House of Representatives
14 March 1961

23rd Parliament · 3rd Session

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

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– I direct a question to the Treasurer. Has the right honorable gentleman read a recent statement made by Mr. Warren McDonald, Chairman of the Commonwealth Banking Corporation, in which he asked that the Development Bank be freed from restrictive financial controls imposed ‘by the Commonwealth Government? Has the Treasurer been officially approached by Mr. McDonald in respect of this matter? In view of a statement made by the Treasurer to the House on 25th November, 1959, that funds adequate for the purposes of the bank would be available, and that the Government would increase the supply of funds should it deem that to be desirable, will he now free the Development Bank from restrictive controls and ensure that necessary funds are made available for the declared objectives of the bank?


– I did see some report in the press of a speech by Mr. Warren McDonald. The report would necessarily be an abbreviated account of what he said. From time to time, Mr. McDonald does consult with me in his capacity as chairman of the board of the Commonwealth Banking Corporation. T can assure the honorable gentleman that any proposals put forward by Mr. McDonald either in relation to the capita] structure or general policy matters on which he would wish to have the view of the Commonwealth Government will always receive the active attention and full consideration of the Government. When we are in a position at any time to make policy announcements arising from these discussions, they will be made either by Mr. McDonald or by me, whoever may be the appropriate spokesman in the circumstances. I will just say that broadly the Commonwealth Government is proud of the way in which this instrument of its policies has been functioning. We believe it has already made a useful contribution to the economic development of Australia and no doubt, in the years ahead, it will continue to add to its record of achievement, which so far has been so welcome.

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– My question is directed to the Acting Prime Minister. Is the right honorable gentleman aware that recent amendments to the Commonwealth Public Service Act, relating to the higher educational qualifications needed for transfer from the Fourth to the Third Division, have created an anomaly, in that officers already partly qualified by examination will not be eligible for transfer, even if they complete their intermediate or junior examinations? Will the right honorable gentleman ask the Public Service Board to prepare a list of Fourth Division officers now partly qualified, with a view to protecting them in the matter of eligibility for transfer on completion of their final examination subjects, even if a further amendment to the Public Service Act is necessary?

Minister for Trade · MURRAY, VICTORIA · CP

– I will inquire into the practicability and advisability of preparing such a list. I cannot offer an opinion on this matter offhand, but I will undertake to consult the Public Service Board about it. It is a fact that when the relevant provisions of the Public Service Act 1960 are proclaimed, the special concessions for exservicemen will lapse, but those exservicemen who have already applied for appointment or transfer . on the basis of having obtained Intermediate Certificates will continue to be eligible. I have been told that the Public Service Board is conscious of the problem that will exist for this group of employees, and the board is making administrative arrangements under the present act which will preserve opportunities for appointment to the Third Division of those who have passes in intermediate or junior subjects to their credit, provided they obtain the remaining necessary qualifications within a reasonable period.

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– Is the PostmasterGeneral aware that during the past weekend and during this week special services and celebrations in commemoration of the 350th anniversary of the issue of the

Authorized Version of the Bible have been taking place? Is he aware that in England, in particular, there have been special observances held in connexion with this matter, and that it has received attention in the House of Commons? Was the Minister requested to have a stamp issued commemorating this anniversary, and did he refuse this request? If so, are we to assume that the Melbourne Cup and similar events are considered to be of greater significance than the issue of the Authorized Version of the Bible? Will the Minister consider the matter further, with a view to acceding to the request that has been made, particularly by religious bodies, for the issue of a suitable stamp commemorating the anniversary?

Postmaster-General · DAWSON, QUEENSLAND · CP

– The honorable member for Port Adelaide has asked whether I am aware of the significance of the present time in relation to the 350th anniversary of the issue of the Authorized Version of the Bible. I tell him that I am so aware. I think it is correct to say that that anniversary occurs to-day. The honorable member has also asked about representations that have been made regarding the issue of a commemorative stamp to celebrate this very important occasion. A number of representations have been made to me, Mr. Speaker. Certain representations have been made by some of my colleagues in the Ministry. The honorable member for Swan and other honorable members have discussed the matter with me from time to time. I think it was a question by the honorable member for Swan that I answered along the lines I shall now follow in answering the honorable member for Port Adelaide. I pointed out to the honorable member for Swan, and I now repeat, that we have, over the last four years, followed the practice of issuing stamps with special religious significance at Christmas time. The request that was made for the issue of a stamp to commemorate the 350th anniversary of the issue of the Authorized Version of the Bible had some association with the issue of the Christmas stamp last year- The request was made at rather short notice, and we took particular pains to try to ensure that the Christmas stamp issued last year would have some association with the anniversary of the issue of the Bible, which occurs during this year. As honorable members know, a Christmas stamp was issued which had particular relation to the Bible. At the same time, the publicity that we gave to that stamp made particular reference to the fact that this is the year of the anniversary and that the stamp had been issued with that in view. We also undertook, to mark the end of this anniversary year and to ensure that the proper significance was attached to it, to give particular attention to the design of the 1961 Christmas stamp. That remains our intention. The stamp advisory committee has been considering for some time various designs for a stamp to celebrate the anniversary, and I have no doubt that when a decision is made honorable members generally will be satisfied with the stamp.

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– My question is also directed to the Postmaster-General. It has been reported that the cost of telephone calls between Australia and the United Kingdom could be reduced considerably if the radio waves could be transmitted via a satellite orbiting the earth. Has the Postmaster-General’s Department had any discussions with the United Kingdom authorities on a research programme directed towards this objective? Is there any danger that the expenditure that the governments of Canada and New Zealand, Governments of Canada and New Zealand, in the laying of a submarine cable between Australia and Canada will be wasted and the installation rendered obsolete by this development?


– The honorable member has referred to a matter which has been engaging the attention of postal administrations for some considerable time, particularly in the last six months. I can assure the honorable member that my department is making the utmost endeavour to keep pace with trends in this vitally interesting and important development in the use of space satellites for communications. It is much too early to give any indication of the cost of communications by this method as compared with the methods already in use. I know that various statements have appeared in the press about the likely cost of sending telephone messages by this method, but at present that is pure conjecture, and quite a period of years will elapse during which a great deal of experimentation will be carried out, before we shall be in a position to say definitely what the cost will be. But I have no doubt that, in view of the very considerable expenditure that has been devoted to experimentation, eventually that form of communication will be adopted and its cost will compare favorably with that of other methods.

The honorable member asks whether it is likely that the development of this medium of communication will render obsolete the method which we are now developing, that is, the use of submarine telephone cables across the Pacific and the Atlantic. On present indications the cables that we are now installing will not be rendered obsolete by the development of space communications. I think that the two systems will work very well together, more or less in parallel. There is nothing in the present situation which should cause us to consider departing from the plan that we have developed for the use of submarine cables.

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– Can the PostmasterGeneral state the result of the tests which were conducted on the foundations of the General Post Office, Sydney, with a view to restoring the clock? What amount of money is involved?


– The restoration of the General Post Office clock is a matter to which several honorable members, whom I shall not try to enumerate, have applied themselves during the last year or two. It will be remembered that during the last session I stated that we would ask the Department of Works to give an estimate of the cost of restoring the clock, particular attention being paid to any necessary improvement in the existing foundations. Within the last week or so I have received an estimate from the Department of Works of the cost of restoring the clock and carrying out the necessary work on the foundations. It is about £130,000, which is considerably less than the £200,000 that I previously mentioned. I submit thai £130,000 expended on this venture would be a material sum, and I can think of a number of post offices and telephone exchanges upon which that amount could be expended with greater benefit to the community generally. Nevertheless, if some of the local authorities or civic authorities concerned, whose civic pride I understand very well indeed, care to make some suggestions as to sharing the cost I shall be happy to consider them.

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– My question is directed to the Minister for Primary Industry. After the Government’s announcement last week of its decision to complete the current five-year stabilization scheme for the dairy industry, which incorporates the dairy industry subsidy, there seems to be doubt in the minds of some farmers as ‘to why the Minister did not guarantee the subsidy for the next fiveyear price stabilization plan beginning 30th June, 1962. Will the Minister explain this point to the House for the benefit of honorable members, and for the benefit of those people who may be wrongly interpreting the statement?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– In making the announcement of the Government’s decision upon the report of the committee of inquiry appointed by the Government I think I assured the dairy industry, as I assured members of this House, that the Government is prepared to honour its agreement with the industry in respect of the present five-year stabilization scheme. That scheme will have another twelve months to run from 1st July next, and obviously, as part of our promise that we were prepared to meet the industry - and we will be here as a government to make the necessary arangement with the industry after the next election - we will consider a renewal towards the termination of the present five-year scheme. It is not for me or the Government at this stage to commit ourselves to any arrangement in advance, because naturally the industry will have its views, and the States are to a degree concerned in this five-year arrangement because they always come in on the price aspect and have given certain powers to the Commonwealth in that regard. Therefore it is not possible at this stage to commit the Government or anybody as to what might be included in a new five-year stabilization scheme. Let me say that this Government recognizes that the basic necessity of the dairy industry, and indeed of any primary industry in which it can be achieved, is stability; and that is the basis upon which we will approach a further five-year scheme.

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– My question is addressed to the Attorney-General. I preface it by saying that on 15th November last I asked the Attorney-General a question concerning the filling of a vacancy on the Northern Territory Supreme Court bench, caused by the death of Mr. Justice Kriewaldt some months earlier. A period of ten months has now elapsed without the vacancy being filled, and in the meantime the bench has been occupied, first, by a South Australian judge, and then by the present occupant, Mr. Acting Justice Clarke. There has been considerable hardship to litigants because of this arrangement, and the position is now worsened by the fact that the acting justice has had to proceed to Christmas Island to preside over a. case involving a murder charge and will be absent for a period of up to one month. Will the AttorneyGeneral therefore inform the House, and, as well, the litigants who await the hearing of their cases, when a permanent appointment will be made so that litigation now pending may be finalized?


– Since Mr. Justice Kriewaldt died, the court has been serviced at all times by an acting justice of great experience and, as far as I know, no one has been inconvenienced by that course. It is true that at the moment the present acting justice has to proceed to Christmas Island to try a criminal charge. If there were a permanent judge in the office at the moment he would have to do likewise. There would be no difference between there being an acting judge in the office and a permanent judge. However, during the time which has intervened since Mr. Justice Kriewaldt’s death I have been concerned to lift the position of the justice of this Supreme Court. That has taken me a little time, certain arrangements having to be made, because I have felt that the Northern Territory ought to have a man of standing - this is no reflection on the late Mr. Justice Kriewaldt, to whom this Commonwealth is much indebted - and I think that the office ought now to be up-graded a little bit. I have been attending to that matter. I can inform the honorable member, as I have done toy private communication, that I expect to make an announcement very shortly of an appointment to fill this vacancy.

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– Is the AttorneyGeneral able to inform the House whether the Government proposes to appoint a committee to examine the Bills of Exchange Act 1909-1958, with particular reference to the Cheques Act 1957 of the United Kingdom? If the answer is in the affirmative, can he state whether professional associations, such as the secretarial and accountancy institutes, have been asked to co-operate by offering their opinions and comments?


– It has been decided to appoint a committee of experts to look into the possible amendment of the Bills of Exchange Act. Exploratory conversations have already taken place in an endeavour to- find a suitable chairman for that committee. It is hoped that a committee will be appointed very shortly, and those bodies to which the honorable member refers will have full opportunity to put their points of view and their various submissions to that committee.

