injustice is done or that no preferential treatment is given to those who are not entitled to it. I offer no -objection to the criticism of the measure which was made by the honorable member for Lalor (Mr. Pollard). In making that criticism, he was performing his proper function on behalf of the Opposition. This amendment was introduced by the Government because there was an oversight in the original legislation. I shall explain what that oversight was.

Mr Pollard:

– Does that mean that no levy will be paid at all on skin wool?

Mr McEWEN:

– I shall deal with that point shortly. This explanation is not intended as an extenuation of an oversight on my part in the original legislation, but of an oversight the responsibility for which must be shared by others. Before the legislation in question was introduced, as I explained to the Parliament at the time, I invited the three federal wool-growers’ organizations to convey their views on the legislation to the Government. There was an oversight on my part, but there was an equal oversight on the part of the three federal growers’ organizations - the Australian Wool Growers Council, the Wool and Meat Producers Federation, and the Australian Primary Producers Union. If the explanation of this bill is justified and valid, then there was the same oversight on the part of the honorable member for Lalor at the time of the original debate.

The legislation which imposed the levy of 7i per cent, was introduced in order to prepare for the operation of a plan which, the wool-growers themselves have long wished to make. In 1947, they asked the Chifley Government to operate such a plan. That Government stated that it was prepared to do so, in principle. The growers then made the same request to the present Government, which stated that it was also prepared to legislate to operate the plan requested provided that the growers themselves wanted the plan in its final form. The Government said that the growers would have to find the capital for the operation of the plan. There being no alternative means of the growers finding it, and the growers themselves, having been invited to suggest alternative means and not having been able to do so, the Government asked the organizations concerned if they were prepared to recommend a levy, and, if so, at what rate. The organizations said that there should be a levy on this year’s wool. Many wool-growers have criticized the present Government for imposing this levy; but it has been imposed for the purpose of bringing into effect a plan which was asked for by the growers themselves, and the levy itself was stipulated by the organizations after a referendum of growers had been conducted by the Graziers Association in New South Wales. There was some difference of opinion between the growers about the rate which should be imposed. Some advised that it should be 7J per cent, and some that it should be 5 per cent. The Government decided that 7£ per cent, was a reasonable and necessary rate.

That is the explanation of the imposition of the original levy. But because there was no plan in operation, and because the final implementation of a plan depended, first, on international agreements being, made; secondly, upon the Government being prepared to proceed with the plan in its final form; and, thirdly, upon the growers themselves expressing, through a referendum, their approval of the plan in its final form, it was provided in the original legislation that the levy now being collected would be repaid in full to the people from whom it was collected if no plan was put into operation and if the levy, as a result, became unnecessary. I overlooked the fact and every one else concerned overlooked the fact, that the promise to repay this levy to the people’ upon whom it was imposed could not with equity be kept in respect of skin wool or fell.mongered wool, for the reason that the butcher who bought a sheep under the circumstances in which a levy was to be imposed would naturally make allowance in the price that he bid for the sheep for the levy that he would pay if he were the seller of the wool. Alternatively, of course, he would make allowance for the equivalent amount which he knew the fellmonger would impose when he bought the sheepskin from the butcher, knowing that, at the final point, the fellmonger would have to pay. So there is no doubt that, on full-wool sheep, an allowance of from 5s. to 8s. a head would be made in the price bid. The fellmongers would buy their skins with that discount of from 5s. to 8s. each in the knowledge that they would have to pay a levy. Having bought their skins at that discount, what would happen if, finally, no plan was brought into operation and the levy was paid back? The result would be a windfall. A fortuitous payment of from 5s. to Ss. a skin would have been made to the fellmongers. No one could justify that. Such a payment would be completely intolerable and unjustifiable and would amount to a present totalling millions of pounds to the fellmongers. Consequently, I had to state that this was an oversight. I had to ask the Commissioner of Taxation to refrain, by administrative processes, from collecting the tax on the understanding that the Government would introduce this legislation to alter the original legislation and so remove the taxation upon these particular skins. That is the total explanation of the matter. I am happy to say that, having made a mistake, I am in the process of putting it right.

The honorable member for Lalor has asked whether, if there is a permanent scheme, sheepskins will still be exempt. The honorable member inquired, also, who asked for this exemption? At a certain point every one woke up and asked for it. The fellmongers pointed out the existence of the anomaly, although they would have been the beneficiaries, had it operated. If there is a continuing scheme and if the principle of the revolving fund is not involved in it, then sheepskins and fellmongered wool will be levied. But if the principle of the revolving fund, which means a yearbyyear continuing levy, is adopted with a progressive repayment, then the problem which the Government now faces would recur. The fellmongers would be the profit-makers in the’ event of a revolving fund being established. Whether that is a good enough argument against a revolving fund or whether that argument should be the deciding factor for a permanent scheme for sheepskins and fellmongered wool, I do not know. That will be discussed with the wool-growers, and after hearing the wool-growers’ organizations put their views the Government will decide the action to take which will ensure justice and equity. In the absence of a revolving fund, if there is a continuing scheme a levy will be imposed.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

WOOL (CONTRIBUTORY CHARGE) BILL (No 2a) 1950.

Second Reading

Debate resumed from the 5th December (vide page 3635), on motion by Mr. McEwen -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and reported from committee, without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 4047

WOOL (CONTRIBUTORY CHARGE) ASSESSMENT BILL (No. 2) 1950

Second Reading.

Debate resumed from the 5th December (vide page 3636), on motion by Mr. McEwen -

That the bill be now read a second time.

Mr POLLARD:
Lalor

.- The key purpose of this measure is to give the Minister complete power to exempt anybody from payment of the 7i per cent, levy when he considers that such an exemption should be made. It is true that under most legislation anomalies arise, and in some cases the terms of the legislation are hard and fast and the Minister has no discretionary power. In this case it is anticipated that injustice may be caused, and, in fact, the Minister has given an illustration of how such an injustice could occur in the case of growers who have not been able to get their 1949-50 wool clip to the markets because of floods or other such reasons. It is not right that such persons should be subjected to this tax, but that will happen unless a discretion is given. The power given to the Minister is remarkably wide and it appears that contrary to past statements and performances of the Minister, he now sets himself up as a dictator. Under the power conferred by the legislation he can do practically anything The relevant clause reads -

The regulation may prescribe cases in which, and the extent to which in those cases, exemptions from the charge may be granted or refunds of the charge may be made.

As” one who believes that final responsibility should rest with Ministers and that they should be given power to mete out justice in the case of anomaly, 1 support the measure. The power given to the Minister should be used only after very careful investigation. The Opposition supports this bill.

Mr McEWEN:
Minister for Commerce and Agriculture · Murray · CP

in reply - There is no intention to exercise, in a general manner, the authority given . by this bill. This measure has been brought down because it has been revealed that without such a discretion to exempt, some wool-growers will be treated unjustly. It has been revealed that in some cases through the forces of nature wool has been held up from last year’s clip. It was never the intention of the legislation that last year’s wool, as well as this year’s should be subject to this contributory charge. Because we have not had a full experience of cases of hardship it has not been possible- to compile a list of the kind of cases to be dealt with. After consultation with the Commissioner of Taxation and with treasury officials whose duty is to protect the revenue, and upon their advice, a general authority to exempt was sought rather than a particular authority.

The regulations which will finally provide for entitlement for exemption will not be drafted by me or in my department alone. They will be drafted only after the closest consultation with the treasury and the taxation authorities in order to ensure that there will be no improper leakage of revenue or improper exemption granted by myself or any of my successors. Exemption will be granted only in cases where there is a valid reason for it.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 4048

BRACHINA TO LEIGH CREEK NORTH COALFIELD RAILWAY BILL 1950.

Second Reading

Debate resumed from the 5th December (vide page 3637), on motion by Mr. McBride -

That the bill be now read a second time.

