House of Representatives
28 April 1959

23rd Parliament · 1st Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

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– Does the Acting Prime Minister propose to state very soon the objects, and especially the results, of his recent mission to the United States? Will he do that, so that there may be some debate on the subject?

Minister for Trade · MURRAY, VICTORIA · CP

– It is my desire that the House should know the purposes for which I went to the United States, but I should make it clear that the situation does not lend itself to a very full statement, for this reason: I was invited, as the appropriate Australian Minister, to attend a meeting of Ministers of wheat-exporting countries, which was to take place on 5th May. For reasons which were obvious, I could not be out of the country at that time. It was mutually agreed between the United States Secretary for Agriculture and myself that it was desirable that I should go across and have some conversations beforehand. Clearly, I cannot canvass the subject in anticipation of the meeting of Ministers, but I shall be glad to make a statement, taking the matter as far as I am able in the circumstances, so that the House may know of my mission.

Dr Evatt:

– Stating the policy?


– Yes, stating the policy. In order to have the advantage of hearing comments upon that policy from both sides of the House, I shall take an early opportunity to make a statement.

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– Can the Leader of the House say whether it is intended by the Government to introduce the divorce legislation before the end of the present sessional period? If the answer to that question is in the affirmative, can he say whether it is intended that, after the introduction of the bill and the Minister’s second-reading speech, the bill should lie on the table of the House until the next session, or that we proceed with the secondreading debate during this session?


– My colleague, the Attorney-General, has been doing a great deal of work in preparation of a bill, not merely relating to divorce as might be implied by the honorable gentleman’s question, but on matrimonial causes generally. I understand that he has reached a stage where the proposed legislation will shortly be considered by Cabinet with a view to submitting it to the House. There has not yet been an opportunity for Cabinet to consider the procedure which should then follow. However, I think I can assure the honorable gentleman that there is no intention of carrying the legislation through all stages during this session. Whether it would be desirable to have a general second-reading debate this session or to let the legislation lie until honorable members have had a chance of studying it during the recess has yet to be resolved.

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– My question is directed to you, Mr. Speaker. I ask whether you have had an opportunity to consider the position of the guides employed at Parliament House, whose weekly earnings have been adversely affected by a decision to give greater service to the public by having the building open for inspection on Sunday mornings. Can you, Sir, say whether this matter was discussed previously by any committee of the House? Would you consider making a statement on the matter, taking into account in that statement criticism that has been expressed in some quarters, and giving an answer to that criticism?


-I will have a look at the question raised by the honorable gentleman, and I will endeavour to give him a reply based on facts.

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– I direct a question to the Minister for External Affairs, ls it a fact that Colombo Plan countries agreed to extend aid facilities until 1961, and that the future of the plan would be considered at a meeting to be held this year? Has this meeting yet been arranged and if so, where will it be held? Do reports indicate that technical assistance, as an integral part of the Colombo Plan, has been of direct benefit to the economic development and raising of living standards of the peoples of the region?


– The answer to the first part of the honorable gentleman’s question is, “ Yes “. A formal decision was reached some few years ago that the Colombo Plan would continue to operate until mid-1961, but that the matter would be reconsidered at this year’s meeting, which will be held in Indonesia - I think, speaking from memory, it has been decided to hold it in Jogjakarta, but I am not certain of that. I expect the meeting to be held some time between September and November. As to the usefulness of economic aid and technical assistance - in particular on the technical development side, about which the honorable gentleman requires an answer - I would say that without any doubt the technical development achieved has been of very great benefit to all the participating countries. Experts in particular techniques have been supplied when asked for; students selected by the Asian Governments concerned have been trained in Australia and other Western countries; and technical equipment has been provided. There is no doubt whatsoever that the meeting of these various needs has been of great value to the economies of the countries concerned.

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– My question, which is directed to the Minister for Labour and National Service, relates to the operation of the call-up for national service training. I refer the Minister to the position of young men called up for national service training who are already voluntarily in the Royal Australian Naval Reserve, but whose presence in the Royal Australian Naval Reserve does not exempt them from call-up for an entirely different form of training. I ask the honorable gentleman: In view of the fact that national service training is confined to the one-third of those eligible, who draw lots and actually do undertake training, is there any benefit to the nation in including in that one-third men who are already receiving another form of training? Would it be possible to vary the regulations or alter the act in order to provide that where a man is actually attending parades and receiving training in another service, he will not be included in the one-third who are called up for national service training?

Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– As the honorable gentleman will know, the call-up to the Army for national service training of people who have voluntarily undergone training with the Royal Australian Navy is in accordance with the provisions of the act. However, from what the honorable gentleman has said to me now, and having regard particularly to the persuasive way in which he has put it, it does appear that a case has been made out for reconsideration of the problem, and possibly for amendment of the act or regulations themselves. I will see that the problem is investigated, and I shall try to give the honorable gentleman an answer in the House just as soon as I can.

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– The Minister for Primary Industry will recall having discussions last year with State Ministers concerning legislation to ban the production of filled milk. Can he inform me as to the progress of such legislation in the various States?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– I speak from memory when I say that Queensland, Victoria, South Australia and Western Australia have already passed the necessary legislation, or have dealt with the matter by regulation, to ban filled milk. New South Wales had its legislation ready prior to the recent election in that State and intended to put it on the statute book. Owing to the election intervening, New South Wales was not able to attend to the matter, but I presume that it will do so. That is the situation in that State at the present time.

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– I ask the

Minister for Trade whether he has received a report of the submissions made yesterday by the Crown at the Goulburn wool dispute inquiry. Did the Crown then submit that the woolbuyers are combining to restrain trade in wool and to limit the output of wool in Australia in a way detrimental to the public interests of this country? Did the Crown recommend yesterday that steps should be taken to render illegal in the future such restraints of trade by the woolbuyers? Will the Government watch the proceedings of this inquiry very closely with a view to the taking of effective Commonwealth action at the earliest moment?


– I have not received any statement along the lines indicated by the honorable member. I am sure that the honorable member would not expect that any action should flow from a statement made even by the Crown in the course of evidence submitted to a tribunal. But to the extent that the issues which are raised at this inquiry touch Commonwealth authority and general public interest as it reposes with the Commonwealth, I assure him that the appropriate Commonwealth authorities will watch the situation carefully.

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– My question to the Minister for Health concerns the application of the special accounts benefit which came into operation on 1st January last. Can the Minister say whether persons who were admitted to hospitals which are not recognized for the purposes of this provision in the act prior to that date will be eligible for fund benefits if they suffer a recurrence of the complaint for which they went to hospital, and it is found necessary for them to undergo further treatment in these hospitals?


– It is realized that there may be a few cases suffering from the disability to which the honorable member refers. At the moment we are having a look to see what can be done in these cases, but at this stage I cannot anticipate what the position will be.

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– I ask the AttorneyGeneral: Is it true that he appeared in a case for, or was a legal representative of, an insurance company that was proceeding against the Commonwealth? Does he believe that his appearance in such cases is either desirable or in the best interests of this Parliament?


– 1 have not appeared in any case since I took office as Attorney-General, other than a case in which I appeared for the Crown, and I do not intend to so appear. I noticed in this morning’s paper that the last case in which I appeared as counsel before taking office was successful.

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– Is the Minister for Health completely satisfied that arrivals in Australia at our numerous ports of entry, particularly by air, who are conscientious objectors to vaccination and who often disperse very rapidly throughout the Commonwealth on our expanding air services, do not represent any risk to our national health?


– If such cases represent any risk at all, it is a very small one. The honorable gentleman, I am sure, will realize that no quarantine system, no matter how efficient - and the Australian quarantine system is most efficient - can guarantee to prevent 100 per cent, of cases of potential infection getting through it. In fact, it was a realm.tion of this which caused the National Health and Medical Research Council to recommend some time ago that it would be advisable for vaccination against smallpox to become a routine measure in Australia.

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– I ask the Minister for Social Services whether it is a fact that all age, invalid and widow pensioners are required by the Department of Social Services to complete an annual review form. Does this form require the pensioner to repeat information regarding personal assets and circumstances which has already been supplied to the department prior to the granting of the pension? Is the Minister aware that the receipt of this form is a cause of embarrassment to many pensioners who regard it as an infringement of their privacy? I ask the Minister whether this form is necessary to the department and what purpose it serves when pensions have already been granted on the information supplied in the original application.

Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– No one would know better than the honorable member for Lang that the circumstances of pensioners change from time to time. In addition, of course, substantial alterations have been’ made to the means test from time to time and the annual review form- is necessary, not only in the’ administration of the Social Services Act by the department, but in the interests of pensioners themselves. Information of the kind is necessary in order to determine that those who qualify for social service benefits shall get the benefits to which they are justly entitled and which are appropriate to their circumstances: In a recent review, covering a period of twelve months, it was revealed that the annual review forms had had the effects of increasing- the pensions payable to not fewer than 26,000’ pensioners; reducing the pensions, because of changed circumstances, of some 6,300 pensioners; and cancelling of pensions being paid to 170 pensioners. Those figures, surely, will show to the House how necessary is the annual review in the interests of the pensioners themselves, iri addition to the normal procedure in the administration of the’ Social Services Act.

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– Has the attention of the Minister for External Affairs been directed to reports that Egypt has seized at least two vessels belonging to the nation of Israel? Is it a fact that the seizure of vessels under somewhat similar circumstances a short time ago endangered the peace of the world and led to armed conflict? Is it also a fact that, owing to the action taken in their defence by the people of Israel’, the Suez canal, as an ultimate result, was put out’ of action? If these are facts, having regard to the importance of the Suez canal arid the freedom of traffic through it, to the Australian people, can the Minister inform the House what action has been taken either by the Commonwealth or by some other agency to bring the matter to the United Nations and to make a protest, if necessary, to Egypt?


– It is a distressing fact that relations between Israel and the United Arab Republic are still bad. It is a fact, as the honorable member says, that what appeared to be hostile action on the part of Egypt against Israeli shipping seeking fo enter the Suez Canal and neighbouring waters has, in the past, led to conflict. I have seen reports, such as the honorable gentleman spooks of, in respect of Israeli shipping being interfered with recently’ by Egypt, which is- a part of the United Arab Republic. The circumstances surrounding that interference are not’ in my mind, but f will look into the matter and advise the honorable member as soon as I can of the result of my investigations.

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– I ask the Minister for Territories a question concerning the report on the incidents at Navuneram which the Chief Justice of Papua and New Guinea presented to” him last November, and which he summarized and interpreted to the House six weeks ago. As- honorable members cannot obtain copies of the report from the Clerk of Papers or the Library, and as he himself, I believe, received only a couple of copies, will he have the report printed and circulated, in anticipation of the House adopting, in this session or the Budget session, the purely formal motion on the notice-paper for the printing of the report? Better still, will he make the report available to the general public, so that Australians will be more fully able to meet the responsibilities and criticisms which will come their way as New Guinea becomes the last part of the world without an indigenous government?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– The report, including the transcript of evidence, is in eight extremely bulky volumes. A full set was tabled in this House and has been available to honorable members for a period of several weeks. It was brought to my notice only last week by the honorable member for Fremantle that honorable members opposite had some difficulty, for reasons that are not within my control, in obtaining access to the set that had been tabled in the House.

Dr Evatt:

– That is probably my fault, but it is an enormous report and I think it should be printed.


– I immediately made arrangements to get a copy of the volume containing the findings for the honorable member for Fremantle. I also made arrangements to have various typescript copies of that volume - which is the one, I think, in which honorable members will be most immediately interested - made available. The question of printing so large a document is, of course, one that will have to be the subject of consultation with the proper authorities.


– I would like to address a supplementary question to the Minister for Territories. I support the suggestion that the report be printed. The document is one of tremendous importance. It is far more important than the actual incident that was being inquired into. I think it may provide a great guide for the future, and I support the suggestion made by the honorable member for Werriwa that it be printed. I ask the Minister to consider the suggestion.


– I can assure the Leader of the Opposition that I will give very careful consideration to the suggestion that, in advance of any resolution or determination of this House, some steps should be taken to put the report in print. Of course, the House will realize that this is not a matter on which I have the final word.

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– Will the Minister for the Interior inform the editor or owners of the “ Canberra Times “ that returned ex-servicemen did not appreciate an advertisement appearing in that newspaper on 24th April, at page 9. I refer to the advertisement which was headed - “Lest We Forget”. Get an Exclusive Used Car.

Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– I do not propose to tell the editor of the “ Canberra Times “ how to run his paper.

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– Will the Minister for Air advise me of the disposition and use of the ten refrigerated trucks, each of 300 cubic feet capacity, recently acquired by his department at a cost of £47,000?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– Offhand, I cannot tell the honorable member of the exact disposition of these trucks, or whether they have yet been delivered, but I can tell him that they are required to replace old wartime refrigerator trucks for which there is an establishment and a recurring need in the Royal Australian Air Force. These vehicles are needed principally for the preservation of food for airfield construction squadrons which often have to work in outlying places, and also for one or two training establishments which periodically go on bivouac for their training.

Mr Stokes:

– Is there none for Butterworth?


– No.

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– I direct a question to the Treasurer. Is the right honorable gentleman aware that moves have been made to have his nomination as Liberal candidate for Higgins withdrawn because of his attitude to certain legislation which was passed through this House recently? Is he aware, also, that the move is sponsored by an organization known quaintly as “ The Ladies of Malvern “, the last remnant, so we are told, of the militant Australian Women’s National League? In view of the old adage that says, “ Heaven has no rage like love to hatred turn’d, nor hell a fury like a woman scorn’d “, what action, if any, does the Minister intend to take to protect himself and the institution of Parliament from outside domination by the variety of sweet young things who evidently seek to plot, plunder and destroy as members of the sinister organization known as “ The Ladies of Malvern “?


– I am afraid that the honorable gentleman has fallen into an error about which we have been so critical of many members of the public in recent times: He has been reading the newspapers and he has believed what he has read therein. I assure him that there is no substance in the rumour.

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– I desire to ask the Acting Prime Minister and Minister for Trade a question. I should like to preface it, by way of explanation, by saying that it is well known that there are now developing in Australia many firms which could successfully compete in overseas markets with a good effect upon our export receipts. Many of these firms either are not aware of their capacity to do this, or, if they are, have not yet made contact with officers of the Department of Trade and, as a result, have not used the services made available to them by the Government. I ask the Minister: What steps are being taken to ensure the maximum flow of exports, and the maximum of co-operation between the firms referred to and such contacts and services as I have mentioned?


– I think it is true, as the honorable member suggests, that there are to-day many Australian manufacturing firms whose products would be competitive and saleable in overseas markets, although those firms have not as yet sought to exploit the opportunities available to them. There is a pretty broad approach to the exploration of overseas marketing opportunities by the Department of Trade, particularly through its very widespread Australian Trade Commissioner Service - to which recently has been added a subsidiary service provided by trade correspondents in areas where a fully fledged trade commissioner is not yet warranted - and a successive arrangement of trade missions that have been proceeding to various overseas market areas - Africa, Asia, the islands near to Australia and, more recently, the United States of America. Over and above all those things, the Government has brought into being, with the willingness of Australian businessmen to help, a body known as the Export Development Council, which is composed of leading and very experienced businessmen. From the conglomerate of all the knowledge gained and all the advice available, there is a constant flow of correspondence and contacts and, lately, specialized publications which are available to all manufacturers, export houses and industry groups. This is having an increasing impact upon Australia’s diversity of exports. Any additional suggestions that were made would be studied by both the Department of Trade and the Export Consultative Council.

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– Is the Minister for Trade aware that, invariably, unsuccessful applicants for import licences in Sydney are visited almost immediately by people with import quotas for sale at an added cost of from 12i to 15 per cent.? Does he agree that in almost all cases the only people who would know that an application had been made and refused would be the person or firm making the application and the officers of the Import Procurement Section of his department? Is he aware that it is commonly known in business circles in Sydney that there is an office in York-street, Sydney, occupied by people who deal exclusively in import quotas and licences and who will do business on the basis of up to 15 per cent, added? In view of the inflationary effect which arises from a continuance of this dishonest practice, will he, in the public interest, seek government approval to the setting up of a royal commission to inquire into all aspects of import licensing and the fixing of import quotas?


– The honorable member for East Sydney introduced his question by asking whether 1 was aware of a series of things. I answer immediately by saying that I am not aware of these things. I make it quite clear that the business of import licences has never been regarded as other than a very difficult matter to administer, one which the Government concedes is difficult to administer, and in which it is very difficult indeed to give satisfaction. To this end we have made our policies publicly and clearly known. The policy in respect of any item for which an import licence entitlement exists may be ascertained by anyone upon application in writing or personally to the appropriate section of the Department of Trade. Necessarily, many decisions are arbitrary, although to the maximum extent entitlement is determined in accordance with a formula. To deal with a situation in which arbitrary decisions are unavoidable, the Government has established in every State an appeal authority which includes private business citizens whose interests are not concerned with the business of import licensing which they are re-examining. It is my belief, from a close examination, that the total of the arrangements made is regarded as being as nearly satisfactory as can be expected in this difficult circumstance. However, I would never deny that there are some people who will try to exploit this arrangement, and the best service that can be given to the community is to convey, in explicit terms, complaints of actual incidents and not to make general statements which cannot be checked by me and which really do not contribute to the alleviation of a difficult state of affairs.

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– I ask the Minister for Air whether all future pilots in the Royal Australian Air Force are to be commissioned on graduation. When the classification of sergeant-pilot is dispensed with, will all sergeant-pilots now serving be commissioned? Finally, will the Minister explain to the House the present method of selecting officers from sergeant-pilot rank?


– As the House knows, my department adopted a new policy not very long ago that all future entries for aircrew duties in the Royal Australian Air Force should be enrolled as cadets and be commissioned on graduation. Existing sergeant-pilots will be assessed annually for commissioning. Those who are commissioned will be offered the usual short service commissions and will have the same opportunities as others to qualify in due course for permanent commissions, if they wish to do so. Those sergeant-pilots who are not commissioned under the present system will be retired at the expiration of their present period of service. I think the honorable gentleman asked me what method was used when considering whether existing sergeantpilots should receive commissions. The method is unaltered. Each sergeant-pilot is reported upon annually by his unit commander and is considered for promotion by the Air Member for Personnel. i TELEVISION.


– I ask the PostmasterGeneral a question without notice. Will the honorable gentleman explain why it is necessary for owners of television sets in South Australia to purchase viewers’ licences before regular transmission programmes begin? 1 remind the honorable gentleman that in New South Wales and Victoria owners of television sets were not required to obtain such licences during the experimental stages of the various television stations.

Postmaster-General · DAWSON, QUEENSLAND · CP

– If I remember rightly, the honorable member asked me a similar question last week. Is that so?

Mr Thompson:

– I asked the Minister a question.


– I knew that this question had been asked last week. Pro vision was made in the act that licences would be required for television sets as from. I think, 1st January in the year after television was commenced. Television commenced about October or November, but under the act licences were required to be taken out as from 1st January. I am speaking from memory, and I will check the facts. The act provided that, from then on, when a person purchased a television set he must also take out a licence. It is to be presumed that a person would not purchase a television set costing about £200 unless he expected very soon to obtain a service from it, and therefore he would be prepared to pay the extra £5 for a licence.

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– I ask the Minister for Primary Industry a question. I preface my question by reminding him of the expressed opinion of the chairman of the Australian Meat Board that an organized approach by this country, together with New Zealand, is desirable if we are to minimize the risk that the United States market for our meat will dry up. In view of this situation, can the Minister say whether the Government is taking any action to encourage such coordination?


– I stated recentlyand I am still of this opinion - that I do not think this is a matter that should be discussed in the first instance at ministerial level. The chairman of the Australian Meat Board has already consulted by telephone with the chairman of the meat board in New Zealand on this matter. As those boards are the appropriate authorities set up by the respective governments to handle the marketing of all meat overseas, I have no doubt that the chairmen of the two boards will attend to their duties properly.

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– I ask the Minister for Health whether it is a fact that in the case of persons with chronic or pre-existing illnesses, the Hospitals Contribution Fund of New South Wales restricts benefits to a socalled standard rate of 16s. a day, irrespective of the table under which the patient may have insured. Is it also a fact that the Medical Benefits Fund of Australia Limited, on the other hand, places no such restriction on the amount that a person may receive according to the table under which he is insured? If these are facts, can the Minister say why one organization thus discriminates against members suffering from chronic or pre-existing illnesses while the other organization does not?


– The position is that under the act, payments from the special accounts must not exceed the hospital charge, but if the person is insured for one of the higher tables and is admitted to a hospital which charges a high fee, he will still be paid that fee from a special account provided he is insured under a table of that order. In other words, he is not disadvantaged by the fact of being in the special account if he is insured in a higher table. The only restriction placed on him is that whatever he is paid out of the special account cannot exceed the hospital charge. I have no doubt honorable members will remember that when the bill was being debated in this House, it was generally agreed on both sides of the House that because any deficit in special accounts has to be made good by public funds, this was a reasonable provision to attach to it.

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– I preface a question to the Minister for Territories by directing his attention to the fact that during a recent television interview in Melbourne, an aboriginal schoolteacher from Western Australia stated that she objected to paying a fee of 10s. 6d. for Australian citizenship. In view of the fact that the Minister for Immigration has recently announced that the Commonwealth Government will abolish the fee charged to migrants for Australian citizenship, will the Minister say whv aborigines are expected to pay for what should be a birthright?


– I have no personal knowledge of this case. The honorable member and the House will appreciate that the administration of all matters affecting aborigines in Western Australia is a matter for the Western Australian Government under the Constitution. I can only make certain assumptions. I would assume that if this woman is a person of aboriginal descent and is living in Western Australia, she probably comes under the restrictive and protective provisions of State legislation affecting aborigines. Under the laws’ of Western Australia, such a person has to apply for exemption from those laws in order to obtain what are the customary rights for all other citizens living in Australia. I am not aware that any fee is charged to a person who seeks exemption from those restrictive and protective laws, but I may be in error in that regard.

As the honorable member has addressed the question to me, I would point out that in the Northern Territory, which is the only part of the Commonwealth where aborigines are directly under the administration of the Commonwealth Government, we have a system under which it is assumed that citizenship is the right of every aboriginal person in the Territory. They lose that citizenship only if they are committed to the care of the State as wards. Their committal by declaration is subject to their right of appeal to a magistrate in chambers against the declaration. There is also provision that if they are not so declared, they are citizens, and their citizenship is not revocable at any time. In addition to that, persons of mixed blood to the number of several hundreds, by one piece of legislation, have been given citizenship and cannot lose any of the rights of citizenship unless they themselves ask to be placed under the care of the State or by some decision of a court are placed in the care of the State in the same way as are other citizens.

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– I ask the PostmasterGeneral: Will he give fresh consideration to a proposal that the unit-fee area for telephone calls from Canberra should be extended to include the town of Queanbeyan and the exchanges of Hall and Mount Stromlo? Will he also consider having the exchanges at Hall and Mount Stromlo connected to the automatic network in Canberra?


– The honorable member has referred to a matter which has been under consideration by a special committee of the Postmaster-General’s Department for some considerable time. We are considering the extension of the unit-fee area by applying the unit fee to calls between adjacent zones which are to be determined in country areas. This is part of the plan for the extension of automatic services throughout Australia. Of course, considerable time and money will be required to bring the plan to fruition. Implementation of the plan will commence shortly and it will steadily progress in the next few years. The honorable member will find that as we go along the objective he seeks will be achieved.

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Assent to the following bills reported: -

Reserve Bank Bill 1959.

Commonwealth Banks Bill 1959.

Banking Bill 1959.

Banking (Transitional Provisions) Bill 1959.

Audit Bill 1959.

Christmas Island Bill 1959.

Commonwealth Employees’ Furlough Bill 1959.

Crimes Bill 1959.

Income Tax and Social Services Contribution

Assessment Bill 1959.

National Debt Sinking Fund Bill 1959.

Northern Territory (Lessees’ Loans Guarantee)

Bill 1959.

Officers’ Rights Declaration Bill 1959. Re-establishment and Employment Bill 1959. Sales Tax (Exemptions and Classifications) Bill 1959.

Ministers of State Bill 1959.

Parliamentary Allowances Bill 1959.

Parliamentary Retiring Allowances Bill 1959.

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Motion (by Mr. Harold Holt) agreed to -

That leave of absence for one month be given to the honorable member for Isaacs (Mr. Haworth) on the ground of parliamentary business overseas.