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Me. WHITLAM. - I address a question to the Treasurer. The right honorable gentleman knows that sales tax collected in any month does not have to be paid to the Commissioner of Taxation until the twentyfirst day of the following month, and that, consequently, none of the sales tax paid on motor cars last month has yet been received by the Treasury. I therefore ask the Treasurer: What would prevent the Commissioner of Taxation, next week, receiving only three-quarters of the sales tax paid on motor cars between the commencement of last month and the date of the Prime Minister’s volte face, so that the remaining one- quarter of tax paid by purchasers of motor cars during that period might be refunded?


– The Deputy Leader of the Opposition introduced some argumentative comment in the course of his question, but I do not propose to answer his arguments now. I have already given notice to-day of legislation which will be introduced by the Government. This embodies the policy decision of the Government and, when the bill is being debated by the House, I can deal more fully with the points raised by the honorable gentleman. I did say last week that the Government, in coming to its decision, was not actuated primarily by revenue considerations. Although I gave some figures to indicate what the loss to revenue would be if we acceded to the request that sales tax be refunded, it will be remembered that I also pointed to the important considerations both of principle and taxation practice which would be involved if we were to follow a course that has never previously been taken by any government.

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– I ask the Minister for Defence whether he is able to give any estimate of the date upon which the Royal Australian Air Force will receive its- first delivery of the Mirage fighter aircraft.’- -I ask also whether he can give an estimate of the period of time required to complete the equipment of the Air Force with this type of fighter.

Minister for Defence · DENISON, TASMANIA · LP

– I could not give the honorable member a firm date. We are hoping that by the end of 1962 the first of these aircraft will go into the Royal Australian Air Force. As the honorable member probably knows, trials are still being conducted with the Rolls-Royce engine. Up to date, they have been eminently satisfactory, but, until the trials have been completed, we shall not proceed with the assembling of these aircraft. All I can say is that it is planned to have them going into the Air Force towards the end of next year.

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– I address my question to the Treasurer. Is it a fact that the Commonwealth Superannuation Fund on 29th

January, 1961, signed a mortgage with David Jones Limited of Sydney for £1,000,000? If this is true, how was this enormous sum negotiated for non-productive work, particularly in view of the credit squeeze and the Minister’s own pronouncements from time to time? Was this money in the Commonwealth Bank at the time? What was the rate of interest? Would the withdrawal of the money affect the ability of the Commonwealth Bank to lend money to local government authorities and cooperative housing organizations? If the report is true, how can the Government line up this vast loan with its urgent appeal to the people to cut costs, reduce inflation and tighten the belt generally in order to restore economic stability?


– The honorable member for Parkes seems to be under the impression that the disposition of investments by the Commonwealth Superannuation Fund is a matter for decision by this Government. That is not my understanding of the position. As far as I am aware, the trustees are free to exercise their own judgment as to how their investments should be made for the benefit of those who come within the scope of the fund. It is a fact that there is an understanding, I believe, under which the trustees invest about 30 per cent, of the funds available to them in Commonwealth securities. However, I shall see whether I can get any further information for the honorable gentleman. What I would like to have clear in my mind is whether he is now proposing that the Commonwealth Government should take the power to control investments by the superannuation trustees, or should exercise such influence as it possesses with the trustees of the fund to determine the direction their investments should take.

Mr Haylen:

– The sum of £1,000,000 has been made available to a rag shop when people have no houses.


– I have no doubt that many trustees of superannuation funds have made investments which would not please the honorable gentleman. As he knows, the Government has already indicated that it is taking action designed to ensure that a reasonable proportion of the funds available for investment are channelled into important government purposes.

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– I wish to direct my question to the Minister for Primary Industry. Does the Minister know that in Victoria there has been a long delay in the first advance on the No. 24 wheat pool by the Australian Wheat Board?. Will the Minister investigate the matter and make available to the growers in that State the reason for this delay?


– The payments made to wheat-growers as the first advance, or indeed any payments, are entirely the responsibility of the Australian Wheat Board. If there have been any undue delays, I will certainly make investigations and direct the attention of the board to the honorable member’s representations made by way of question. I did have the matter mentioned to me by a Victorian grower. When 1 asked for information, the board told me that the dockets pertaining to this grower’s deliveries had not at that stage been received from the Rate bulk handling authorities. It may be that some delay has occurred in this way.

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– I desire to ask the Acting Minister for External Affairs a question. Is it a fact that the Commonwealth Government has refused a request to aid the Government of the Union of Soviet Socialist Republics to bring to justice a nazi war criminal, now living in Australia, who was directly responsible for the mass murder of 1,499 Russian soldiers in 1941 when those soldiers were fighting as our allies?


– I take it that the honorable member refers to a request recently made in Moscow for the extradition of an Estonian.

Mr James:

– Yes.

Sir GARFIELD BARWICK__ The honorable member has many more facts about this matter than the Russians have supplied to me. The papers have come into my hands in the last few days. I am examining them and I hope to make a decision to-morrow as to what I shall do. I expect to be able to tell the honorable member after that what success he has had with his question.

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– My question is directed to the Acting Minister for External Affairs. I ask him whether there is any truth in recent reports that the Prime Minister of Australia has joined with other Commonwealth Prime Ministers in deciding that red China should be seated in the United Nations General Assembly and on the Security Council.


– I read a report or reports to that effect. I said at the time that they were highly imaginative. I now think that that was very kind. The right thing to say is that those reports were both untrue and groundless. I am in daily contact with the Prime Minister and I may say that I have in my possession no information to suggest that there is any change in Australia’s policy in connexion with the seating of red China in the United Nations.

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– I direct a question to the Attorney-General. Is it an established fact that some of the 32 corporations in the United States of America which were recently convicted under the Sherman antitrustact on counts of rigging prices and bids -for tenders and the like have subsidiaries and branches in Australia? Are the Westinghouse and General Electric companies typical examples? Has the Minister considered the apparent likelihood that the Australian counterparts of these American firms may well be involved in similar monopoly practices by conspiring against the public interest? Has he caused any investigations to be made into the activities of these companies, and has he any plan to provide for the Australian community protection similar to that enjoyed by Americans?


– I would have thought that the honorable member would have been the last to suggest that we should look for guilt by association. If there is any activity on the part of any company in Australia that offends the laws that I administer, I shall deal with it. In the meantime, I would be delighted if the honorable member would give me any information in his possession which would assist my consideration of the recommendations that ought to be made to both this Government and the State Premiers on this matter.

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– My question is addressed to the Minister for Trade. Is the right honorable gentleman aware that a huge telecommunications project to cost 200,000,000 dollars is being planned in Venezuela? As Venezuelan engineers have been invited to Japan to inspect Japanese facilities and potential for the manufacture of telecommunications equipment, I ask the Minister whether a similar invitation has been issued from Australia so that the engineers may inspect Australia’s potential for the manufacture of this equipment.


– I am not aware that tenders for such a project are being called or are imminent. If I find on inquiry that the Department of Trade does not know of it. I shall cause inquiries to be made immediately through our Trade Commissioner Service. If purchases of equipment for this project are in prospect, we would without delay acquaint those concerns in Australia which are capable of tendering for the supply of telecommunications equipment, because Australia, I am happy to say, has shown that it is able to tender competitively against the world for telecommunications equipment and to do business successfully.

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– I address my question to the Treasurer. One of the immediate results of the credit squeeze has been the refusal of an overdraft which was sought to enable the Coburg City Council to undertake street works. This will result in the immediate dismissal of 25 men and the stopping of this construction work. In what way does the unemployment of 25 men and the stopping of urgent public works assist the stability of the economy and the development of the nation?


– What the honorable gentleman is putting to me in effect is an invitation to debate the whole of the Government’s economic policy. I invite him to give his patient attendance here this evening when, I hope, I shall be able to illumine his mind.

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– Is the Postmaster-General aware of the large back-lag of applications for telephones in the Warringah electorate, especially in the subdivisions of Seaforth, Balgowlah and Manly Vale? If he is, can he do anything to relieve the position of taxpayers who need to obtain telephones in order to carry on their businesses efficiently and economically?


– I am not immediately aware of the actual position in the honorable member’s electorate, but I assure him that 1 shall be very glad to have a look at the position immediately, and advise him as soon as I can of the department’s plans for relieving the situation he mentioned.

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– I wish to direct a question to the Acting Prime Minister. I preface it by saying that I am pleased that the Minister for National Development has changed his mind after repeatedly rejecting my representations that the Commonwealth Government accept financial responsibility for the prosecution of urgent national work, in particular in the port of the Newcastle. I ask the right honorable gentleman: Has the Minister for National Development conferred with the Premier or the Minister of Public Works of New South Wales regarding how much financial assistance will be forthcoming for the further development of the port of Newcastle? For what projects will this financial assistance be available? Will it be in the form of a grant or a loan, and when will it be available?


– My colleague, the Minister for National Development, needs no urging from anybody in order to arouse in himself a consciousness of the need for better port and loading facilities in the coalloading ports of New South Wales. He has been aware, as all members of this House have been aware, that these have historically been the responsibility of the State authorities. It is only because of the balance-of-payments problem of this country that this Government has broken precedent and has intimated to the Premier of New South Wales that it is prepared to enter into discussions with the Government of New South Wales to see whether there is a case for the Commonwealth’s giving some exceptional aid in order to accelerate the improvement of port facilities and coalloading facilities in certain New South

Wales parts The Premier has acceded to the suggestion that he should enter into discussions with my colleague, the Minister for National Development, or that officers of the State Government should have discussions with officers of the Commonwealth Government, so that the well-being of this country may be safeguarded.

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– - My question is addressed to the Postmaster-General. When is it expected that the new automatic telephone exchange will be ready to operate in the city of Bundaberg? Is the work proceeding according to plan?


– Whilst I appreciate very much the great interest of the honorable member for Wide Bay in the progress of the telephone exchange at Bundaberg, I also want to point out that this matter is of personal importance to me too, because my electorate adjoins his electorate and takes in part of the area affected. So I can assure the honorable gentleman that 1 am watching the matter closely - though not more closely that I watch similar development elsewhere, Mr. Speaker. The work is proceeding according to plan and the equipment now being installed should be ready for the opening of the exchange on a date which I cannot give at the moment, though I shall look it up. I assure the honorable member for Wide Bay that the exchange will be in operation later this year, and that I shall have the great pleasure of associating with him in the opening ceremony.

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– I preface a question to the Attorney-General by informing him that last year in this House I asked the Prime Minister whether he would undertake to go into the activities of vending machine companies throughout Australia. The reply that I received was not reassuring. I therefore ask the AttorneyGeneral, in view of the recent disclosures, whether there are any federal laws under which people can be protected from these unscrupulous financial conspiracies. If the answer is in the negative, will the Government bring down legislation designed to prevent these frauds? Further, will the Government in conjunction with the States institute a Commonwealth inquiry into the operations of these companies throughout Australia?


– The

Commonwealth has no powers in this respect. The honorable gentleman will be aware that the Commonwealth has been participating with the States in an endeavour to get a common form of company law which would include provisions designed to protect the public against such matters as the honorable member brings under attention. I have no powers, at the moment, to make an inquiry or to interfere.