Mr WARD:
East Sydney

.- The Opposition supports this measure. It provides for part of the plan for the standardization of the gauges of the Australian railways initiated by the previous Government in co-operation with State governments. This represents only a small section of the work, but it is an important one, particularly having regard to the reason for which the Government of South Australia desires this work to be given priority. That is to expedite the carriage of coal, to increase the development of the Leigh Creek coal resources and to make it possible for the production of adequate fuel to operate the new power station at Port Augusta. I hope ‘that it will not’ be long before it will be possible, to proceed with the other sections of this great railway standardization programme. I agree with the honorable member for Chisholm (Mr. Kent Hughes) that it would not be practicable to undertake large sections of that work at the present time, but I hope that the programme will not be put aside as a sort of stock job to be undertaken at some distant date. I hope that at the earliest opportunity the Government, in cooperation with the Government of South Australia and with the other State governments with which agreements can be reached, will continue with efforts to put the programme into practice. I regard the standardization and modernization of our railway system as an important defence and developmental project. Because of its importance it should be given some priority in the scheme of national development. The Opposition supports the measure.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I support the remarks made by the Minister for Defence (Mr. McBride) when he moved the second reading of the bill, and also the remarks just made by the honorable member for East Sydney (Mr. Ward). As the honorable member for East Sydney has said, the bill deals only with one particular railway line in South Australia, which came within the terms of the bill that was passed in the dying hours of the last session of the previous Parliament, whereby South Australia entered into an agreement with the Australian Government to proceed with railway standardization in South Australia on the basis that 70 per cent, of the cost would be borne by the Commonwealth and 30 per cent, would be borne by South Australia. The Leigh Creek railway line will grow in importance in view of the tremendously increased output of coal which is expected from the Leigh Creek field. Had the same foresight as has been shown in relation to that railway line been shown in relation to the transport of coal in New South Wales, we should now be in a much better position in respect of coal supplies from that State. I also join with the honorable member for East Sydney in hoping that railway standardization agreements with other States that are prepared to enter into such agreements will be proceeded with at an early date. That is not to say that we should go ahead with any very large projects of rail standardization at an early date. However, there are lines in Victoria that are similar to the Leigh Creek line. For instance there are the Ferntree Gully to Gembrook, the Mangalore to Albury, and the Dandenong to Traralgon lines. The development of the line from Mangalore to Albury is a most important part of our defence planning. As the result of an agreement that was reached between the honorable member for East Sydney, when he was Minister for Transport of the Australian Government, and myself, when I was Minister for Transport in the “Victorian Government included in the standardization agreement. However, now that South Australia has gone ahead with its agreement it is impossible to leave Victoria in what is virtually a pocket with another break of gauge at the border. I hope that the Minister for Defence will confer with the Minister for Fuel. Shipping and Transport (Senator McLeay) on this particular matter, and on the importance to our defence of the various railway transport projects contained in the standardization programme. After all, as 30 per cent, of the cost of defence is incurred on transport that factor of defence cannot be neglected. This bill and the bill that is to follow it both deal with sections of railway lines which, though small, are part of the programme of standardization originally laid down. That programme was divided into three parts. One part dealt with lines that were to be standardized in three years, the second part dealt with lines to be standardized in seven years, and a third part dealt with lines to lie standardized in ten years. Those lines stretch almost from the Northern Territory to Melbourne and from Perth to Brisbane. They are not all large sections of line, but they are all important projects. I hope that the Minister for Defence will take the earliest “possible opportunity of discussing this matter in full with the Minister for Fuel, Shipping and Transport.

Mr DRAKEFORD:
Maribyrnong

– It is refreshing to find some agreement between the opposing parties in regard to a bill of this nature. The bill is designed to do something which, in my opinion, should have been tackled long ago. I compliment the honorable member for East Sydney (Mr. Ward) for the energy that he displayed when he was Minister for Transport in attempting to have some agreement arrived at between all the States and the Commonwealth. Congratulations are also due to the honorable member for Chisholm (Mr. Kent Hughes) for the activity that he displayed when he was Minister of Transport in Victoria in an endeavour to bring about a state of affairs which, in my opinion, has been too long delayed in that State. For many years Victoria adopted a parochial attitude that prevented it from taking advantage of opportunities, the taking of which would have made our defence system much better than it is. This matter must be regarded not only from the point of view of our transport requirements, but also from the point of view of our defence requirements. It was known by almost every person who took an interest in the matter that during the. last war it would have taken six weeks or two months to transport a division of troops from Perth to Adelaide. It was only the development of aircraft that permitted us to undertake war-time tasks that we could never have undertaken otherwise. I consider that - the average member of Parliament in the States takes practically no interest in matters of this kind beyond wishing to ensure that the railway system of his own State should give the best possible results to the State itself. Railways are not now viewed, and have not been viewed, in recent times at all events, by the representatives of Victoria and the Commonwealth from any parochial standpoint. I know as the result of attending some Commonwealth and State transport conferences that the difficulties that confronted us in relation to transport were mostly financial. We should have undertaken this great task of standardization in years when plenty of labour and materials were available. Had we done so it would have been so much the better for Australia now. In the past I was not satisfied with the attitude adopted by the Victorian people in relation to rail transport. I did my best to induce various Victorian governments to regard transport from an Australian point of view rather than from a State point of view. During the last war Victoria could very well have been left in the position of being entirely by-passed in transcontinental rail traffic because it had then, as it still has, a 5-ft. 3-in. gauge. Had the connexion between Cockburn and Broken Hill been made, rail transport could have been taken along the standard gauge all the way from Perth to Sydney, via Broken Hill. It is quite possible that that position could arise now. I know that when the honorable member for East Sydney was Minister for Transport he did his best to have the standardization programme adopted. Had this great work of standardization been undertaken in the depression days when there was widespread unemployment it would have been of great benefit to the people who were out of work. Not having undertaken the work then we find ourselves in the position of being unable to do it now because of shortages of labour and materials. However, this bill is a step towards the establishment of a standard gauge in a part of the country where it will be of very great benefit in the future. I commend the bill and I hope that the Minister for Defence (Mr. McBride) will consult the Minister for Fuel, Shipping and Transport (Senator McLeay) about getting on with the whole standardization programme as soon as the necessary labour and materials are available.

Question resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. McBride) agreed to -

That it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill for an act to authorize the execution by or on behalf of the Commonwealth of an agreement between the Commonwealth and the State of South Australia, relating to the construction of a railway from Brachina to Leigh Creek North Coalfield in the State of South Australia, to provide for the construction of that railway, and for purposes connected therewith.

Resolution reported and adopted.

In committee: Consideration resumed.

Bill - by leave - taken as a whole, and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 4050

PORT AUGUSTA TO ALICE SPRINGS RAILWAY

Second Reading

Debate resumed from the 5th December (vide page 3638), on motion by Mr. McBride -

That the bill be now read a second time.

Mr WARD:
East Sydney

.- This bill deals with the route of that part of the proposed railway from Port Augusta to Alice Springs which lies between Stirling North and Brachina. A disagreement has arisen between the Commonwealth and the South Australian railways authorities about whether the township of Quorn shall be by-passed by the new railway. The Opposition raises no objection to the method by which the disagreement is to be resolved. A royal commission will be appointed, and both parties have agreed to accept its decision. However, I bring to the notice of the Minister for Defence (Mr. McBride) the suggestion that, should the route by-pass Quorn, the Commonwealth find South Australian Governments should not overlook the obligation to compensate workers who have established their homes in that township, and who may be obliged to transfer elsewhere. Railway employees are the persons principally concerned. The difficulty to v.which this bill refers first arose whenIwas the Minister for Transport in the Chifley Government and the proposed route was being surveyed. The contention was advanced on behalf of the Commonwealth that the change of route would reduce operating costs, but offsetting that consideration was the factor of the disturbance to the township of Quorn and the loss of the capital of workers and other persons. Nobody can foretell the decision of the royal commission, but should the by-passing of Quorn be recommended, the Minister should confer with the South Australian Government with a view to arranging a system of compensating workers who will be obliged to transfer their homes elsewhere, and others who suffer loss.