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Mr SPEAKER (Hon John McLeay:

I have received a letter from the honorable member for Macquarie (Mr. Luchetti) proposing that a definite matter of urgent public importance be submitted to the House for discussion, namely -

The failure of the Government to deal with the persisting problem of unemployment in coal mining areas throughout Australia which causes avoidable hardship to miners, tradespeople and the community generally resident in such areas.

I call upon those honorable members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places) -


The failure of the Government to deal with the persisting problem of unemployment in coal-mining areas throughout Australia is properly a matter for the attention of this Parliament. This is a serious problem affecting the lives of men, women and children. The issues involve the whole community and the future of towns and villages, but also inherent in them are considerations of an economic nature, including decentralization of industry, and the national security. As New South Wales is the principal coal-mining State in the Commonwealth, I shall naturally discuss the mining industry in that State.

One may well ask what has brought about this problem. I think the answer can be found under two headings - mechanization and the increasing use of oil fuel. As a result of mechanization, production in the coal industry has reached a record level yet fewer workers are employed. During the next few minutes I propose to give some statistics of those who have been forced to leave the industry, their homes and their districts, and I shall tell the House of the serious problem, not merely as it affects those who go down into the bowels of the earth to win coal for the warmth, comfort and convenience of the people of this nation, but as it affects the mining community generally and the whole of the national fibre.

I am indebted to the secretary of the miners’ federation, Mr. Mahon, for a most informative letter stating the federation’s point of view on this matter. The letter deals with those who have left the industry, those who are likely to lose their employment in it, and the general feeling of despair which grips many coal-miners to-day. It should be remembered that in 1952 the number of men in the industry was 20,131, and the average output per man-shift was 2.95 tons. At that time, 40 per cent, of the total output was produced by mechanical means. The total production was 14,264,000 tons of coal. Perusing this valuable statement prepared by the secretary of the miners’ federation, one can see clearly the effect of mechanization on employment. In dealing with this question, one has to think of the broad position not only of those engaged in coal mining but also those engaged in all forms of industry where mechanization and automation must inevitably reduce employment.

I ask honorable members to think of the background to this problem. On the admission of the Minister for Labour and National Service (Mr. McMahon), some 60,000 persons are registered as unemployed at the present time, although we know that, for a variety of reasons, the figure is more likely to be in the vicinity of 100,000. In addition, there is to be a further cut-back in the production of lead and zinc, which will cause more unemployment. This has therefore become an acute question and 1 hope that the Minister, in speaking to it, will treat it, not as a proposition coming from this side of the House just for the sake of academic debate, but as a vital, living question affecting men, women and children.

Let us consider the outstanding performance of those engaged in the coal-mining industry. I have time only to refer to the position in 1958, by which year the number of employees had been reduced to 14,349 from 20,131 in 1952. A record production of 15,832,900 tons of coal was achieved, although 5,782 fewer persons were engaged. These are figures supplied by the Joint Coal Board. That is surely an argument that ought to appeal to the Minister. This is a problem which needs immediate, positive action by the Government. I do not expect the Government to accept in full the proposals on this vexed subject made by the miners’ federation, but how does the Government propose to meet the crisis in this great national industry? In colliery after colliery great numbers of men have been displaced as a result of mechanization. It is idle for the Government to say that there is no unemployment or that these men can go somewhere else. I think I shall be able to show in the next few minutes that avenues of employment elsewhere in the industry have closed and that there is a need to do something. I was appalled - in fact, disgusted - to read the news release dealing with the mining industry which was issued in March by the department administered by the Minister for Labour and National Service. All that the department had to say about the plight of the people on the coal-fields was -

There were some further retrenchments in New South Wales coal mines during the month.

I say to the Minister that there is no warmth, no humanity, no hope for the miners, in such a statement. Surely we could have expected something better than a statement of that kind.

I remind the Minister of what happens to the men who are thrown out of industry through the Government’s inaction. They are forced to leave their communities, their homes, their villages. Their homes have been depressed in price, but they are forced to leave them in an attempt to find employment somewhere else. But look at the other side of the picture! When the Joint Coal Board was terminating the services of contractors who had been engaged in the coal-mining industry - people like the Parkinson Strip Mining Company and the George Wimpey interests of London - it made a most generous provision in respect of the suspension of contracts that became necessary because machinery had become redundant; but when men become redundant there is no thought of such an approach. There is no thought, for instance, of a national approach by establishing new industries in the area. I do not refer to the provision of relief work - something for to-day or to-morrow - but to the establishment of permanent industries. The Government has had no thought of doing anything of that kind. It merely says- to the displaced miners, “You can po somewhere else in Australia and find employment “.

The position is a serious one, Mr. Speaker, and I tell the Minister that his plausible words will not be good enough on this occasion. The blizzard that has hit many mine workers calls for action, not words, from the Government. Here is the position: We have lost some 5,000 men from the industry already. In addition, what is the picture for the immediate future? As from 15th May, the New South Wales Electricity Commission and the New South Wales Department of Railways will require 8,050 fewer tons of coal than hitherto. That is a most serious matter, which must cause further unemployment in the coal industry. In my own district, the western district of New South Wales, it will mean that 2.455 fewer tons of coal will have to be won. When one considers that only recently some 30 miners lost their jobs in one pit and 35 lost their jobs in another pit, and that various changes taking place will lead to unemployment for another 200 men, the real need for positive action on the part of the Government is obvious. Pelaw Main in the north is to put off another 166 workers.

What is happening in this regard at present, taken in conjunction with the repercussions from the decreased demand by 8,050 tons which is to come into being next month, shows that the position is indeed grave.

Indicative of the serious position is the fact that membership of the western miners’ federation has fallen from 1,700 to 700 - a loss of 1,000 men in that district alone. It may be said by some, quite carelessly, if not callously, that as these men are not needed it would be uneconomic to employ them. I remind the House that when it comes to the butter industry, which has been uneconomic for a long time, a different attitude is shown. The taxpayers subsidize that industry. Consumers pay more for their butter in order to keep the industry going. We have never complained about that, because we realize that people who have a stake in that industry - buildings, land and so on - ought to be able to remain in their districts and continue in the industry. But what do we see when it comes to the problem of the coalmining industry? There is no suggestion that this industry should be dealt with in the same way as the butter industry.

The Minister may say that there is a reemployment committee to handle this matter. But I say that that re-employment committee has not been able to do all the things that it ought to do. The colliery representative complained at a meeting of the re-employment committee in Newcastle that he did not know about dismissals that were about to be made, and the committee was obliged to put on record the difficulties that existed there. In reference to the position in my own district, Mr. Howard Smith, at the annual meeting of the company with which he is concerned, indicated that the Invincible Colliery at Cullen Bullen would probably close down in the near future. Does the Minister realize that if the Invincible Colliery closes down, that means the end of a whole town? It means the end of the whole community of Cullen Bullen, and the people who have lived there, and reared their families there, will suffer.

I wish to conclude my remarks with a few constructive suggestions to the Minister in regard to this problem. I want to put it to him that this business of passing the buck between the State and the Commonwealth must stop. The Joint Coal Board ha9 done a good job, up to a point, in reaching production targets. But we want to go beyond production targets now. We want to provide avenues for the use of 00al We want the establishment of new industries which will use coal. We want the development of our shale industry. We want a search for new markets for our ooal. We also want consideration by the Government of the claims made by the miners* federation. We want to see the mining towns, with their established services, given an opportunity to serve this country. I am heartily sick of hearing about the establishment of satellite towns around the perimeter of Sydney while in the north, for instance, we have places like Cessnock and Kurri Kurri, and Lithgow in the west, which have services already in existence and which would be able to make a contribution to the nation if new industries were established there. I have here a photostatic copy of an article headed “ Shale Oil Heads for the Market “, which, with the permission of the House, I shall incorporate in “ Hansard “. This article appeared in the “ International Management Digest”, of October, 1958, and deals with this matter in a most interesting way. It reads -

Advanced techniques today are speeding up the processing of valuable fuel from rock rich in hydrocarbons.

How much oil is contained in the world’s extensive deposits of petroleum shale is anybody’s guess. Until recently, no one cared enough to find out. Shale oil had been used for more than a century in Scotland and other parts of Europe, but with the discovery of huge petroleum reserves in the Middle East and Western Hemisphere, its importance diminished.

What was needed was an economical and highspeed method of vaporizing the shale into its useful components. Such processes now are being perfected, and new attention is being given to the world’s shale resources. Extensive studies are going on in Brazil; production of Swedish shale products is increasing; and a U.S. firm has plans for S3-million plant using a new, cost-saving process.

The Swedish Oil Shale Co., near Kvarntorp in central Sweden, has been processing products from shale for 15 years. Techniques have been greatly improved in recent years. New producing units have been added each year, and another 20% capacity increase is now under way. During the fiscal year ended in June, the firm produced 250,000 bbl of gasoline, 500,000 bbl of fuel oK, 22-miIIion liters of propane and butane, 38,000 tons of sulfur, 24,000 tons of ammonia, and 55,000 tons of quicklime.

Oil shale consists of marlstone, sandstone, and kerogen (a compound of yellow wax-like hydrocarbons). When the shale is heated, the kerogen decomposes into shale - oil, a liquid more like coal tar than petroleum. This pan be refined by conventional methods into gasoline, jet fuel, and other useful products.

A recent development pf the Swedish firm has been the use of underground electric heaters to vaporize the kerogen (photo below). The heaters are placed in holes that have been drilled to the base pf the shale deposits. Vapors leave the field slowly during a period of six to sixteen weeks after heating has begun.

The normal practice at Kvarntorp is the use pf vertical retorts about 20 cm in diameter at the top and flared larger at the bottom. Shale fragments about the size of walnuts are fed at the kp. Hot gases travel upward heating the shale to combustion temperature.

U.S.A.’s Oil Shale Corp. soon will begin using a shale oil recovery process that is said to be 50% cheaper than anything used to date. The firm has improved a basic process developed by Olof Aspergren, a Swedish engineer.

The process gets its heightened economy from mixing broken-up shale in a revolving drum with heated balls of metal or ceramics. This speeds up the vaporizing cycle from the 60 minutes required in older systems to 10 minutes.

All sizes of shale may be handled by the improved process. Fines do not have to be removed, as is required in some plants. Developers say that their process results in less degradation of end products.

The crushed shale is heated to a temperature of close to 600 C. At this temperature, about two-thirds of the kerogen is turned into shale oil, another 10% into gas, and the residue becomes a- solid coke.

The improved process came out of a two-year study by Denver Research Institute, Colorado, LT.S.A., with a 24-ton-a-day pilot plant. On the Institute’s recommendation, Oil Shale Corp. plans on a’ $3-million semi-commercial plant in the near future that will process 1,200 to 2,400 tons of shale a- day.

  1. fully-commercial $23-million plant is also under study. Institute spokesmen say it would produce a shale oil comparable with low-grade crude- at a cost of $1.42 to $1.92 a barrel. (Petroleum Weekly, July 18, p. 72; Aug. 8, p. 31).

The: Sydney “Sun “, of 21st August last year; published an article under the heading, “£520;000,000 industries depend on oil”. We know, in these days of cold war, and with disturbances happening throughout the world, just the kind of things that can Happen to a country that is dependent on imported fuel for its industry. I suggest that we are gambling very unwisely in not taking positive action to deal with this problem. So I hope that the Government will, heed the constructive suggestions that we are trying to make in the limited time available in this debate. The Government has spent £3,124,634 on the search for flow oil since 1949. I submit to the Minister and the Government that instead of gambling by putting holes in the ground, it would be .much ‘better to get on with the job of providing an opportunity for the production of oil from coal and oil from shale.


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

Minister for Labour and National Service · Lowe · LP

– I think it will be obvious to the House that there is very little case to answer in what has been put by the honorable member for Macquarie (Mr. Luchetti). What are we debating? We are debating, according to the terms of the proposal, “ The persistent failure of the Government to deal with unemployment in the coal-mining industry “. Now, Sir, one would think that the first thing any honorable gentleman, particularly the person who initiated the debate, would have done would have been to stress the scope and nature of the problem. That, in fact, has not been done. The areas involved have not been identified, the figures of those receiving unemployment benefits and registering for employment have not been produced, the real cause of the problem has not been stated by the honorable gentleman.

Nobody denies that there is unemployment in the coal-fields and that, in particular, unemployment is concentrated in the Cessnock area. I think that there are 1,007 males on the Cessnock field registered for employment. I emphasize to the House that this is the area where the main problem exists. No one would deny, either, that such a condition has repercussions which affect other sections of the community. But it is the individuals concerned in whom we are interested. It is the human problem as well as the economic problem that we regard as important. I think that the Government can prove that much has been done to protect these people and to ensure that, as they go out of employment, they will have solid prospects of employment in other avenues.

Before we discuss the nature of the problem I wish to emphasize that what is occurring is largely due to the fact that large-scale reorganization and mechanization has taken place within the industry. Mechanization has resulted in fewer miners being employed. That process has not been completed and it is possible that further mine workers - I hope not many - will be retrenchedin the course of the next few months.

What is the nature of the problem? It is this: In New South Wales over the last five years the production of coal has increased from 14,173,000 tons to 15,725,000 tons. At the same time there has been a reduction in total employment of over 5,000. Although there has been an increase in production the number of mine workers has decreased, and there has been a fall in price since 1954. Coal is one of the few commodities of which the actual price has fallen. That is the nature of the problem. What does this mean in terms of unemployment benefits? I mentioned that 5,000 mine workers have been retrenched, but of that number about 600 miners are receiving unemployment benefit of whom 567 are in the Cessnock area. This poses to the House the scope and nature of the problem. The problem is due to mechanization, but it is not an Australia-wide problem which must be regarded as an insuperably big one. I have pointed out that of the total number retrenched only 567 are recipients of unemployment benefit.

What is the root cause of this problem? The honorable member for Macquarie mentioned mechanization. But what was responsible for rapid and large-scale mechanization? I donot want to go over the turbulent history of the coal-mining industry. Therighthonorable member for Hunter will know the facts and what the unfortunate condition ofthe industry was when thisGovernment came into office. Far from producing enough coal to meet our own needs, let alone any for export, we were compelled to import coal. The leaders of the coal-mining industry were therefore forced hard up against the fact that unless the efficiency of the industry was increased not only would we lose much of our domestic markets to alternative fuels but we would also certainly not be able to recapture the overseas markets which had been lost. Does any honorable member think for one moment that but for those conditions the South Australian Government would have gone ahead with production at Leigh Creek or that the Victorian Government would have developed Yallourn? Would these things have happened if there had been industrial peace and real efficiency in the coal-mining industry when the Labour Government was in office? The answer, is clear. Efficiency has been introduced into the industry and if that had not happened coal mining would have become derelict. Instead of employing the large number of workers that it does to-day it would have gradually gone out of existence.

Who has been responsible for this development in the production, sale and distribution of coal? Every honorable member knows that, generally speaking, it it a problem for State governments. The Commonwealth has a general responsibility for maintaining a high level of employment, for maintaining the concept of full employment policy.In the case of coal, there is this difference: The JointCoal Board is acting as the instrument of the Commonwealthand of the State of New South Wales and has generalresponsibility for the development of production and the distribution of coal.Iventure to say that that organization has done a magnificent job in ensuring that the coal-mining industry has achieved the objectives for which the board was established. The recent story of coal production in Australia is a story of success.

What has been done? We do not regard this as a purely Commonwealth problem. Nor can it be said that it is a problem solely for each State or for one group of people. We are all responsible andwe all have to take action within our own power to ensure that the mine worker has an opportunity of getting into a new job if he is retrenched. Let us look at what the management and owners of coal industry itself have done. It has performed near miracles. During the post-war years £26,000,000 has been spent on mechanization and reconstruction. As a result, the mechanized underground mines produced 74.3 per cent, of mechanically cut coal and 77.4 per cent, was mechanically loaded. This has led to an increase in production per man-hour and also to areduction in the price paid by the Australian consumer.

I mention one other factor. The owners of this industry provided something like £374,000 from their own funds at nominal rates of interest for the Hunter district board to use in public works programmes in the area. I cannot go through all the things that have been done by the coal industry but I can say that, due to its efficiency we are able to produce sufficient not only for our own needs but also to export more than 700,000 tons. In February, 1958, sales of coking coal to Japan of 3,120,000 tons were made, to be supplied over the course of the next five years.

May I turn to what has been done by the Commonwealth and State governments and by the Joint Coal Board? In the first place, the re-employment committees, which are presided over by representatives of the Department of Labour and National Service, and consist of representatives of the Joint Coal Board, the miners’ federation and the owners, meet regularly and decide how the problem of employment on the coal-fields is to be met. Entry of new labour into the industry is controlled and opportunities are taken for seeing that displaced mine workers are given preference in employment in neighbouring areas. The success of these measures is reflected in the fact that only 567 workers in the Cessnock area are in receipt of unemployment benefit, despite the fact that 5,000 workers in the industry have been retrenched. What else has happened? Arrangements have been made for miners to move from the western and northern fields to the south coast. This means that 230 have been placed in employment on the south coast and there are a further 91 vacancies to be filled.

After discussion with the Commonwealth Government, the Joint Coal Board made £300,000 available to local government authorities in the Cessnock area, £150,000 of which was to be applied to roads and £150,000 for water and sewerage work. One other fact is that recently the Government of New South Wales was given approval to increase its local borrowing programme by £2,000.000. It was expected that a large proportion of this sum would be applied to the Cessnock area to provide employment in local government works.

This process of re-organization is still taking place. In addition to emphasizing that, I wish to mention two other factors. Only this morning I was able to ascertain that one of the principal collieries, I think the Maitland Main colliery, was re-opened and 173 miners will be taken back into employment. Secondly, I have just heard that the Broken HAI Proprietary Company Limited is installing a washing machine which will remove a lot of clinker and other materials from the mined coal. This will mean that additional quantities of coal will be required and should provide employment for another 200 miners.

The honorable member for Macquarie referred to the future. The best estimate that the Joint Coal Board can get as to the future is that it is expected by 1963 the steel industry will be using something like 5,300,000 tons a year and electricity undertakings 4,500,000 tons. By 1968 the coal requirements for electricity will possibly reach 6,000,000 tons a year. All this, of course, must provide additional permanent employment in the future for miners in the northern fields. 1 come to the answer to the case put by the Opposition: Much has, in fact, been done. We regard this as a human problem. There has been cooperation between the leaders in the industry, particularly men such as Mr. E. E. Warren and those who run the Abermain Seaham collieries. There is the closest cooperation between them, the Commonwealth Government, the Joint Coal Board and the miners’ federation in an effort to get the miners back into employment as soon as possible.

I have mentioned the nature of the problem and what has been done by the various people and groups concerned. I venture to say that there is more than a persuasive case to show that this problem has been handled sensibly and, I think, effectively. I conclude by saying this: Of course we are anxious to find employment for these people as quickly as we can. But the real solution to this problem lies in finding permanent employment for them in the Cessnock-Maitland or the MaitlandNewcastle areas. That will depend upon the erection of power stations at places such as Vale’s Point, and upon big sewerage schemes such as the two at Wyndale which could easily employ 300 or 400 men. Such a public works programme would not only expand employment but also on completion would give private industry an opportunity to establish itself in the area where mine workers now available could be fitted into private employment. I now give the House my assurance that whatever lies within the capacity of my department will be done. I repeat, we regard this as a human problem. It is not one capable of facile and easy solution. But we say positively that we are all working towards one common end - the good of the miners and the good of the Australian community.

Leader of the Opposition · Hunter

– The Minister for Labour and National Service (Mr. McMahon) has completely misstated what 1 think is the real problem. It is perfectly true that the Commonwealth has rendered assistance of a temporary character in the field of certain other types of employment, and the State has, too. But these are the facts which I think summarize the position: In 1952, 14,000,000 tons of coal were produced in New South Wales. In 1958, the total production was 15,832,000 tons. Over that period there was a comparatively small percentage increase, but the output per man-shift rose from 2.95 tons to 4.47 tons, due primarily to the adoption of mechanization.

The number of employees is the key to the problem - a key which the Minister will not recognize. It is not a question of getting men other jobs. The important thing is to increase coal production and, at the same time, keep trained miners in their jobs. Instead of that, there has been this series of wholesale dismissals which have reduced the number of employees from 20,100 in 1952 to 14,300 in 1958, a period of six years. Almost 6,000 men are no longer employees in the coal industry, the industry in which they were trained and a vital industry! The production, per man-shift has gone up. What has happened is plainly this: The Federal Government went in for the mechanization on a huge scale for certain purposes, and took no account of organizing mechanization so that employment would not be dissipated but could continue. That could1 have been done. It is absurd to think that coal, this vital product, ought to have a limited production. This is exactly the position that was illustrated by Sir John Cockcroft, the great British atomic energy research man who is coming to Australia. He said that Britain now had three nuclear powered stations operating and that four bigger ones would be built. He said that one-quarter of Britain’s electricity would be generated in nuclear stations by 1966, and that the entire country would be converted to nuclear power by the end1 of the century. Asked whether this would mean closing down Britain’s huge coal industry, Sir John said that, on the contrary, it had been found that as cheap nuclear power developed, more and more coal was wanted for the chemical industry. He said -

Already only one quarter of our coal production is being used on power generation and the rest is used by chemists to make innumerable other things. It has become a very precious raw material.

The view of experts to-day, I believe, is that the export of coal should not take place except in an emergency. The by-products can be utilized. The miners’ federation and the other coal-mining unions have put this view to the Federal Government. The Minister should face this position. Adoption of such a scheme would permit planned coal production with mechanization; the miners’ jobs would remain, coal production would increase instead of being practically stationary, and valuable chemical by-product plants would be established. But no! The Government does not believe in that. In Victoria, utilization of the chemical by-products of oil is being fostered. This should be done instead with coal, our only real native fuel.

I want to put a broader view to the Minister in the time that remains. One fact that has not been made clear is that the institution by the present Government of the system of mechanization corresponded with very large concessions to the employers in this industry. The result has been that profits of the employers during the last six years have reached record heights. Through mechanization, each man has been producing more and greater profits have been made. Yet at the same time skilled employees and juniors who were becoming skilled, are now asked to find work on the roads! It is said in the coal-mining districts of the north that the roads are only looked after in time of deep depression in the coal industry.

I ask the Minister for Labour and National Service to come and see the district. He will see schools in which the attendance has fallen. He will see homes that have been broken up because miners have had to go, not only to work in other employment, but in other parts of the State. It is simply unfair and unjust if coal production can be maintained.

Where is the solution? There is a solution and it is the mandate that binds the Government and which it will not recognize. I refer to the great act of Parliament which was passed by the Chifley Government - the Coal Industry Act of 1946. The whole purpose of that act, amongst other things, was to deal with these matters in a systematic way - not to reduce employment in the coal industry but to ensure that coal is produced so that it will meet all requirements throughout Australia and the requirements of trade with other countries. That is not being done if coal that could be used for other purposes is not being so used. The Coal Industry Act was also designed to ensure that the coal resources of the State were developed, not merely conserved, and to ensure that coal would be distributed at prices calculated to serve the public interest. Those are the statutory provisions that bind the Government. Among the chief requirements are the efficient and economic use of coal, the development of uses or markets for coal, and the recovery of the by-products of coal. In that field - and it is not a mere question of choice - the Government’s record is very bad. The situation has not been tackled at all. Profit for the coal owners has been one of the chief objectives of the Government. Mechanization was accompanied by taxation concessions and price changes which resulted in profits which I have described before, correctly, I believe, as enormous. That is not a policy for Australia. That is not a policy for building up the coal industry. The Government must do more. I beg the Minister to go to the districts concerned. He will see that the points I have made are not without substance.

One other function of the Joint Coal Board, as set out in the Coal Industry Act, is the regulation of employment in the coal industry, including the control of the manning of mines and the promotion of stability of employment. Section 18 provides that the Prime Minister and the Premier of New South Wales are to act in agreement, and one of the matters with respect to which they are to act in agreement is national policy, including defence policy. We must have coal in time of war. If war came to Australia coal would again be the most precious commodity in the country for purposes of defence. The Prime Minister and the Premier are also to act in agreement with respect to full employment and price stabilization. Have we full employment iri the coal industry? Of course hot. The Minister has admitted it. He says there is no case to answer, but the fact is that there has been a complete change in the industry. The various districts have been affected. The position is the same, for instance, in the Lithgow district. The honorable member for Macquarie (Mr. Luchetti) told us of the situation in Lithgow, and the figures that I have for the northern district indicate a similar problem.