– I ask the Minister for Territories whether there is any truth in the published report that the Governor of Netherlands New Guinea protested to him about an article published in “ South Pacific” in the middle of 1959. Did the Minister for Territories instruct members of the staff of the Australian School of Pacific Administration that they were not to discuss matters of policy and that they should cease the publication of “ South Pacific “?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– There is no truth whatsoever in the implications contained in the honorable member’s question. I think, Sir, that the source of error is a small fortnightly paper called “ Nation “, which published a piece of fiction dealing with this matter. Because it involves another government, I should like to inform the House categorically, first, that no complaint has ever been made to me by any Netherlands official or any representative of the Netherlands Government about anything published in “ South Pacific “. Secondly, I have never given any instruction or directive to any member of the staff of the Australian School of Pacific Administration regarding contributions to this magazine. The only fact that emerges from the question is that the publication of “ South Pacific “ ceased in October, 1959. In December, 1960, its successor, a magazine, which all members will have received, called “ Australian Territories “, came into existence. The decision which led to this change of publications goes back to October, 1957, when I asked the Department of Territories to let me have some proposals about widening the usefulness of the publications of the department.

As a result of discussions which took place between the Department of Territories and the Australian School of Pacific Administration, a certain proposal was put to me for ending the publication of “South Pacific “ and inaugurating the new magazine. In accepting the department’s recommendation there was certainly nothing in my mind other than widening the usefulness of the publication. In case my memory might have been at fault, I went to the trouble of consulting the departmental files relating to this matter. Nowhere in any of those files is there any reference to any complaint by the Netherlands Government; there is no reference to any particular contributor to “ South Pacific “; and there is no reference to any particular article published in “ South Pacific “. So the honorable member’s question is based on a piece of fiction which has come out of somebody’s imagination, and which, I think, might have been checked before publication.

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– My question is addressed to the Attorney-General. What are the reasons for changing the confident assertion of a year ago that the Government would legislate upon restrictive trade practices to the more timid proposal to take the matter up with the States? Do constitutional impediments prevent the Commonwealth from doing anything at all in this field? If so, why was not this considered by the Government a year ago? Can the Attorney-General provide a detailed statement of the difficulties, constitutional or otherwise, that surround this matter?


– The honorable gentleman begins somewhat badly. The statement a year ago was not a confident statement that something would be done. It was a statement that the Government would examine the matter; and the Government has honoured its promise. The present proposal is anything but timid. It is a new concept to me that a person who undertakes to treat with six AttorneysGeneral with a view to unanimity is timid. I would think that, on the contrary, that is a rather courageous enterprise. The Commonwealth, of course, can cover a deal of this field - much more than is commonly thought perhaps - but there is no sense in leaving boles in a legislative scheme which cannot be filled by the Commonwealth, and I should have thought it good sense to try to get the co-operation of the States in an attempt to make the project more effective.

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Tariff Board Report

Dr Donald Cameron:

– I lay on the table report of the Tariff Board on the following subject: -

Edible gelatine (Industries Preservation).

The findings of the Tariff Board have been accepted.

Ordered to be printed.

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HigginsTreasurer · LP

– I lay on the table the following paper: -

Taxation - Thirty-ninth report of the Commissioner of Taxation, dated 1st June, I960, together with Statistical Appendices. and move -

That the paper be printed.

As a result of proceedings in the High Court of Australia in the Magrath case, it is not desirable that copies of the report be made available to honorable members or the public until the Parliament has given the necessary authorization. I have mentioned this aspect to the Deputy Leader of the Opposition (Mr. Whitlam), and I have his concurrence in the proposal that this motion be not opposed in order that the report might be circulated as soon as possible.

Question resolved in the affirmative.

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PostmasterGeneral · Dawson · CP

– I lay on the table of the House for the information of honorable members the following paper: -

Commonwealth Telegraphs Agreement- Commonwealth Telecommunications Board - Ninth General Report for 1959, and Statement of Accounts for year ended 31st March, 1959.

T stress that this is the report of the Commonwealth Telecommunications Board.

That is a British board and not the Overseas Telecommunications Commission whose accounts have already been tabled.

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– by leave - As I have been misrepresented, I wish to make a personal explanation. Some days ago, Mr. Speaker, I was requested to see a Mr. Viks, an Estonian by origin, whom the Soviet Government required to be extradited from Australia. I did see him. On 8th March, the Communist paper, the “ Tribune “, printed a hearsay account of that meeting which was wholly false and entirely a fabrication1. One does not take much notice of the “ Tribune “, which is not noted for its truthfulness; but the matter became more serious when, four or five days later, the Moscow radio broadcast some material again misrepresenting what had taken place, and an extract was reprinted this morning in the “ Sydney Morning Herald “. among other newspapers.

Now, Sir, the Moscow radio has said that, since Russia and Australia were allies at the time when the alleged misdemeanours of Viks were committed, I therefore have a short memory. I have a long memory in this regard. T remember very clearly the infamous Nazi-Soviet pact which was designed to create the Second World War and did create the war within a week. I remember very clearly that, during the course of that pact. Russia was the active ally of Nazi Germany, and the Communist Party and its agents in Australia and elsewhere were Nazi accomplices. I remember very clearly the circumstances of the Communist invasion of Estonia in 1940 when the Communists were the allies of the Nazis and our enemies. I remember very clearly that the infamous Nazi-Soviet pact signed by Stalin was terminated only when Germany unexpectedly turned on her Russian allies.

Secondly, the Russian broadcast has implied that those who are anti-Communist are pro-fascist. The opposite is the case. Nazism and communism are only different versions of the same thing, and any sincere opponent of nazism must also be an opponent of communism. I hope to make a longer statement on this matter on the adjournment later this week, but in the meantime this will suffice.

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Australian Economy

Debate resumed from 9th March (vide page 137), on motion by Mr. Calwell -

That because the Government’s rapidly changing plans have failed to protect and develop the Australian economy and to safeguard our overseas funds and have caused grave confusion, dislocation and hardship to many sections of industry, both primary and secondary, and unnecessary suffering to many citizens, particularly those who have lost their employment, this Government does not possess the confidence of the Parliament or of the nation.


.- When the Leader of the Opposition (Mr. Calwell) moved his motion expressing want of confidence in the Government, I believe that he was really trying to point the bone. He was trying to wish onto the Australian people a malady from which he would like to see them suffer because he believes that there lies his only hope of political salvation. However, the Leader of the Opposition has been crying calamity for so long that no one takes him seriously any longer, least of all the Australian voters. Any one who listened to the Acting Prime Minister (Mr. McEwen) last Thursday has no doubt whatever that the Government is in full command of the situation. The worker and the businessman, who have enjoyed eleven years of unparalleled prosperity under the Menzies Government, are being asked to believe that a government which has brought about the greatest period of prosperity in Australia’s history has suddenly taken leave of its senses.

Any thinking person who listened to the Acting Prime Minister realizes that in adopting its present economic policy, the Government was perfectly well aware that these measures were not calculated to win votes. Any person who realizes this must know also that there is a perfectly good reason for these measures of restraint that have been adopted. As a matter of fact, the Prime Minister (Mr. Menzies) stated only last month in a speech -

We see no reason to alter the substance of our policy which we knew would, in the short run, be unpopular with many people, but which we believe is in the best interests of the nation.

The Government has been accused of trying to ruin the prosperity we are enjoying and trying deliberately to create unemployment. If we stop to think about these accusations, we realize just how incredibly stupid they are. No one likes to see a tree which has been bearing good fruit heavily pruned. The ignorant person believes the orchardist is ruining the tree, but, in truth, in the near future the tree becomes stronger than ever and better able to withstand disease and produce more and better fruit than it did before. No one likes taking medicine, but we all know that when a physician prescribes medicine he does so for our own good. During the next few weeks people all over Australia will be receiving injections to help them ward off Asian ‘flu, just as others have received injections of Salk vaccine to help them withstand poliomyelitis, and others have been vaccinated against smallpox. These vaccines give persons small doses of the diseases they are designed to combat, and this is the exact effect of the measures which the Government has taken. But when the first effects of the injections have worn off, the Australian people and the economy generally will be stronger than ever before, and better able to withstand the effects of a severe drop in prices received for our exports - and this is a factor over which we have no control.

Mr Courtnay:

– Tell us about the imports.


– I will come to the imports shortly. It is a fact that the terms of trade have moved against Australia to a greater extent than any other country. These are not idle words. They are substantiated by an index prepared from international financial statistics, which give the terms of trade between 1950 and 1960. They show that of seventeen nations, which are the only ones for which figures are available for the complete period, the terms of trade have moved against only three, and in favour of fourteen. Figures are given for other nations over a shorter period, and in every case the terms of trade have moved in favour of those nations, while they have moved against Australia much more severely than they have against any other country. For instance, Australia’s terms of trade in relation to the year 1950 are down 56 points, while for New Zealand they are down twenty points and for Latin America 24 points. For all of the other nations the figures are well up, and for Germany they are up as much as 31 points.

The Acting Prime Minister said last Thursday that if we were to receive this year the same prices for our exports as we received in 1953 - which was not a boom year but which was a base year, recognized throughout the financial world as a year of normal prices - our exports this year would be worth £1,350,000,000, instead of the £880,000,000 which we expect to receive. As I said before, the drop in prices is a factor over which the Government has no control.

It is a strange fact that when everything in the garden is lovely, and when prosperity is obviously booming, the Opposition says that such a state of affairs has come about in spite of the Government, but when our export prices on world markets fall, the Opposition says that the Government should get the blame.

As to the proposition that the Government wishes to create a pool of unemployment, as the Opposition would have the people believe, this is laughable. I will say that by far the most important consideration in the question whether the Menzies Government will be returned to power at the next election will be the level of employment or unemployment at election time. Businessmen will have overcome the hardships of the credit squeeze; the public will have forgotten that for about twelve weeks sales tax on motor cars was increased by 10 per cent. But for every man who wants work and cannot find it the Government could lose one or two votes. The Government is conscious of this fact, and, apart altogether from its desire to see every one share in Australia’s prosperity, it has a vested interest in full employment. The Opposition has a vested interest in unemployment, because its hopes of regaining the treasury bench depend on there being a high level of unemployment just before the next election.

The Government can congratulate itself on the very low level of unemployment that has obtained in Australia over the whole period of its term of office. At the same time, I realize that statistics cannot fill empty stomachs, and for every man out of employment the position is very serious.

Contrary to what has been said by the Opposition, the objectives of the Government remain constant. These objectives have been recently stated by both the Acting Prime Minister and the Treasurer (Mr. Harold Holt), but they are worth emphasizing again. They are, first, the maintenance of national development; secondly, a planned immigration programme, with an intake of about 125,000 persons annually; thirdly, a continuing high level of employment; fourthly, improvements, where practicable, in the extent and scope of our social services; fifthly, an adequate level of home building and home ownership and, sixthly, stability of costs and prices. Changing conditions necessarily cause temporary changes in the policy required to bring about all of these objectives, but the objectives themselves remain unchanged.

When we examine the truly magnificent record of the present Government we can see that these objectives have been achieved over eleven prosperous years in a manner unsurpassed anywhere else in the world. We have maintained a steady programme of national development, in the field of water conservation, in the field of electricity generation, and in the field of the development of our natural resources, such as minerals. We have successfully absorbed more than 100,000 immigrants each year, whom we have found employment and housed. We have a record of employment over more than eleven years of office of which we can be proud.

I obtained to-day certain figures from the Bureau of Census and Statistics. Honorable members opposite have cited United Nations statistics, and these figures have also been taken from a United Nations publication. Unfortunately it is not possible to make fully up-to-date comparisons, because although we have figures for Australia announced in February by the Department of Labour and Nation Service, the latest figures available from the United Nations are for November in the cases of Canada and the United States, and for September in the cases of Japan, the United Kingdom and West Germany. The proportion of unemployment in Australia, compared with our total work force, at the end of January was 1 .7 per cent. If we go back to November, in order to make a comparison with

Canada and the United States, the proportion for Australia was then only 1.1 per cent. Some honorable members may draw false conclusions from the increase that has occurred. Undoubtedly there has been a rise in unemployment, but we must remember that such a rise always occurs early in the year, because there are great numbers of young people leaving school and seeking employment at that time.