Mr McBRIDE:
Minister for Defence · Wakefield · LP

in reply - The matter whether Quorn shall be by-passed or not will be decided when the royal commission has made its investigation and presented its report. It is recognized that a change of route may cause a depreciation of the value of property in Quorn, but the town will continue to be an important centre, despite the fact that the number of railway employees who now live there will be reduced. The matter of compensating property holders who might be disadvantaged by the adoption of the new route has already been discussed, and those discussions will be resumed when the Government receives the report of the royal commission. Of course, I cannot say at this stage what the result of those discussions will be, but I assure the honorable gentleman that the matter to which he has referred .has not passed unnoticed.

Question resolved m the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 4051

STATES GRANTS (MILK EOE SCHOOL CHILDREN) BILL 1950

Second Reading

Debate resumed from the 5th December (vide page 3642), on motion hy Sir Earle Page-

That thu bill be now read a second time.

Mr TOM BURKE:
Perth

.- The Opposition supports this bill. It represents a small step towards the implementation of the Government’s national health scheme. Problems of administration and supply will probably arise, but I hope that they will be solved without difficulty. I hope also that the free milk for which the bill provides will become available at an early date.

Mr HASLUCK:
Curtin

.- Although I support the bill, I wish to direct the attention of the House to one matter which may arise under it and on which there is uncertainty at present. I very much regret that the illness of the Minister for Health (Sir Earle Page) made it impossible for me to satisfy myself in relation to this point before the debate reached this advanced stage. I am particularly concerned about the position, under the terms of this bill, of coloured children, especially those who live at mission stations. If we accept the proposition that the sole justification for the bill is the better nourishment of children who are not being satisfactorily nourished at present, the strongest ease can be made out in favour of its application to the thousands of coloured children in Australia, for they are suffering from malnutrition to a much more extreme degree than is generally experienced in the white population. This bill is designed to provide free milk for school children. The extent of it9 benefits will therefore depend on the meaning given to the word “ school “. I can understand that it will not apply to the children of bush natives who wander in the open country and do not come under white surveillance in any way. Even though their nutritional need is very great, they are clearly not school children. On the other hand, there are some coloured children who attend recognized State or private schools in the normal way and who, quite clearly, will be entitled to benefit by this bill. My present concern is with a group of children who come in between - children who do not attend the normal educational institutions but who are being regularly cared for and who are being taught according to their capacity and opportunity for instruction. I submit that they should benefit by this measure. They may be said to be living under marginal conditions.

This bill places the responsibility on the State governments of distributing free milk and when they are carrying out this task they will have to determine who is eligible to receive the benefit and they will turn’ to the bill for guidance. The definition of “ school “ in the bill is obviously intended to be wider than the narrow dictionary meaning, for it states that “ school “ shall include “ nursery school, kindergarten or creche “. I suggest that the meaning should be made still clearer and wider by adding to. the definition words that would indicate that coloured children who are cared for regularly on governmental or religious missions but who may not be attending school in the narrow sense of the term may he included. I do not want the State authorities to limit the meaning of “ school “ to those which are inspected by the State education departments. I wonder whether, even at this late stage, the Government would consider an amendment extending the definition so as to include missions at which aboriginal children are taught.

The need of aboriginal children is very great, and I consider that the Government ought to make clear to the States, as the distributing authorities, that it intends that these young Australians shall be provided with free milk. It is anomalous that Australia, very properly, is contributing to the United Nations Children’s Emergency Fund in order to provide free milk for underfed children in other countries whilst many of our own children do not receive a similar benefit. As a result of our munificence, the underfed coloured children of Africa receive free dried milk, but underfed coloured children in Australia do not, and it is possible that they will be excluded from the benefit under this bill. I hope that, while we continue with this international generosity and with the extension of social services to people of. our own colour in Australia, we shall not forget those other Australians who, perhaps, have a more deeply rooted claim to the title “Australian” than we have, and who are very sadly neglected. I have before me a letter from the superintendent of the Mount Margaret Mission at Morgans, in the district beyond the eastern gold-fields in Western Australia, where conditions are dry and local food supplies are poor. According to his statement, which I can support from first-hand knowledge, the natives do not obtain sufficient good food to maintain them in good health. Therefore, I commend most strongly the claims of those children of aboriginal or part-aboriginal descent who are being cared for at missions and who should share in the distribution of free milk under this bill. I realize that bush natives must be excluded, but I hope that, in some future and separate measure, adequate provision will be made for them.

Dr EVATT:
Deputy Leader of the Opposition · Barton

.- The Opposition supports the suggestion of the honorable member for Curtin (Mr. Hasluck), lt could be incorporated in the bill by means of a minor amendment to clause 2. I hope that the Government will give serious consideration to the proposal. It seems to me to be in accordance with the wishes of all honorable members.

Mr LAWRENCE:
Wimmera

– I” support the bill because I know what a beneficial effect the distribution of free milk will have upon school children. As most honorable members are aware, I was a dentist before I was elected to this House, and I appreciate the importance of an adequate supply of milk to the health of children generally and to the condition of their teeth in particular. The custom of most children during the morning recess period at school is to have a play lunch. If they are not provided with milk in some form, they usually eat sweets or biscuits. The Melbourne newspapers this morning reported some interesting statements that had been made by Dr. Hearman, the lecturer in preventive dentistry at the University of Melbourne, which I commend to all honorable members. Dr. Hearman said that the use of sugar and carbohydrates has a very bad effect upon the teeth of children. I believe that, when children are provided with free milk under this bill, they will eat smaller quantities of carbohydrates than formerly and that the ultimate result will be a general improvement of the condition of their teeth. I have noticed that the policy of the Government is to start the scheme by supplying free milk in cities and large towns where adequate provisions are made for the pasteurizing of milk. I believe that milk should be supplied in other centres also if adequate steps are taken first to ensure that it is germ-free. For instance, it can be boiled and supplied to the children in the form of cocoa. In the district where I live, school children have been supplied with cocoa throughout the winter period for many years. This has been made possible by the activities of the local Rotary Club, mothers’ clubs, and other citizens’ organizations, which have provided the necessary funds. The voluntary workers who have been supplying the cocoa at the schools are willing to continue with their activities iri order to ensure that milk is consumed under satisfactory hygienic conditions, but they deserve to be relieved of the financial responsibility of providing the milk. I am whole-heartedly in favour of the bill.

Mr LESLIE:
Moore

– I support the bill. I believe that it will effect one of the most revolutionary changes ever made by any government in the interests of the health of young Australians. The implementation of the Government’s proposal in Western Australia will present difficulties that will be tremendous, but not insuperable. Those difficulties are, first, that the supply of milk available may not be sufficient to give every school child in the State an issue; and, secondly, the wide distance separating the settled areas in which the milk will have to be distributed. However, determination and ingenuity will undoubtedly overcome those difficulties. It is intended in Western Australia that the scheme shall be inaugurated in the metropolitan area, and extended to1 the country areas, and ultimately to the more remote areas. When the Minister for Health (Sir Earle Page) introduced the bill, he referred to the fact that the incidence of child malnutrition is greater in country areas’ than in metropolitan areas. In many parts of Australia, children do not receive milk at all because milk is not available in those areas. I suggest to the Minister that some effort might be made to provide fruit juices for children for whom milk cannot be provided. The honorable member for Wimmera (Mr. Lawrence) made a good suggestion to the effect that cocoa should be supplied to them, but I suggest that the supply of fruit juices would provide some of the food values intended to be provided by the free milk scheme.

I think that the free milk scheme should have been inaugurated in the remote country areas, and later extended to the metropolitan areas. After all, the need of children in country areas is, generally speaking, far greater than that of children in the metropolitan areas. Voluntary schemes of free milk distribution have operated in metropolitan areas in Western Australia for some years, and have functioned very satisfactorily. I suggest, therefore, that the Minister should concentrate on the requirements of children in the outback areas, and if milk cannot be supplied to them, fruit juice should be made available.

Another practical difficulty that I foresee in the administration of the scheme is the restriction of the issue of milk to children under thirteen years of age. In practice, that will present great difficulty and cause serious embarrassment. Teachers will be placed in a most difficult position in having to refuse milk to children over thirteen years of age when they issue it in their presence to younger children. I hope that the scheme will be extended subsequently to include all children of school age.