The problem must be tackled on the basis that the coal itself is the precious commodity, and that the districts must be developed. We must eliminate the necessity for workers to leave the districts, taking their families with them and their kiddies away from the schools. The schools in the coal-mining areas are among the best in the State, and the situation that now exists results in the education of the children being interrupted. Families are broken up. The Government must tackle both the human problem and the industrial problem.

Mr Haylen:

– The Minister acts like a liquidator.


– The Minister has got into the habit of saying in this House, “ There is no case to answer “. There is an overwhelming case to answer. I would like him to see the conditions for himself. He would quickly realize that there is a case to answer.

Mr McMahon:

– I have not used the phrase, “ No case to answer “, in this House before.


– The Minister used it to-day. That was the first sentence he uttered in reply to the honorable member for Macquarie.

Mr McMahon:

– You said that I have become accustomed to using the phrase. That is the first time I have used it.


– You used it to-day, and I am saying that there is a case to answer, but of a different character. The production of coal is of vital importance, but there is also the human problem. We must maintain the schools and look after the districts. The business life of the communities is becoming injured and in some cases shattered. This is a human problem, and I ask the Minister to tackle it.


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


.- The Opposition has proposed for discussion, as a matter of urgent public importance, what it calls the failure of the Government to deal with the persisting problem of unemployment in coal-mining areas throughout Australia, which causes avoidable hardship to miners, tradespeople and the community generally resident in those areas. Before I develop my own argument I would like to reply to some of the main points made by the Leader of the Opposition (Dr. Evatt) a few moments ago. In the early part of his remarks he referred to the fact that the Federal Government supported large-scale mechanization in the coal-mines, and that while the total output had not increased to a very marked degree between 1952 and 1958, the output per man-hour had increased from 2.9 tons in 1952 to 4.7 tons in 1958. That proposition was effectively answered by the Minister for Labour and National Service (Mr. McMahon), who preceded the Leader of the Opposition in this debate. The Minister pointed out that it was necessary to adopt some measures to reduce the cost of coal.

Mr Cope:

– Have they brought the price down?


– The price has been reduced. It was necessary to bring the price down to make coal competitive with the other fuels offering. This necessity existed whether the coal was to be used as a fuel, this being its original purpose, or whether it was to be used in the chemical industry, as outlined by the Leader of the Opposition. The cost of the basic material is the governing factor in determining whether it can be used to its full extent in competition with other materials.

The second point made by the Leader of the Opposition related to the alleged huge profits made by coal-mining companies during certain years that he mentioned. It may interest him to know that a large proportion of those profits was ploughed back into the industry by the coal owners. In the five years ended 1958, £25,800,000 was invested in the industry. Of this amount some £8,000,000 was spent on face equipment, mainly for cutting and loading machines. About £6,000,000 was spent on underground transport systems and some £2,500,000 was spent for washeries to improve the quality of the coal.

The third point put forward by the right honorable gentleman was the necessity to maintain our coal industry so that coal could be used as an alternative fuel in time of national emergency, particularly for defence. I have some sympathy with him on this argument. Recently I have been making some inquiries of my own, thinking along the same lines as the right honorable member. However, my inquiries reveal that his proposition is not soundly based. I have made inquiries of defence authorities and representatives of organizaations concerned, and they all agree that the time has passed when coal may be considered as important from the defence angle. Defence equipment is being converted for oil-burning, and there will be ho opportunity, in time of emergency, to reconvert this equipment so that it can burn coal. I am also assured that a continuing supply of the fuel that we need in time of war will be available as a result of agreements made with our allies. This source of supply, I am informed, will be maintained and guaranteed. I quite agree with the right honorable gentleman that these statements are arguable, but this is the information that has been given to me, and I think it is at least worthy of consideration.

I now direct attention to the statements made by the Minister at the beginning of his speech. He isolated the areas in which this problem applies. I quite agree with him that the main problem exists in New South Wales, which produces 70 per cent, of our coal, and that, further, on the figures presented, it exists on the northern coalfields, in the Cessnock area. 1 believe we should inquire to what extent the Commonwealth has a responsibility for maintaining employment on the coal-fields. The Commonwealth has, by its financial policy, been able to maintain full employment throughout most of the Australian economy, and while we realize that pockets of unemployment, such as that existing on the coalfields, do arise and have to be dealt with, the solution does not necessarily lie in the formulation of a particular overall financial policy for Australia.

Other bodies share with the Commonwealth the responsibility for supporting an efficient coal-mining industry. For example, there is the State Government, which shares the responsibility with the Commonwealth through the Joint Coal Board. There is also the miners’ federation and associated trade unions, and there is the industry itself. In this debate, however, I think we should limit our remarks to the responsibilities of the Governments, and in particular the Commonwealth Government. Let us ask, therefore, what the Commonwealth can do and what it has done in this way. The first matter to which I direct attention is the Commonwealth’s encouragement of new industries. This has been the policy of the Government, as has been made public and as the House is well aware, but, unfortunately for the coal-fields, the new industries have decided to establish themselves elsewhere. This is no fault of the Commonwealth Government. There are a number of reasons for it. One is what is believed to be the bad industrial record of the coal-mining areas.

Mr Cope:

– Ah!


– It is all very well for the honorable member to say “ Ah! “. He has not heard what I am about to say. I was going to say that it is a wrong conception to believe that the miner himself has a bad industrial record. I have had some experience with him, both in peace and in war, and I do not believe this to be the fact. But he has made a mistake sometimes through mistaken loyalty. He has often been very badly led. This has resulted in strikes, in interruption of employment and of continuity of supplies of coal. I fully realize that in the early days some of the direct action taken by the miners was more than justified because of the conditions under which they worked and of the treatment they received from the employers, which resulted in lock-outs, again causing interruption of supplies and of continuity of contract. But the fact remains - and this is what I should like honorable gentlemen opposite to realize - that there is a new spirit in the coal-fields. Quite a number of the younger generation that is now growing up in these areas have not had experience of the unhappy times of the past, and they are willing to undertake new employment, despite what the Leader of the Opposition has said.

I mentioned earlier in this session that a large number of citizens on the coal-fields feel that it is their responsibility to make the potential of the coal-fields known not only in New South Wales but in Australia as a whole, and I suggest to the Leader of the Opposition and those associated with him that they would do well to join with us in bringing this potential before the notice of the general public and in speaking with confidence of the way in which new industries would be welcomed instead of directing attention to some of what they call the bad points and thereby instilling fear and uncertainty into the minds of potential investors and undermining the confidence of them and of people who wish to encourage new industries to go to the coal-fields.

The second thing that I want to say, Sir, is that the Commonwealth Government has encouraged in many ways the export of coal. The Parliament is well aware of the overseas markets that have been gained through our agencies. In 1951, 100,000 tons of coal were exported, and in 1958, exports totalled 795,000 tons.


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


.- Mr. Deputy Speaker, I support the remarks made by the honorable member for Macquarie (Mr. Luchetti) in bringing this matter forward for discussion as a matter of urgency. Had this Government tackled the problems of the coal-mining industry in Australia, many of the difficulties facing the unemployed, business people and the community generally could have been avoided. I believe that the Government’s approach to the ever-increasing problems of the coalmining industry lacks sincerity and realism.

Indeed, the honorable member for Robertson (Mr. Dean) showed his infantile thinking when he said, just a few minutes ago, that in the event of a war, oil fuel would be supplied from overseas under an agreement with our allies. Does any honorable member in this House think for one moment that the submarine fleet of Russia, for example, would be kept in port or would sail idly about and allow Australia to receive supplies of oil from American sources, probably from the Persian Gulf, and from other sources, if a world war were raging? Does the honorable member for Robertson really think that a truce would be called to enable us to get our oil?

I consider that the miners are on the right road to-day when they protest at the inactivity of this Government in relation to the coal industry generally. The Minister for Labour and National Service (Mr. McMahon) indicated what the Government is doing to provide alternative work for those who have been displaced from the coal-mining industry by mechanization and automation. I suggest to him that he did not state the position honorably and truthfully before his House. I have in my ‘hand a letter from Councillor Pendlebury, President of the Lake Macquarie Shire Council. This gentleman from my electorate is a person to whom we must pay tribute for the work that he has done and is endeavouring to do in order to get work for the displaced miners and the unemployed generally in the Lake Macquarie Shire. He writes -

I particularly wish to point out that the Commonwealth Government will receive benefits totalling approximately ?113.490 as assessed in the following manner: -

Saving on Social Service Unemployment Payments for 200 men for one year - approximately ?95,550. The Federal Government will then receive by way of Income Tax from the 200 men so employed - approximately ?11,700. In addition to this the Hunter District Water Board, as employers of the 200 men, will pay approximately in Pay Roll Tax ?6,240.

He shows that if a job estimated to cost some ?463,000 were undertaken, thereby providing employment for these men, the Commonwealth Government would benefit to the extent of ?1 1 3,490.

Government supporters talk about what this Government is doing to assist the coalmining industry. I say deliberately that the Government has only been toying with the industry and playing about with the unemployment caused by mechanization. This year alone, the coal-owners propose to spend more than ?7,000,000 on machines to mechanize some mines still further, although, at the same time, they are closing many others as being uneconomic to operate. The president and the general secretary of the miners’ federation have been active in trying to impress on this Government and the New South Wales Government the need for new industries in Australia to use the coal which will become surplus as a result of the increasing use of oil as a fuel. I note that the Commonwealth Government was very active recently in proposals for the establishment of a petrochemical industry, at a cost of some ?25,000,000, to produce chemicals from oil. Why could the Government not do something to establish a petro-chemical industry to produce chemicals from oil obtained from coal? The Government would do well to realize the importance of this matter.

Only a few minutes ago, the Leader of the Opposition (Dr. Evatt) suggested that the Government should seek the advice of Sir John Cockcroft, and Mr. Mahon, the general secretary of the miners’ federation, has recently made a similar suggestion. This eminent authority, who is associated with the United Kingdom Atomic Energy Authority, was reported, on his arrival in Australia a few days ago, as having said that coal was wanted by the chemical industry in Britain in greater quantities every year. Yet this Government is doing practically nothing about it in this country. It is most interesting to see what was said on this subject by another eminent gentleman who visited Australia recently, as reported in the press in these terms -

Coal basis for “ vast industry “… Mr. David T. Barritt said yesterday.

Mr. Barritt is a joint managing director of the Simon Engineering group.

The company is building a ?36 million nuclear power station in England.

Mr. Barritt will leave Australia to day after a fortnight’s visit.

He said Australia could produce synthetically from coal:

Oil, petrol and petroleum products at competitive prices.

Many chemicals now imported.

He said: “The coal industry here will come into its own when you learn to use coal. “Australia has coal resources as good as those of any country in the world. “Your coal is abundant and cheap. “ But there is no need to burn it. “ Burning coal generally is a crime. “‘You get only about 30 per cent, of the useful ingredient of coal by burning it to .generate electricity . . .”

Views recently expressed by Dr. Charles Prien, of the research institute of the .Denver University, in the United States of America, were reported in these words - “ If Australia has shale deposits it should be able to produce its own oil for less than it now pays for imported crude oil,” said Dr. Charles Prien head of the chemistry and chemical engineering division at the institute . . .

Dr. Prien, recognized for the past 15 years as a world authority on shale oil, said his research group had fully tested the process at a pilot plant over the past nine months.

The same .report mentions the views of an American shale oil company in the following terms: -

A spokesman said , in -New York last night that his concern was anticipating strong opposition from the regular oil companies. “Nevertheless we are prepared . . .”

In 1956, the New South Wales Government and the Commonwealth Government appointed a committee to investigate the possibilities of a coal-based chemical and liquid fuel industry. This committee, in its report, mentioned an earlier report made to the two governments in 1956, and stated-~-

The Report recommended that an investigation into this field be made -by a Committee composed of representatives of the various interested authorities, and that the terms of reference, in summary, should be to establish all available information in the fields of coal carbonization, hydrogenation, gasification and synthesis, to institute market surveys and process cost analyses, and to propose future action.

The committee was formed in .1956, and a .little later it divided into -two working groups. The first .was to investigate the practicability of burning char under boilers an.d the second was to investigate the economic value . of ‘.low-temperature tar as compared with petroleum crudes. .What has happened? Although the report was made in June, 1958, not one thing has been done by. this Government to implement the. findings of the committee. But all the time more and more men are being displaced from the coal-mining industry. I want to know what the Government intends to do. Only the other , day, a New South Wales Minister, Mr. J. B. Simpson, drew attention to the fact that the Commonwealth Governmen had refused .to take .any action in respect of .a report that has been made. I do ,not know .whether ,the report has been made to the Joint Coal .Board or elsewhere. It .was made ,by Mr. Williams, who is believed to have .reported favorably on investigations .overseas of a proposal to establish a coal by-products plant near Newcastle. Although the Government has done nothing about this report or about the investigations pf .the second working group to which I referred earlier, it has recommended that we send certain of our highgrade northern coals to America for treatment and investigation.


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


.- Every one knows that coal is essential to Australia. When we realize that 75 per cent, of all .energy .produced here has been produced from .coal, we can realize its importance. However, to my mind, the approach of the Australian Labour Party to this important subject is very immature. The coal-mining industry, with the shipping industry, has been described as a pauper industry. If one reads an analysis made by a chartered accountant, Mr. M. R. Vickery, of the tragedy and the gloomy results pf the coal-mining industry in the last .27 years, one realizes why the industry is in such .a bad position. Only to-day, in my opinion, is coal coming into its own. Most .people know .that this industry, like the coastal shipping industry, is a turbulent one. I have the figures on industrial disputes before me, and they show that in the last three war years, 1,903 disputes occurred. That is an average of over 600 disputes a year, involving a loss of 1,300,000 man-hours. Jo my mind, the unhappy industrial relations and the poor financial return to investors are the reasons whv this has become a pauper industry.

We are losing .our markets for coal. Victoria was a very .important buyer of New South Wales coal. However, uncertain delivery resulted in the loss of this market, because Victoria developed its own resources. I have a great deal of time for the coal miner. I met him during the war and knew him as a very fine comrade, but he is a man who is easily led. The whole of the trouble on the coal-fields has been brought about by Communist influence. The coal industry and the coastal shipping industry have been .destroyed by these people. One example of what is occurring in the:coal industry. can be seen in Queensland to-day. A Japanese .company wishes ito work open cut coal fields there, but .the -miners’ union .will not supply men. Coal has been sold .to .Japan but the manpower is not available to win the .coal.

It is important that . coal be made competitive. Several types of fuel are available to-day, but we must realize that the more markets we “have for coal the more competitive we can make the price. Of course, the more markets we have, the more jobs there will be available. But the markets come first and employment follows. John L. Lewis, the leader of the coal-mining unions- in the United States of America, did not -really care how many men in the industry lost their jobs,: provided that those who remained were well paid, that they produced well and that they made coal competitive. We would benefit if we followed his example. Coal can be used to create more jobs. Take, for example, the production of electricity. The more powerhouses we create the more men will be employed in them, and more men will be needed to win coal for the powerhouses. The Leader of the Opposition (Dr. Evatt) has supported the views I have expressed, but I do not agree with a statement he made to the Summer School of the Australian Institute of Political Science in 1944, when he said -

I do not think . . . there is any longer . a real right for every person to choose his vocation in life. The right of the -individual to choose his own . vocation and employment is only one of the freedoms .which the Australian people must -forego in the interests of the State.

Mr Turnbull:

– Who said that?


– The Leader of the ‘Opposition.

Mr Griffiths:

– That was said during the war years.


– It does not .matter whether it was said during the war or at any other time. One tragedy is that as improvements occur in production, men “lose their jobs, but we should remember that with these improvements production “becomes cheaper, and that in itself creates new jobs. The problem we must solve now is how to find new jobs for those who are unemployed. We must decide whether the responsibility for finding new jobs lies with the Federal ;or State authorities. The Leader (of :the -Opposition has .again supported me. In .a booklet on post-war reconstruction prepared .by the Leader of the, Opposition. in 1942,. he-said 17 -

In -peace’time, the ‘Commonwealth ‘Parliament has no -.general .power to provide or regulate employment or occupation.

This power is vested in the States. In answer to a question, >the right honorable gentleman has ‘made the same statement. -However, he-is now, with the support of his colleagues, trying :to pass the buck on to this Government. We do not accept his view. We believe -that we have -a responsibility to the unemployed, but it is an indirectresponsibility to - make financial provision to alleviate the situation. We :have made ample financial provision, and some of the details have already been given. ‘But how is the money that has been made available used by the States? We find that in New South -Wales it:has been used ‘to grant three week’s annual leave to employees. However meritorious such a provision -may be. one must question why the money has not been employed to create -factories in the ‘.Cessnock .area, which is -the only area where grave ‘.unemployment of . miners is to be ‘found.

Miners are unemployed in this area because. production there is lower than anywhere else in the State. The miners at Cessnock are producing .about 3 tons a man a shift. as against 4.87 tons elsewhere. That is why .Cessnock” has the .greatest amount of unemployment. This .is the place where money should be. invested to encourage industry that .unemployed miners may be able to find .jobs. ,B.ut instead of doing that. .the. money. made:available by. the Commonwealth to. the State of New South Wales is .used to .give .three weeks’ annual leave to .those who ar.e .employed, to introduce equal pay. for women and to pay .quarterly adjustments in the basic wage. Why. in paying these quarterly adjustments alone, £3;500,000 is lost each year!

Mr Jones:

– ils the Australian Country Party opposed to that?


– I am not opposed to the> merits of it, but does the honorable member favour giving increased privileges to those who are in employment at the expense of those who are unemployed? Here is a man who believes that those in employment should be given all the benefits!

The honorable member for Macquarie (Mr. Luchetti) spoke about the distribution of industry. Of course industry must be distributed. In New South Wales big country towns are stagnating because the political representation of the State is concentrated in Sydney and no industries are leaving the metropolitan area. The honorable member deplored the fact that satellite towns were not springing up near Cessnock or Lithgow. I have every sympathy with him. I am a country man myself. But this is not a Commonwealth task. It is a task for the Government of New South Wales. If the New South Wales Government had not squandered its money on the amenities and privileges that I have mentioned, it would have been able to provide employment for the people who are now unemployed.

I should like to point out that it is estimated that by 1975 Australia will probably require 80,000,000 tons of coal a year. There is a great future for the coal industry if it is allowed to make reasonable profits and reduce its operating costs to the minimum so that it may compete on the world’s markets. If the industry is handled carefully, and if coal is produced as cheaply as possible, we may look forward to a bright future, where coal will become as important to this country as wool is to-day, or perhaps more important. However, if it is to reach such a state the industry must be handled correctly. We must get rid of the immature idea that unemployment can be countered by introducing shorter hours for the same pay. Coal must be produced cheaply. If it is produced cheaply there is no end to the number of uses to which coal can be put, thereby creating employment in the industry. Merely to air the problems of the coal industry in a debate such as this does no service to the industry at all.


.- Honorable members have listened to three Government supporters who have endeavoured to harness the Government’s answer to the Opposition’s contention that the Government has failed to deal with the persisting problem of unemployment in coalmining areas throughout Australia, which causes avoidable hardship to miners, trades people, and the community generally resi dent in such areas. One might have expected the Minister for Labour and National Service (Mr. McMahon) to be something of an expert on this subject, but after hearing him I can only describe him as a desiccated calculating machine, one who has little regard for the human considerations involved in this problem, but who recognizes that he has an obligation to produce figures to satisfy and deceive the people whom he represents in this place.

The honorable member for Robertson (Mr. Dean) is a man who should be concerned with the present situation, but he bought into this debate not to defend the Government’s policy, but to indicate that he had some interest in the miners’ cause. The honorable member for Hume (Mr. Anderson) indulged in some irate and irrational comments. His general attitude indicated his hatred of the people engaged in the mining industry.

Honorable members have stated that in their view the coal-mining industry is no longer of any account as a defence consideration. They have dismissed the subject airily. They have forgotten that the fate of Australia at one time depended on the coal-mining industry. When this country needed coal, the miners rallied to the call for increased production. They were given a guarantee that they would get good conditions in the industry as a result of their efforts. But after they had met all the requests of the Government, and after they had fulfilled their obligations to this country, they discovered that, with great surpluses of coal lying at grass, they had become forgotten men. The coal-mining communities are greatly concerned about the inactivity of this Government. Some honorable members opposite, including the honorable member for Hume, have contended that the Government has no obligation or responsibility towards the coal industry.

I think it would be useful to look at the Coal Industry Act of 1946. Let it be remembered that it was a Labour government which, in 1946, had sufficient regard, not just for the mining industry, but for the miners themselves, to bring in legislation designed to stabilize the industry for the benefit of Australia generally. I wish to refer particularly to section 18 of the act and after I have read this section nobody will doubt that this Government has failed in its responsibility towards the industry. Although the Joint Coal Board has certain responsibilities under the act, section 18 clearly shows that the Government has full responsibility. Section 18 reads - (2.) The Prime Minister may, in agreement with the Premier of the State, issue directions to the Board on matters of policy and it is to be the duty of the Board to observe and carry out any direction so given.

Honorable members will note the words “ any direction “. Although the Joint Coal Board has certain responsibilities, the Prime Minister, as the mouthpiece of the Government, has overriding authority. Subsection 3 of section 18 states -

Where … the Prime Minister . . . issues to the Board a direction in relation to that matter, the Board is to have the power . . .

The board is to have the power to do what the Prime Minister indicates. To-day there is a crisis in the coal industry, and the Prime Minister’s failure to take action indicates either that he is unconcerned about the situation or that he has no remedy for it. There is an obligation fairly and squarely on his shoulders to issue some directions to the Joint Coal Board.

It is important to point out that the Coal Industry Act imposes very specific obligations. Section 14 (1.) states -

The powers and functions of the Board are to include the taking of such action as, in the opinion of the Board, is necessary or desirable -

to ensure that the coal resources of the State are conserved, developed, worked and used to the best advantage in the public interest;

Can it be contended that the Government has not failed in its responsibility under paragraph (b)? Paragraph (d) of section 14 (1.) states that the powers and functions of the board are to include the taking of such action as is necessary or desirable - to promote the welfare of workers engaged in the coal industry in the State.

Has not the Government failed to promote the welfare of the workers at a time when thousands of men are going out of the industry? Indeed, 1,000 men have left the industry since 12th January last. Section 14(2.) of the act states -

In particular, without limiting the generality of the foregoing, the Board is to have power to make provision for or with respect to -

the efficient and economical use of coal, the development of uses or markets for coal, and the recovery of the by-products of coal;

Has not the Government failed in this regard?

I should like to deal with this subject of the by-products of coal. Many countries with much smaller deposits of coal than Australia have developed large byproducts industries. The United Kingdom, Holland, West Germany, Russia and New Zealand are some countries that have large coal by-products industries. More than 4,000 different by-products can be obtained from coal, but practically nothing is being done about by-products in Australia. As the honorable member for Shortland (Mr. Griffiths) pointed out, this Government is more concerned with the £23,500,000 petro-chemical industry - a United States industry at that - than it is with Australia’s coal industry. This is a shocking state of affairs. It is well known that a plant to manufacture by-products from coal would cost between £50,000,000 and £60,000,000, but a skeleton plant, which could be used to get the industry going, would cost only £5,000,000 or £6,000,000. But nothing has been done in this regard. American industrialists, and industrialists from other parts of the world, are astounded when they come to this country and find that we have done nothing about coal by-products. Recently, Mr. Henry Reichhold, president of Reichhold Chemicals Incorporated of New York, visited this country, and he was amazed that we are doing nothing to develop our coal resources and the coal by-products industry. He pointed out that Australia imports a great quantity of commodities that could be produced in this country with a consequent saving to the country of possibly £50,000,000 worth of imports. Imagine what that would mean to our trade balance! Imagine how such an industry would alleviate our unemployment problem! Last year Australia imported £5,000,000 worth of plastics, which could have been produced in this country if we had had a coal by-products industry. Already, we are importing £17,000,000 worth of synthetic rubber each year. I am told that synthetic rubbers are superior to natural rubber. Tyres made of synthetic rubber have 30 per cent, more wearing capacity than tyres made of natural rubber. The experts say that a person can walk 2,000 miles on shoes with heels of synthetic rubber compared with 300 miles on heels made of natural rubber.

Last year, Australia imported £4,000,000 worth of artificial fertilizers such as ammonium nitrate, calcium nitrate, sodium nitrate and superphosphates. These byproducts could be made in Australia if this Government showed concern and enthusiasm. If the Government is not prepared to do this, it should give more leadership to private enterprise. Miscellaneous chemicals valued at £7,000,000 are being imported each year. They include naphthalene, calcium carbide and various organic solvents. Total imports valued at £50,000,000 could be saved and yet this Government continues to deny what the New South Wales Government has requested it to do for a long period - to announce its preparedness to finance or encourage a scheme for the production of by-products.