Mr Cash:

– And there are seasonal workers.


– There is the factor of seasonal work, as the honorable member for Stirling reminds me. In November, as I have said, the proportion of unemployment in Australia was 1.1 per cent. In Canada it was 6 per cent., and in the United States it was 5.7 per cent. My friend, the honorable member for Perth (Mr. Chaney), now tells me that the proportion is now 7 per cent, in the United States. As his statements are usually accurate, I see no reason to doubt this. If we go back to September, which is the latest month for which figures are available for Japan, the United Kingdom and West Germany, we find that the figure for Australia was a little more than half that for the United Kingdom, it was equivalent to that for Japan, and only West Germany had a lower level of unemployment.

We have improved the amount and the scope of our social services at a rate unprecedented in Australia’s history. We have, I believe, the highest rate of home ownership in the world. About 75 per cent, of all the married couples in Australia either own or are buying their own homes. We have a level of home building in Australia of which we can be proud. Whereas in 1939 there was one home for about every 4.5 persons, to-day there is a home for approximately every 3.7 persons. Only last year we built more than 90,000 homes, which is the highest number ever built in a year in our history.

As to costs and prices, the honorable member for Hughes (Mr. L. R. Johnson) on Thursday, 9th March, quoted figures which had been published by the United Nations to show the trend of prices between 1953, which had been accepted as the base year, and to-day. He stated -

I was interested, a short time ago, to look at the monthly bulletin of statistics provided by the statistical office of the United Nations. It is very interesting to see how Australia compares with other countries with respect to inflation.

He proceeded to quote many figures based on a unit of 100 for 1953, and he said -

Since 1953, we find that the index of wholesale prices has risen to 105 in Canada and to 106 in the Federal Republic of West Germany . . for the United Kingdom 103 and for the United States of America 109. To demonstrate that Australia does not shatter records only in the Olympic Games, the figure for Australia went to 116.

Those figures are correct, but the honorable member conveniently forgot to mention that the figure in France went to 134. The honorable member, like most politicians, quoted only those figures which he believed supported his case. I have heard it said that a politician clings to statistics as a drunk clings to a lamp post - not for illumination but for support. What he did not mention was the way in which wage levels have moved in those countries in the same period.

I want to refer again to the figures which 1 have obtained from the Bureau of Census and Statistics and which, in turn, have been taken from a United Nations publication. These figures relate not to primary production but to male units in the manufacturing industry and are based on male wages. They indicate wage levels in the August quarter of 1960 as compared with the levels in 1950, and they cover the ten-year period. Wages in Canada have increased by 63 per cent, and in the United States by 53 per cent. In Japan they rose by 106 per cent, and in West Germany, the only country to top Australia, by 110 per cent. In Australia wages rose by 106 per cent., and in the United Kingdom by 94 per cent. Those figures are interesting when compared with the rise in prices. Whereas, as was mentioned by the honorable member for Hughes, in Canada prices rose to 105 on the index, wages increased by 63 per cent. In Australia prices rose to 116 on the index and wages increased by 106 per cent.

Mr Chaney:

– Where did you obtain these figures?


– From the Bureau of Census and Statistics, and I was informed that they are taken from a United Nations publication. In the United States prices rose to 109 on the index and wages increased by 53 per cent. Compare those figures with Australia’s figures of 116 and 106 per cent, respectively! In the United Kingdom prices rose to 103 on the index and wages by 94 per cent. If you take the figures in their entirety they give a completely different picture from that which was painted by the honorable member for Hughes.

The Government has been criticized severely for abandoning import licensin g. It is strange to recall that the Government was criticized also when it imposed import licensing. Both of these criticisms were made because of the way in which the controls affected the pockets of the critics. There were several reasons why import controls were dropped. Two of them were, first, because they were inequitable and, secondly, because they were open to abuse. One heard many stories of exploitation, some being told in this Parliament. I also heard many outside this place, but the trouble was that people who told me about other persons with import licences who were charging 15 and 20 per cent, for the use of licences would not come forward and supply the facts which would enable the Government to take remedial action. One man told me about this, and when I asked him the name of the company concerned, he said, “ You cannot expect me to put myself in like that. I heard it at so-and-so.” That was always the case. One could not obtain the facts. I have no doubt that many firms were exploited by companies or individuals who had licences. That in itself was a very good reason for ending import licensing, and I hope that the Government never finds it necessary to re-impose it.

Apart from that, the Government felt that the additional flow of goods into the country would sharpen competition and reduce prices. We all know that when goods are in short supply those who have money get what they want. I recall just after the war, even before this Government came into office, some one ask:d me whether T knew how he could obtain a State Electricity Commission sticker for a hot-water service. He stated that he was prepared to pay £25 for it. I replied, “ That is black-marketing, and as long as people like you are prepared to pay money to get the sticker the price for that article always will be higher than it should be “. He replied, “So what? I have the £25 and I want the sticker. Anyway, I did not start it “. That was typical of the attitude of people. The Government felt that by abandoning import licensing the flood of goods on the market would bring about more genuine competition. In any case, as the Acting Prime Minister pointed out, the proper way to control imports is by customs duties and not by licensing. But whether the lifting of controls has the results that it should have rests largely on the manufacturers themselves. I know that some manufacturers who complained that imports were harming their products imported, in those cases where they thought that advantage would accrue to them, the components to manufacture the completed article. They could import the components more cheaply than they could manufacture them here. To me that seems to be a particularly short-sighted policy.

I have a very interesting story to relate. Some two years ago a manufacturer approached me and asked me to make representations to the Minister for Trade with a view to having his import quota increased because he could not get by on his existing quota. Only a few weeks ago, the same manufacturer sent for me and asked me to make representations to the Treasurer to have the credit restrictions eased. I said, “ Why do you think the credit squeeze has been brought about? Do you not think that Australia’s balance of payments position has had a lot to do with it and that the import controls which you were very happy to see lifted have resulted in a flood of imports? Added to this, unfortunately, the price of our exports has fallen. These are the reasons why the credit squeeze is necessary.” But this man’s pocket has been affected and he, like other people, feels it there most.

The Acting Prime Minister on Thursdaylast announced measures which have been taken by the Government to overcome the balance of payments position. He announced export incentives including a remission in pay-roll tax and, in certain circumstances, income tax. He referred also to the lifting of the embargo on the export of iron ore. In my opinion, this should help to swell greatly our export income. He referred to the speeding up of the standardization of the rail gauge between Kalgoorlie and Fremantle and between Broken Hill and Port Pirie, and he mentioned the Government’s policy in relation to road development in the north.

I believe that this Government which has so successfully governed Australia during the past eleven years and which has been largely responsible for making Australia one of the world’s great trading nations and which has an unsurpassed record in employment, housing, immigration and social services, knows exactly what it is doing, and that when the people have the opportunity later this year to give their verdict they will again show their confidence in the Menzies Administration by returning it to office.

St. George

.- On Thursday last, the Leader of the Opposition (Mr. Calwell) moved the following resolution: -

That because the Government’s rapidly changing plans have failed to protect and develop the Australian economy and to safeguard our overseas funds and have caused grave confusion, dislocation and hardship to many sections of industry, both primary and secondary, and unnecessary suffering to many citizens, particularly those who have lost their employment - and there he might have added “ or their businesses “ - this Government does not possess the confidence of the Parliament or of the nation. 1 entirely agree with the sentiments expressed by the Leader of the Opposition in moving that resolution. This Government has indulged in a policy of stop and go to the utter bewilderment of the people of Australia. Let us take our minds back to February last year when the Government suddenly abolished import restrictions without warning, and to November when it suddenly introduced the greatly increased sales tax on motor vehicles and its very extensive credit restrictions.

Let me deal first with the increased sales tax on motor vehicles. The effect of that impost, added to the fact that credit restrictions were enforced at the same time, resulted in immediate panic in the motor industry, and in the course of a few weeks thousands of workers lost their employment in that industry. It might be all very well for the Government to say that most of them have been absorbed in other jobs -

I am not disputing that - but I believe many of them have been re-employed in jobs which carry a great deal less pay than those which they had to leave, and so the burden - if any - on the motor industry has been thrown on the working man.

When it comes to the point where the motor industry recovers sufficiently to reemploy the many thousands of workers who have been dismissed, I do not know whether the Government realizes that in that industry the labour turnover is terrific. Very few men are able to adapt themselves to the stark monotony of much of the work performed in the motor industry and therefore, as I have said, there is a very heavy labour turnover in it. When the several thousands who have been dismissed from the motor industry are re-employed the motor companies will have much greater expense in re-training and re-selecting the kind of people who will stay with them and do the monotonous work involved.

As a consequence of the Government’s actions one of the first reactions, of course, was that many thousands of workers were dismissed from the motor industry. I came to the conclusion then that the industry was using political blackmail on the Government. I am sorry to say that the Government has yielded to that political blackmail to the extent that it reduced the sales tax from 40 per cent, to 30 per cent, again. T do not know how many thousands of people bought motor cars in the period during which the higher sales tax obtained but I do know that the honorable member for Bendigo (Mr. Beaton) asked the responsible Minister a question about it. I believe that the people who bought cars during the period of the higher sales tax should have that extra tax refunded to them.

Mr McColm:

– What nonsense!


– The honorable member says “ What nonsense “. The Government should refund that money to the several thousand innocent victims of that additional tax. I believe that a confidence trick was played on the many thousands who bought motor cars during that period, and I repeat that the Government yielded to political blackmail on the part of the motor industry. If the Government did not intend to continue the higher taxation, why did it not say in the beginning, “ We do not intend to leave this higher taxation on for long, but only for two or three months “? Why take it out of the hides of the several thousand people who bought cars during that period? A great many of those who buy cars are on the lower rungs of the ladder. That is what the Government has done. I do not believe the Government contemplated using that measure as a means of raising additional revenue. Any member of the public who was guilty of misdemeanours similar to those committed by the Government in regard to the motor industry and the increased sales tax would have been charged with drunken driving.

In addition to the people who bought new motor cars during the period of the operation of the increased sales tax, it is worthwhile to mention those engaged in the second-hand motor car trade. Many of the latter practically went out of business because the credit restrictions made it too difficult for them to get money. Lending institutions refused to lend money for the purchase of cars more than five years old. As a consequence many hundreds of secondhand car dealers were dealt a heavy blow by the Government as a result of the way in which it increased the sales tax on motor vehicles. I had a ring on the telephone some five or six weeks ago from a gentleman who told me, among other things, that he had always been a supporter of the Liberal Party. He said that he had been continuously employed by the Ford Motor Com”.v ?t Lidcombe, Sydney, since 1936, a period of 25 years, and that during the whole of these years he had never suffered the fear of dismissal, but now the fear of the sack was hanging over his head. In his political ignorance, which is common to a large number of people, he blamed me for what had happened, but T soon disillusioned him on that point. It seems tragic that some one who has had a job continuously in the one place for 25 years and who has given the utmost loyalty to a particular company should suddenly find the sack hanging over his head.

Mr Anderson:

– Was he sacked?