Another factor in the scheme which appears to me to be of considerable importance is the need to refrain from introducing any element of coercion. Many children do not like milk, but their teachers and others may be able, without applying compulsion, to induce them to drink it. I think that it is particularly important that the Minister should ensure that no directive is issued to school teachers and others who will administer the scheme to the effect that children should be compelled to drink milk. I support the bill, and commend the Government for inaugurating this enlightened and far-sighted scheme.

Mr DRUMMOND:
New England

.- The Minister for Health (Sir Earle Page), unfortunately, is unable to be present in the chamber to-night because of ill health, but I nonetheless congratulate him upon having evolved this scheme for the distribution of free milk. I know something of this matter because I was Minister for Education in New South Wales for some years, and the subject of providing free milk for children was constantly under consideration during my tenure of office. In the first place, I think that it must be abundantly clear, from the almost unanimous testimony of members of the medical profession and dieticians, that the provision of milk for growing children is absolutely necessary. Because of the specialized knowledge that I have acquired of the health of school children, I can appreciate the practical difficulties that have confronted the Minister in preparing this scheme. While I was Minister for Education in New South Wales certain extensive researches were carried out on the subject of child nutrition. Unfortunately, we were experiencing the hardships associated with the worst phases of the depression at that time, and naturally the authorities were greatly concerned about the effect of that depression upon the health of school children. Some surprising discoveries were made in the course of the scientific researches carried out by the medical officers of the department. For example, although it is commonly believed that malnutrition is more frequent amongst the children of poor parents than it is amongst the children of rich parents, the reverse is actually the case. Furthermore, our investigations revealed that malnutrition is more prevalent in metropolitan areas than it is in the country. In consequence of complaints of bad cases of malnutrition amongst school children in certain areas comparative surveys were carried out by the medical officers of the department to ascertain the incidence of malnutrition. We were inclined to think that the incidence would probably be greatest in the areas where economic distress was most prevalent. A special examination was made of children in a coal-fields area, and the results were compared with the information obtained from researches carried out in other parts of the State. The comparative statistics showed that vitamin deficiency was most prevalent in certain dairying districts, notably in the Byron Bay and Murwillumbah areas. Although there were isolated cases of extreme malnutrition in the coal-fields areas, the average health of the childen in those areas was comparatively good. Although malnutrition may arise from an insufficiency of food, most cases of malnutrition arise from improper feeding.

New South Wales was the first State to introduce a scheme for the distribution of free milk to children. The decision to provide free milk was made after many years of careful examination of the health of school children in all parts of that State. When I decided, during my term of office as Minister for Education, to introduce the distribution of free milk, voluntary schemes of milk distribution were already in operation in many parts of the State, and we had the benefit of the experience gained in applying them when we introduced our scheme. One unfortunate fact that we discovered was that in those areas where children most needed fresh milk, they were receiving the least quantity of that commodity. At that time it was estimated that it would cost about £200,000 a year to distribute free milk throughout New South Wales, but to-day, the cost is, of course, much greater. I particularly congratulate the honorable gentleman who succeeded me as Minister for Education in New South Wales on the great success that has attended the operation of the scheme. Unfortunately, for many reasons, the scheme could not be implemented as fully as I should have liked. When I was responsible for the administration of the scheme I laid down as a matter of policy that every school child had to receive free milk, irrespective of the circumstances of his parents or the school that he attended. Of course, I realize that we must be extremely careful in the details of any nation-wide scheme of milk distribution and we must always bear in mind that a good supply of pure milk is indispensable to the maintenance of the child’s health. The consumption of milk that is not handled hygienically may prove fatal. Therefore, extreme care must be taken to ensure that the milk that is provided for aboriginal children, particularly in remote settlements, shall not be contaminated. Experiments that were carried out in supplying dried milk to residents in western districts of New South Wales proved most successful. In recent years the quality of dried milk has been improved considerably. The success of the scheme contemplated under this measure will depend largely upon the degree to which co-operation is established between teachers, parents of the children and the departments concerned in its operation.

The Australian Government and the State governments should arrange contracts for the supply of refrigerators at nominal prices to be made available to parents and citizens associations. The refrigerators would be required for the storage of dried milk, which, after it bus been mixed at a certain temperature; must be chilled in order to render it palatable. The New South Wales Government of which I was a member had difficulty in obtaining suitable containers for the distribution of milk. As the responsible Minister, I made inquiries in overseas countries with a view to obtaining containers to replace bottles, which, with tinfoil, were in short supply d urine the recent war. Eventually, I discovered that milk was being distributed in New York in square containers that were made of oil paper. The milk was consumed through a straw and when the container was emptied it was destroyed. As the result of my experience in administering the scheme in New South Wales, I whole-heartedly support the measure. This scheme will help to produce a’ sturdy race in this country. I support the suggestion that the honorable member for Curtin (Mr. Hasluck) lias made that milk should be supplied to aboriginal children. All children, regardless of colour, should be entitled to benefit from this progressive legislation.

Dr NOTT:
Australian Capital Territory

– I join with other honorable members in congratulating the Minister for Health (Sir Earle Page) upon introducing this measure. It is by no means revolutionary legislation. In Scotland, milk has been provided free of charge to school children for the last 30 years and that scheme has proved to be most successful. I do not propose to canvass the possibility that during bad seasons the production of milk may fall short of requirements under this proposal. However, that difficulty .could be overcome by stockpiling supplies of dried milk. Indeed, the Govern ment ‘would be well advised to follow that course because in would appear that the Minister has made his computations with respect to availability of supplies on the basis of production in good seasons. Furthermore, dried milk that is produced in Australia is equal in quality to that produced in any other country.

I should not have spoken at this juncture but for the remarks that the honorable member for Curtin (Mr. Hasluck) made. He suggested that milk should be supplied under this scheme to all aboriginal children. I remind the Government that charity begins at home. In this respect, it has an obligation to ensure that a continuous and adequate supply of milk shall be made available to aboriginal children in the Australian Capital Territory. Of course, milk is a necessary food not only for individuals who may be suffering from malnutrition, but also for elderly persons as well as juveniles and infants. The aboriginal settlement at Wreck Bay is likely to become the largest settlement i:i point of numbers of aboriginal children for whom the Government is directly responsible. I urge it to ensure that those children shall receive adequate supplies of milk.

I believe that the Government has at last evolved an efficient method for the distribution of milk free of charge to children, and I sincerely trust that the State governments will co-operate fully with it in the operation of this scheme. Greater care should be exercised to ensure that school teachers who will play a part in the distribution of milk to children shall periodically undergo an X-ray examination to ensure that they are not suffering from tuberculosis. On various occasions in the past in the Australian Capital Territory large numbers of children have been placed in a room under the guidance of teachers who were suffering from tuberculosis. Every teacher who will play a part in the distribution of milk under this scheme should be obliged to undergo an X-ray examination to make sure that he or she is not suffering from that disease. I support the bill, and I trust that it will be the means of considerably improving the physique and health standards of our people.

Mr EGGINS:
Lyne

.- I support the measure. I believe that the cost that will be incurred in operating this scheme for the provision of milk free of charge to school children will be more than offset by the saving that will thereby be effected in the cost of hospitalization and by the improvement of the general health standards of the community. Having regard to the high quality of dried milk that is produced in Australia, I can see no reason why it should not be supplied as a substitute for fresh milk in remote areas in which it is not practicable to distribute fresh milk to children under this scheme. Full-cream dried milk should be made available in such areas. I have not the slightest doubt that sufficient milk will be produced to meet all requirements under the scheme. This is a progressive step from a national viewpoint and no ground exists for misgiving that it may not produce the results that the Government expects that it will produce.

Mr ANTHONY:
PostmasterGeneral · Richmond · CP

– I regret that the Minister for Health (Sir Earle Page) is not present because this scheme has been very close to his heart for many years. The Government will accept the suggestion that was made by the honorable member for Curtin (Mr. Hasluck) and will add the term “ aboriginal mission “, but it will do so in another place in order to avoid the reprinting of the bill to-night.