From time to time, statements are made on behalf of the New South Wales Government by the State Minister for Mines to the effect that a plan has been approved and that that Government is waiting patiently for the Commonwealth Government to act. During the course of this debate when members on the Opposition side have directed attention to the Government’s failure to face up to these things, supporters of the Government have denied any responsibility or any failure to act, but they stand indicted and condemned by the conditions which are developing throughout the country. The Government has no answer to these charges of failure. In the face of its record, it should resign.


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


– I deny that the Government has failed to meet its responsibilities in dealing with the problem of unemployment in the coal industry. Nothing I say will detract from the statement of the Minister for Labour and National Service (Mr. McMahon) that this Government feels a deep responsibility and concern about the human, industrial and national economic problems involved in the present disturbance in the coal industry. But, Sir, I also aver that the responsibility for unemployment in the coal indus try, its development and its cure should be shared by the Commonwealth and the States, and in that regard we cannot exclude the miners themselves.

Any sort of a post mortem is a melancholy business and in this case it is not one that I would embark upon if I did not believe wholeheartedly that there are some valuable and essential lessons from the past which we do not appear to have learned. One of these is the fact that employment is created by customers and not by governments. If we look over the post-war years, we must recall very clearly that many of our industries were suffering unemployment in the early part of those years because of a shortage of coal to the point where this Government had the unfortunate necessity of turning Australia for the first time into an importer of coal. The two great States of Victoria and South Australia, faced with constant shortages of coal and, therefore, constant disruption of industry, were forced to free themselves from dependency upon New South Wales coal. The result was the great development of the Leigh Creek coalfield in South Australia and the brown coal deposits in Victoria. Here was a loss of two great markets because the producers of coal failed to understand that the customers are the real employers. If we fail to keep our customers satisfied, we are likely to be out of a job, as the coal-miners have found.

There is an interesting but particularly tragic cycle operating in the coal industry. About the time when Victoria and South Australia were showing very clear determination to free themselves from dependence on New South Wales coal in 1950-51, it is interesting to note that production of coal on the northern fields in New South Wales fell short of potential productive capacity by 18.9 per cent, in one case, and 12 per cent, in the other. I do not canvass the cause or justification for the industrial stoppages which led to that decline in production. I merely point out that the inevitable consequence was the loss of markets and a reduction in employment which has persisted. Then, in protest against the loss of employment resulting from the loss of markets, we had more strikes. The result was another blow against the national economy and further insecurity for those who were employed in the coal industry. Yet, the honorable member for Macquarie (Mr. Luchetti) has had the effrontery to come here and bring forward a matter of urgency based on avoidable unemployment. Here was avoidable unemployment if you like!

In February, 1958, we were fortunate to find a market in Japan for 3,000,000 tons of coking coal for delivery over five years. Let us see how we dealt with that order. I want to go back to 16th September last year when a collier, the “ Cape Horn “, tied up in Newcastle to load 9,500 tons of coal for Japan. The day before, there had been a great demonstration on the coal-fields against dismissals of miners. The Leader of the Opposition (Dr. Evatt) was there as one would expect, but not saying the things that ought to have been said on that occasion. The fact was that we had at that time five of the Aberdare mines idle and 850 men were out on strike in protest against dismissals the previous week. Warnings came thick and fast. Mr. J. Blits, of the Blits Trading Company, coal exporters, warned -

Prolonged strikes on the south Maitland coalfields may destroy Australia’s coal markets in Japan.

At the same time, a visiting American coal industry authority said -

The slump in the coal industry throughout the world is only temporary.

Yet we were busy doing permanent damage to our share of the market. The damaging fact was that on 24th September, eight days after arrival, the “Cape Horn” left Newcastle without a cargo or a ton of coal in her hold, and with her charter cancelled. About the same time, another ship left lightly loaded, and as late as last week the “ Cape Howe “ lost two days waiting for cargo and unable to load coal because of a shortage through stoppages.

A bad effect is the adverse impression made by these events on shipowners who might engage in future charters. The real significance however is this: In a world where Australia is in competition with other efficient coal-producers for Japanese orders, we are virtually putting ourselves at the end of the line and may well lose our customers and the employment that goes with orders for coal. If we jeopardize current contracts, we will have only ourselves to blame if the coal industry is ruined. It is quite true that mechanization in the coal industry would have produced some displacement of labour and a reduction of employ ment, but I point out that this mechanization would have gone forward as an orderly process with little effect if the process had not had imposed on it the extraordinary conditions created by the loss of markets to which I have referred. Clearly there is need for greater efficiency in the coalmining industry, and that means mechanization. Inevitably, until we can increase our markets overseas, it means a reduction of employment, but we can get it back if we can raise our overseas markets and we can do that by looking after the needs of our customers.

Coal-owners have spent £26,000,000 on modernization of plant. That is a great contribution to the national economy, and is a step towards the stabilization of the industry. It will give stability and certainty of employment to those who are left in the coal industry. I deny that this Government has not come to the party in relief of unemployment. One of my predecessors in this debate has pointed out that last year, in October, an amount of £300,000 was distributed through the Joint Coal Board for the relief of unemployment on the northern coal-fields. Of that amount, £150,000 was a grant to be used for the purposes of road works. That grant was to facilitate the movement of displaced mine workers to employment then existing and likely to exist in the Newcastle area. Yet I picked up the “ Maitland Mercury “ a few days ago and read that Mr. Hills, the New South Wales Minister without Portfolio assisting the Premier, was reported to have said -

The Premier also asked me to look at the question of a quick connecting road link between Cessnock and Newcastle which he feels is absolutely essential.

The State Government has had in its hands for almost six months £150.000 to do this job, but on lv now is somebody being sent there to look at the problem. If there is serious unemployment in the coal-fields, and there certainly is with the most dire consequences, would not one think that the New South Wales Government, having great responsibility in this matter, would adopt a crash programme to get the job done, to expend this money to employ, if only temporarily, the people who are at present out of work, and to endeavour to facilitate their permanent employment in a new industry?

Mr Uren:

– Why does the federal Government not make money available?


– If my honorable friend had only been listening instead of dreaming, he would have heard me say that the State Government has had £150,000 in its hand for six months and has not used it. We want new industries in the coal-fields. Only twelve months ago the New South Wales Premier went overseas looking for new industries for Australia, yet so badly mishandled have been conditions in New South Wales that it is highly unlikely we shall see new industries in New South Wales under the present State Government and. unhappily, those in the coal-fields who depend on new industries for employment must pay the price. The New South Wales Government, for months or a year, has been talking about a new power-house at Wallis Creek, but always in the most vague terms. If there is to be a new power-house there, why can the State Government not get on with it now? If there is not to be a new power-house at Wallis Creek, why does the New South Wales Government not say so clearly and unequivocally, so the people will know where they stand. I conclude with a statement reported to have been made by Mr. Hills that -

  1. . he saw no reason why there should not be an immediate start on the first £800,000 stage of the psychiatric hospital to be built at Cessnock.

I would like to see it begin soon.


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


.- I listened with interest to the honorable member for Paterson (Mr. Fairhall) and the previous speaker on the Government side, the honorable member for Hume (Mr. Anderson). We have heard all the side issues about the place dragged into this debate, yet we have not heard Government supporters get down to the real question, which is: What is the Government doing about mechanization of industry and what is it doing to provide new industries and extensions of existing industries on the coal-fields, where so much labour has been displaced. Opening the debate on the Government side, the Minister for Labour and National Service (Mr. McMahon) confused the issue by saying that only 506 miners were unemployed and seeking employment in the Cessnock area. Let us have a look at the real unemployment figures. We cannot dissociate Cessnock from Maitland and Newcastle, because these three centres are all so closely tied together that we must look at them as one. In the twelve months from March, 1958, the number of unemployed in Newcastle has grown from 432 to 961, in Cessnock from 208 to 835, and in Maitland from 234 to 506, or in all from 874 to 2,302. Yet the Minister has tried to tell the House that there is no unemployment problem in the coal industry. He should cite all the figures and try to convey a true picture instead of a distorted picture. He tried to convey that seeking employment in the Cessnock area were only 506 coal-miners out of the 5,782 that were displaced from the industry between 1952 and 1958 and the further 1,282 that have been laid off this year. He would have us believe that the position was quite rosy and that there was nothing to worry about in the Newcastle-Cessnock-Maitland area, although the figures show that 2,302 are actually in receipt of unemployment benefit. That figure does not take into account other persons who, because of the casual nature of their employment, are not able to draw the benefit, although they are unemployed.

Both the Minister and the honorable member for Paterson have spoken of what the Government has done to provide employment on the coalfields. It was said that money has been made available for sewerage and road-works. Let us have a look at the real position and examine all of the figures, instead of just some of them. The Government has made available £150,000. That is the sum total of its contribution in the last two years. The Government says that it has made loan money available. Of course, it has, but who will have to pay back the money? It will not be the Government. The people who will really have to pay it back are the Hunter District Water and Sewerage Board and the New South Wales Government, through its Department of Main Roads. They will have to pay back the money to the Government, in conformity with the Government’s policy of taxing the people and lending the proceeds to the States. That is all that this Government has done to provide employment for these people.

The honorable member for Hume expresses the general attitude of the Liberal Party and Country Party, whether they form the Government in this Parliament or the Opposition in the New South Wales Parliament. These people are opposed to all kinds of industrial reform. Reference has been made to three weeks’ annual leave, long service leave, and other conditions to which the workers are entitled. Facts and figures have been cited, and I shall not weary the House by a repetition of them. Nobody will deny that at present production per man-hour in the coal industry has increased considerably, and that it is now producing a record amount of coal with a reduction of almost 7,000 in the number of men employed. Why are the people in the industry not entitled to some of the benefits of the increased and more efficient production, of which so much is said?

The honorable member for Hume said that it was not the responsibility of governments to do anything to assist. He said it was the responsibility of the coal industry to improve itself and to give assistance. Does the honorable gentleman say the same of the primary industries? Is that his attitude to the subsidies on butter, milk, and milk products? What about the fishing industry? In the publication, “ Australia in Facts and Figures “, made available to honorable members last week, a reference is made to trawling in the Great Australian Bight, and to this Government’s contribution to that undertaking. The Government is prepared to make a contribution to that industry. Further on in the booklet is a reference to the assistance and protection given to the plastics industry. I do not disagree with these actions. I agree with them, but I ask that similar consideration be given to the coal industry so the Minister for National Development (Senator Spooner) can get on with the recommendations of the report made available by the Joint Coal Board as a result of investigations by various committees. A committee was appointed by the New South Wales Government and this Government some years a co. After it made its recommendations this Government continued to hedge for almost six months and to refrain from doing anything about it, until finally it was forced to do something. Then the Minister for National Development insisted that when the chief engineer of the Joint Coal Board, Mr. Williams, went overseas, he should investigate certain aspects of byproducts from coal. Since the report was made available, in February this year, has the Minister done anything about it? Has the Government done anything about it? lt is quite obvious that no one has done anything about it, because the “ Newcastle Morning Herald” of 16th April, carries a report of a complaint by the New South Wales Minister of Mines, in the State House, in reply to a question asked by the State member for Cessnock, Mr. Neilly, that the Federal Government had done nothing about the report. When it is a question of assisting in stabilizing the wheat industry, or assisting the fishing industry or the dairying industry, the Government does something; but it is not prepared to assist the coal industry. All it will do is to try to cloud the issue, as the Minister did in his opening remarks this afternoon, and as the honorable member for Paterson has tried to do. The honorable member talked about disputes being the reason for the present position, but he did not attempt to give the real reason for the disputes. He used them only as an argument to cover the Government’s inactivity and the fact that the Government, in all the years it has been in office, has done nothing about establishing a coal by-products industry. It has done nothing about sending experts overseas to investigate what has been achieved by coal by-products industries in other countries. It has made no investigation of the big plant outside Johannesburg, for instance, which after a number of years of experimentation is now on a sound financial basis. In the last financial year that plant operated at a profit. I have a feeling that the opposition of some honorable members on the Government side to the establishment of a coal by-products plant is tied up with the establishment of the petro-chemical plant now under way in Melbourne. Tn that connexion once again we are tying ourselves up with interests controlled by overseas investors.

Mr Curtin:

– Yankee dollars.


– Yankee dollars, if you like to put it that way. The result will be that Australian industry can be strangled at any time those overseas interests desire, just as is the case at Mr Isa at the moment, because overseas investors have decided that production must be cut by 33 per cent. Let us watch out and see that the same kind of thingdoesnothappeninrelationtothe petro-chemicalindustryorotherindustries associated with it.

Minister for the Army · Bennelong · LP

.- The charge levelled against the Government in this proposal for discussion of a matter of urgent public importance is that the Government has failed to deal with unemployment on the coalfields. Proposals for discussion of this kind, Mr. Deputy Speaker, are the proper and the traditional way used by an Opposition to direct attention to any neglect on the part of the Government. But I have listened carefully to this debate and, whilst we have had a lot of hot air- which is very often the case in urgency debates - I have not heard any direct proof produced by any speaker to indicate failure on the part of the Government to deal with this unemployment problem. Whilst, as I say, urgency discussions may properly be initiated by an Opposition, such action in fact reflects great discredit on the Opposition unless it can prove its claim. If it cannot prove its claim the use of this method indicates complete irresponsibility on the part of the Opposition, especially when the matter honorable members opposite choose to bring before the Parliament for discussion as a matter of urgency concerns a problem that is of their own making, but for which they are trying to blame the Government. I claim that the problem that we are discussing - and there is a problem - is of the Labour Party’s making. So, unless the Opposition can prove its claim, honorable members opposite stand indicted. I propose to prove to the hilt the truth of what I say in that respect.

First, let me say frankly that there Is a problem on the coal-fields, as the Government is aware. That problem has been attacked by the Government, and with success as the relevant figures show. The number of men employed on the New South Wales coal-fields has fallen in the last six years by 7,441. Yet, at the present time, there are only 655 people registered for employment on the coal-fields. If that does not indicate that something has been, and is being, done by the Government I should like to know what does. I am not suggesting that there is not still a problem. But for anybody to say that this Government has completely neglected its duty, or has failed to recognize the problem, is fantastic, when we can point to the figures which show that employment has been found for people displacedfrom the coal industry. I claim that the facts and the figures show that a great effort has been made by the Government in this respect.

The honorable member for Macquarie (Mr. Luchetti), who initiated this debate, and who is, I believe, very serious and very intent upon assisting his electors, spoke of warmth and humanity. I would say that there is not one member on this side of the House, or on the other side, who lacks sympathy for people who suffer as a result of what has taken place - and there are people who suffer. It is a dreadful thing for any man who has served a portion of his life - perhaps the greater part of his life - in the coal industry, and then finds himself out of work. It is a great tragedy for his family, and it is a great tragedy, too, if he has to break the associations that he has built up over the years. That is a real human problem, and one to which we all ought to direct our attention, whether we are in office or in opposition, whether we are in the Commonwealth or the State sphere. This Government is pledged to do its best in this matter and, in fact, is doing its best, as the facts show. Let us go back to taws. Coal production is essentially a State responsibility.

Mr Griffiths:

– Then what about the Joint Coal Board, which was set up by New South Wales and the Commonwealth jointly?


– It is only in New South Wales that the Commonwealth Government is involved in the coal industry, and that is as a result of the establishment of the Joint Coal Board. Seventy-five per cent, of Australia’s output of coal comes from New South Wales. This Government has been in office, however, for only nine years or so, yet look at the transformation in the coal industry that has occurred since the end of the war - a transformation brought about directly by the activities of this Government. As the Minister for Labour and National Service (Mr. McMahon) said in his very important remarks, this industry has been rescued and resuscitated so that, from being a derelict industry, it has become an industry of great efficiency. One needs to point to only a few figures to show that that is sb In 1950, coal output was three tons per rhan-shift. It is now 4.76 tons per man-shift - an increase of more than 50 per cent, iri production. In some” coal-mining areas, as some honorable members may know, the increase’ has been 75 per cent. This has all” been brought about as a result of the’ inspiration and the help given by this Government in connexion with the use’ of the latest methods of mining and transportation, and other matter’s with which I have no time to deal on this occasion.

The Government has encouraged the investment in the industry of £26,000,000 of additional capital in the last five years. AH this has been of tremendous help. Private enterprise; has been- encouraged’ to come forward and give this assistance, which it is doing” in full measure. There’ is also an entirely new attitude on the part of men engaged in the mining- industry compared to that which prevailed when the Labour Government was in control of coalmining. Who can deny that, as a result of the efforts of this Government, coal has been made available to industry at lower prices? Electricity-producing authorities and steel-makers have been able to buy their coal for less, and that has meant increased earnings of millions df pounds by this country, and has aided our economic development. All these things have resulted from the activities of this Government.

What did Labour do about the coal industry? Let us have a very brief look at the record under the Labour Government. The history of coal production in New South Wales under Labour is tragic. New South Wales coal is the best coal in Australia and, had the industry been conducted properly under Labour, the many millions of pounds that have been spent on the production of brown coal in Victoria and of a relatively inferior type of coal at Leigh Creek, iti South Australia, need never have been spent. New South Wales coal was of a quality and in sufficient quantity to provide for the whole of the needs of at least all the southern States. This was all lost as a result of the attitude of the Labour Party in its handling of the coal industry, as well as of the activities of the unions associated with that industry. I had a lot of experience in this matter, because immediately after the war, in 1946 and 1947, I passed through- some of these tragedies. We had to spend millions of pounds to provide pipe lines into Botany Bay to supply oil- to the Bunnerong power station to keep it going. That should have been quite unnecessary. The quality of the coal sent to Victoria and South Australia was of such a character that it was. impossible to use. It was rubbish, and as a result our markets in both those States were destroyed and they found it necessary for their self-protection to produce coal from their own resources.

In New South Wales, industry was starving. The coal-mining industry was unable to get on its feet in the years 1946, 1947 and 1948 because of the irresponsible spirit that was engendered by the Labour Party through its handling of the situation. The progress of Australia was retarded and that sorry state of affairs was not remedied until this Government took office. The irresponsible attitude which developed in the mining community as well as in other industrial areas of New South Wales was a very serious matter indeed.


– Order! The Minister’s time has expired.


.- During’ the course of this debate the Government has made it very clear that it is on the defensive. It has clearly indicated that it has no concerted plan and no vision in respect of the crisis in the coal industry. What can be said of its attitude in respect of the coal industry applies equally to its attitude towards other industrial activities in this country. The tenor of the remarks of Government supporters, from the Minister for Labour and National Service (Mr. McMahon) to the Minister for the Army (Mr. Cramer) who has just concluded, has been a defence against the charge made by the Opposition. The Government has refused to face the facts adduced by the honorable member for Macquarie (Mr. Luchetti) who initiated this debate. The Opposition has justified its contention that the Government’s failure to deal with unemployment in the coalmining industry is causing hardship for miners, trades people and the community generally in coal-mining areas.

The Government has admitted that there is substantial unemployment. The Minister for Labour and National Service said that there were only 500 unemployed in the Cessnock area. He appears to be blind to the morass of unemployment throughout the country. For many months there have been 60,000 unemployed in Australia of whom approximately one-third are subsisting on the dole. That is the kind of efficiency and prosperity that has been flowing from this Government’s actions. Figures have been cited to show the productive value of the coal industry as a result of mechanization. We do not refute that. We know full well that science and the inventive genius of man have increased production with less man-power and at the same time has reduced the retail price of coal. These things are elementary and cannot be credited to this Government; they are the inevitable consequence of events not only in Australia but also throughout the world.

The Minister for the Army seemed to take great pride in the fact that mechanization had proved to be an economic success in the industry and that this Government was entitled to credit on that score; but the fact is that this has come about in spite of anything the Government has done. It is a normal development. This debate has shown to the Parliament and to the people that the Government has failed to handle the transition in this industry from conditions which prevailed ten years ago to what should have been the normal progressive -conditions which operate in coal-mining in other countries. We condemn the Government’s failure to organize that transition and in the eyes of the people that condemnation is wholeheartedly supported. The Government has been responsible for unemployment in this industry. It has forced individual miners to pick themselves up, as it were, and transport themselves and their families from one district to another. It has forced them to do this at their own expense. The Leader of the Opposition (Dr. Evatt) properly pointed out that this is an intensely human problem and must be looked at from that point of view. Some of the 5,000 ill-fated northern miners have been arbitrarily propelled into my district. They have been uprooted from their former employment, taken from their homes and forced to go to the south coast to regain employment in the coal-mining industry.

These men have paid a terrible price -and so have their families, but this Govern ment has not helped them to meet it in any way. Not a penny has been taken out of the profits of the coal-mining industry to reimburse them for the expense involved in moving from their homes in Cessnock to other areas and in re-establishing themselves. Many miners to-night are living in hostels at Port Kembla and Wollongong and their wives and families are almost foreigners to them. The only way they can visit them is to tighten their belts and save up enough money to pay their fares to return home once a fortnight. The honorable member for Robertson (Mr. Dean) smiles at that statement. I have not sufficient time to illustrate it by many cases which I could cite. The Government has failed to handle the transition of the coal-mining industry from conditions which formerly prevailed to modern mining conditions. I agree that we want improvement and scientific development in industry, but we want these improvements to be the servants and not the masters of the workers, lt is evident that the coal-mining industry will not settle down on the basis which the Minister for Labour and National Service indicated. We are not yet at the end of the road of unemployment nor have we reached the limit of progress in mechanization. Consequently, under the policy of the present Government we can only look forward to many more miners being thrown out of work as the march of mechanical development goes on.

Are these men to be faced with the inertia at Government level which their predecessors had to suffer? Of course they will be. This problem will be solved only when the Government is of a kidney that will introduce mechanization into industry on a proper basis. There must be a more balanced outlook towards markets and also a more balanced approach to the human element in the industry. Miners should not be uprooted from their homes and forced to go to other areas, at their own expense, seeking fresh employment. What would be their position if they withheld their labour from the industry? It is very likely that the law of the country would be brought to bear harshly upon them and they would probably finish in gaol. Although the Coal Industry Tribunal has been set up, miners have been thrown out of work and their only alternative has been to leave the area in search of employment on another field.

The law of the jungle is in full blast in the coal-mining industry and it behoves this Parliament to watch the trend of unemployment which is developing. Obviously the improvements provided by science have been applied with little regard for the human element and have resulted in unemployment. Automation is only in its infancy, but when it is in full swing not only in the coal-mining industry but also in other heavy industries the plight of the workers will be grave indeed. I suggest that the problems of the coal industry can be properly and equitably solved only by the nationalization of the industry. The importance of and the need for these things is evident.

The Government, up to the present time, has had the escape channel of saying to the northern miners, “ When you become unemployed, there is plenty of work on the south coast “. That has been so. The south coast mines have absorbed men from the northern fields. But as the honorable member for Macquarie (Mr. Luchetti) indicated in his introduction to this important debate, the position is different to-day. There are no avenues on the south coast for the absorption of further men from the northern coal-fields. Our own mines are starting to contract production. Tongarra, a small mine which used to employ about 60 men, now has about twelve. The number of men at the South Bulli mine is being reduced. With the introduction of mechanization, employment in other mines will be restricted. So, the south coast is now facing the conditions that are rampant in the northern mines - conditions which are making ghost towns out of the old mining fields and disrupting community and home life.

Our approach to the use of coal is still that of the savage. We are still burning up all the coal that we get. We are not obtaining chemical by-products from it. Other nations are doing so. The Government has side-stepped this issue. As has been stated, this Government is pandering to the oil cartels. It has no instinct or desire to pursue a policy which would create a chemical by-products industry in the coal-fields. We are still walking with bowyangs in this country in regard to this question and others. The Government, chosen by the electors, must accept responsibility for this state of affairs. The respon sibility cannot be evaded on this or any other issue. All the evidence demands the establishment of a by-products industry.


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


.- I have listened very carefully to this debate. It is quite wrong for honorable members of the Opposition to say that members and supporters of the Government are not sympathetic towards the miners. After all, there is as much heartfelt sympathy towards the miners on the Government side of the chamber as there is on the Opposition side. This is a problem of long standing. It was not brought about in the last month or two. We all know that the mines have been so disrupted that when the Labour Party was in office, it had to put troops in to work them and to break a strike.

The honorable member for Macquarie (Mr. Luchetti) was quite wrong in saying, by way of illustration, that money was being paid as a subsidy on butter while the price of butter was going up. The subsidy was not the reason for the rise; it keeps down the price of butter to the consumer. That is one of the main reasons for paying it. This honorable member tried to link up the coal industry with an illustration which was basically wrong.