– He was sacked about a fortnight ago. I want to refer now to the policy of the Government in regard to import restrictions, which were lifted in February of last year. Ever since that was done there has been a very heavy drain on our overseas funds. Everybody knows that a few years ago we had something like £500,000,000 or more to our credit overseas. And everybody knows from newspaper reports and statements made in this House that there has been a very heavy drain on our overseas funds. As a result of the abolition of import restrictions by the Government last February there is hardly a business in Australia, big or small, which is not down; but the small men are the worst hurt. The only people who are happy about what the Government has done are the big retail traders. Probably they had forewarning of what was going to happen and were able to arrange for credits overseas to finance the importation of luxuries and non-essential goods which the small businessman could not get. One has only to walk into any retail store in any capital city of Australia to confirm that fact. The Leader of the Opposition mentioned the importation of such luxuries as frogs legs in aspic. One thinks of tinned mandarines from Japan, but it is a long time since the revolution of Sun Yat Sen and there are no more mandarins in China. Otherwise we would have been importing canned mandarins.

How can it be practical for a nation of 10,000,000 people to abolish import restrictions? We are a happy dumping ground for nearly every big manufacturing country on earth. They want wool, and many of them are prepared to dump their products in Australia - products which are probably subsidized - in order to obtain supplies of Australian merino wool which is the best produced in the world. For instance, under the Japanese Trade Agreement, we have agreed to buy much more from Japan than we bought previously, but I cannot see how this small nation of only 10,000,000 people can possibly be expected to buy from the Japanese goods comparable in value to that of the wool which Japan buys from us. After ali. Japan buys from us only the wool sir: requires, and because she requires it. Th” day sh does not want our wool, she “‘HI in* buy another ounce from us.

A?a;n, we members of Parliament mingle with the people in our electorates, and in doing so meet the managers of the trading banks and of the Rural Bank and the Commonwealth Bank. I find from talking with these gentlemen that they are greatly worried, indeed at their wits’ end as the result of the policy forced upon them by this Government. For instance, they have been told that their customers must reduce their overdrafts. In many cases, these clients are personal friends of the bank managers. In others they are men who are struggling to build up a business, and I suggest that it is practising a form of refined cruelty for the Government to require these bank managers to do its dirty work for it. Under such a policy, the innocent are being forced to suffer with the guilty.

We also know that while many of our businessmen and merchants import essential goods there are many others who import non-essentials, luxuries, rubbish and even such dangerous weapons as a stiletto made to look like a ball-point pen, to which the honorable member for Barton (Mr. Reynolds) referred last week. I suggest that it is high time that some supervision was exercised over what is being imported into Australia.

Let me refer also to the extreme difficulty being experienced in raising funds not only to build homes but also schools and for the carrying out of local government works. While there is this difficulty in obtaining finance for such essential purposes, there still seems to be no obstacle in the way of obtaining finance to buy luxury hotels. Every day we read in the press that local government bodies are complaining that they are unable to obtain money with which to carry out much needed works and, because of this, are finding it necessary to increase valuations within their areas in order to obtain further revenue by way of rates. Even the television industry is being affected by the Government’s credit squeeze. Recently in Sydney there were some dismissals from this field and no doubt the same thing is occurring in Melbourne. There have also been dismissals from the electrical trade, which has been badly hit. It has been suggested that dismissed employees are finding employment elsewhere. If they are, it is certain that they are receiving less money than they did in the jobs from which they were dismissed. lt is not possible, in the time allotted to us, to mention all the matters to which we would like to refer but, in speaking to this censure motion, I do feel it necessary to make some mention of education. In common with other honorable members on this side, I have been inquiring into what is happening in other States in connexion with education. Like those others, I am convinced that there is great need for an inquiry into the whole field of education in order to bring about some uniformity of facilities and conditions. For instance, I find from inquiries that the school-leaving age in Victoria is fourteen years, in New South Wales fifteen years and in Tasmania sixteen years. This alone points to urgent need for adjustment even if it should mean that in the long run the Commonwealth Government will become the controller of education for the whole of Australia.

When speaking the other day, the Acting Prime Minister (Mr. McEwen) said that the Australian economy was like a sailing ship, and that under existing conditions a certain amount of tacking and turning was necessary. He also said that this economy was not engine-motivated, that it was influenced by external circumstances. I suggest it is high time we were not influenced so much by external circumstances, and that it is time we stopped using the vehicles of. the nineteenth century. Here, perhaps, it is appropriate that I remind honorable members of the following remarks by the honorable member for Melbourne Ports (Mr. Crean) recorded at page 105 of “Hansard” for 9th March, 1961-

Now, here is where you get the basic cleavage between this side of the House and that. You on the other side are prepared to allow a certain amount of unemployment to develop, but you are not prepared to interfere with certain other people’s economic freedom in order to reduce the flow of goods and services into this country. Apparently it is not considered interference with freedom when thousands of people lose their jobs altogether. That is regarded as just the inevitable working of economic forces. I suggest again that that outlook pinpoints and highlights the difference between this side of the House and the other.

In the press to-day I read that there has not been any significant change in the unemployment figure for this month as compared with that for February. I challenge that statement. While the figures mentioned might be a true statistical record, they do not reveal the true position. For instance, we find no mention of the fact that thousands of workers do not register for unemployment immediately they have been out of work for one week because they st iii live in hopes of obtaining other jobs. In some cases they find employment for one day and, if a man with a wife and family earns more than £6 2s. 6d. in any week, he is debarred from registering for employment until the expiration of one week after the last day on which he was employed. The figures quoted do not take these facts into consideration and therefore do not reveal the true state of unemployment in Australia. To argue that they do would be as logical as arguing that sitting in front stalls of the Folies Bergeres brings on bald-headedness because the majority of the men who sit there are bald-headed.

Here I should like to remind the Government of a piece of sound advice given by one of the characters in Shakespeare’s “ Hamlet “ to his son. I refer to the advice given by Polonius to his son Laertes on the eve of his departure for France, when he said -

Neither a borrower nor a lender be

For loan oft loses both itself and friend.

If ever a government distinguished itself for borrowing, it is this one. It seems to live from day to day in the hope of raising further loans. I emphasize that this is the twentieth century, yet the Acting Prime Minister compares our economy with nineteenth century vessels. To-day, instead of sailing ships, we have modern oilburning motor vessels. As against the road transport conditions of the nineteenth century, we now have congested highways, and just as there is great need for law and order on those congested highways, so is there an urgent need for law and order on the financial highways of Australia. I suggest that the time has come when, irrespective of whether the Government likes it, there is urgent need for control over imports. We must have those controls if we are to cope with the traffic on the financial highways of to-day, and if the Commonwealth Government needs more power to impose those controls, then it should have the courage to seek that power from the people by way of an amendment of the Commonwealth Constitution.


.- Listening to the speeches of Opposition members on this want of confidence motion, one wonders whether they were informed by our large newspapers or our large newspapers were informed by Opposition members. Their statements are particularly confused and far from the truth. The honorable member for St. George (Mr. Clay) mentioned the motor vehicle industry and suggested, amongst other things, that pressure and criticism from the motor vehicle industry forced the Government to abandon the additional sales tax on motor vehicles. We all know that the Treasurer (Mr. Harold Holt) said that the additional sales tax was imposed for the specific purpose of reducing the number of motor cars in use and when that purpose had been achieved the tax would be removed. I do not think that any one at the time the tax was imposed realized that our supposedly responsible press would panic the community to the extent it did and so make the measures adopted by the Government more severe than they were intended to be. I shall revert to this point in a moment.

The honorable member for St. George said that the additional tax could have been stated to have been imposed for a specific period - say, three months. Would any person buy a motor car if he knew that the additional tax would be removed at the end of three months? The suggestion is utterly ridiculous! The honorable member referred to employment. Of course, we are very concerned about the employment position. I would state very definitely that if these measures had not been introduced, we would have had disastrous unemployment in Australia. We undoubtedly have some unemployment, but it has not reached the proportions alleged by the press and Opposition members. The figures for February have just been released and they show that over the whole of Australia 1.7 per cent, of the work force is unemployed. I know that Opposition members say that not every one thrown out of employment registers, but this argument has applied at all times. The figures for the various periods, therefore, bear a relationship to each other.

Taken on a world-wide basis, our employment position is really extraordinarily good. In February. 7.7 per cent, of the work force in America, a great and wealthy country, was unemployed. The position in Canada was about the same. This compares with 1.7 per cent, in Australia. The measures adopted by the Government here are designed to safeguard employment. Although it has been stated by the Treasurer, very few people realize that 75 per cent, of our imports to-day consist of raw materials and part-processed goods, and if we could not maintain the flow of these imports we would have disastrous unemployment.

It has been said that we should not have removed import restrictions. This line has been followed by the press, and unfortunately the press seems to be in the hands of groups of people who profit by inflation. I refer to such people as land developers. No one has mentioned the position of primary producers who suffer from inflation. Import restrictions were removed so that manufacturers would have free access to the cheapest goods available and so be able to reduce costs. This has been done. It must be clearly understood that the removal of import restrictions was a great forward move and we were compelled to remove the restrictions as a contributor to Gatt. It is part of the code of Gatt that import restrictions should not be applied unless they were necessary to right an imbalance of trade.

As my friend, the honorable member for Richmond (Mr. Anthony), has pointed out, the position is not so serious as to warrant the re-introduction of import licensing. The tremendous sur,ne of imports that we experienced was caused mainly by the increased funds in the hands of the public following the basic wage and margins cases of 1959. and undoubtedly the public has some desire for imported goods. The import of goods previously not subject to licensing has increased by 32 per cent., but the import of goods previously licensed but now free has increased by only 23 per cent. This suggests that factors other than the removal of import licensing have caused the tremendous drop in our overseas balances. Previously, 60 per cent, of our imports were not subject to licensing and restrictions have been removed from a further 30 per cent. Licensing still remains on 10 per cent, of our imports. I am again indebted to my friend, the honorable member for Richmond, for the information that these goods are mostly supplied by Japan, which is not a member of Gatt.

Opposition members, when they talk about unemployment, have a very weak case to present. We have many recent instances of strikes which disrupt our economy. We had a power strike in Victoria. The Victorian Labour Party tried to call it off, but the workers went ahead and had their strike. Power was cut off and the whole of the community suffered inconvenience. In Queensland, it is intended to hold a strike in the next day or two in protest against new arbitration provisions. This strike has been condemned by some of our far-seeing right wing unions, which realize that strikes mean unemployment and disruption of community life. But what do the members of the Australian Labour Party care? In these matters the Communist Party of Australia dictates to them and they have no say whatever.

A week or so ago, the Treasurer came to Queensland and appeared on a television programme called “ Meet the Press “. He was very impressive and he convinced those who saw him of the worth of this Government’s policy. He also met a delegation from the Queensland Trades and Labour Council. As every one knows, Mr. Deputy Speaker, that council is run by the Communists.

Mr Uren:

– The president is a member of the Australian Labour Party.


– The council is run by the Communists. The president of it may not be a member of the Communist Party of Australia, but he is one of those people who aid that party by not being a member of it. He is an under-cover member of it. Dawson, the previous president of the Trades and Labour Council, was an avowed Communist. MacDonald, the present secretary of the council, is an avowed Communist. We may be sure that the Communists would1 not install as president of that council a man who was not a Communist sympathizer. The Treasurer met a deputation from the council, as I have said. To anybody who has read an account of that meeting, it is obvious that the whole thing was just a political gesture on the part of members of the council. They were not concerned with the unemployed as they suggested.

Every one knows that Queensland is suffering more than are the other States. We in Queensland are .probably in a position different from that of people in most other parts of Australia. We have suffered from 40 years of socialist government, for a start, and we have not been able to build up our industries. We have suffered as a result of the previous Labour Government’s policy of soaking the rich. Before the uniform tax system was introduced, we in Queensland had the highest incidence of income tax in Australia, and that was the most expensive State in which to die. Consequently, no manufacturer or wealthy retired person viewed Queensland very favorably. The State is suffering as a result of all these factors, and it has not developed as much industry as has the south. The timber industry in Queensland has suffered not only from restrictive policies but also from over-expansion in the industry, as has been stated in a report by the Tariff Board. But I believe that relief can be given to this industry.