Question resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Anthony) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to make provision for the grant of financial assistance to the States in connexion with provision by the States of milk for school children, and for other purposes.

Resolution reported and adopted.

In committee: Consideration resumed.

Bill - by leave - taken as a whole and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 4056

SUPERANNUATION BILL 1950

Second Reading

Debate resumed (vide page 3969).

Mr CALWELL:
Melbourne

. -Some time ago the Government increased the value of each of the units of superannuation payable to officers of the Public Service from £26 to £32 10s. and increased the maximum number of units for which an officer could contribute to 26. The present bill proposes to increase the value of each unit, up to the first eight units, from £32 10s. to £39. There is now a discrepancy between the Victorian and the Commonwealth schemes, but that is not a new feature of superannuation schemes. It seems to indicate that there should be some uniformity in the value of the units provided for in the superannuation schemes of the Commonwealth and State governments just as there is uniformity in the payment of pensions. However, it is not possible under existing powers to enact a uniform superannuation scheme for Commonwealth and State public servants.

In 1947, the Australian Government led the way in increasing the value of superannuation benefits by raising the value of each unit from £26 to £32 10s. and by increasing the number of units for which an officer could subscribe from 16 to 26. All States of the Commonwealth have more or less followed the Commonwealth’s action, and improvements are therefore being made in the pensions of all those who are on the pay-roll of the Commonwealth or the States. Victoria broke away from the arrangement which arose when the initiative was taken by the Commonwealth in 1947. Further difficulties will be created for the Commonwealth in the event of Victoria or some other State again increasing the value of its units. I understand that the Governments of New South Wales, Queensland, South Australia, Tasmania and Western Australia have not made their units worth any more than they were worth after the 1947 adjustment.

What the Government proposes to do is quite fair. The first eight units will affect practically everybody who is entitled to receive superannuation. It will be a benefit to those who have no other form of income and who may be precluded from drawing the age pension.

I think that it should be placed on record that no report has been made by the Superannuation Board since 1947, due to the fact that staff problems have prevented its preparation. The increase during recent years in public servants’ salaries, which are still rising in order to meet the increased cost of living, have made it impossible to keep pace with the statistical work involved. I think that enough has been said to indicate that the action taken by the Government is worthy of support and that it will be appreciated by the members of the Public Service. I wish the bill a speedy passage at this very late hour of the night.

Question resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Fadden) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Superannuation Act 1922-1948 and for other purposes.

Resolution reported and adopted.

In committee: Consideration resumed.

Bill - by leave - taken as a whole and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 4057

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate: -

Without requests -

Appropriation Bill 1950-51.

Without amendment -

Appropriation (Works and Services) Bill 1950-51.

Defence Forces Retirement Benefits Bill 1950.

page 4057

HOUR OF MEETING

Motion (by Mr. Fadden) agreed to -

That the House, at its rising, adjourn to to-morrow, at 10.30 a.m.

Sitting suspended’ from 12 midnight to 12.30 a.m. (Friday).

Friday, 8 December 1950

page 4057

STATUTE LAW REVISION BILL 1950

Second Reading

Mr HOLT:
Minister for Labour and National Service and Minister for Immigration · Higgins · LP

– I move -

That the bill be now read a second time.

On the 16th March, 1949, the then Acting Attorney-General in the former Government made the following statement in another place : -

I desire to inform honorable senators that it has been decided to prepare a consolidation of Commonwealth acts as at the 31st December, 1950. The consolidation will be published as early as possible in the year 1951. The first consolidation of Commonwealth acts was prepared as at the end of 1911, and a second as at the end of 1935. It was then intended to issue a fresh consolidation at the end of each ten years, but that intention was, of course, frustrated by the war. It has also been decided to issue a consolidation of Commonwealth statutory rules as at the 31st December, 1950. The statutory rules have previously been reprinted twice, namely in 1914 and 1927. Besides being of great utility, those works will mark the completion of 50 years of federation, and will be issued to commemorate this important milestone in the history of the Commonwealth of Australia.

The present Government has adopted the decision of the previous Government and the work of preparing Commonwealth acts for reprinting has been proceeding for some time. The AttorneyGeneral (Senator Spicer) has made a detailed statement in another place of the reasons for this bill. As he gave a good deal of detailed information concerning it, I do not consider that at this stage of the session it is necessary for me to go into the provisions of the bill in any detail, unless the House wish me to do so. The purpose of the bill is clear and I believe that honorable members on both sides of the House will agree that it is necessary. I therefore commend it to the House for speedy consideration.

Dr EVATT:
Deputy Leader of the Opposition · Barton

.- The Opposition will support the bill. Indeed, its foundations were laid early in 1949 during the term of office of the Chifley Government. Its object is that we shall have a Commonwealth statute-book that shall start afresh from the end of this year. It will get rid of a lot of dead wood in the statute-book. It will repeal many acts that have ceased to operate but which still cumber the statute-book. It will also alter titles of acts where such alterations are likely to clarify the scope of those acts and to clear up doubts. The whole point about the measure is that it will effect no alteration of the law, but will merely bring the law into a more convenient form. The bill is correctly titled the Statute Law Revision Bill. Its result will be something like that which was achieved in 1935 by Sir George Knowles, who was then Solicitor-General of the Commonwealth. The new Commonwealth statute-book will start afresh as from the fiftieth anniversary of federation. That was the objective that we had in mind when we laid the foundations of the measure in 1949, and this Government is giving effect to it. We whole-heartedly support the bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 6 agreed to.

Clause 7- (1.) Section three of the Customs Tariff 1933-1049, as amended by the Customs Tariff 1950, is amended by omitting the definitions of “tarin’ alteration” and “the Tariff”. (2.) Sections seven, thirteen, fourteen, fifteen and sixteen of the Customs Tariff 1933-1949, as amended by the Customs Tariff 1950, are repealed. (3.) The Customs Tariff 1933-1949. as amended by the Customs Tariff 1950, is amended by omitting from the items, or portions of items, in the Schedule to that Act as so amended which are specified in the first column of the Fifth Schedule to this Act the words respectively set out in the second column of the Fifth Schedule to this Act opposite to those items or portions of items. (4.) Section one of the Customs Tariff 1950 is amended by omitting sub-section (3.). (5.) The Customs Tariff 1933-1949, as amended by the Customs Tariff 1950 and by this section, may be cited as the Customs Tariff 1933-1950.

Mr HOLT:
Minister for Labour and National Service and Minister for Immigration · Higgins · LP

– I have circulated amendments that are purely formal and are consequential on other legislation that has been passed in the course of this session, and even in the last few days. I can give to the House the assurance mentioned by the Deputy Leader of the Opposition (Dr. Evatt) that the bill is not intended to make any alteration of the substance of the law. It will correct overlapping provisions which occur in more than one act, and will also correct verbal mistakes and delete words that are obviously unnecessary. The bill seeks to amend about 85 acts and to repeal just under 500 other acts. The amendments merely bring our legal story up to date, as it were, and I suggest that they might be adopted in their entirety. I move the following amendments to this clause -

That, in sub-clause (1.), after the words ” Customs Tariff 1950 the following words be inserted: - “by the Customs Tariff (No. 2) 1950 and by the Customs Tariff (No. 3) 1950 “.

That, in sub-clause (2.), after the words * Customs Tariff 1950 “, the following words be inserted: - “by the Customs Tariff (No. 2) 1950 and by the Customs Tariff (No. 3) 1950 “.

That, in sub-clause (3.), after the words “Customs Tariff 1950”, the following words be inserted: - “by the Customs Tariff (No. 2) 1950 and by the Customs Tariff (No. 3) 1950 “.

That sub-clause (4.) be left out, with a view to insert in lieu thereof the following subclause : - “ (4.) Section one of the Customs Tariff (No. 3) 1950 is amended by omitting subsection (4.).”