– Order! As the time allotted for this debate has expired, the discussion is terminated in accordance with Standing Order No. 92.

page 1599


Second Reading

Debate resumed from 21st April (vide page 1419), on motion bv Mr. Harold Holt-

That the bill be now read a second time.


.- The bill before the House provides for an increase in the contributions by Australia to the International Monetary Fund and the International Bank. Why are we increasing our contributions to these institutions? I listened to members on the other side of the House and I got the impression that some Government supporters believe that the object in increasing our contributions tothe International Monetary Fund and the International Bank, was to enable us toborrow more money as rapidly as possible.

Mr Turnbull:

– That is quite wrong.


– That impression was given to me by the speech of the honorable member for Wentworth (Mr. Bury). He said -

We have a particular problem of financing our development, and I personally cannot share the feelings of those who are frightened to borrow money, because in the broad sense, that is what it means. Nearly all the argument against Australia borrowing money overseas and having investments here from overseas applies to an individual with an overdraft. If he has not run his business properly or has done so at a loss, he would have been far better off if he had not borrowed; but if he wants to grow quickly and manages his affairs well, bank credit opens up to him much larger opportunities than otherwise would be available. Very similar considerations apply to international borrowing. One cannot necessarily measure the effect of a particular loan by what it produces in overseas currency, but the process involves Australia growing industrially and becoming a stronger nation in every way. Eventually, we shall export a considerable volume of manufactured goods; in fact, we shall have to do so.

It was the argument implied in that contribution that caused me to get to my feet. I remember an occasion when the headlines -of the press of this country were full of the word “ repudiation “. The newspapers asked, “ Will we repudiate our overseas obligations? Must we repudiate .our overseas obligations? Can we pay the interest commitments due in Britain upon our debts? “ That was the tenor of articles in the press of this country about 1930. We were able to pay the interest on our commitments overseas only by marshalling every ounce of gold in this community and sending it overseas. Even then we had to receive liberal treatment from our creditors. Of course, that position arose in Australia “because people had maintained the attitude that there was no limit to the capacity of a country to borrow. Our friend, the honorable member for Wentworth, said that a nation is like a business: If the nation is well run, then the nation can continue to borrow, as a business that is well run can continue to borrow without disastrous results.

Who was running this country during the period, not just immediately prior to, but for many years prior to, the occasion on -which default became a danger to this nation? The Bruce-Page Government! The “‘tragic treasurer” was a member of that Government. No doubt the honorable member for Wentworth and others who sit upon the benches opposite would maintain that that government conducted the business of this country, not only to the best of its ability, but much better than any other type of government could possibly have conducted it. Yet, the result was the danger of repudiation!

Why did that danger arise? It arose because the price of our primary products had diminished and we had to meet commitments upon overseas borrowing which had been carried on continuously by the Bruce-Page Government. There was around the necks of the Australian people a millstone of debt which they were unable to meet. Throughout its period of occupancy of the Treasury bench, this Government has followed in the footsteps of the BrucePage Government. It has .used the type of government exercised by the Bruce-Page Administration as its example. It has carried .out the policy implied in the re: marks of the honorable member for Wentworth (Mr. Bury). Let me list for the benefit of honorable members the overseas borrowings that have taken place since 1950. From the International Bank we have .borrowed over 3.00,000,000 dollars. The first loan was obtained at 4i per cent., the issue being at par. The last of the loans was of 50,000,000 dollars, in December, 1-956. This was obtained at an interest rate of 4i per cent., the issue again being at par. New York we have borrowed over 15.0,000,000 dollars. The first loan of 23,000,000 dollars was -negotiated in 1954, at 3* per cent. The issue was made at 99. The last loan was of 25,000,000 dollars in October, 195.8. The interest rate was 5 per cent., and the issue was at -97i. This, of course, results in a higher interest rate than 5 per cent. The interest rate is gradually increasing and the commitments have been increasing.

Then we went to London, and we borrowed a considerable amount there. The first loan was in 1952, of f 11,800,000. It was at 4i per cent., issued at 98. The last loan was in October, 1958. It was of an amount of £15,000,000, at 5 per cent., issued at 98. The second last borrowing in London was in February, 1958, of an amount of £16,000,000, at an interest rate of 6 per cent., issued at 99£. In Switzerland we borrowed to the extent of more than 120,000,000 Swiss francs. In Canada we borrowed 50,000,000 Canadian dollars.

The Government of this country has vastly increased our commitments abroad. This means that we must pay annually an increasing toll of interest. At present we are paying over £4,000,000 a year more in interest than we were when this Government came to power, and the interest payments are continually increasing. If the price of wheat falls, as the price of wool has already slumped and may slump again, and as the price of other commodities such as meat has slumped, we will have to send overseas greater amounts of these commodities to meet our increasing interest commitments. This, of course, is not intelligent economics. It is not an intelligent way of controlling our trade.

The Labour Party does not object to our investing money in a monetary fund or in the International Bank, if that fund and bank are used as a kind of changing house, so that we can utilize the money invested therein to buy goods in countries in which we have no credit. But we do object if the money is to be used to increase our commitments overseas, and to allow more goods to be imported into this country while the quantity of our exports and the receipts from them are decreasing.

The honorable member for Corangamite (Mr. Mackinnon) has been asking me, by way of interjection, to read more of the speech of the honorable member for Wentworth. I will not read more of it, but I will read again a part of it that I have already read. The honorable member said -

Eventually, we shall export a considerable volume of manufactured goods; in fact, we shall have to do so.

Then the honorable member went on -

But the means to establish these new industries, the real pacemakers in Australian industrial development, do, in fact, with few exceptions, come from overseas.

If the honorable member for Wentworth thinks that Australia can, to any substantial extent, export manufactured goods in competition with Japan and the growing industrial strength of China, or in competition with America and Great Britain, he is living in a dream-world. Our country cannot do it. We must depend mainly for our export earnings upon primary production.

Mr Turnbull:

– Dried fruits!


– Yes, even dried fruits.

I would like to see more and more dried fruits and other primary products exported. But the position that has arisen, as the honorable member for Wentworth pointed out, is that because of the expansion of our manufacturing industries, we must import more goods than we did in earlier times. We must import raw materials to carry on these industries. We must import more oil and more of all the things that are essential to the smooth working of our industrial undertakings, which employ the vast majority of the Australian people. In order to do so, we must maintain a wider margin between the amount that we send overseas to meet our commitments, either in the form of interest or in the form of dividends to countries or private individuals, and the amount that we receive for our exports. Of course, this has not been the case, and it will not be the case in the future.

The honorable member for Wentworth may be basically right, if the goods that we buy with money obtained from the International Bank or by way of loans raised in New York, Switzerland, Canada or London, enable us to increase the quantity and value of our exports of primary products. But who is there among honorable members opposite who will say that we will in the future sell more of our primary products overseas at prices enabling us to obtain for them more than we have done before, or to establish overseas credits to a greater extent than we have done previously? Nobody would dare to make such a statement.

This brings me back to the comment I made previously, that there was at one time a period in which we were unable to pay our debts. Immediately after World War I., the prices of primary products were relatively high and we could sell our goods easily overseas. Not only did we sell them overseas, but also we did what this Government is doing now. At a time when our income from exports was greatest we borrowed heavily overseas. When prices fall, or when we are hit by bad seasons or some other difficulty and we cannot sell as much as we previously sold overseas, the first call upon our export income is made to meet our commitments. In the present case, it would be our commitments to the International Bank for Reconstruction and Development and the bondholders in New York, London, Switzerland and Canada, and what is left we shall be able to use for the purchase of those commodities that are essential to the maintenance of our industries and to their expansion, if we can expand them. After World War I., of course, when we had met our statutory obligations, we were unable to maintain the necessary margin to import the goods essential not merely to the expansion of our economy but to the carrying on of the country at all. As a result, because of bad government, the Australian people experienced a depression and unemployment of an intensity that they otherwise would not have experienced.

That is why I warn the Government and its supporters against wholesale borrowing. If facilities for borrowing are available, some people, of course, take advantage of them - but not the cautious people. Borrow, if you can get money to promote the development of this country - and particularly the development of its industries - and enable it to meet its commitments overseas in the future, but do not borrow if you have to pay exorbitant rates of interest, because you know that the time will come when, because of decreasing primary production, you cannot meet your commitments overseas. If all the moneys that have been borrowed overseas had been used for the construction of roads, houses and dams, and the implementing of water supply schemes, we might have increased our production to an extent that would have justified that borrowing. But most of these borrowings have not been so used. Most of them are merely commitments that we have entered into because we have purchased from overseas, and permitted to come into Australia goods that should never have come into the country. What came into Australia for the expenditure of the 120,000,000 Swiss francs that we borrowed?

Mr Curtin:

– Watches.


– Watches and chocolates. At any airport cafeteria one sees Swiss chocolates all over the shelves. In the shop of any brummagem jeweller in the cities, one finds imitation jewellery from Switzerland. All these things came into Australia through the expenditure of the funds that we borrowed from Switzerland, and they should not have come in. But, of course, there is pressure brought to bear by those individuals who can make great profits out of these things. They bring pressure to bear on the Government to give them licences to import goods of that description. Similarly, numerous other articles came into this country from other countries, to the great detriment of Australia, through the expenditure of funds that we had borrowed from overseas.

For these reasons, I suggest that the investment of these funds which we are to invest in the International Monetary Fund and the International Bank for Reconstruction and Development should not be regarded as an invitation to borrow. Rather, we should use them, when we have to, to the best advantage of this country, and we should be reluctant to borrow from the International Bank. We should not be, as the honorable member for Melbourne Ports (Mr. Crean) pointed out, the greatest borrower from the bank. Why not let some of the undeveloped countries borrow those moneys from the bank - countries in whose development we have a stake, because as they develop, and their standards of living rise, the markets for our goods must increase? I have in mind countries such as Indonesia and India. It has been estimated that if the standard of living of the people of India were raised by the equivalent of one penny a head a week, the people of England would export to India an additional £60,000,000 worth of goods a year.

I do not know whether those figures are right, but I do know that if we raise the real standard of living of the Indonesians, the Indians and others by means of the resources of the International Monetary Fund and the International Bank, the result for Australia would be an increased demand for our primary products, which we should then be able to sell at higher prices than we receive to-day. We should not then be in the deplorable position in which we now find ourselves, and in which we send our representatives overseas to plead with the people of the United States of America not to release at low prices the thousands of millions of pounds worth of primary products held in storage in that country, because such an act would destroy our markets. In India, hundreds of thousands of people starve to death every year. They do not merely suffer from malnutrition. In the islands of the Pacific, many people starve to death yearly. Yet, so-called international statesmanship demands that we say to the people of the great United States, “Whatever you do, do not release your stored primary products on the markets of the world at low prices in order to relieve malnutrition and prevent starvation among the masses of the world’s people, because, if you do so, you will reduce the ability of the Australian primary producers to sell their products “. That, of course, is not statesmanship. That is not in accordance with the ideals upon which Labour’s philosophy, here and elsewhere, is built.

Mr Turnbull:

– What is it built on?


– It is built on service to the human race. It is built, not only upon profit but upon use. It is built on humanity, and not merely on the adoration and accumulation of wealth to the detriment of the welfare of vast masses of the people.

Sitting suspended from 5.44 to 8 p.m.


– The legislation we are discussing concerns Australia’s participation in one of the greatest developments in international finance during modern times. It concerns our contributions to the International Monetary Fund and to the International Bank for Reconstruction and Development. The basic philosophy behind this is that we must realize that Australia, together with many other nations, is showing its capacity to make a contribution to a method of finance which must obviously overcome many of the difficulties caused by international financial shortage. It is a development of modern thinking and modern philosophy.

The legislation provides for an increased Australian contribution to both institutions. Towards the International Monetary Fund, we are, under this legislation, committed to an increase of 50 per cent, in our liability from 200,000,000 dollars to 300,000,000 dollars. Incidentally, 25 per cent, of the increase, or the equivalent of £A. 11,000,000, is payable in gold. Australia’s subscription to the International Bank for Reconstruction and Development is being increased by 100 per cent., but this does not involve any further cash contribution. It is well to remember that in their reports the executive directors of both the fund and the bank implied that no change would be made in policy in regard to the activities of both these international financial institutions. As far as the fund is concerned - and this applies equally to the activities of the bank - the directors, on page 5 of their report, said -

The Executive Directors are of the opinion that the policies and practices governing the use of the Fund’s resources, which have now successfully stood the test of practical application, should not be changed as a consequence of the increases in quotas now envisaged. While the Fund must, of course, remain alert to the needs of changing circumstances, it will at all times have to ensure that its transactions with its members promote the purposes of the Articles of Agreement.

Australia has a direct interest in these activities. Not only do we as a country expect to enjoy some benefit from loans, but also, as a country, we are prepared to commit ourselves to the responsibility of helping other countries which are perhaps not quite as successful as we are or which do not enjoy quite the same prosperity as we enjoy to-day. Could I mention one case which is very pertinent at the moment? A question has arisen about the finance involved in the railway line to serve Townsville, Cloncurry and Mount Isa. Shortly, a request will be made on behalf of Australia, through the normal channels, to the International Bank that a sum of about 50,000,000 dollars be made available to help to develop and extend the capacity of this railway line to service the areas of Cloncurry and Mount Isa. In that part of Queensland, we have probably one of the widest mineral areas in the world. We believe as a government that this is something that has an enormous potential, not only for our own advancement but also as a contribution to world finance. I mention that because it is typical of the reliance that Australia must place on finance from overseas. In the future, we could also look at the question of the development of the Weipa bauxite area. This will take an enormous amount of finance, which would be quite beyond our resources. Eventually, it must come either from an institution such as we are discussing now or through the investment of private capital in Australia.

The expansion of the funds as suggested in the reports of the directors illustrates clearly the growing activities of both institutions. Reference has been made to the reason for the extension of the quotas and the subscriptions. The honorable member for Melbourne Ports (Mr. Crean), who led the debate for the Opposition, mentioned that he believed that general world inflation was the basic reason for the expansion of the resources of the International Bank and the International Monetary Fund. I prefer to believe that the requirements of the funds are due to wider and growing international trade, which, after all, is one of the basic reasons for which these institutions were formed. The charter shows that one of the fundamental reasons for the establishment of the International Monetary Fund was the extension of international trade. As the world grows closer and as we come to depend more and more on our neighbours, it is quite obvious that international trade in itself is one of the economic features which we cannot escape and it has to be financed. I admit that basically there has been a tremendous pressure on the financial resources of the world through inflation, but at the same time I would prefer to believe that the fundamental reason is that international trade is growing.

At various times we have heard reference in this House to Australia’s requirements. Obviously, Australia has a tremendous need for capital to-day, and will have in the future. At the same time, due to our seasonal difficulties and our balance of trade problems, we will also have currency difficulties and we will naturally rely in these circumstances on short-term assistance from the International Monetary Fund. It is as well to remember at this stage that the availability of assistance from the fund is regulated by our subscriptions to it. It would be idle to point out the importance of the exchange function of the International Monetary Fund. We have already on two or three occasions benefited by the use of short-term credits to adjust our balance of payments problem. To exemplify the value of this contribution towards international finance, we need consider only our immediate problems in regard to soft and hard currency. That brings us naturally to the point of convertibility. But on that subject one could speak volumes, so I do not propose to weary the House with the virtues of convertibility. At the same time, we have a degree of convertibility through our contribution to the International Monetary Fund, and in that regard I think we must realize its value not only to ourselves, but also to many nations of the world in a position similar to ours who have available to them the resources of the International Monetary Fund.

I want to refer briefly to some remarks about the need for overseas investment in this country. I propose to quote the remarks of Mr. Trout, President of the Associated Chambers of Commerce of Australia, who recently said -

The vital contribution which overseas capital resources have made to Australia’s development since the war makes it amply clear that we will require a steadily increasing inflow of capital from abroad to ensure the continuation of our present rapid rate of progress. Australia has an extremely favorable climate for overseas investment

That is possibly due to the activities of the present Government in inspiring confidence overseas - but there is a world wide shortage of capital and Australia is a long way from the world’s industrial and financial centres. We must therefore make every effort to bring to the attention of a wider circle of prospective investors the opportunities for investment in Australia and take all possible steps to improve conditions which might be unattractive to investors overseas.

This has a concomitant with it, because, after all, whatever we bring into Australia would be useless if it were not profitably employed. Mr. Trout refers to an analysis made by Mr. Eugene Black, president of the International Bank, and says -

Also, as Mr. Black has pointed out, Australia has a very good record for honouring its overseas obligations even in periods of extreme difficulty - a record which has already been appreciated by many investors overseas.

This debate has touched on the much wider subject of overseas investments in Australia, and I introduce that note to give what I believe is a balanced opinion on the requirements of this country. The honorable member for Melbourne Ports, leading for the Opposition, expressed Labour’s traditional fear and distrust of overseas investment in Australia. Earlier to-day, a similar line of argument was put forward by the honorable member for Scullin (Mr. Peters). It seemed to me that their arguments were based on a depression complex, a feeling that we were incapable of developing Australia’s potential. The honorable member for Scullin went to some lengths to quote the remarks of the honorable member for Wentworth (Mr. Bury), and that was probably the best part of his speech, because the remarks of the honorable member for Wentworth were based on a knowledge of International Monetary Fund activities, and on a firm and wide knowledge of international finance.

Originally the Opposition’s attitude arose, I believe, from a fear of foreign investment and foreign financial domination of the Australian economy. It probably goes back to the days when Labour was afraid of the power in Australia of the Old Lady of Threadneedle Street. This fear was very evident in the remarks of Opposition members who have so far spoken in this debate. But this is not their only fear; they fear also that Australia will not be able in the future to service the loans to which we have committed ourselves. That is probably the most pessimistic view of Australia’s future that could be suggested. If the Opposition ever used that fear as a political catch cry in the future, the people of Australia might well say: “ Who are these people to govern us when they have no confidence in our future, when they reject the possibility of administering our own financial relations, and suggest that we are quite incapable of honouring the obligations that overseas borrowing would impose? “.

I should like to point out to the honorable member for Lalor (Mr. Pollard), who is interjecting - he is very vocal on this subject - the inconsistency of Labour’s argument on this point. First, it is suggested to us that it is a bad thing for Australia to borrow overseas. The Opposition says that we should not bring borrowed money into this country; that we should be able to raise it internally. That is their line of argument. But every time the Budget is introduced in this House - at least, since I have been here - and a government, with some due caution with regard to its fiscal policy, suggests that perhaps it would be wise if it could underwrite the States’ loans for capital works and use revenue to finance such capital works as the Commonwealth is committed to, the Opposition says that is wrong, that you should not finance capital works out of revenue - that they should be financed by loan money. Well, the Opposition cannot have it both ways. Capital works must either be financed out of revenue, without borrowing money, or - and I think this is a reasonable and sensible suggestion, as implied in the bill that we are discussing - we accept the responsibility that we are a growing and progressive nation, that we require finance to develop our potential, and that only by the availability of finance, not only from our own sources but from sources overseas, can we bring this country to its rightful place among the nations of the world.

I want to say something on the subject of Australia as a borrowing nation. Again I refer to the remarks of my friend, the honorable member for Melbourne Ports, for whom I have a great regard and a great affection. He has posed to this House a proposition, which I see has a basis of logic behind it, that one of these days Australia must reconsider its position and decide whether it is to be a borrowing country or a lending country. Quite recently, the honorable member and I had the opportunity to travel in parts of South America, and the problems facing some of those countries make ours fade into insignificance. The idea behind the honorable member’s thoughts is, I believe, that Australia, judged by world standards, is a fairly highly industrialized country. We have an immense potential for primary production. Coupled with that we have a very high standard of living. So, in the eyes of certain countries, it would be quite unreasonable to assume that Australia is what one might call a lesser developed country or a country in need of financial assistance in order to bring it up to a higher standard of living. I think that is a reasonable assumption. But at the same time, I think we must look at the situation from another angle. We in the south-east Asian area have a responsibility to our neighbours. If we can lift our standard of production and increase our wealth, we can, I believe, make a very direct contribution to those countries with which we are at present associated, and which place some value on our assistance.

I think that it may be appropriate at this moment to refer to some of Australia’s activities in this regard, because that would dispel the belief that may be held in some quarters that the procedures contemplated in this legislation would constitute one-way traffic, and that all the benefits will accrue to this country. Apart from the finance Australia has provided under the Colombo Plan, Ecafe and Seato to assist our neighbours in South-East Asia and, in a very wide field of private investment, particularly through New Zealand, to assist our friends in South Africa and certain areas of South-East Asia, notably Malaya, Australia last year made a loan of £10,000,000 in Australian currency on short term to our sister dominion of New Zealand. I am happy to state that the loan is in the process of complete repayment at the moment.

I would refer again to an acceptance under our International Bank commitments of providing the needs of certain other countries within the contribution of our 36,000,000 dollars- the 20 per cent, of that portion of our International Bank commitment which is regarded as hard currency or gold. Out of that section of our commitment, we have already agreed with the International Bank to make available loans of 3,600,000 dollars to India 1,100,000 dollars to Pakistan, 1,600,000 dollars to Nigeria and Rhodesia and separate loans of 800,000 dollars to Japan, Burma and Thailand totalling some 7,250,000 dollars. Again, on the international level - and this is perhaps not known to honorable members - within the past two years, the Government of Fiji has floated some loans which have been underwritten in Melbourne by a well-known firm there to the total of £3,250,000 in Fijian currency which is at a slight depreciation in relation to the £1 sterling. That money has not actually been raised in Australia but the loan has been arranged and underwritten by an Australian firm.

I believe, Mr. Speaker, that all these things point to the interesting part that Australia is playing in international finance. In other words, it is not completely oneway traffic; and it fits in, I believe, with the suggestion of the honorable member for Melbourne Ports (Mr. Crean) that we must not only, within our own capacity to borrow, look at our own requirements, but must also stand up to the responsibilities we have as a fairly well-develoned country towards our neighbours. It is possible, as I have suggested before, that a better developed Australia could make an even greater contribution to our neighbours. particularly those countries’ which are in the process of economic development. That is a reasonable assumption and I believe the people of Australia will be prepared to stand up to it. After all, if we can build up the economic circumstances of our neighbours in the near South-East Asia area, we shall be making available markets for our own produce to help our own export trade.

I should like to refer briefly to the question of availability under the International Monetary Fund of assistance in our own temporary balance of payments problems. Speaking before the sitting was suspended, the honorable member for Scullin (Mr. Peters) asked: How are we to stand up to our commitments if we have a series of bad seasons? It is just that very problem which can be dealt with by our availability from the International Monetary Fund. It is short-term money. It has to be paid back in a very short time and would be ideally suited to deal with seasonal conditions that apply in Australia. So I suggest, Sir, because we have a shortterm problem due to our own seasonal difficulties, that is just the very thing for which the contribution from the International Monetary Fund is designed. Incidentally, In connexion with that, it is also designed to deal with our own immediate balance of payments problem; but, in the long term, on the question of loans from the International Bank, we have naturally also the problem of our own internal policy. So, while we could adjust our circumstances in the short term with an immediate loan from the International Monetary Fund, by our own internal policy we will have the responsibility of dealing with the servicing of loans in the long term, and that is where fiscal policies within the Commonwealth will be involved. To-day, we are faced with the difficulties of reciprocal trade agreements and reciprocal trade policy. As a country, we have to face up to the fact that the finance required by many of our customers is not within their immediate command. In those circumstances, we have also to face up to the responsibility of assisting them in their own immediate problems. I mentioned earlier the problems of the South American countries with which I became fairly familiar on a recent visit. I also said that whatever our balance of payments problem may be. it dwindles into complete insignificance compared with the problems which face many of those delightful countries of South America.

One case in point illustrates how they employ devices to restrict spending money requiring foreign exchange. In Chile, a delightful country which is subject to economic difficulties in part by the reduction in metal prices, they have introduced a device to prevent people from buying motor cars from overseas. It is this: If some one desires a new motor car which involves foreign currency, the purchaser has to pay fifteen times the value of the car to the central bank until such time as the car is delivered. Honorable members will realize that it is a very restrictive proposition. If a person wants to buy a car worth £1,000 in Australian money, he has to place £15,000 with the central bank so that he can get an import . licence to import the motor car. I mention that to show the difficulties which are facing many of the South American countries. While I was there, I tried to point out to these people that we in Australia are also of the southern hemisphere and have many problems similar to theirs, but I repeat that ours are insignificant by comparison.