Employment in Queensland is subject to seasonal fluctuations. We hope for a degree of relief in this respect. People must not forget the factor of seasonal employment in Queensland. We have heard quoted the numbers of workers in the meat industry and the sugar industry who are said to be out of work as the result of this Government’s economic policies. Such statements are utterly ridiculous. The position of these seasonal workers is taken into account in the awards made by the arbitration tribunals. Those awards are loaded in order to counter-balance these seasonal factors. We must remember that.

The position in Queensland is not so bad as it is made out to be, Sir. I know that the loss of jobs as a result of these factors which I have mentioned is a bad thing. But I remember a strike of meat workers in northern Queensland for the whole of a killing season a few years ago. As a result of that strike, every grazier in northern Queensland had to hold his cattle for another year. People do not remember those things, but Opposition members in this Parliament would do well to remember hem.

Mr Hamilton:

– There was a waterside strike in Fremantle recently.


– I am indebted to the honorable member for reminding me of that strike, which disrupted the whole of the shipping trade on the coast of Western Australia. I understand that it was caused by a dispute between two unions. There is no alternative to shipping for the transport of goods and people along much of the coast of Western Australia. The whole of that shipping trade was disrupted and the jobs of many people were affected, but because the strike resulted from a dispute between two unions, no mention of it is made by Opposition members in this House. We hear no condemnation from members of the Australian Labour Party.

Recently, there was a dispute between two unions as a result of which production at the works of the Broken Hill Proprietary Company Limited, in Newcastle, was disrupted. Somebody put in a crane a few bolts which should have been fixed by a member of another union. As a result, the greatest industry in Australia was disrupted for a few weeks and vital supplies of steel ceased to flow into our economy. This steel was needed for development projects and various works. I know that local government works in Queensland were delayed because much-needed supplies of steel failed to arrive. As a result of the shortage of local steel, substantial quantities had to be imported, although Australia was in a desperate position in its battle to limit imports, the continued flow of which was aggravating our balance of payments position.

I believe that there are signs that the Government’s measures are winning the day. There are signs that they are succeding. I saw published to-day a report that the advances of the trading banks had decreased by, I think, £50,000,000, and that their deposits had risen. Does that indicate that the economy is being ruined or is retrogressing? This Government will succeed in its efforts to bring stability to the Australian economy.

Many ridiculous statements are made. Unfortunately, as I mentioned earlier, not all our newspapers are responsible. I am thinking in particular of major newspapers such as the “ Sydney Morning Herald “, the Sydney “ Sun “ and the Brisbane “ CourierMail “. Their attitude towards the Government’s economic measures has been com pletely irresponsible. When these measures were announced, on 15th November last, the Sydney “ Sun “ came out with large headlines in letters about 3 or 4 inches high, using the words “ chaos “ and “ ruin “ and words of similar meaning. The “ Sydney Morning Herald “ followed suit, and these newspapers panicked the community. As a result of their panic, small investors on the stock exchanges sold out. They lost tens of thousands of pounds because of the panic engendered by our so-called responsible press. The business world should take note of this, because we want the small investors to invest in industry and play their part in it. If a newspaper like the “ Sydney Morning Herald “, on which, unfortunately, the people still put a lot of reliance, panics the small investors, we shall not have them investing in industry and sharing in the fruits of our prosperity.

The Brisbane “ Courier-Mail “ sank to depths even lower than those reached by the Sydney newspapers. A few weeks ago, that publication reported that remarks on the Government’s economic policy made by the Treasurer to a meeting of the Government parties in this building were received with gales of laughter. That was a complete lie and I have no knowledge of its ever having been retracted.

Mr Reynolds:

– I could not imagine the honorable member laughing.


– I was not laughing. This same newspaper, dealing with the efforts of the Minister for Trade (Mr. McEwen) and the Government to stimulate the interest of the community and promote efforts to export, published on its second page a feature article written by an alleged former official of the Department of Trade. That article made all sorts of wild statements that the writer was unable to get a licence to export 100,000 blankets, or something of the sort. Those were ridiculous statements and they constituted a very serious reflection on the Government’s policies. The Minister for Trade wrote a reply to the article, and it was published - but on page 11 instead of page 2, where the feature article had appeared. When one compares the text of the Minister’s reply with that portion of it which was printed, one can see that about half of it was cut out. I am not surprised that half of the article in reply was cut out, because it was most damaging to the newspaper. The article pointed out that there was no record that this alleged official had ever been associated wim the Department of Trade. It said that when he was a member of the Public Service prior to 1955 there was no such thing as the Department of Trade. It is unfortunate when our press, by making wild statements, joins with those small groups in the community which favour inflation and profit from it at the expense of the whole community. This is particularly reprehensible in the case of the “ Courier-Mail “, because above its editorial in every issue appears the following quotation: -

Our liberty depends on the freedom of the press, and that cannot be limited without being lost.

That is a quotation from a very good source but, after all, it is a fact that any confidence man endeavours to cloak himself in the mantle of respectability. I have no doubt that somewhat similar considerations apply here, too.

A great many wild statements are made about people engaged in our export industries, particularly primary industries, being refused credit. Unfortunately, the Australian Broadcasting Commission ‘three weeks or a month ago said in a broadcast that graziers in western and central-western Queensland were unable to re-stock owing to credit restrictions. Since then I have been endeavouring to find even one such case. I have gone to all the sources most likely to be possessed of such information, and I have failed to find it. I have invited people at public meetings to tell me of such cases, I have written to people who, I have been told, knew of instances, and I have yet to find somebody who has been grossly upset by the credit restrictions. Recently I had a case in my electorate of a man in heavy industry - he has a small welding business - who showed that he had very good grounds for claiming that his credit had been reduced. I am investigating that case, but it is the only one I have found. Incidentally, he said that he had had to dismiss, I think, six employees. I asked him whether they were still out of work, and he told me that they had immediately found other work. The same applies in many other instances.

The motor car industry is being cited as one in which employment has been affected by credit restrictions. I point out that the motor car industry is notorious for overexpansion. In America every few years millions of motor cars ‘are unsold. To-day in America there are 1,000,000 new motor cars that cannot be sold. Expansion in the motor car industry in Australia has been tremendous. We all know what happens in the grazing industry. As a result of a number of good seasons some growers are encouraged to overstock, and when a bad season comes they suffer the consequences. The same applies in any industry. The difference is that secondary industry employs more people than are employed in the primary industries.

The employment figures for General Motors-Holden’s Limited have been quoted here. That company was employing 41,500 people on 30th June last year. At the end of October it employed 43,000-odd. As a result of -recent dismissals its employment figure is back to where it was at 30th June last year. I think that honorable members will realize that that company was making the most of the great prosperity of Australia.

Mr DEPUTY SPEAKER (Mr Brimblecombe:

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


– We have just listened to the honorable member for Mcpherson (Mr. Barnes) telling us that everything in Australia is in a glorious condition. According to him there is nothing wrong with Australia, but if there happens to be anything wrong it is all attributable to those wretched Communist trade union leaders who lead the great bulk of trade unionists around by the nose. If it is not the Communists and their trade union friends who are responsible for what is wrong then it is the capitalist press with its tremendous prejudice and bias against the Government. And if it is not the press it is the Australian Broadcasting Commission. He went the full distance, and said if it was not the Australian Broadcasting Commission it was the representatives of the manufacturers who were warning this Government that it was on the verge of bankruptcy if it continued with its present policies. In other words, everybody in the community is wrong, bar the Government.

That is a happy state of affairs, and I am quite prepared to live with it, particularly if there is an election in the offing.

The honorable member for Mcpherson, after criticizing everybody, walked out of the House a moment ago. In his speech he went on to say that if the Government had not applied its present economic policy there would have been disastrous unemployment. But he did not go on to remind us that the reason that there would have been disastrous unemployment is the gross misjudgment and mismanagement of this country’s economy twelve months ago when the Government opened our doors to a flood of imports. It allowed imports to flood into a country that could not afford to import to such an unbridled extent. The honorable member talked about graziers over-stocking but he did not refer to the Government’s allowing this country to buy goods overseas which it cannot afford to buy.

The Government poses before the Australian people as the rescuer of Australia, but it forgets to tell the people that the things from which it is rescuing them are the disastrous results of the Government’s own policy.

The honorable member for Mcpherson went on about the reduction of prices caused by the importation of goods and the freeing of import controls. Typically, he did not cite one example of reduced prices: In fact, the various cost of living tables show no reduction in the cost of living. In the honorable gentleman’s own State, Queensland, and in some other States also, there have been continued increases in the cost of living. I defy any honorable member to point out any sizable reduction of price for any worth-while commodity to-day which has resulted from the freeing of imports. Probably the only appreciable result of the freeing of imports is that there are more goods available, with goods being imported perhaps at reduced prices - but the reductions are not being passed on to the public. There is no evidence of the tremendous competition that was supposed to produce efficiency after imports were freed.

The honorable member went on to talk about the terrible scourge of strikes and their effect on the economy. It is only a week ago that somebody else was giving this Government the credit for an unprecedented period of peace in industry.

Mr Haylen:

– They are a lot of liars.


– Order! The honorable member for Parkes will withdraw that remark.

Mr Haylen:

– Yes, Sir, I withdraw it.


– I do not want to traverse the whole of the speech made by the honorable member for McPherson, but I must refer to one other thin» that he said. He referred to Queensland and its long-term Labour rule, and blamed the present difficulties of Queensland on past Labour governments, despite the fact that fifteen out of eighteen federal members from Queensland are on the Government side in this chamber. The honorable member for Macarthur (Mr. Jeff Bate) is trying to bait the people by taking 22 back-benchers to Queensland and the north of Australia to show them the prospects and potentialities there. So I suppose that after twelve years of mis-government by this Liberal-Country Party group honorable, gentlemen opposite will come up with propositions about the development of the north next year. That is typical of their lack of realism, because they probably will not be in office to implement any kind of proposal.

The honorable member for Henty (Mr. Fox) said that Australia’s prosperity was unsurpassed by that of any other country. If he looks up some of the figures about productivity he will find that, compared to some other up-and-coming countries, Australia is not doing so well. I refer to the percentage increase in industrial production which is a pretty good indicator of the country’s progress. From 1953 to 1958 the industrial production of Australia increased by 33 per cent. That is not too bad, but it is not as good as Government members would have us believe. The corresponding increase in West Germany was 52 per cent., in France 53 per cent., in Italy 43 per cent., in Japan 69 per cent., and in Russia 70 per cent. Those figures are some indication of the improvement made by other countries which are in competition with Australia. Except in respect of Australia, my figures are from the National Institute of Economics and Social Research, London. The figures for Australia are from the Australian and New Zealand Bank Index of Factory Production.

I shall cite only a few indicators of our so-called unsurpassed prosperity before I dip into the present situation regarding employment, housing and public utilities. The January bulletin published by the Treasury puts loan raisings by this Government in the first half of 1960-61 at £57,800,000. That indicates the amount of confidence that the Government has engendered in the Australian lending public! It was able to raise only £57,800,000 compared with £94,600,000 for the corresponding six months of the previous year. In its moments of calamity, this Government is frequently asking what the Australian Labour Party would do if it were in office. In the first place, the Labour Party would never have put itself in the position in which the Government now finds itself. That is clear from what Labour spokesmen said at the time import restrictions were removed and other parts of the Government’s economic policy were initiated. In any case, the advice given to this Government over recent years has not been accepted or has been accepted too late to be of value in remedying the situation.