That, in sub-clause (5.), after the words ” Customs Tariff 1950 the following words be inserted : - “, by the Customs Tariff (No. 2) 1950, by the Customs Tariff (No. 3) 1950”.

Dr EVATT:
Deputy Leader of the Opposition · Barton

.- The Minister for Labour and National Service (Mr. Holt) has summed up the position accurately. Even bills that are now going through both Houses and that have gone through them during the last few hours, will be included in the scope of this measure. We support the amendments in view of the assurance that the Minister has given.

Amendments agreed to.

Clause as amended agreed to.

Clauses 8 to 18 agreed to.

First Schedule -

Second Schedule, as amended, agreed to.

Remaining schedules agreed to.

Title agreed to.

Bill reported with amendments; report - by leave - adopted.

Bill - by leave - read a third time.

page 4061

PAPERS

The following papers were pre sented : -

Arbitration (Public Service) Act - Determinations - 1950 -

No. 73 - Professional Radio Employees’ Institute of Australasia.

No. 74 - Commonwealth Public Service Artisans’ Association.

No. 75 - Association of Railway Professional Officers of Australia.

No. 76 - Federated Clerks’ Union of Australia.

No. 77 - Australian Third Division Telegraphists and Postal Clerks’ Union.

Commonwealth Conciliation and Arbitration Act-

Annual Report by the Acting Chief Judge of the Commonwealth Court of Conciliation and Arbitration, 8th October, 1949, to 7th October, 1950.

Annual Report by Chief Conciliation Commissioner, 8th October, 1949, to 7th October, 1950.

Norfolk Island Act - Ordinances - 1950 -

No. 1- Sale of Food.

No. 2 - Tuberculosis.

Scat of Government Acceptance Act and Seat of Government (Administration) Act - Canberra University College - Report for 1949.

House adjourned at 12.38 a.m. (Friday).

page 4061

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

International Monetaryfund

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice -

  1. What amount has been subscribed by private financial institutions to the International Monetary Fund and the International Bank for Reconstruction and Development, under the provisions of the Bretton Woods Agreement?
  2. Is it a fact that, under the articles of the Bretton Woods Agreement, world private financial and banking interests can and are attempting to dominate the Federal Government interests?
  3. What proportion of the dollar loan recently negotiated in the United States of America by the Federal Government came under the provisions of the Bretton Woods Agreement ?
  4. Will the Government secure from Professor Melville, at the earliest opportunity, a report of his views concerning the working of the International Fund and International Bank in relation to the effect upon the overseas trade and the internal economy of Australia?
  5. Will the Government inform the House, before, it rises, whether a delegation is about to visit Australia from the International Bank. If such a visit is proposed, when will the delegation arrive and what is the purpose of the visit?
Mr Fadden:
CP

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

  1. Both the International Monetary Fund and the International Bank for Reconstruction and Development are international institutions exclusively representative of member Governments. Private financial institutions cannot subscribe to them or participate in their control.
  2. No. See also answer to No. 1.
  3. The whole of the recently negotiated 100,000,000 dollar loan is to be obtained from the International Bank for Reconstruction and Development.
  4. Mr. Melville was recently elected as an executive director of the International Monetary Fund and the International Bank for Reconstruction and Development and has taken up his duties in Washington. The Government will be receiving regular reports from him on the activities of the fund and the bank as they affect Australia.
  5. No definite date has yet been fixed for a visit to Australia by officials of the Inter - national Bank. However I explained in my second-reading speech on the Loan (International Bank and Reconstruction and Development) Bill 1950, the president of the bank has offered, if the Government so desires, to send officials of the bank to Australia to gain a closer knowledge of our developmental programmes and to consider with us to what extent further participation by the Bank in the financing of these programmes may, in all the circumstances be necessary and justified.

This offer has been welcomed by the Government and it is expected that a visit to Australia by officials of the Bank will be arranged early next year.

Motor Vehicles.

Mr McBride:
LP

e. - On the 31st October, the honorable member for Mackellar (Mr. Wentworth) asked the following ques tions : -

  1. How many Buick and Cadillac cars, complete with bodies, were imported under special licence from the 1st January, 1945, to the 30th June, 1950?
  2. Will the Minister for Trade and Customs make available a complete list showing the date on which each permit was granted, the date of importation, the identification particulars of each car, the name of the person to whom the permit was granted, the reason for granting it, and details of any undertaking that was given in connexion with the transaction, as well as the name of any agent who acted for t’..u importer?

The Minister for Trade and Customs has now furnished the following reply : -

  1. There are no records available of importations of complete Buick and Cadillac cars prior to the 1st January, 1948. Between the 1st January, 1948, and the 30th June, 1950, special licences were granted for the importation of 5fi Buick and five Cadillac cars, complete with bodies. This includes cars imported by diplomatic and consular representatives.
  2. It is not desirable to make available for public information particulars of this nature, having reference to the business of private citizens.

Steel.

Mr McBride:
LP

e. - On the 5 th December, the honorable member for Bowman (Mr. McColm) asked the following questions : -

  1. Will the Minister for Trade and Customs ascertain whether pressed steel from dollar sources is being used for the manufacture of baths in Australia ?
  2. If steel imported from dollar areas is being used for the manufacture of baths, will the Minister inquire whether the expenditure of dollars for this purpose is justified?

The Minister for Trade and Customs has furnished the following reply : -

  1. Licences have been issued for the importation of a small tonnage of steel sheets from dollar sources for use in the manufacture of baths. Information before the department at the time the licences were issued indicated that the steel was suitable for the pressing of baths which were then in short supply.
  2. Yes.

National Development

Mr Leslie:

e asked the Minister for National Development, upon notice -

In connexion with the schedule recently supplied to honorable members setting out works of a developmental nature which are in an advanced stage of planning or are being undertaken by the Commonwealth and State governments, will he say -

What direct financial contribution, if any, has been or will be made by the Commonwealth Government towards the preliminary and/or capital costs of the following works iri Western Australia: - (i) South Fremantle steam power station; (ii) South-west power scheme; (iii) increasing the output of coal from the Collie coal-fields; (iv) the estimated cost of £1,100,000 and the work involved in the development of the Albany harbour; (v) the estimated cost of £1,000,000 and the work involved in the development of the Bunbury harbour; (vi) the estimated cost of £20,000,000 for extensions to the Fremantle harbour and the general improvements and additions’ to wharf space; (vii) the survey and construction of the new 4-ft. 8^-in. gauge railway line between Perth and Kalgoorlie to join with the transcontinental railway, and (viii) the improvement and maintenance of natural forests and the development of exotic plantations in Western Australia; and

What direct assistance, other than financial has the Commonwealth Government rendered, or arranged to render, in connexion with the above-mentioned works.

Mr Casey:
LP

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

  1. Of the projects listed by the honorable member the Commonwealth has directly incurred expenditure as follows: - (i-vi) Nil; (vii) the survey of a new standard gauge railway line between Perth and Kalgoorlie. £38,668; (viii) on Forestry - approximately £1,000 for equipment at a new forestry research station. Whether contributions will bc made in the future is a matter of Government policy, which it is not the practice to discuss in reply to parliamentary questions.

    1. Details of direct assistance, other than financial which has been rendered or is being considered, are as follows: - (iii) Collie coal - in the Collie coal-field area the Bureau of Mineral Resources has carried out geophysical surveys. These have determined the configuration and depth of the basin, and the results have assisted the West Australian Government in the planning of its drilling campaign; (vii) Railway from Perth to Kalgoorlie - there have been negotiations since 1945 between the Common wealth and Western Australian governments regarding Western Australian railways including the proposed line from Perth to Kalgoorlie. As I have already mentioned the Commonwealth contributed £38,6(18 towards the survey of this line. This survey has been held up by the Western Australian Government, but is sufficiently advanced to allow construction t« commence at any time. In March, 1949, a joint committee of Commonwealth and State officers submitted a report on the problem of the rehabilitation of Western Australian railways. Recently, the Commonwealth and Western Australian governments have been considering this report. (viii) Forestry - in January this year the Commonwealth cooperated with the Western Australian Government in the establishment of a forestry research station ,at Dwellingup. This station, which will conduct research into hardwood forests is at present staffed by State officers, the Commonwealth hopes to appoint staff shortly. In addition to this, the Commonwealth has assisted in an aerial survey for some 170,000 acres of forest. No direct assistance has been provided by the Commonwealth to the other projects mentioned.