I conclude on this note: These two institutions - the International Monetary Fund and the International Bank for Reconstruction and Development - have already shown their capacity to service the requirements of many parts of the world. I believe they have already made a tremendous contribution not only to our own selfish interests but also to many countries which require finance even more than we do. One way in which we can show that Australia is growing up and reaching maturity is to give our public support to this legislation.


.- The honorable member for Corangamite (Mr. Mackinnon) asked: Who are the people who wish to govern this country and who are fearful of foreign capital investment here? May I remind the House that they are the same persons who carried Australia through the Second World War, spending up to £1,500,000 a day and yet balancing their Budget. The right honorable member for Hunter (Dr. Evatt), the honorable members for Melbourne (Mr. Calwell), Lalor (Mr. Pollard) and East Sydney (Mr. Ward) were Australia’s leaders in the time of war and are still leaders on this side of the House. Those people led this nation through a time of war, spending £1,500,000 a day and still balancing the Budget.

This great nation of ours must go forward. We know that this measure is designed merely to increase the resources of the monetary fund and funds of the bank - to bring them up to date, as the honorable member for Melbourne Ports (Mr. Crean) said, because of inflationary movements throughout the world. There is to be an increase of 50 per cent, in our quota of 200,000,000 dollars in the International Monetary Fund, and an increase of 100 per cent, in our subscription to the International Bank for Reconstruction and Development. The International Monetary Fund was originally established after great consideration. There was a good deal of discussion in the ranks of the party that I represent before it was decided to enter the international monetary field and become a member of this organization. Legislation for that purpose was introduced by the Chifley Government in 1947, and its provisions are being brought up to date now.

We of the Opposition support this measure. The International Monetary Fund was established to assist countries in times of trade deficits, droughts, floods or famine, with short-term loans - generally three to five years - at very low interest rates. There have been two loans to the Australian Government. The first was of 20,000,000 dollars to the Chifley Government and the second of 30,000,000 dollars to the present Administration. Both these amounts have been repaid, and there is now no money owing by Australia to the International Monetary Fund. With reference to the International Bank for Reconstruction and Development, the then Prime Minister, Mr. Chifley, said on 13th March, 1947, when introducing the original legislation -

The purpose of the International Bank for Reconstruction and Development is to provide a source of capital funds for the reconstruction of countries devastated by war and for the development of industrially backward countries. . . . Australia would share with all other countries in any losses incurred by the bank, but they should not be great and would be spread over a long period. It is unlikely that Australia would itself require to borrow from the bank.

This passage appears at page 592 of Volume 190 of “Hansard”. As we all know, the present Australian Government was the greatest borrower from the International Bank.

Mr Stokes:

– It will borrow more.


– Of course it will. It will put us into pawn with foreign countries. There is no doubt about it. We are fearful of foreign investment and foreign capital entering this country. We realize that it is partly necessary, but let us decide what foreign capital we are to receive, and not he flooded with money as we have been in recent years.

Mr Roberton:

– But you are supporting the bill.


– That is so. I think all will agree that the late Mr. Chifley was one of the greatest economists ever to have control of the Treasury of this country. He said that he did not think we should ever borrow from the International Bank, yet this Government is one of its greatest borrowers. We have faith in this country, and we do not need to borrow money from foreign sources for its development. We became a subscriber to the bank because we had goodwill towards backward countries, as Mr. Chifley said in his introductory speech. The honorable member for Corangamite said that we must assist the people to our near north. We are assisting them with loans at interest rates of 5i and 6 per cent. We know that those interest rates are out of proportion. We must make money available to those people. We must assist them to develop and uplift themselves. The fact is that for 1,000 years, whether by colonialism, capitalism, or imperialism, they have been bled of their life-blood. Now we are very generous benefactors by making money available to them at 5i per cent, and 6 per cent, interest!

Mr Mackinnon:

– That is rubbish. We have already given £26,000,000.


– What is £26,000,000? We bled them of their life-blood for 1,000 years. In 1953 I went from Lithgow to Sydney to hear a lecture by Mr. Justice Douglas, a member of the United States Supreme Court Bench and one of Roosevelt’s New Deal men. He said that if 1 per cent, of the military budget of America was made available to Asia, it would solve the problems of Asia. The honorable member for Melbourne Ports pointed out that an additional two billion dollars was being made available to the International Bank, yet the United States of America spends 50 billion dollars annually on armaments! Even in this country we are spending the equivalent of half a billion dollars a year on defence, yet a mere pittance is made available, at 5i per cent, or 6 per cent., to the people of the near north!

We are justified in being fearful of foreign capital in this country. As is well known, more and more foreign investment is taking control, and Government supporters should be as fearful for the future as we are. I have previously quoted extracts from the quarterly review of the Bureau of Agricultural Economics. Many economists are fearful of the outflow of dividends on foreign investment. In fact, the inflow may not be sufficient to pay for the dividends that are flowing out. We are supporters of the International Monetary Fund and the International Bank for Reconstruction and Development but not for the same reason as the Government supports them. We support them because they are a brotherhood aimed at assisting the backward nations.

The honorable member for Corangamite talked about internal loans in this country. We have some faith in our national credit and we have a marvellous instrumentality in the Commonwealth Bank, which we shall utilize for our development. As an illustration of the stranglehold of foreign capital, I direct attention to the Sydney “ Sun “ of 23rd April, which reported an instruction from America to cut by one-third the production of the Mount Isa mine.

Mr Killen:

– It simply is not true.

Mr Roberton:

– I think he is only joking.

Mr Killen:

– It is untrue.


– Order! The honorable member for Moreton will refrain from interjecting.

Mr Opperman:

– Read the later editions.


– When members opposite quieten down, I shall read the report. It states -

A savage cut which reduces the capacity output of Mount Isa mine by 33 per cent, will operate from June 1. A new slash of 14 per cent, in current production was ordered to-day by the American parent company.

An A.A.P. message says the parent company, American Smelting and Refining Company, which owns 54 per cent, of the Mount Isa company, has cut also the rate at which the Australian company can sell zinc concentrates.

The report continues -

Importance of lead to the Australian economy is underlined by the fact that in the last financial year lead alone brought in almost 10 per cent, of our export dollar earnings.

Mr Mackinnon:

– Read what George Fisher said on the same subject.


– Order! The honorable member for Corangamite has already spoken.


– The fact is that these things are said. The article continues -

But the company maintained its distribution to shareholders at 25 per cent, of which some was paid in bonus shares.

Production of minerals in the 1957-58 year was a record.

The article proceeds -

At the company’s annual meeting last December, chairman Mr. G. R. Fisher-

The honorable member for Corangamite’s friend, Mr. Fisher - said that the company expected better results this year.

Now I should like to quote what the trade union movement had to say in reference to this. Its opinion was reported as follows: -

Decision by the American company to restrict production at Mr Isa was condemned to-day by the secretary of the A.C.T.U. “Any drastic reduction of production which would inevitably result in retrenchment of employees would be disastrous, particularly to the people of Queensland”, Mr. Souter said in Melbourne. “We have always protested strongly at international or foreign interests in a national undertaking which make decisions without regard to the national economy. “ Mr Isa is a classic example of this.”

Mr. Souter added, “ Premiers are running around the world seeking international capital and at the same time these people are making decisions affecting the national economy and creating problems of unemployment without regard to the people themselves.

Mr Mackinnon:

– Now give us the boxing news from the back page.


– Honorable members opposite will have the right to say later whether what I have read is true or not. This is in black on white, and I am just reading it from the newspaper. I have very strong feelings about foreign capital, or any capital at all, deciding the future of this country. I strongly object to investors deciding that they must maintain a 25 per cent, dividend whatever the effect on Australia’s economy. The fact is, as I have pointed out before, that for 1,000 years colonialism, capitalism and imperialism have been bleeding the nations to our near north.

Mr Killen:

– What is communism doing to them?


– At present we are discussing capitalism, and capitalism has been doing what I have said. I know that honorable members opposite have to find a new bogy, but let us deal with first things first. The position is that the capitalists have been bleeding the nations to our near north for 1,000 years. What do we find in this country now? We, too, are coming into the ambit of economic exploitation from abroad. We find that General ,MotorsHolden’s Limited, which was launched with an investment of £1,750,000, has assets of £60,000,000, and has sent out of the country profits amounting to £40,000,000. That is stated in a report of the federal secretary of the Vehicle Builders’ Union. I believe that the Minister for Labour and National Service is to speak next and he will have the opportunity to answer what I have said.

Honorable members should be fearful of what can happen as a result of the investment of great amounts of foreign capital in this country. It is necessary at times to have foreign investment here, but let us decide what capital we need instead of allowing money to be indiscriminately invested in this country. Recently in the “ New York Herald Tribune “ there was a 50-odd page advertisement, in the form of a supplement, which showed State competing against State for investments. That arises entirely from the fact that this Commonwealth Government will not make sufficient money available to the States for their urgent public works projects. So the Premiers have to go cringing for foreign capital. Instead of the six Australian States working hand-in-hand we have them competing against one another for foreign investment. Only yesterday the same kind of 50-page supplement was published in the “ Financial Times “ of London.

We in Australia must do something definite for ourselves. We must put Australia first, and we should not be worried about foreign capital. We must have legislation to protect Australia from foreign exploitation. On one occasion the honorable member for Melbourne made a statement, which 1 heard over the air in a parliamentary broadcast before I came here, that it should be mandatory for Australian capital to control at least 51 per cent, of the shares in any Australian company in which foreign money was invested. Personally, I should like to see a provision that foreign capital could be invested in Australia only in partnership with the Australian Government, the Government to control 51 per cent, of the shares.

There is one more point I want to make before I close. I noticed a report in the Sydney “ Sun “, which reads as follows: -

The Queensland and Commonwealth Governments are on the eve of jointly agreeing to approach the World Bank for a £22,000,000 loan to rebuild the Townsville-Mount Isa railway.

No honorable member opposite can convince me that we could not reconstruct that railway line by using the national credit, through the Commonwealth Bank, without borrowing £1 from outside Australia. We can produce everything needed for it in Australia. We have the men and the materials, and we can reconstruct that line without borrowing one penny from outside. I should like to endorse the view expressed by the honorable member for Mcpherson (Mr. Barnes) in his speech on the recent legislation dealing with the Northern Territory. Not only should we construct the line from Townsville to Mount Isa, but we should also continue it from Mount Isa into the Northern Territory, in order to further the development of this nation. There are nearly 100,000 unemployed people in Australia. We have the monev and the materials. We have the labour. All we need now is for the people opposite to have the courage to carry out such a programme. We have men of courage on this side, and in the past they have shown what courage they had. We have on this side the men who set about solving the great developmental problems of this n-tion. Thev set out on a programme, and got the Snowy Mountains scheme started. We must go forward with faith in the future of the nation. We can develop it with our own capital. We do not need foreign capital.

Minister for Labour and National Service · Lowe · LP

– This is not a debate in the ordinary meaning of the word, because I think that most honorable members agree that the quotas that can be subscribed to the International Monetary Fund, or the actual subscription that can be made to the International Bank for Reconstruction and Development, should be made or subscribed. So. Sir, what has happened is that instead of debating the actual terms of the bill each honorable member has made his contribution to the debate an intellectual contribution, stating what he thinks to be the solution of the world’s international money problems. We have had, too, if I may put it in this way, a very interesting diversion from my good friend from Reid (Mr. Uren) who has just resumed his seat.

May I, first of all, mention the contributions made by the honorable member for Melbourne Ports (Mr. Crean) and my colleague and friend from Wentworth (Mr. Bury)? Both contributions are well worth studying and were well worth listening to because of the problems that are raised, particularly in one case in which attention was drawn to the provocative nature of the question asked this House.

Coming down to the bill itself, I ask, “ What are we really interested in? “ I thought it a little surprising that when we were discussing this bill and the functions of the fund and of the bank, we did not ask a simple question and get an answer to it. I put the question in the vernacular: What dividend is there in making our contributions to the fund and to the bank? In short, what does Australia get out of them? What, in fact, does the free world get out of making these subscriptions? I think that until you ask and answer those questions it is difficult to make up your mind whether we should contribute to the bank and the fund.

Before I actually touch on the terms of the bill itself, may I go back a little into history and recall that at Bretton Woods, the idea of the International Bank and the International Monetary Fund were conceived and brought into being. The Bretton Woods conference, held, if my memory holds good, shortly before I came into

Parliament, was a standard for the free world. It meant something. It meant that the free world was to attempt to establish two institutions which would permit trade to expand on a basis of non-discrimination and of what is called multilateralism. In other words, instead of having trade as between two nations and trade agreements as between two nations, we would try to have trade agreements on the widest possible basis in order to get the benefit of the lowest possible costs. So Bretton Woods did stand for something.

I am prepared to state quite categorically that but for Bretton Woods, the International Monetary Fund, and the International Bank, the free world would not have developed its trade as it has done. In fact, the free world owes a permanent debt to both those organizations for the contributions they have made to the peaceful development of the world.

Having said that, I should mention the part played in getting the executive decisions, which are the basis of the bill before the House, approved by the governors of the fund and of the bank. My good friend and former colleague, Sir Arthur Fadden, was one of the governors at the meeting in New Delhi last year. He played a prominent and important part in having the executive decisions brought into being and endorsed by the governors. It is those decisions and executive resolutions which are now before the House. What do they do?

I shall deal, first of all, with the system of the International Monetary Fund. What is the purpose of that fund? The International Monetary Fund is, in effect, a bank. These two institutions have not the appropriate names. I think that the fund should have been called a “ bank “ and the bank should have been called a “ fund “. The purpose of the International Monetary Fund is to provide short-term credit on a banking basis for countries that have difficulties in their balance of payments. In other words, if a country finds itself temporarily unable to pay its debts, it can obtain a loan from the fund. It is desirable that that loan should be repaid over a short period. So the fund is a genuine bank, providing loans on a short-term basis at very moderate rates of interest.

The purpose of the bill before the House is to increase the Australian fund quota from 200,000,000 dollars to 300,000,000 dollars. That is an increase of 50 per cent. Payment of 25 per cent, of the contribution is to be made in gold and the balance in Australian currency, paid to the central bank as a trustee or a fund holder for the International Monetary Fund.

At the beginning of my remarks I said that we had to ask what dividend there was in all this for us and what dividend was in it for the rest of the world. Our benefit is that we have a second line of reserves that we can draw upon if we have balanceofpayments difficulties of our own. We do not see any immediate necessity to draw upon the fund, but it is there as a second line on which to fall back should the occasion arise. We can draw money in three different amounts and at three different times. First of all, there is what is called the gold tranche which is of the order of 33,000,000 dollars. We can always, having the maximum benefit of the doubt, go to the bank and, without any preliminary discussion, draw up to 33,000,000 dollars, the fund having our word on the purpose for which it is needed - to solve or help in solving our balance-of-payments problem. This word “ tranche “ merely means a drawing on a bank.

Subsequent to the gold tranche we have what is called the “ first credit tranche “. That has been of the order of 50,000,000 dollars and it will now be extended to 75,000,000 dollars. These are healthy funds. On the one hand, we have an immediate drawing of 33,000,000 dollars and. on the other hand, we have a drawing of 108,000,000 dollars upon proving to the bank that we are taking steps to see that the stability of our currency is assured. Those, as I have said, are substantial sums of money. They are solid amounts on which we can rely in case of need. This is the real dividend that we in Australia get through increasing our quota. We can also get what is called the “ third tranche “, but that can only be obtained on proving to the bank that permanent action has been taken to ensure that we are putting our house in order and that internationally, we will be able to trade on a basis of fair competition.

Let us consider now the other point of view: What contribution is being made by the fund itself to the free world? During the period from October, 1956, to September, 1958, the fund loaned 2.7 billion dollars to the various countries that were contributors to the fund. So, it has made a magnificent contribution to permitting those countries to continue their trading and’,, indirectly, to sustaining the price of Australian commodities which are sold in international markets. Honorable members will see, therefore, the dividend that the free world, with the other countries of the World, gets out of this contribution. They will also see the help that the fund gives us, indirectly by means of increased trade, and directly by providing a second line of reserves on which we can rely in times of need. Those are the main purposes of the fund and of the bank. 1 have heard a question asked persistently in the House by my friend from Parkes (Mr. Haylen) or the honorable member for Reid concerning the interest rates charged on the loans. Those are notional amounts of about one-half per cent, interest and one-quarter per cent, as a standing charge. They are small payments and could never be regarded as a disincentive to obtaining the loans.

Mr Haylen:

– The bank rate is 6 per cent.


– I shall come to that. There are other functions of the fund which I think deserve to be highlighted in this chamber My colleague from Wentworth touched upon them. As is well known, he is an authority on the International Bank and the International Monetary Fund and 1 think that most of us listened with interest to what he said. But I think that if we care to read the annual reports of the International Monetary Fund, and in particular the contributions that are made by Mr. Eugene Black, we will find in those documents what must be regarded as the most succinct and the best statements on monetary and financial principles that are published throughout the year. They are well written and comprehensive. They are written by people who obviously know what they are talking about and who do attempt a solution of the international monetary problems of the world.

Let me, then, come to one of the main functions of the fund. It gives advice. If contributors, or those who have contributed their quotas, care to go to the fund, they can discuss their problems with the fund, and they will find a wealth of technical advice and a number of individuals who can give them opinions on international monetary problems. Secondly, these experts act as advisers when the exchange rates in various countries are to be changed. As the honorable member for Wentworth pointed out, these people are available over the week-ends, because that is the time when exchange rates are usually changed. They can give advice to countries intending to change their exchange rates, as to what the effect of the change will be and what other action should be taken at the same time. They also advise in connexion with exchange restrictions, whether they are for the purpose of assisting an adverse balance of payments or for increasing international funds. They also advise in connexion with import restrictions.

But it is not that aspect that I want to discuss in the House to-night. There is one other growing function of the International Monetary Fund that I think is deserving of the most careful attention. In latter years, particularly, the bank has interested itself in the economic and financial basis of disputes between various countries, and when it has thought it proper to do so, and it has considered that by intervention and offering help it could persuade two countries that might otherwise be in dispute to come together and submit their difficulties to conciliation or negotiation, it has not hesitated to intervene or offer assistance. In this regard, I mention but two examples. The first concerns the settlement of the Suez Canal dispute. I refer to the dispute relating to the charges, and to the moneys that had been frozen as a result of the difficulties arising from the Suez dispute. Mr. Black personally intervened in this matter, and I think that largely as a result of his personal intervention a sensible settlement, or, in any event, a settlement acceptable to most of the parties, has in fact been achieved. I venture to say, Mr. Deputy Speaker, that had it not been for the help willingly and wisely given, the various parties would still have been disputing, and that this would have been one further source of difficulty and dispute in the world to-day.

The second example I shall mention is that involving the Indus waters dispute between Pakistan and India. This concerns the way in which the Indus waters should be distributed. Due to the willing help that has been given by the fund, it has been found that instead of growing into what could be regarded as, perhaps, even a military issue, this dispute has been kept on the basis of peaceful financial and economic negotiation. It is expected by those who are most closely in contact with the matter that in time the parties will be able to find a solution and, perhaps, that the fund itself, or the bank, may be able to make a financial contribution towards ensuring that Pakistan gets the residue of the waters that it so desperately needs.

That is what I wished to say about the International Monetary Fund. I hope sufficient has been said to prove the point that I put to the House at the beginning of my speech. The free world owes a great debt to the International Monetary Fund for the contribution it has made towards increasing world trade, for finding finance for world trade, and for seeing that the standards of living not only of ourselves but also of many other people in the free countries of the world have improved and will go on improving in the future.

The second part of the bill relates to the International Bank for Reconstruction and Development. Here the proposal is to increase the Australian capital holding in the International Bank from, I think, 200,000,000 dollars to 400,000,000 dollars. The capital will be doubled. But in this case we are not going to make any contribution into the fund. Our liability will be an uncalled one, and it will be called up only if the bank needs funds. The amount to be contributed is increased from 200,000,000 dollars to 400,000,000 dollars. In other words, the Australian liability has increased from £89,000,000 to £178,000,000. The question might be asked: What is the purpose of doubling the capital but not calling up the full amount of the money that may be required? The answer to that is, quite clearly, that the bank is continually lending money. It has now got to the position at which, unless it increases the capital subscriptions, it will not be able to continue making advances at the present rate. The reason is that the people who lend the money to the bank usually look at the uncalled liability of the United States Treasury or the United States Government before they decide whether they are prepared to lend. In other words, they regard the security that they will get as the uncalled liability of the United States Government or the United States Treasury. It is that 80 per cent, that is needed if the work of the bank is to be continued.

As I have said, when we look at these institutions we ask, “What benefit is it to others and what benefit is it to us? “ We have obtained six loans from the bank, to the extent of £142,000,000. The bank has made loans amounting, in all, to 4,300,000,000 dollars. These advances have been made not only to this country but also to other highly industrialized or underdeveloped countries. The fund and the bank have lent, respectively, 2,700,000,000 dollars and 4,300,000,000 dollars over the last three years. These are prodigious sums of money, and I leave you, Mr. Deputy Speaker, to work out just what a contribution they have made to the solution of world economic problems.

During the course of the debate three honorable members have raised various questions that I think should be answered. Let me deal first with the question raised by the honorable member for Melbourne Ports, and a little later by the honorable member for Reid, who, as I have said, was in a very discursive mood to-night. I was very pleased to listen to everything he had to say. But he mentioned the matter of international borrowing. I, for one, cannot understand how there can be hesitancy on any one’s part about borrowing, particularly this kind of borrowing, which means that we can bring productive resources into being, and that we, as a country, can make a profit out of the borrowing, thus being able to repay the loans with interest in time, and, when they are paid, having assets for ourselves on which we can base subsequent development.

I cannot understand this mentality of the 1930’s, and I would have dearly loved to be in the House when the late Mr. Chifley was making his statement, because if there was one occasion on which he might have been vulnerable - and I have the utmost respect for the man - it was that particular occasion. I know that the honorable member for Melbourne Ports did raise the question of Australian participation in private investment in Australia, in companies formed here. Naturally, we all have that subject very much in our minds, and 1 would welcome increasing Australian participation. The difficulty is always to know exactly how we can bring it about, particularly in the case of companies like General Motors-Holden’s Limited and perhaps Mr Isa Mines Limited. Nevertheless, both honorable gentlemen raised a very interesting subject, and one that members of the Government have discussed quite frequently.

My colleague from Wentworth, too, raised several very interesting questions. I hope that the Treasurer (Mr. Harold Holt) will listen to what I am about to say concerning the first one, because he was not in the House at the time when the honorable gentleman from Wentworth spoke, and when he mentioned that when the United States Treasurer attends meetings of the International Monetary Fund he takes members of the Congress with him.

Mr Harold Holt:

– I was in the House when the honorable member for Wentworth spoke.


– I am sorry that I mis-stated the situation. I hope that the right honorable gentleman will register the point that I intend to make now. The honorable gentleman from Wentworth felt that there should be a virtual monopoly of attendance at these meetings by the two technical experts - the honorable member for Melbourne Ports and the honorable gentleman from Wentworth. If the Treasurer cares to call for nominations, I should like to put my name in the list. I should be happy to go with him.

The second point that I should like to make with respect to the remarks of the honorable gentleman for Wentworth is that he raised the question of the restriction on dollar imports, and stated that only something like 70 per cent, of our imports could be purchased freely from dollar sources. In answer to the honorable gentleman, I should like to point out to him that there has been a substantial relaxation of restrictions on dollar imports over the last few years, and that my colleague, the Minister for Trade (Mr. McEwen), is constantly on the look-out to see when and how more relaxations can be made, but keeping in mind that you cannot remove them all at once - that you cannot do it too quickly - because you always have to take into account what may be the effect on Aus tralian industry. If it is likely to be severe, it has to be avoided at all costs.

Having dealt with those two problems raised by my colleague from Wentworth, Sir, may I now come back to three ‘of the other problems that were raised by the honorable member for Melbourne Ports. The first is a problem that 1 think needs much more careful consideration and action in the world. That is the problem, not so much of the stabilization of commodity prices as of ensuring that the underdeveloped countries and the primary producing countries get reasonable prices for their commodities, in the same way that the General Agreement on Tariffs and Trade protects the manufacturing countries. We want for the primary producing countries the equivalent of what the industrial countries have in Gatt. That is a matter that I think should be debated in full in the House at some time so that we all - not one or two of us, but all of us - will have a better idea of what is involved and what contribution we can make to the solution of the problem.