For a number of years, not only the members of this party but other responsible people in the community, including economists, have been pleading that the Government should establish some plan of national development - that there should be a co-ordinated, integrated plan of development. In 1954, and probably even before that, there was reference to the dangerous effects on the financial set-up of the advantageous position of notes and debentures as against shares. The Government was warned that the growth of hire-purchase companies and other financial institutions outside the banking system was in a large measure attributable to the fact that interest payments on loan raisings by way of debentures and notes were taxable deductions for the companies concerned whereas investments in shares were not. Now, seven years later, after typical procrastination the Government has been brought to its knees and forced to try to do something about it. Even now, it is backing and shifting on what it should do about the deductibility of interest paid on notes and debentures.

Time after time, the Labour Party has referred to the dangerous growth of monopolies and restrictive trade practices but still there is no legislation before the House on this subject. The Attorney-General has had to canvass the opinions of various State governments in order to get some kind of protection for the people against this parasitic growth that has contributed to the inflationary spiral over recent years. Government supporters have decried our plea for closer relations with our Asian neighbours. Even at question time to-day, the Government, by implication, decried our suggestion that we should recognize the most powerful Asian country of all - China. The Government is sending trade commissioners to al! parts of the world except to the most powerful nation in the whole of our Pacific area. Trade representation there is precluded by the fact that we do not even officially recognize China.

On this side of the House we do not necessarily support China’s kind of government any more than we support the kind that Russia has or the kind that Chiang Kaishek provided for his people. Bui we accept the governments of those countries because they are the effective instruments of government. This Government, in its petty political way, denies our people the opportunity to trade with China except by sneaking to the back door when nobody is watching and shovelling in a million bushels of our surplus wheat or some wool. It will continue to play its little political game until it is given different orders from Washington.

The Government has resisted pleas from every section of the Australian community that it should regard education, particularly technical education, as a matter of national importance which is tied to the economy and to the welfare of the Australian people. The Government has resisted those pleas year in and year out, but I do not know whether the Australian people will give it many more months in which to resist them.

I was at a conference in Sydney last yea at which primary producers, industrialists, professional people, commercial people and every other section of the Australian economy was represented and that conference unanimously called upon the Federal Government to provide emergency aid for Australian education. The way has been shown by the United Kingdom and by Russia which recognize that their educational system is intimately connected with their economy. Now, President Kennedy has recognized the needs of education by providing, for the next three years, 2,200,000,000 dollars for education to supplement earlier allocations amounting to the equivalent of £A.450,000,000. He has done this in order to provide more qualified teachers and better school facilities to help America to compete in the world economic struggle as well as in the world social and philosophical struggle. There is a federal government that recognizes its responsibility and is doing something about it!

Government supporters applaud what West Germany has done. I have not been there, but I have talked to educators who have been there and who have had intimate contact with the education system. They all speak of the tremendous importance that West Germany places on technical education. It is pre-eminent in Germany. Scientific research and educational programmes are tied up with the stupendous development of West Germany since its defeat in World War II.

Government supporters ask what Labour would do if it were in office. Surely it is clear that a Labour government would take positive action. The things that the present Government has done belatedly should have been done long ago. The granting of tax concessions to exporters, now a Government proposal, was suggested at least two years ago by the Government’s export promotion people. It has taken the Government all this time to consider the matter. To act belatedly is almost as bad as not acting at all. There is no co-ordinated plan for development. The Government paid no attention to our warnings about the kind of investment that was coming in from overseas. It now recognizes that a lot of this investment was inflationary, that it was not productive, and that it helped the land boom and saddled unfortunate people in municipal government with all sorts of burdens, and so saddled the taxpayers with tremendous rates.

The Government uncritically and unquestioningly accepts everything that comes its way, whether it is a dollar or any other kind of money. The purpose to which the money is directed does not seem to concern the Government, lt all seems like going the wrong way about trying to teach a young fellow to swim. You can go about the task methodically and follow a scientific routine, or you can push the young fellow into the middle of the pool and say, “ Get out. If you do not you will drown.” Then when he does not look like getting to shore you bring in some pumps and take away the excess liquidity. You suck the whole pool dry. It seems to me that that is the sort of thing the Government is doing with the Australian economy. You have thrown the Australian people, the manufacturers and employers into the middle of the pool and sard, “We have abolished all restrictions on imports. We have done away with all that sort of protection. Get yourselves out of your difficulties.” When these people were trying desperately to get on to firm ground, the Government has clamped restrictions on them and has hit everybody. Talk about a free enterprise economy! Yet the honorable member for Mcpherson has told us that anybody who is deserving of bank credit can get it.

I know personally of young persons who have won ballots for land in Queensland to enable them to start beef production, but who could not get one penny from the Commonwealth Development Bank or from any government instrumentality. They were passed on to the pastoral companies which, to their credit, have helped as best they could. I know one young fellow, a close relation, in Queensland who rs trying his best to make use of land that he won in a ballot. He has been unable to get assistance, and his is a typical case. The periodical “ Muster “, which deals with rural matters, has reported that because of the credit restrictions, farmers are unable to buy store cattle to replace fat cattle that they have sold. I know of many farmers who want to improve their pastures and they have been denied finance by the Commonwealth Development Bank and other instrumentalities, just as various timber interests and others have been denied bank advances. Yet this Government tries to convince the people that it has not done anything to the Australian economy, and that there is nothing wrong at all. The fact is that we have had a catastrophic fall in overseas balances to £299,000,000. We remember that only three or four years ago - in 1956-57 - our balances were as high as £567,000,000. If we go a comparatively few years further back we recall when our balances totalled over £800,000,000 but they have been dissipated. Soon we will have import controls again. Everybody is buying all sorts of things, essential and nonessential, just as they did in 1951-52. We squandered our reserves and then when we wanted essential goods to help in the development of Australia, they were not available to us.

Like the honorable member for St. George (Mr. Clay), I challenge the figures relating to unemployment that have been issued. I say quite seriously that I do not think they show the true position. My office is in the same building as a Commonwealth employment office. 1 see people sit there for hours. They do not get a chance to see the officer and they go away. 1 would say that on a conservative estimate one-third of those who call at the Kogarah employment office walk away without registering. They are not prepared to wait just to get the unemployment benefit. A single adult male is allowed £3 5s. a week and a female £2 12s. 6d. with an additional 12s. 6d. for a child. God help the big families. They do not get anything for tV second, third, fourth or subsequent children. The allowance has stayed at those levels for years. The employment officers are snowed under. From my observations, I would say they are all decent, capable people but with the best will in the world, they cannot help everybody. They cannot interview unemployed persons for longer than five minutes. Instead of getting out among industries to observe production and ascertain where workers are likely to be required, they can only register people as best they can. All other activities have gone by the board so far as I can see. It is typical of the Government that there has been no recruitment of employment officers to reinforce the staff of the Commonwealth Employment Service to meet the current situation. The same few people are trying desperately to cater for the growing numbers of unemployed.

Housing has been struck a sorry blow. Just when we seemed to be coping with the problem, the value of new buildings approved fell in December last by 28 per cent, compared with the figures for November. The value of new houses and flats, apart from other buildings, fell by 20 per cent. The value of all other new buildings approved for construction fell by 38 per cent. That decline must leave its mark on the community. Possibly there is no gross unemployment at present, but all the seeds have been sown and they will germinate in the next few months. Unhappily, there will be a substantial increase in unemployment. Last December, the number of houses under construction was the lowest in seven years. At the same time, those who attended the Citizenship Convention in Canberra were confronted with a plan to increase our quota of immigrants over the next five years. We had a fiveyear plan for immigration but no integrated plan to provide housing, education facilities or other amenities.

Under the credit squeeze, not only the persons who import non-essential goods are affected. Even the Acting Prime Minister (Mr. McEwen) has acknowledged this fact. The people who have to pay are the masses of the community. People whose jobs are hanging by a thread are dependent on the Government’s economic measures to stop imports entering the country so that their jobs c°an be preserved. What a dilemma the Government is in. If it relaxes credit restrictions, imports will rise and it will be faced with the same old problem. If the Government retains the present credit restrictions, it stands a good chance of creating the unemployment about which Sir Douglas Copland and others have warned us. Unfortunately, all these things could very well happen.

I cannot speak about all the matters 1 wish to discuss, but I shall offer some positive suggestions. First, it is absolutely essential that selective import controls should be re-introduced. Secondly, we should step up our trade promotion programme. Appropriate measures would include taxation concessions to exporters. In that respect, the Government has done the right thing so far as it goes, but this is a long-term plan. The immediate objective is to stop the rot. We should help trade promotion by an extension of trade commissioner services particularly in Asia. We must also solve the political problem of what to do about recognition of China. We should go beyond the establishment of insurance facilities for our exporters. Like other countries, we should provide credit facilities in Asian countries which want to buy our goods. I have had representations made to me personally by a firm which makes high-class optical equipment. It can out-bid Germany, Japan and the United States of America in price and surpass the quality of goods from those countries. Some people from Pakistan have examined this industry and have been trained in it. Their only worry is that they might have trouble in raising sufficient credit to establish the business in their own country. In the first six months of this financial year, we are raking in £56,500,000 in customs duties. It would not be a bad idea to devote that revenue to a fund to help provide shortterm credit at reasonable interest rates to purchasers of our goods in Asian, countries. Once we get a foothold, our trade will grow.

I suggest also a full-blooded drive to encourage tourism. We should not humbug around with a vote of £200,000. If we are fair dinkum, let us get right into this field and try to help those people in our own country who are catering for potential tourists. Credit must be made available for those who produce in Australia goods that we are importing from overseas.

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.


.- I do not know whether the members of the Parliamentary Labour Party expect the Government to take their censure motion very seriously. During the debate this afternoon, even when their own speakers were on their feet, the Labour Party has been able to muster only about eight of its members to sit in the chamber and listen to the debate. The leader cf their party has not been in attendance in the Parliament at all this afternoon while the debate has been going on. notwithstanding that he moved the motion to censure the Government because of its financial policy. I cannot understand, therefore, how the Government can be expected to take this censure motion very seriously.

I make that statement for another reason also. About two weeks ago the Leader of the Opposition (Mr. Calwell) appeared on a “ Meet the Press “ television programme in Queensland. When cornered by the panel of interviewers and asked what he would do if he were in power and his government were faced with the economic problems that the present Government has had to face, the Leader of the Opposition said to the people of Queensland, “ We would do much the same things, but we would go further.” Those were his words. Yet, within two weeks of making that statement publicly, he comes into this House and moves a motion of censure on the Government.

What does a censure motion actually imply? When the Opposition moves a motion of censure on the Government it implies that in its opinion the Government should be voted out of office and the Opposition should become the Government. That is the essence of a motion of censure. If we take this motion seriously we must consider the possible position if the Australian Labour Party were to form a government at this time. In considering whether or not the members of the Labour Party are fit to form a government, we must consider a number of matters with regard to that party and its constitution. We must consider what the party represents, and we must decide who are the people whom the party represents in this Parliament. If we were to ask the members of the Labour Party in this Parliament whom they represent they would tell us that they represent the members of the trade union movement. This claim, however, is not borne out by the facts. If we were to ask them who were the people who voted for the Labour Party they would tell us that they were supporters of the Labour Party. This contention also is not borne out by the facts. Actually the Labour Party gets a minority of the votes of the people of Australia, and they are the votes of people who are not prepared to vote for the Liberal-Country Party coalition. There is a difference between a vote for the Australian Labour Party and a vote against the Government. The great majority of the votes polled for Labour Party candidates are not really polled for those candidates; they are polled against the particular Liberal or Country Party candidates involved.