Social Services

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

on asked the Minister representing the Minister for Social Services, upon notice- -

  1. Is Lidcombe State Hospital an approved benevolent asylum for the purposes of section IS of the Social Services Consolidated Act?
  2. Is the same hospital now equipped for the admission of patients transferred from ordinary hospitals; if so, will consideration be extended to the question of now classifying Lidcombe State Hospital as an ordinary hospital ?
  3. Were the aged pensioners of Lidcombe Hospital paying 27s. fid. a week for maintenance prior to the 2nd November, 1950, leaving only 15s. a week for personal needs?
  4. Are the same inmates now required to pay a further 5s. a week for maintenance leaving then only 2s. 6d. » week out of the recent pension increases?
  5. Will he take steps to give the full 7s. 6d. a week increase in this instance without delay ? fi. Do pensioners admitted to ordinary hospitals receive their pensions without deductions ?
Sir Earle Page:
Minister for Health · COWPER, NEW SOUTH WALES · CP

– The Minister for Social Services has supplied the following information : -

  1. Yes, this institution, the full title of which is Lidcombe State Hospital and Home, is an approved benevolent asylum for the purposes of section 18 of the Social Services Consolidation Act.
  2. Lidcombe State Hospital and Home does . admit aged, infirm and sick persons as hospital cases for temporary treatment. Its main function, however, is to accommodate, for an indefinite period, aged, infirm and sick persons who are in need of care, attention and treatment. As this function is the same as that of other benevolent asylums, it is not proposed to regard this Institution as an ordinary hospital.
  3. Prior to the recent amendment, which operates from the 2nd November, 1950, pensionerinmates of Lidcombe State Hospital and Home, as well as those of other approved benevolent asylums were paid pensions at the institutional rate of 15s. a week specified in section 50 of the Social Services Consolidation Act and, in accordance with that section, the balance of the pension (then 27s. 6d. a week) was paid to the institution for the maintenance of the pensioner.
  4. Under the Social Services Consolidation Amending Act (No. 2) 1950 the maximum rate of age and invalid pensions was increased by 7s. Gd. from 42s. 6d. to 50s. a week, with effect from the 2nd November, 1950, and the pensions payable to inmates of benevolent asylums were increased by 2s. 6d. from 15s. to 17s. 6d. a week. Thus, under section 50 of the act, the amount payable to the institution for the maintenance of a pensioner was increased by 5s. from 27s. 6d. to 32s. Gd. a week, commencing from the 2nd November, 1950. The average cost of maintaining an inmate in all approved benevolent asylums exceeds, and in some cases is much higher than, the 32s. 6d. a week now payable by the Commonwealth. The average cost of maintaining each inmate of the Lidcombe State Hospital and Home for the year ended the 30th June. 1949 was £3 5s. 9d. a week.
  5. As Parliament has sanctioned the allocation of the increase of 7s. Od. where the pensioner is an inmate of an approved benevolent asylum, in the proportion of 2s. 6d. to the pensioner and 5s. to the institution, the Government does not propose to take any further action in the matter. This allocation preserves the percentage that the inmate’s pension bears to the full pension, which has stood at approximately 35 per cent, for the past eight years.
  6. Yes.

Royal Australian Navy

Mr Swartz:

z asked the Minister for the Navy, upon notice -

  1. Is it a fact that a certain sum of money is being held by the Commonwealth Government as prize money for distribution to personnel of the naval service?
  2. If so, will he indicate (a) what is the total amount of this fund, (b) when will this prize money be distributed, and (o) what will be the method of distribution and what will be the approximate amount to be received by each member of the Naval Service entitled to receive same?
Mr Francis:
Minister for the Army · MORETON, QUEENSLAND · LP

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

  1. Yes. 2. (a) £249,000 approximately. (b) An exact date cannot yet be given but the money will be distributed as soon as all details in connexion therewith can be completed, (c) All eligible personnel will be requested to apply and nominate a bank account to which the amount will be paid. The amount available for each person will be approximately £8.

Tobacco and Cigarettes.

Mr McBride:
LP

e.- On the 5th December the honorable member for Leichhardt (Mr. Gilmore) asked the following questions : -

  1. Will the Minister for Trade and Customs state whether newspaper reports that the Government intends to increase the allocation of dollars for the purchase of American tobacco leaf are correct?
  2. If the reports are correct, how many dollars will be allocated and for what type of leaf?

The Minister for Trade and Customs has furnished the following reply: -

  1. The newspaper reports are not correct.
  2. The Government has not yet considered the question of the amount of dollars which will be made available for the purchase of tobacco leaf in the next licensing year which commences on the 1st April, 1951.
Mr MCBRIDE:

– On the 29th November the honorable member for Parkes (Mr. Haylen) asked the following questions : -

  1. Would the Minister for Trade and Customs ascertain why it is that although Australia and Britain are not large growers of tobacco and must import considerable quantities, there is in this country a plentiful supply of imported English cigarettes of all kinds and a shortage of locally-manufactured cigarettes ?
  2. Is it a fact that the English cigarettes are from sixpence to one shilling a packet dearer than local cigarettes?
  3. Is the Minister aware of a report to the effect that as Christmas approaches Australian cigarettes are becoming scarcer?
  4. Is it also a fact that the brands of cigarettes imported into this country from England are not known as even popular brands in Great Britain and that they were formerly sold to kaffirs in Africa and coolies in India?

The Minister for Trade and Customs has furnished the following reply: -

  1. The present demand for tobacco and cigarettes is estimated to be about 50 per cent, greater than in 1939. Australian manufacturers are not able to meet the full demand because it is not possible to provide all the dollars necessary to purchase the additional American leaf required. If sufficient dollars were made available to purchase all the leaf necessary to meet the full demand some items of essential raw material and capital equipment would be excluded from the dollar budget or the quantities now being purchased would be curtailed. The present distribution of manufactured tobacco and cigarettes represents about 117 per cent, of the pre-war demand and to achieve this rate it is necessary to allocate to American leaf slightly more than 9 per cent, of the total of the ordinary dollar budget. The United Kingdom receives a substantial proportion of its requirements of American tobacco leaf under Marshall Aid and has contracted to take up the major portion of the Southern Rhodesian crop. The United Kingdom regards tobacco as the raw material for an export trade of long standing which is valuable in earning credits for the purchase of its food and other essential needs.
  2. Yes, but the same cigarettes are dearer in the United Kingdom than they are in Australia.
  3. Every year in the period immediately preceding Christmas large quantities of cigarettes packed in cartons containing 100 or 200 are used for gifts in trade circles and to private individuals and this makes it difficult for the normal purchaser of a single packet. Overall the distribution is greater at Christmas than any other period of the year.
  4. It is not known whether these cigarettes are of a type formerly sold to kaffirs and coolies but as they find a ready sale in Australia it would appear that the quality cannot be entirely unsatisfactory.

Munitions Establishments.

Mr Beale:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

e. - On the 5th December, the honorable member for Hoddle (Mr. Cremean) asked the following questions : -

  1. Will the Minister for Supply say whether the cadet engineer scheme is still in operation in relation to the entry to or promotion within the munitions establishment controlled by the Department of Supply?
  2. If so, what are the present qualifications of entry into the scheme?
  3. Who are the members of the selection committee and what sections of the department does each selector represent?
  4. How many qualified candidates have presented themselves for selection from 1943 to the present time?
  5. How many of such qualified candidates have been successful during the same period, and what are their names?