I think that 1 should mention what the honorable member for Melbourne Ports stated was the real problem here. He read a quotation from a speech made by a member of the House of Commons in the United Kingdom. I think that this speech summarizes the real difficulties that are faced by the raw material countries owing to the recent drop in prices. I hope that that decline has now finished and that we shall see an increase in the prices of foodstuffs and primary commodities. The member of the House of Commons pointed out. Sir. that because of falling commodity prices the value of the exports of the sterling area primary producing nations fell, between the first quarter of 1957 and the second quarter of 1958, at the rate of 2,000.000.000 dollars a year. In other words. Sir, the quarterly reduction was something like 500,000,000 dollars. If there had not been that fall it would have been the equivalent at least of all the aid that had been given to the under-developed countries. In other words, if we want to see those countries saved from communism, if we want to see them have the opportunity to develop - and we believe we are idealists, and we want to see something done to help them - one of the ways of making a real contribution is to try to get. first, stability, and then a gradual increase in the prices of commodities, so that they can pay their own way in the world, develop by their own efforts, and give their own people reasonable and decent prospects of sustained and well-earned standards of living.

That was another one of the problems that my friend raised, and one that I personally was glad to hear discussed. I hope that I have been able to make some worthwhile contribution to the discussion. The honorable gentleman did not actually refer to the Special United Nations Fund for Economic Development, but he did at least refer to the question of countries agreeing to set aside 1 per cent, of their gross income or gross national production for the development of under-developed countries. That is a concept that was developed some years ago, particularly in the United Kingdom. It is worthy of consideration, but T think that, at present, it is a little premature. It is certainly a concept that does not find any great support in international councils to-day.

Having made those points, Sir, may I now conclude. I started with the proposition that it was right that we should contribute our quota to the International Monetary Fund. We do that because it permits world trade to expand. It permits us to have large-scale reserves of 33,000,000 dollars on the first tranche and 75,000,000 dollars on the second tranche, against which we can draw in time of need. Secondly, the fund will be expanded by something like 100 per cent., and as we have already drawn, I think, £142,000,000 from it, we shall be able to draw much more should we find it necessary to do so. I say to the honorable gentleman from Reid that, for us as a country that has to develop and must increase its population as quickly as it can, it would be practically impossible to achieve the kind of development and the rate of development that we want unless we have ready access to international markets, particularly for the purpose of borrowing money.

After having listened to my colleague, the Treasurer, and to what has been stated in the debate, I endorse the proposals. I hope, Sir, that the International Monetary Fund and the International Bank for Reconstruction and Development will continue to play their part as what are pro bably the greatest of the international financial institutions that we have in the free world to-day.


.- Mr. Speaker, I shall have a little to say on this most interesting subject, but I have no desire to intrude upon the rarefied stamping ground of the honorable member for Wentworth (Mr. Bury) and my very dear friend and colleague, the honorable member for Melbourne Ports (Mr. Crean). I was particularly interested in the solid, down-to-earth analysis of these two kindred measures - we could call them the twins of Bretton Woods - made by the honorable member for Melbourne Ports, and in his reasonable and balanced statement about the imperfections of all banking, including international banking. His remarks were in such contrast to the cloud cuckoo land story that we heard from the Minister for Labour and National Service (Mr. McMahon). We would have thought, listening to him, that we were living in the most delectable fairy land of all times, with no trade restrictions, no economic blocs, and no barriers erected against us by the Soviet and the Chinese Republics. One would have thought that we all were dancing in the sunlight of general and universal prosperity, because the Americans had decided that, within the Bretton Woods agreement, they could create an international fund and an international bank for the benefit of Australians and the world. Of course, that is childish; it is futile.

When we heard a word out of the past spoken by the honorable member for Reid (Mr. Uren), a young, new member among us, but one full of valiant thoughts in his approach to the problems of finance, we realized that in this country the problem, still as old as time, is the problem of money and finance. The Australian Labour Party will not be led along the seductive path of believing that all these international banking schemes are good things, and that they are highly desirable for this country. We know that Mr. Chifley, the Prime Minister of the time, himself instituted our participation in them, because he was in charge of the country’s finances, the administration of which then was a very different thing from this willynilly sort of mad spending that is part of the dominating policy of all Liberal governments, and particularly this one. You cannot expect the sober Opposition, looking at what is happening, just to accept an economic dissertation on banks and how they are managed, and to fall down and adore them, because we have been beaten by that kind of animal. We know the old kings, and we do not like the breed.

Many aspects of this question remain to be answered. The Minister for Labour and National Service gave a well-considered analysis of the situation as he saw it, and to an economist everything seemed to be all right. First the fund and then the bank, and the things that they did, were all right in their way, but great question marks hang over this problem. It is perhaps right and proper for me to say now that we on this side of the House approve, and will vote for, this measure, but we will do so with very definite reservations. The first question that comes to the mind of any member of the Australian Labour Party anywhere is why in the name of sweet reasonableness we need to borrow 50,000,000 dollars or £30,000,000 to build a railway anywhere in this country. In this instance, of course, it is from Townsville to Mr Isa in the north. That has been a dream for a long time but it will become a nightmare if money to build it is borrowed at 6 per cent.

We have the steel rails, the labour force, the timber for sleepers and all other physical requirements for this project. It is a vast and necessary project and some money may have to be borrowed for certain capital goods. But to say that because we want to build a railway in Australia we must borrow from the International Bank is not reasonable. That does not seem to be equated with the history of this country as we know it. This may be an outmoded example these days, but it is true that the Trans-Continental Railway was built, with money raised internally, by people with the requisite physical capacity and the goods and services to build it. It was much the cheapest major undertaking that we had ever built in Australia. When honorable members say that these things cannot be done by Australia or by the Government of the day, they should remember that in the days of Mr. Chifley we gave £40,000,000 back to the British people, through the British Government of the day. They were beset with the turmoils and anxieties of the times, and we had our overseas balances arranged in such a way that we could help them.

When we look back along the rocky road of Labour’s progress, we see that there; always has been a warning finger pointing, at these very deals. We are told fairy tales of how remarkably good they are, and that they mean everything. I was amazed at the picture so subtly drawn by the Minister when he said that we will borrow money for a project, make a profit out of it, pay back the 6 per cent, interest, and. everyone will be happy. Unfortunately, that does not always happen. We may find that the economic weather has changed and that, where previously we gave away one bag of wheat to pay for a debt, we must give away three, and where previously we sent one bale of wool, wemust now send two bales. There arealways changes in the economic weather, and the dream that we will prosper if money is borrowed for development does, not always come true. There are soberfacts in the economic set-up that are not always known on the political level and not always appreciated on the highest financial level. Burnt into the hearts of. all men of my age in this country is a fear of international finance, brought about by the many wretched things that happened during the depression. One can: talk about the stability of the greatestnation in the world, but when the banks, begin to fall, as they did in America, and’ the international collapse takes place, the? strongest nation is no stronger than the? weakest little country at the extreme: perimeter of civilization.

Recently, when we were borrowing money rather heavily from the International Bank, Mr. Eugene Black came tothis country and said - it is on record - that too much money was being spent on public works; that we were expanding toorapidly. I do not know what happened elsewhere but I know that in my nativeState of New South Wales, Mr. Black’s statement was the beginning of the disastrous curtailment of public works. Half a . dozen dams were in the process of construction, but some of them are not yetcompleted. The country was dotted with great works, but there was a criticism that too much development work was being done in this country. I had thought that if money was borrowed for development the logical thing was to go on with the development.

I made a note of the Minister’s comments about this same Mr. Black. He said that in two instances Mr. Black had been able to act as the great arbiter of peace. In the Suez dispute he was able to talk to the two dissident groups. He was able to say that, if it were a matter of money, arrangements could be made. And there was peace and calmness where before there had been turmoil. The Minister also mentioned the dispute between Pakistan and India over the Indus waters. There again the ministering angel, Mr. Eugene Black, came along and talked in terms of money, and there was no further trouble. That sounds all right, but if the whole basis of settlement is to be money, the picture does not look very good.

What the Minister has to say about these matters, in a general sense, is subject to the rather mild but still vital strictures that we on this side of the House make. I note the rather airy way in which we are told that £11,000,000 in gold will be found. We will find it in gold. I suppose, from our reserves in London, and that will fix up one part of the fund that needs that much money in gold. I read in the newspapers a suggestion that we should double the value of gold. One gentleman, wanting to whip up the ante, suggested that it be trebled. Everybody seemed reasonably happy about that until they found out that Russia had a vast store of gold amounting to about nine billion dollars. Of course, if the value of the gold holdings of the so-called free world was boosted, the gold hoardings of the Soviet and its satellites would be boosted at the same time. So that scheme was hurriedly dropped.

The point I made first was the highly canvassed one about the loan for the railway line in Queensland. I think if a Labour government had been in office in Queensland, this matter would not have reached the stage of talking about international money. It is strictly the business of the State and Federal Governments of this country. It is strictly the right of this country to finance these undertakings. If every project is built by borrowings from outside sources, we will find that our borrowings will come home to roost at a time when we do not want them to do so. No matter what the Queenslanders say about this railway, it is still, I believe, a matter for the Commonwealth and distinctly a matter for the State of Queensland.

We have no great complaints about the international activities of this fund; its significance in this field is acknowledged. But then we are told that it has done so much for the free world. Of course, its sphere is limited; it cannot do anything for worlds other than the world in which it is able to circulate and have its being. But its role is not by any means complete because there is not a free exchange of money throughout the world. This is caused by the differing systems that exist in various countries. However, we will leave it at that.

Perhaps the honorable member for Wentworth, the honorable member for Melbourne Ports and the Minister for Labour and National service, did give clear and concise explanations of the purposes of the bill; but the issues raised by the Labour Party seem to me to be extremely vital. The honorable member for Reid raised the matter of investments coming into this country and the Australian people being left as second-class investors. They cannot take out the bonds that produce the big profits; those bonds belong to the American investors, whether they happen to be General Motors-Holden’s Limited or some other organization. Overseas investments here are gradually reaching such enormous proportions that soon, if we do not look out, we will be sending out as dividends almost as much money as we receive in new capital. This is an unplanned and bodgie way of doing things, and every opportunity should be given to the Australian internal investor to become interested in these undertakings. Furthermore, look at the excessive earning power of overseas investors. It should be competent for anybody to come into this country if they are prepared to accept a return of 6 per cent, or less on their investment, but fantastic earnings of some investors give an unreal aspect to the matter. Undoubtedly the successive millions of pounds that have been mulcted by way of dividend on a small investment of less than £2,000,000 have attracted the predatory eye of international capital to this country.

Foreign investors do not say: “ Go to Australia and give the little place a chance “. They say: “ It is a good place to get into if you can beat the British to it “. That is what has happened.

All along the line the Government has been wrong. The ineffable Bruce and tragic Treasurer after Treasurer all came to the same bad end by the boom, borrow, and bust method. If we on this side of the House give them a little well-meant advice, they bristle, go red in the face and interject, but all that we are trying to do is make a simple case in their favour and not against them. The Government should consider Australian sentiment in these matters. We are reaching a stage when so much money is coming into this country that within a year or two we will have to send almost as much out in dividends. If there is a change in the economic weather - members of the Australian Country Party know what I mean - we will be sending out two bags of wheat for a debt of one bag, or one bale of wool to meet the cost of something that was usually met with one-quarter of a bale.

We are charged by the Government with being old-fashioned and having an economic pair of elastic-sided boots. But the verities do not alter: What you sow you reap. There is no royal and fantastic road created by the Menzies Government, or its predecessors, by which you can get around the predatory activities of overseas finances. If it has been organized into a more or less useful adjunct, such as the International Bank and the International Monetary Fund, you have to keep your eye on it. In conclusion, I wish to reiterate the remarks of the honorable member for Reid, who quoted the former Prime Minister and Treasurer, Mr. Chifley, when he gave those words of advice about funds of this sort and the price of liberty in a financial sense being eternal vigilance. Government members have spoken of the International Monetary Fund as something that has solved our economic problems, but we are in tortuous and troublous times. One has only to think of the Mount Isa turmoil. If we allow large British or American organizations to set up subsidiaries in this country, it is only natural that their directorates in New York or London will say, “ There is a surplus of our products, so shut down the Australian factory “. Just imagine what that will do to the unemployment figures.

The point that I rose to make primarily, the one that disturbed me most, was not that we were voting £11,000,000 in gold to the International Monetary Fund, not that we had become so enslaved by the proposition that everything can be done overseas on the advice of Mr. Eugene Black, but that what we want in this country is a railway and good transport in order that northern Queensland, and Mount Isa in particular, may be developed. Let us go to it. Let us gird up our loins. Let us get the workers, the sleepers, and the steel rails - we have the best in the world. No, the Government says that it will borrow the money from the International Bank and go merrily to hell, because that is the downward path that dalliance leads to. You only develop a country by developing the resources of its people and by providing work for them. If you live entirely on the silken threads of credit you will perish and strangle by the same means.

The most serious point that I wish to bring to light at this stage is the dereliction of duty on the part of the Queensland Government in relation to the building of the line at Mount Isa and the destruction of an Australian ideal in insisting that you borrow the money overseas without using the services, the materials and the goods to hand. We have the shining and almost classic example before us of how we were able to build the line across the Nullarbor Plain in the old days by the use of national finance, national man-power, and national goods and materials. But we are not prepared to try the same experiments 30 years later, because we have lost a lot of our patriotism and a great deal of our common sense.


.- The House is debating an amendment to the International Monetary Agreements Act and the purpose of this amendment is to increase Australia’s contribution to the International Monetary Fund and to the International Bank for Reconstruction and Development. Prior to the First World War the international gold standard was sufficient to control international finance and give it stability, but during the period between the First World War and the Second World War, the international gold standard seemed to go haywire and it worked very unsatisfactorily. In consequence it was decided that in order to maintain financial stability internationally, the fund and the bank should be created.

Australia, is one. of many countries which have made contributions to those two institutions, and Australia is about to increase Its contribution to them. Australia in turn has borrowed from each of those institutions and in fact, as far as the International Bank is concerned, Australia has been told that she is regarded as one of the bank’s best customers. That is not without its importance, because the process by which the bank operates is that it will not allow its money to go into the hands of a country that is unsound financially, or which is unable to manage its own affairs. Consequently, the statement that Australia is one of the bank’s best customers indicates that financially Australia is extremely sound and does manage her affairs well. Under those circumstances it is somewhat amazing to hear the extreme cries of fear on the part of members of the Opposition that they are afraid to pledge their country’s credit. That shows extreme weakness of outlook and extreme weakness of heart, as well as puerility of economic knowledge.

Mr Bryant:

– They are hard words.


– They may be, but, if they apply to any honorable member in particular, they would apply to the honorable member for Wills more than to anybody else. With regard to the honorable member for Scullin (Mr. Peters), if I understood his speech rightly, one of his complaints was that Australia should not be borrowing from the International Bank. He said that we should allow the underdeveloped countries to borrow from the bank. The truth of the matter is that we are not preventing the underdeveloped countries from borrowing from the bank. In fact, they do borrow from the bank. But it is for the bank to say who its customers will be, and if the bank chooses to accept Australia as its customer because of the splendid way in which our finances are managed, then the underdeveloped countries can have no complaint. But so far from Australia attempting to do any harm to the underdeveloped countries, she has been giving tremendous assistance to them. I need only refer to the Colombo Plan, the technical assistance given through the United Nations, the assistance given through the South-East Asia Treaty Organization, and assistance in other ways, mentioned by the honorable member for Corangamite (Mr. Mackinnon). All these things are being given to the underdeveloped countries by way of gift, and Australia has no need to apologize to them for the fact that she is a business customer of the International Bank for Reconstruction and Development.

As I have said, Australia’s credit has been high in the eyes of the world, and we have no fear at all of being unable to repay moneys we have borrowed. We have been able at all times to repay our debts. We have never defaulted, and I have wondered at hearing the cries of repudiation from the Opposition during this debate because there has never been any question of actual repudiation. It may be that some of the newspaper headlines have referred to repudiation, but governments are different from newspapers. There is some solidity about governments, and the governments of Australia have not at any time repudiated international obligations, nor will they do so in the future. The point is that so long as our productivity is high, and while we are maintaining stable conditions here, we need have no fear whatever about our borrowing powers. In fact, at the moment it would be as well if we were borrowing more money, because there is need for even greater development. There are many investors in the world who still are unaware of the potentialities for investment in Australia, and they should be advised of those potentialities so that we might develop even beyond the rate of development of recent years which has been colossal.

Let us consider for a moment how the money is being spent. Let us take immigration as an example. We could not possibly be conducting the huge immigration programme, which is so essential for the defence and development of Australia, if we did not have this money flowing in from overseas. For immigration means there must be building construction, housing, factories, employment and equipment, and all those things require money. Although our domestic resources are good, our domestic savings have been quite insufficient to enable us to carry on the tremendous development of the past few years.

Statements such as ‘that made by the honorable member for Parkes (Mr. Haylen) that we were able to build a railway line over the Nullarbor Plain from our own revenue would seem to imply that we are not able to do anything out of our own revenues to-day. That, of course, is quite contrary to fact. Our development programme out of our own revenues has been pursued at very great cost and will continue to be so pursued. But that is only part of the development programme, and the money has to be found from overseas. One only has to look at what happened last year in the world. A recession took place overseas and it had a marked effect on overseas prices for Australian goods. That in turn had an effect on the moneys coming into Australia. The wool cheque and other returns decreased tremendously, and people thought there would be a serious recession in Australia; but in the meantime, as a result of the policy of the Menzies Government in bringing overseas capital into Australia - and in the past ten years £675,000,000 of private capital has come here - the industries of Australia have been built up tremendously. We are now an industrial nation. Therefore, we were not affected by the recession overseas to nearly the same extent as were overseas countries themselves. We can well be proud of that fact. We are able to stand on our own feet and to carry on as an industrial nation.

That brings me to the extraordinary statement made by the honorable member for Reid (Mr. Uren) to-night. He referred to a report which appeared, I understand, in the Sydney “Sun” on 23rd April. The honorable member suggested that that was an indication of the way in which overseas corporations could have an effect on the Australian economy. He referred to a published passage which stated that the production of lead at Mount Isa was to be cut down suddenly. Of course, the implication was that there would be great unemployment; but the amazing feature of the honorable member’s speech was that he made no reference to the fact that on the following day reports in the press stated that the statement to which the honorable member referred had no bearing in fact on present circumstances. Apparently, lead production was cut down months before because the

Mount Isa mines were swinging over to greatly increased copper production. The output of copper had been increasing from month to month, so much so that when the statement was published, production had reached no less than 7,000 tons a month and the chairman of directors was able to announce that by June - a very short time from now - the production of copper ore would be up to 8,000 tons a month, a most magnificent effort.

Mr Whitlam:

– Because we started paying a bounty on copper.


– I do not understand the force of that interjection at all. I was dealing with a mis-statement made by the honorable member for Reid in the sense that he made a statement which was incorrect and although it had been corrected elsewhere, he made no attempt to put it right. It is idle for the honorable member for Werriwa to make an irrelevant interjection. Of course, it is not the first irrelevant interjection that we have heard from the honorable gentleman. The position is that, so far from the labour situation being worsened - if I might use that unfortunate expression - by what has happened at Mount Isa, there will be far more opportunities for development at Mount Isa because of this switch in production which took place many months ago from lead to copper.

Mr Reynolds:

– That is not the case at Broken Hill.


– I am speaking of the effect of events at Mount Isa. Apparently, honorable members opposite generally are just as ill-informed as is the honorable member for Reid. The Mount Isa company is spending £30,000,000 on a gigantic expansion programme. In fact, the potentialities for employment in that area will be greatly increased by the construction of this railway upon which Opposition members have poured a certain amount of scorn. Actually, the very body we are dealing with in the bill before the House - the International Bank for Reconstruction and Development - is being asked to find the money for this railway. The construction of this railway will mean a tremendous amount of additional employment. It will result in greatly increased production. In other words, this is a great developmental measure. Yet, because the Labour Party does not like this wise practice of getting finance from overseas when it is available, honorable members opposite are prepared to oppose development. They are prepared to stand against further employment.

The whole policy of this Government is development, full employment and higher living standards. Because this Government has been able to get so much money from overseas we have been able to bring about great development, full employment and the higher living standards we have to-day. Things are so good here that the Premier of Victoria referred to his State only a few days ago as being a near Utopia. One Victorian member opposite laughs at that. I do not think his constituents will share his derision. We are living under conditions better than any we have ever enjoyed before. Labour’s policy of cutting out overseas finance would prevent development and lead to unemployment. It would then be impossible for people to buy those things which once were luxuries but which are regarded to-day as necessities. That is the alternative if Labour members persist in this stupid and idiotic policy of not borrowing from overseas.

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. Harold Holt) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act relating to a proposed adjustment of the quotas of members of the International Monetary Fund and to a proposed increase of the capital stock of the International Bank for Reconstruction and Development.

Resolution reported and adopted.

In committee: Consideration resumed.

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

Bill reported without amendment or debate; report adopted.

Third Reading

Motion (by Mr. Harold Holt) - by leave - proposed -

That the bill be now read a third time.

Melbourne Ports

– I should like to commend the unusual courtesy displayed by the Government this evening in putting up a Minister to answer some of the points that had been raised by the Opposition during the debate. I hope that this is a precedent that will be followed by the Government on subsequent occasions.

Question resolved in the affirmative.

Bill read a third time.

page 1621


Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Mr. Harold Holt) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant financial assistance to the States in relation to roads and to works connected with transport.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Mr. Hasluck do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Treasurer · Higgins · LP

– I move -

That the bill be now read a second time.

It gives me great pleasure to lay before the House proposals for new Commonwealth aid roads legislation to replace the present acts which will expire on 30th June, next. The new legislation will take effect from 1st July, 1959 and it will have a term of five years. Under it the Commonwealth will make available to the States greatly increased amounts of money for expenditure on roads. But before I explain these proposals I think I should say something in general terms about the problem of roads finance and the part the Commonwealth could and should take in it.

As our economy has grown in recent years the need for more roads and better roads has also grown - perhaps more than proportionately - and we can expect this ! The total mileage of roads is lengthening as new areas are opened up for settlement and as older areas are subdivided for industrial or residential use. Meanwhile the volume of road traffic has grown, and continues to grow, prodigiously. The number of motor vehicles registered in Australia has more than doubled in the last ten years and there can be no doubt that it will continue to rise at a very rapid rate. Besides this growth in volume of traffic, the advent of vehicles carrying heavier loads and of faster vehicles has added to the stresses which roads are called upon to bear. Many thoroughfares which served well enough in pre-war days are now obsolete. They are too narrow, too lightly built and in other respects not properly designed for modern traffic requirements. In and around capital cities and industrial centres there are serious problems of traffic congestion; in rural areas there is a perennial need for new roads and for improvement of existing roads.

As a response to these needs, total expenditure on roads, streets and bridges throughout Australia has increased rapidly during recent years. In 1948-49 it was £28,000,000; this year it will probably be about £110,000,000. There will thus have been virtually a four-fold increase in ten years. Costs of road construction rose during the period, as did costs of other forms of construction; but roads expenditure has risen faster than expenditure on most other classes of public works.

Of course, in a matter of this kind, we have to keep in view the needs of development as a whole. There is a great need for better roads but there are also many other needs. Roads must be seen as part of the transport problem generally. There is also much scope for improvement in railways and in port and harbour facilities, and civil aviation has large requirements ahead. In turn, the transport problem, vital though it is, still forms only a part of the pattern of requirements for larger capital facilities, and the demands it makes upon resources have to be measured against the demands for other forms of construction and equipment.

We have to think, for example, of the need for housing, for schools and colleges and hospitals, water and sewerage services, power supplies- and, , of , course,1 of the still larger need for expansion of industry in many of its sectors. Our resources are, it is true, increasing; and I myself believe that we should be able to accomplish, in this decade, an even greater rate of expansion than we did in the last decade, when our progress was indeed notable. But there will always remain the necessity to weigh any one branch of development against others to ensure that all obtain a due share of the available resources, physical and financial. Probably no country in the world is satisfied with its roads system, any more than we are. In Australia we have the problem of great distances between centres, so that relatively great lengths of road are required to serve a limited population, and while this may mean that to have an efficient roads system we must devote a larger share of resources to roads than would a country smaller in area, it also emphasizes that a high standard of roads is more difficult for us to achieve and maintain. The Government recognizes that much more must be spent on roads - our proposals certainly demonstrate that - but it is necessary to stress the limitations on what we can do in this one field, having regard to all the other pressing demands upon us.

It should also be made clear where the Commonwealth, as such, stands in relation to roads finance. Recognizing the national importance of roads, the Commonwealth has long been making contributions to assist in financing roads expenditure - ever since our distinguished colleague, the right honorable member for Cowper (Sir Earle Page), 36 years ago played a leading part in inaugurating federal aid for roads. I think it is universally recognized now that Australian development over the intervening years owes a great deal to his vision and initiative in that regard. In recent years these Commonwealth contributions under the Commonwealth aid roads legislation have increased greatly. In 1946-47 Commonwealth provision for roads was £4,800,000. In 1950-51 it was £14,100,000. In 1953-54 it was £17,100,000, and in the current year, 1958-59, it is estimated to be £38,300,000, of which £37,300,000 represents grants to the States. During the five years of the current legislation the Commonwealth will have provided about £157,800,000 for roads purposes and, of this amount, £153,000,000 will have gone to the States. It is significant that, during these five years, Commonwealth road grants to the States will have been greater than the total of such grants during the whole of the previous thirty-one years since federal aid for roads began.

But the main responsibility for construction and maintenance of roads, and for the administration of roads matters, lies with the State governments and the local and municipal authorities. Not only does the responsiblity for roads rest with them, as it properly should, but they have very considerable resources of their own available for roads purposes; these resources, moreover, are capable of substantial increase. Therefore the Commonwealth does not regard itself as being primarily responsible for roads finance, but rather as providing finance supplementary to that of the States and local authorities. That has been a cardinal point in our approach to this problem. We recognize that a big effort is necessary to improve the roads system, but we believe also that this should be, and can be, a co-operative effort in which all the authorities concerned with roads will share. We are willing to provide a large additional amount of money for roads over the next five years; but we consider that the State governments and local authorities should also provide more money so far as their means allow. If that is done the annual rate of roads expenditure will be stepped up far above its already high level and, given effective use of the money available, a really adequate attack can be made on the roads problem in Australia.

Briefly, then, the main provisions embodied in this bill are as follow: -

  1. As I have already mentioned, the legislation will cover a period of five years from 1st July, 1959.
  2. Subject to what 1 shall say presently as to matching contributions by State governments, the Commonwealth will make available to the States over the five-year period a total sum of £250,000,000 for the construction, reconstruction and maintenance of roads.
  3. Within this total of £250,000,000, the Commonwealth will pay to the

States basic grants totalling £220,000,000, distributed over the five years as follows: -

  1. In addition to these basic grants of £220.000,000, the Commonwealth will make available to the States further sums totalling £30,000,000 on the basis of £1 for every £1 allocated by State governments from their own resources for expenditure on roads over and above the amounts allocated by them for roads expenditure in the current financial year, 1958-59. The total amounts of such matching contributions by the Commonwealth will be subject to annual limits as follows: -

The annual limit applying to each State will be proportionate to its share of the total grant as determined by the formula which I shall describe presently.

  1. No part of the money provided under this legislation will be reserved, as under the present legislation, for expenditure on roads serving Commonwealth purposes or for road safety. The Commonwealth will make separate provision for those purposes.
  2. The States will be required to ensure that not less than 40 per cent, of the funds made available by the Commonwealth will be spent on roads in rural areas, other than highways, main roads or trunk roads.
  3. The amounts made available by the Commonwealth will be distributed between the States in the proportions of 5 per cent, of the total for Tasmania and the balance between the other five States on the basis of one-third according to population, one-third according to area and one-third according to vehicles registered.
  4. As under the present legislation, it will be permissible for the States between them to spend up to £1,000,000 of the amount made available by the Commonwealth each year on works connected with transport by road or water other than the construction, reconstruction and maintenance of roads.
  5. As under the present legislation also, the States will be free to allocate any part of the money received by them from the Commonwealth to municipal or local authorities for roads purposes.

I shall now say something on each of these main provisions. First of all, a term of five years seems, on past experience, to be the most suitable. Some of the earlier legislation had a term of ten years but this proved too long. The legislation had become obsolete several years before it expired. Then a term of three years was tried. This proved too short. State governments complained that it did not give sufficient time for road programmes to be developed and carried out. Five years appears to be about the right balance between various requirements.

As to the total amount of £250,000,000, I may point out that, whereas over the five years of the current legislation the States will have had grants from the Commonwealth for roads purposes totalling slightly more than £150,000,000- in itself a large amount - they will receive under the proposed legislation approximately £100,000,000 more.

It is also well worth adding that, while the Commonwealth contribution for roads purposes will thus be £100,000,000 greater, total expenditure on roads over the five years ought to increase by a good deal more than this amount. During the five years of the current legislation total expenditure by all authorities on roads, streets and bridges throughout Australia will have been approximately £470,000,000. But by taking the additional £100,000,000, the Commonwealth will provide for the States and, making some reasonable assumptions as to the likely increase in expenditure by the Commonwealth on its own account and as to the additional amounts State governments and municipal and local authorities should be able to provide from their own resources for road expenditure, it is estimated that total expenditure on roads, streets and bridges in the period should be in the vicinity of £720,000,000. This makes it seem that the increase in total roads expenditure during the coming five years should be of the order of £250,000,000. On the same assumptions, it is likely that the annual rate of expenditure on roads, streets and bridges will be at least £160,000,000 in 1963-64, the last year of the scheme. Since, as I said earlier, the current rate of expenditure is probably about £110,000,000 a year, there will thus be an increase in the annual rate of expenditure of at least £50,000,000 a year.

The amounts to be provided as basic annual grants will be paid to the States regardless of what they may do about the matching contributions I shall explain presently. I may point out, even in the first year, 1959-60, the total basic grants will be considerably greater than the amount being allocated this year under current legislation for payment to the States and thereafter the total basic grants will increase by £2,000,000 each year. The proposal for additional Commonwealth payments against matching contributions by State governments is intended to give the States an incentive to allocate more money for roads expenditure each year from their own resources. This is in line with what I have said about the importance of making a co-operative effort to improve the road system - an effort in which all the authorities concerned with roads, Commonwealth, State and local, will have a part. I may mention here that State allocations for this purpose need not be confined to allocations from particular sources of revenue, such as motor tax revenues. Allocations from other State sources, including loan money, will be eligible. The main requirement is that they shall be made for the express purpose of expenditure on the construction, reconstruction and maintenance of roads.

With regard to roads serving Commonwealth purposes and road safety, the Government proposes a change in practice. Of the total amount allocated for roads purposes under present legislation, £850,000 a year is reserved for expenditure on strategic roads and other roads serving Commonwealth purposes and £150,000 a year is set aside for road safety expenditure - making a total of £1,000,000 a year. It is now proposed that separate provision will be made for these matters. Where expenditure is required for roads in the territories or for roads to meet Commonwealth requirements in the States, provision will be made in the annual votes for the departments or authorities concerned. The money provided under this bill, therefore, will be wholly for road grants to the States.

I shall now explain the proposal for a revised method of distributing the Commonwealth road grants between the several States. Under previous legislation, distribution has followed a formula which gave 5 per cent, to Tasmania and divided the remainder on the basis of three-fifths according to population and two-fifths according to area. The weighting of the formula in favour of the larger but more sparsely peopled States has been justified on the grounds that their need for aid in transport development was relatively greater than that of the more densely settled and generally richer States, like New South Wales and Victoria; and there is undoubtedly a great deal of force in this still. In recent years, however, it had come to appear that, with heavy concentration of industry and consequent growth in commercial and industrial transport, the road systems of these two States were being subjected to exceptionally heavy demands and that they had therefore a case for a somewhat larger allocation of roads finance.

Accordingly, after much consideration, the Government has decided to adopt in the new legislation a formula which will improve to a limited extent the relative positions of New South Wales and Victoria. Under the formula Tasmania will continue 1o receive 5 per cent, of the total amount; the remainder will be divided between the other States on the basis of one-third according to area, one-third according to population and one-third according to numbers of motor vehicles registered. As in the existing legislation, the population figures will be the latest census figures available. With motor vehicles, the numbers registered at 3 1st December preceding each financial year covered by the- legislation will be used; these figures will be available at the start of each financial year and the use of them will avoid the need for the adjustments that would be necessary during the year if later figures were to be used for purposes of distribution.

On this distribution, New South Wales will receive approximately 27.9 per cent, as against 27.5 per cent, at present, Victoria 19.9 per cent, against 17.6 per cent., Queensland 18.4 per cent, against 19.2 per cent., South Australia 1 1 .2 per cent., which is the same as at present, Western Australia 17.6 per cent against 19.5 per cent. -

Mr Cleaver:

– Not enough.


– Tasmania will receive 5 per cent., as now, and I would point this out for the comfort of my friend from Western Australia: Although the distribution will not be weighted as heavily in favour of Queensland and Western Australia as it has been hitherto, on a population basis, these two States will continue to receive very much more than New South Wales and Victoria. In the first year of the scheme, for example, the total Queensland grant will be approximately £5 8s. per head and the Western Australian grant £10 6s. per head as compared with £3 3s. per head in the case of New South Wales and £3 per head in the case of Victoria. I may point out also that both Queensland and Western Australia will now obtain much greater amounts of Commonwealth aid for roads than they have had under the present legislation. Thus, if those States take full advantage of the Commonwealth poundforpound offer, Commonwealth road grants to Western Australia will rise from about £7,200,000 in the current financial year to about £10,200,000 in 1963-64 and road grants to Queensland will rise from about £7,100,000 this year to about £10,600,000 in 1963-64. Also, if any State’s share in the basic grant next year - apart that is, from what it may receive under the matching arrangements - should be less than its share of the amounts allocated in respect of this year under the current legislation, the Commonwealth will make a special payment to that State to offset that short-fall. Western Australia is the only State that might be expected to qualify for such a payment.

After discussion and correspondence with the State Premiers, the Government has decided to retain in the new legislation the provision whereby at least 40 per cent, of the total road payments to the States shall be spent on roads in rural areas, other than highways, trunk roads and main roads. This means that, of the £250,000.000 being made available, not less than £100,000,000 will be specifically reserved for rural roads, other than highways, trunk roads and main roads, compared with something less than £61,000,000 under the present legislation.

This is essentially the only condition the Commonwealth lays down as to how the States shall allocate the roads grants made to them. Beyond this they remain free to apply the money to roads expenditure whenever and in whatever manner they consider best. In particular, it is made clear in this bill that they can allocate any part of the money they receive from the Commonwealth for expenditure on roads by local authorities, including municipal authorities.

As under the present legislation, the States will be permitted to spend each year an amount equal to their respective shares of £1,000,000 on works connected with transport by road or water, other than for the construction, reconstruction, maintenance and repair of roads. This is a longstanding provision which States have found useful at times, in that it has assisted them in undertaking such works as jetties, boat havens and the like. The States will also be permitted to spend such amounts as they think fit on research into problems connected with road construction and maintenance.

Finally, it will be seen that the amount of money to be provided for roads under this legislation is in no way related to the revenues that will be obtained from taxes on petrol and other motor fuels. We are all familiar with the claim that since petrol taxation is paid by motorists the whole proceeds of petrol taxation should be spent on roads. However, no Commonwealth Government has ever accepted that claim. The Labour Government which preceded us resisted it just as steadily as we have done. Even as an argument it has always seemed to me to be very defective. Since a very large part of the petrol which bears tax - probably much more than half of the total consumption - is used in commercial and industrial transportation, we can suppose that a very large part of petrol taxation is not paid by motorists as such, but is passed on in transport charges or in the prices of goods, and so is paid by the public at large.

In any case, it is an unsound practice to allocate the proceeds of any one tax for one particular class of expenditure. To do so cuts across the fundamental budgetary principle that all governmental receipts should be paid into a common account from which particular expenditure can be met only with the approval of the Parliament under annual votes or special appropriations.

But there is another objection of great practical importance to the system of relating roads grants to petrol tax revenues or to petrol clearances. Generally, petrol consumption has tended to increase, but the rate of increase varies considerably from year to year. In one recent year it was nearly 18 per cent.; in another year, however, it was little more than 3 per cent. Taking the past seven years, the average rate of increase was 7.2 per cent. Over the past five years it was nearly 8.5 per cent.; but over the past three years it has been only 6.1 per cent. Looking ahead, we cannot tell with any real certainty what the future rate of increase will be; and that is a vital point. It is hightly important that the authorities responsible for road construction and maintenance should be able to plan some years ahead, but if they are to do this on a reliable basis they must know what amounts of finance will be available from year to year. If, however, the Commonwealth grants for roads were to depend on the rate of petrol consumption, there could be no certainty as to what amount of finance would be available. The chances are that petrol consumption will continue to increase - but at what annual rates, or by how much over the next five years, simply cannot be known in advance. If the petrol tax basis were retained, it could not be known to within perhaps £30,000,000 how much the States would receive or how much the Commonwealth would have to provide over the term of the legislation.

It therefore seems far better for the Commonwealth to provide road grants on the basis of specific amounts available each year and increasing each year. The Commonwealth will then know just what its forward budgetary commitments are, and the States will know exactly how much they can depend on getting. They will be able to frame their roads programmes on the assurance of having not only a much larger total amount over the period as a whole, but also of having this amount made available to them by steadily increasing annual instalments.

Much has been said about the need for national planning of roads, but that conception can of course be taken to mean many different things. We understand, in any case, that there do exist the essentials of a national roads scheme in the sense that each State has a forward programme of road construction. Moreover, the competent authorities of the States consult from time to time on matters requiring interstate co-operation, and roads policy is also dealt with by the Australian Transport Advisory Council, which meets under Commonwealth chairmanship. What the Commonwealth is now doing is to provide a secure and adequate financial foundation for an increasing nation-wide programme of road improvement. Given the full cooperation of the State governments and local authorities - and we feel sure that this will be forthcoming - this legislation should provide the starting point and basis for a new era of progress in Australian road development. I therefore commend the measure to honorable members.

Mr Crean:

– Might I suggest that the Treasurer get his officers to prepare a financial statement showing what the aggregate expenditure will be, in their estimation, over the next five years. While it is interesting to know what was spent in the last five years, I think the important thing is what will be spent in the next five years, so that a comparison can be made.


– I indicated that in the course of my speech.

Mr Crean:

– I know, but I think you will save yourself a lot of trouble and the House a lot of confusion if you provide that information, and also the difference between the amounts that will be given under the new formula and what would have been given if the old formula had remained.

Mr. SPEAKER (Hon. John McLeay).Order! I think the honorable member is out of order.

Debate (on motion by Mr. Crean) adjourned.

House - adjourned . at 10.26 p.m.

page 1627


The following answers to auestions were circulated: -

Commonwealth Scholarships

Mr Uren:

n asked the Prime Minister, upon notice -

  1. How many scholarships are issued by the Federal Government to persons attending universities in Australia?
  2. What is the highest amount payable to students each year under these scholarships?
  3. What qualification is necessary for a scholar to gain a scholarship?
  4. What means test is applied?
Mr Menzies:
Prime Minister · KOOYONG, VICTORIA · LP

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

  1. Under the Commonwealth scholarship scheme the Government provides Commonwealth scholarships and Commonwealth post-graduate awards. Three thousand Commonwealth scholarships are awarded annually for students undertaking first degree courses and certain undergraduate diploma courses at universities and certain other professional courses; in 1938, 90 per cent, of Commonwealth scholars were undertaking university courses. Commencing this year, the Government is awarding Commonwealth postgraduate awards for advanced research work at universities and to initiate the scheme 100 awards were made available in 19S9, all of which were taken up. lt is estimated that approximately 8,000 full-time and 1,800 part-time students now hold Commonwealth scholarships. 2. (a) Commonwealth scholarships: Students awarded Commonwealth scholarships are entitled to have all compulsory fees paid on their behalf. In 1958 the average amount paid in fees per scholar was £86 4s. In addition a full-time scholar may be granted a living allowance subject to a means test. The maximum rates of living allowance are £221 per annum in the case of a scholar living with his parents and £338 per annum in the case of a scholar living away from his parents. (b) Commonwealth post-graduate awards: the stipends paid to students holding post-graduate awards are determined by the respective universities. The Government pays up to £900 a year for each student in respect of stipend and tuition and facilities provided by the university. 3. (a) Commonwealth scholarships: Apart from general conditions of age and residence, the award of Commonwealth scholarships is made entirely on merit, and no regard is had to the means of an applicant’s parents. In general, selection is based on the results obtained by the applicant at the examination qualifying for matriculation. Scholarships are available in the various States on a quota basis and the standard for selection naturally depends on the competition for scholarships. (b) Commonwealth postgraduate awards: Apart from general conditions of residence, post-graduate awards are made entirely on merit by the Universities Commission, on the advice of the university concerned. 4. (a) Commonwealth scholarships: No means test is applied in awarding scholarships or in the payment of fees. However, students who are undertaking full-time studies may apply for a living allowance which is payable subject to a means test. For students under 25 years of age, the maximum allowances are payable when the adjusted family income of the student’s parents does not exceed £675. The adjusted family income is the full income of the scholar’s parents for the preceding financial year less £150 for the first dependent child (other than the scholar) under sixteen years of age and £75 for each other dependent child under sixteen years of age. The maximum allowances are reduced at the rate of £2 for every £10 of the adjusted family income between £675 and £1,350 and £3 for every £10 in excess of £1,350. A scholar’s own income from employment during the long vacation is not taken into account but his income in excess of £2 per week during term is deducted from the allowance granted on the basis of the family income. For married scholars, scholars over 25 years of age, and others who are considered independent of their parents, the maximum living allowance payable is £6 10s. per week. In addition a married scholar is entitled to an allowance of £1 14s. per week for his wife and 10s. per week for the first dependent child under sixteen years of age. The maximum allowance is paid to a single scholar whose income does not exceed £2 5s. per week and to a married scholar, whose income together with that of his wife does not exceed £4 10s. per week. Where the income of a scholar (excluding income from employment in the long vacation) exceeds these amounts, the living allowance is reduced by 2s. per week for every 3s. of the excess. (b) Commonwealth post-graduate awards: No means test is applied.

Allowances to Prime Minister

Mr Ward:

d asked the Prime Minister, upon notice -

Will he during this Parliament supply answers to two questions which I directed to him on the notice-paper of 29th April, 1958, regarding (a) the financial saving to the Commonwealth when he and his wife stay at Kirribilli House, Sydney, and (b) the allowances received by the Prime Minister when travelling away from Canberra?

Mr Menzies:

– The allowances received by me as Prime Minister have been published and are readily available to the honorable member. I do not collect any part of the per diem travelling allowance when staying at Kirribilli House.


Mr Ward:

d asked the Prime Minister, upon notice -

  1. Did he, in January, 1957, following the release of the report of a Western Australian parliamentary delegation on the living conditions of aborigines in the Warburton Range area, state that the Commonwealth Government was awaiting documented evidence about the sufferings of natives in Western Australia before deciding what it should do?
  2. Has the Commonwealth yet completed inquiries into the matters raised in the report; if so, what action has been taken by the Government to rectify the position?
Mr Menzies:

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

  1. On 25th January, 1957, in reply to a telegram from the honorable member, I said that a precise statement of facts concerning this matter was to be submitted to the Commonwealth for its consideration and that this statement was awaited.
  2. The report of the West Australian Parliamentary Select Committee included two charges only which affected the Commonwealth Government, namely, violation of a natives reserve in the Sladen Waters area, and interference with the normal life of the aborigines by prohibiting them from traversing an uninhabited desert area near the Maralinga testing ground. The Minister for Supply dealt with both of these matters in a public statement and in a letter to the Minister for Native Welfare in Western Australia, and pointed out that the first charge was grossly exaggerated - the second untrue.

Industrial Arbitration

Mr Ward:

d asked the Prime Minister, upon notice -

  1. Has the Commonwealth Public Service Board refused to have anything to do with efforts to negotiate a settlement of professional engineers’ salary claims because of current arbitration proceedings?
  2. Is it the accepted practice of Commonwealth authorities to reject conciliation as a means of settling industrial disputes on the ground that a matter is the subject of arbitration proceedings?
Mr Menzies:

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

  1. No. This and related claims are before the Conciliation and Arbitration Commissions as a consequence of action initiated by the claimant associations which wanted their claims affecting public service members considered side by side with those affecting members employed by the States and in private industry because of the obvious occupational link. That there is such a link is undoubted and that, apart from any other consideration, would make it inappropriate for the Board to negotiate separately.
  2. No.

Atomic Energy

Mr Swartz:

z asked the Minister representing the Minister for National Development, upon notice -

  1. What stage has been reached in the development of the atomic reactor at Lucas Heights?
  2. Will experiments be conducted at this plant with isotopes for medical and industrial purposes?
Sir Garfield Barwick:

– The Minister for National Development has replied as follows: -

  1. A high flux reactor such as Hifar, the atomic reactor at Lucas Heights, has to undergo a lengthy process of “ running in “, of trials and calibration, before it is taken up to full power. Hifar is undergoing this process now, with satisfactory results. Research is already going on in Hifar. It is being used on low-power runs to produce basic data in reactor physics, as an essential preliminary to high-power radiation work. The Australian Atomic Energy Commission has been able to supply the United Kingdom Atomic Energy Authority with some essential reactor physics data which are relevant to their own Dido reactor. Dido is the prototype for Hifar.
  2. As a by-product of flux measurements, a small quantity of an isotope of sodium has been produced and used in a biological experiment. Later, the reactor will produce other isotopes for use in Australia and nearby countries, including cobalt 60 which is widely used for medical and industrial purposes. The commission’s isotope advisory service is helping industrial and other users in the applications of isotopes, investigating particular problems, and is carrying out some research. During the last financial year more than 300 inquiries were received and the use of isotopes is steadily increasing.

Chemicals and Liquid Fuel from Coal. Mr. Timson asked the Minister representing the Minister for National Development, upon notice -

Has the Minister received any report from the Joint Coal Board upon the investigation overseas of the Chief Engineer of the Joint Coal Board and the Chief Engineer of the New South Wales Electricity Commission into the possibility of establishing a coal-based chemical and liquid fuel industry in Australia?

Sir Garfield Barwick:

– The Minister for National Development has received a report from the Joint Coal Board following an overseas investigation by the Chief Engineer of the Joint Coal Board. The report was not exclusively addressed to the possibility of establishing a coal-based chemical and liquid fuel industry in Australia, but was concerned generally with developments takng place abroad in techniques for processing coal. The Chief Engineer of the Electricity Commission of New South Wales was also overseas but was not a party to this investigation.

Although I understand that he was consulted on some aspects, the report presented to me certainly does not cover his views or those of his authority. It would, of course, be for that authority to state any views it may hold on this subject.

Sale of Cowra Military Camp

Mr Ward:

d asked the Minister for the Interior, upon notice -

  1. Has the Government disposed of the site and appointments of the former military camp situated in the vicinity of Cowra, New South Wales?
  2. If so, was the property submitted for sale by auction; if not, what method of disposal was employed?
  3. What is the name of the purchaser?
  4. What was the amount paid for the (a) land and (b) buildings, roads, sewerage installations, water mains, &c.
  5. What is the area of the land and what was the estimated value of the property, including the appointments and services at the time of sale?
  6. Did the local municipal authorities approach the Government, prior to the disposal, with a view to acquiring the property for the purpose of putting into effect a developmental plan; if so, what were the details of the offer made by these authorities?
Mr Freeth:

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

  1. Yes. 2. - (a) No, as regards land which was re-sold to the former owner. (b) Yes, as regards buildings and other removable assets after satisfying requirements of government departments, local government authorities and non-profit-making organizations.
  2. Mr. A. W. Emery as regards the land. There were over 200 purchasers of the buildings, &c. 4. - (a) Originally the Commonwealth acquired about 716 acres from Mr. Emery. He delayed settlement for many years but ultimately accepted £10,000 conditionally that the Commonwealth re-sold to him about 265 acres for £3,670 subject to survey. The area re-transferred to him in 1957 in accordance with this settlement was approximately 258 acres. The balance of the area, i.e., 458 acres, was later sold to him for £30 12s. 6d. per acre (£14,026). (b) Approximately £60,000.
  3. Approximately 716 acres. The 458 acres were valued from £25 to £32 17s. 6d. per acre. The buildings and services had only a demolition and removal value on the closing of the camp. A considerable length of eight-inch water main was transferred to Cowra Municipal Council at no charge.
  4. The Cowra Municipal Council submitted rather indefinite proposals for the Council to take over the land at a “suitable price” and subdivide it into small allotments. The proposal was not supported by expert opinion.

Cite as: Australia, House of Representatives, Debates, 28 April 1959, viewed 22 October 2017, <>.