I now advise the honorable member as follows : -

  1. Yes.
  2. Cadets are recruited by two methods : (a) From university or technical school students or apprentices in departmental factories who comply with the following requirements: - (i) Applicant must be under 24 years of age at date of appointment except in case of ex-servicemen, who are eligible up to age of 31 years; (ii) applicant must have at date of appointment completed at least the first year of an engineering course at an Australian university; or (iii) possess an engineering diploma from a recognized technical school and be eligible to matriculate and enter upon a course of engineering at an Australian university; (iv) have passed at date of appointment sufficient subjects at a recognized technical college to qualify him to proceed with the third year of the course leading: to the fellowship diploma in chemical engineering at’ the Melbourne Technical College; or (v) be an apprentice under 24 years of age at the time of appointment with not less than two years’ service in a government factory who has qualified by matriculation for entry to the faculty of engineering at an Australian university, (b) Under Public Service Board general scheme for selection of cadets for various professional positions. Applicants in this category must be qualified by examination for entry into an Australian university tothe appropriate course of engineering. Under category (b) above selectionis arranged by the Public Service Board.
  3. Mr. E. J. W. Herbert, manager, Ordnance Factory, Bendigo, Victoria; Mr. W. A. Bedding, assistant manager, Explosives Factory, Maribyrnong; Colonel W. F. E. Schraeder, Superintendent of Design, Army Branch, Department of Supply; Mr.J. Hollingsworth, personnel manager, Government Aircraft Factories. The committee interviews eligible applicants in all States of the Commonwealth and functions under the chairmanship of the local Public Service Inspector.
  4. One hundred and one applicants were received in 1949 ; 181 applications were received in 1050. Supply of figures for previous years will necessitate some research and will be supplied as soon as possible.
  5. Fifty-nine. There was no recruitment in 1945-46. Names- 1943. - R. E. Mill, H. I. W. Miller, J.G. Keegan, J. S. Thwaites, J. Powell, J. A. Gray. 1944. - L. Walker, R. Smith, D. E. Lewis, J. B. D. Joslin, E. C. Frankland-Bell, I. Buchan, D. Findlay. 1947.-P. J. W. Cottrell, A. L. O’Brien, L. J. Lutze, K. G. Elthan, M. C. Morrison, L. W. Fleming, L. J. Wrigley, J. F. Rodoni, C. L. Cookson, J. R. Pascoe, S. G. Schleiger. 1948- B. B. McClean, H. C. Tansell, K. G. Adlan, B. Nienaber, I.N. Engeman, G. J.F. Hill, P. R. Williams, W. L. Sidebottom, D. A. Dodds, -A. D. Grant, D. H. Hewitt, A. J. Cargill, C. F. Bouse. 1949.- H. G. Ball, K. A. Buckley, J. A. Clark, H. A. N. Everingham, C. A. Everingham, J. L. Harvey, B. E. Hind, V.. J. Payne, E. B. Ware, W. F.Yann. 1950. -D. R. L. Callow, C. L. Alchin, B. H. Arndt, J. J. Charles, I. B. Campbell, S. J. Wookey, D. P. Melrose, T. D. Robinson, J. S. Mappin,R. H. Evans, W. F. Miles, J. G. Prisk, R. S. Davey.

Gold.

Mr Menzies:
Prime Minister · KOOYONG, VICTORIA · LP

s. - On the 27th September last, the honorable member for Kalgoorlie (Mr. Johnson) asked me the following question : -

I should like to know whether the Prime Minister can. give, at this stage, any indication of when real and practical assistance to the gold-mining industry, as was promised by himin his policy speech last December, willbe granted?

I draw the attention of the honorable member to assistance which has been given to the gold-mining industry in connexion with the procurement of machinery and diamond drilling equipment. The Department of National Development is also undertaking, in association with State mining authorities, a comprehensive programme of geological, geophysical and geochemical surveys. These surveys have made and will continue to make a valuable contribution to mining exploration and will cover many parts of Australia including large areas in the goldfields of Western Australia. In fact, one of the first areas to be surveyed by the Bureau of Mineral Resources with an airborne magnetometer, which is being installed in an aircraft specially acquired for the purpose, will he in the Western Australian goldfields.

Dollar Deficits.

Mr Fadden:
CP

n. - On the 9th November, the honorable member for West Sydney (Mr. Minogue), asked me the following question. -

Will the Treasurer inform me what Australia’s net dollar deficit was for the financial year that ended on the 30th June, last?

I now supply the following information to the honorable member: -

Reasonably accurate estimates of Australia’s balance of payments with individual countries or monetary areas are more difficult to obtain than estimates of Australia’s balance of payments with the rest of the world. Thebest available estimate, however, of Australia’s dollar balance of payments in 1949-50 shows a net deficit of 47,000,000 dollars. The major elements were as follows : -

Repayment of 11,000,000 dollars of debt arose from the maturity in New York of two semigovernmental dollar loans amounting to 9,100,000 dollars and from normal sinking fund payments.

The net debit of 5,000,000 dollars for invisibles is after making allowances for the inflow of dollar capital into Australia. Statistical inquiries on capital movements conducted by the Commonwealth Statistician in recent years have not yet been completed for 1049-50, and in any event it is impossible for these inquiries to cover all types of capital movement. The evidence available,, however, suggests that private capital arrived from the dollar area in substantial amounts during the year and that the inflow may have approached 70,000,000 dollars. Fart of this private capital inflow represented genuine dollar investment in Australia. It is clear, however, that a considerable part was of a speculative nature transferred in expectation of on alteration of the Australian exchange rate. Some of then funds may be used during the current financial year to purchase Australian export commodities, thereby reducing Australia’s dollar receipts from exports in the current year.

Australia’s gold production of about 30,000,000 dollars in 1040-50 was sold to the United Kingdom against payment in sterling. This gold may be regarded as equivalent to dollars and is thus an offset to the deficit for 1949-50 shown in the total. Australia’s drawin? of 20,000,000 dollars from the International Monetary Fund on the 24th October, 1949, was available to finance the deficit. After allowing for these sources of finance for the deficit and for an increase in Australia’s dollar working balances by 4,000,000 dollars over the year, net purchases of dollars from the United Kingdom during 1 049-50 amounted to about 1,000,000 dollars.

Commonwealth Bans

Mr CHARLES RUSSELL:
MARANOA, QUEENSLAND · CP

l asked the Treasurer, upon notice -

  1. Is the percentage of gross profit’ to capital and reserves of the Commonwealth Bank of Australia for normal trading activities much lower than that for n trading bank in a comparative period.
  2. If so, what is deemed ‘ to be the reason or reasons underlying this state of affairs, and, particularly, is the accumulation of fun;!:! overseas having a derogatory affect on the Commonwealth Bank’s profits by causing the London branch to show a loss on normal bank trading.
Mr Fadden:
CP

– The information requested by the honorable member is being obtained and will be furnished as soon as possible.

Mr Fadden:
CP

n. - On the 29th November the. honorable member for Fremantle (Mr. Beazley) asked a question in the following terms: -

In the absence of the Treasurer, I ask the Prime Minister a question relative to the custom of the Commonwealth Bank of insuring exporters, at a premium of 2s. 6d. per cent., against the possibility of loss resulting from re-valuation while their goods are in transit.

If thu Government’s decision against revaluation is definite and final will it issue an instruction to the Commonwealth Bank to desist from insuring against a certainty, or alternatively to reduce the rate of insurance! Will the Prime Minister be good enough to mak, available to me details of the amount of money that the Commonwealth Bank has earned out of this insurance?

I am advised by the Commonwealth Bank that it provides forward exchange facilities for exporters and importers but traders are free to determine whether or not they avail themselves of these facilities. Traders may, of course desire to insure against the risk of variations in exchange rates made overseas. The fee of approximately one per centum per annum charged for this service compares favorably with charges made for forward exchange cover in other countries. It may be regarded as in the nature of a small insurance premium and the bank does not consider any reduction is warranted. It is not the practice to publish the earnings arising from the various classes of business of a department of the bank and therefore it is not possible to furnish particulars of the hank’s forward exchange earnings.

Cite as: Australia, House of Representatives, Debates, 7 December 1950, viewed 6 July 2017, <http://historichansard.net/hofreps/1950/19501207_reps_19_211/>.