When the members of the Australian Labour Party in this Parliament tell us that they represent the trade union movement, I can answer them by saying that events in Queensland in recent times prove conclusively that the Australian Labour Party no longer represents the trade union movement. In fact, only this week in Queensland the trade union movement has, in effect, passed a vote of no confidence in the Australian Labour Party in that State. The representatives of 31 unions in Queensland supported the vote of no confidence in the A.L.P. representatives in the State Parliament of Queensland. More than half the workforce in Queensland has supported them in this action. Taking into consideration the voting strength of the working force, it is obvious that a great many trade unionists vote for the Liberal Party, that many of them vote for the Country Party, and that many vote for the Democratic Labour Party or the Queensland Labour Party. Some vote for the A.L.P., not because they think the A.L.P. is any longer fit to represent them in the Parliament, but simply because they have no acceptable alternative.

Let me direct the attention of the House to headlines that appeared in the Brisbane “ Courier-Mail “ yesterday, which said -

More than half working force involved. State-Wide Strike Called in Protest Over Bill.

This is a bill which was introduced into the State Parliament by the Country-Liberal Party Government, and the Trades and Labour Council in Queensland, not with the goodwill and not at the wish of the central executive of the Labour Party, and not at the wish of the members of the Australian Labour Party in the State Parliament, and even contrary to their wishes, has called on this strike. The Trades and Labour Council, through the representatives of the 31 unions concerned, voted for a half-day’s strike in protest against the bill, because those unions considered that the Australian Labour Party was not competent to fight the bill in the State Parliament.

But there is a degree of anarchy involved in this matter, because ‘the Minister who introduced the bill told the representatives of the trade unions, when they met him in a deputation, that he would consider many of the matters that had been put forward by them, and that he would place them before Cabinet - and that is being done today. The Trades and Labour Council, however, is a Communist-dominated organization, as I will prove, because I have here the official records of that body for 1959 and 1960. These documents are not facsimiles. They are the true, official records of the organization in Queensland. This Communist-dominated organization has been responsible for calling the strike. As I said in this House the other night, the Labour Party no longer has the confidence of the trade union movement, because it has not been prepared to fight in the trade unions against Communist infiltration. To-day, the Communists are actually dictating Labour Party policy, as again I would prove this afternoon, if I had the time, by quoting people who are representatives of the Labour Party executive, and who are doing what they are told by the Communist Party.

Mr Allan Fraser:

– Did you steal those books?


– I did not steal them.

Mr Allan Fraser:

– Where did you get them?


– That is the 64-dolIar question, which I certainly will not answer in this House. Let me get back to the matter of this strike. More than half the workers in Queensland will go on strike to-morrow because the Communist-dominated Trades and Labour Council has called the tune. At this time, when the Labour Party in the Commonwealth Parliament is telling us that there is a financial crisis in the country, and that people are unemployed and on the breadline, the workers in Queensland are going to lose £300,000 as a result of an irresponsible strike called on by the Trades and Labour Council, a Communist organization.

Not all unions, even though they are affiliated with the Trades and Labour Council, are prepared to allow their members *o be called out on strike. According to headlines appearing in to-day’s Brisbane “ Courier Mail “, the Federated Ironworkers Association will not take part in the Queensland strike. The representatives of that union have made a statement that it is a political strike. They have said it is not an industrial strike but a political strike called by a Communist-controlled Trades and Labour Council. Would anybody in this House suggest that the Federated Ironworkers Association was not a militant union? As we all know, it is one of the most militant of unions, but at least it has had the courage, in this instance, to come out and stand against the Communists, and that is something which other members of the Australian Labour Party, particularly those who sit in this Parliament, have not had the courage to do.

It is for these reasons that I say emphatically that sitting on the other side of this House are the representatives of an almost defunct political party. It is a political party that has been waning steadily over all the years since the end of World War II. It is a political party that will continue to wane and to lose seats in this Parliament. It will lose them not necessarily because the Liberal-Country Party coalition is gaining in favour. The swing of the political pendulum suggests that the Government should have been changed years ago. In politics the pendulum always does swing. But why has the Labour Party, even in the last election, continued to lose seats? The reason is that the Labour Party no longer speaks, in any Parliament in Australia, for the trade union movement. It is now dominated and controlled by the Communists, the emissaries of Moscow, who have taken control of the trade union movement. They have combined unions in groups so that they can exercise even greater control than they have had in the past.

Let me inform the House about the Trades and Labour Council in Queensland, and let me name the people who are principally responsible for dictating Trades and Labour Council policy in that State. When I name a man as a Communist let it be understood that T do not base my statement on hearsay. Any man on the list which I shall read whom I call a Communist is a man who has a current membership ticket in the Communist Party of Australia and has attended a meeting of the Communist Party within the last twelve months. Among those whom I shall not call Communists are some who have held tickets in the Communist Party but have not attended meetings within the last twelve months and have now given it away. The president of the Queensland Trades and Labour Council is John Egerton, a man who sits on the Queensland Central Executive of the Australian Labour Party and who has been described by Labour members of the Legislative Assembly in the Queensland State Parliament as a rat. But this man sits on the Queensland central executive and helps to make the policy that is dictated to members of the Australian Labour Party. This man is not a member of the Communist Party of Australia because if he were he no longer would be any use to the Communist Party in Queensland and would be dropped. He is president of the Trades and Labour Council because he is the useful tool of the Communist Party in that State. It pleases the Communist Party to keep him there even though I heard a Labour man describe Egteron as a person to whom he would not give a job even as an office boy. In this man’s opinion John Egerton is a “nong”. I quote his exact words.

There is Mr. F. O’Brien, of the Sheet Metal Workers Union, who during 1958-59 did not attend one meeting of the Trades and Labour Council, but at the end of the year when the election of officers for 1960 was held was re-appointed as treasurer. I remind you, Sir, that no election of any description took place; this man was reappointed as treasurer of the Trades and Labour Council. There is Mr. Arnell, of the Waterside Workers Federation, who won his position on the executive of the federation on the unity ticket that has been displayed in this Parliament - the same unity ticket of waterside workers as was used in 1958, 1959 and 1960. Now, because of the agitation of the Communist stooges in the trade unions who lobbied for this man, he has won Labour Party endorsement as No. 3 on the Labour Party’s Senate ticket for the State of Queensland.

Then we have Mr. A. H. Dawson of the Electrical Trades Union - Archie Dawson, a member of the Australian Labour Party and not a Communist. Recently he visited Communist China and returned starry-eyed carrying a red flag and talking of the wonderful job that is being done by the Communist regime in China. Then there is Mr. F. J. Waters, of the Amalgamated Postal Workers Union of Australia, a man with extremely left-wing tendencies. He is a member of the executive of the Trades and Labour Council and his only friends seem to be members of the Communist Party. Then came Mr, B. Milliner, of the Printing Industry Employees Union of Australia, Francis George Nolan, of the Australian Railways Union; Thomas McLellan Millar, of the Queensland Colliery Employees Union, who is a member of the Communist Party; Alexander MacDonald, secretary of the Trades and Labour Council and a member of the Communist Party - the man who was thrown out of office in the Federated Ironworkers Association by the “ groupers “ and who is now in his present position because the Communists took sympathy on him and persuaded Communist Gerry Dawson to retire to make way for him.

Then there is Alfred John Carruthers of the Queensland Plasterers Union, another member of the Communist Party; Thomas William Chard, of the Queensland carpenters union; John Francis Daly, of the Hospital Employees Federation of Australia, a member of the Communist Party who is employed at the Greenslopes Repatriation Hospital; William John Fahy, of the Federated Moulders (Metals) Union of Australia who is a member of the Communist Party; Edward John Hanson - he used to be called Edward John Hanson, junior - of the Operative Painters and Decorators Union of Australia who is a member of the Communist Party; Cyril Bailey Boland, a member of the same union and also of the Communist Party; Gerald McAdam Dawson, of the carpenters union and a leading member of the Communist Party who tries to make out that he represents the Building Workers Industrial Union. The records of the Trades and Labour Council are to this effect but in fact he represents the carpenters and joiners union.

Then there is Eric William Burke, of the Amalgamated Postal Workers Union; Archibald Thomas Nicol, of the carpenters union, who is a member of the Communist Party; John Riordan Vaggers, of the Operative Painters and Decorators Union of Australia, another member of the Communist Party; Herbert William Field, of the Australasian Meat Industry Employees Union, a member of the Communist Party; Charles McKenzie Murphy, of the Queensland Colliery Em ployees Union, another member of the Communist Party; Wallace Lyle Dawson, also of the Queensland Colliery Employees Union and also a member of the Communist Party, and Henry Gurnett, of the Amalgamated Postal Workers Union of Australia. Among the people whom I have named are the principal members and the executive of the Trades and Labour Council, the organization which has delegates sitting on the Queensland central executive of the Australian Labour Party.

The Trades and Labour Council has a series of seven committees, four of which are under the chairmanship of members of the Communist Party of Australia. Not less than thirteen members of those seven committees are on the Queensland central executive of the Australian Labour Party. Now, can any honorable member on the other side of the House tell me that the Communists have not moved to the point where they have control of the Australian Labour Party? Can any honorable member on the other side of the House tell me that the Australian Labour Party any longer speaks for the trade union movement? It does not! Can any honorable member on the other side of the House deny the truth of my statements? Can any real member of the Australian Labour Party, as so many Opposition members are, continue acting for the Communists? How long will it be before the Australian Labour Party is only something that we shall read about in the history books? How long will it be before its members repudiate their inactivity and lack of courage and refuse to accept the policies that are being dictated by men like Chamberlain and Stout which eventually will destroy them? How long will it be before they rise up and throw off this old’ man of the sea, who will destroy them?

Look at the organization of the Australian Labour Party! Look at the way in which it is made up! Look at the way in which these Communists in the trade unions are able to control its policy making! I have here a chart which shows the organization of the Australian Labour Party and the strength of the Communists in its various sections. Let us take the Australian Council of Trade Unions. Who are the delegates from the Queensland Trades and Labour Council to the interstate executive of the A.C.T.U.? Two Communists

Dawson and MacDonald! The A.C.T.U. biennial conference organization is representative of 97 affiliated unions and consists of 420 delegates of whom 350 are pro-Communist and only 70 are antiCommunist. The A.C.T.U. interstate executive consists of sixteen members. The executive of that body numbers four. The trades and labour councils and the groups each have six representatives. Of these three are Communists and thirteen are nonCommunists.

The Queensland Trades and Labour Council has 30 affiliated unions with 90 delegates. The executive of this body numbers fourteen of whom six are Communists and eight are non-Communists. There are seven committees with 40 delegates, of whom fourteen are Communists and 26 are non-Communists, and thirteen of these delegates serve on the Queensland central executive of the Labour Party.

There are 275 registered federal unions and 80 registered State unions with a direct policy link with the Australian Labour Party State triennial conference. Thirtyeight per cent, of union delegates and 62 per cent, of branch delegates form the triennial conference policy committee, the people who dictate the policy of the Australian Labour Party. Can you tell me that with Communists dominating the committees the few A.L.P. men on the committees of those organizations and executives are able to resist the policy drummed into them by the Communist Party? Of course not. The Communist Party has even succeeded in persuading these people to break the law. I have here a photostat copy of a document, headed “ District Committee Room 34, Trades Hall, Brisbane, 3rd November, 1960 “, in which members of trade unions were incited to break the law, over the signature of H. Gilmour, district secretary of the organization.

This censure motion - a motion of no confidence in the Government - by the AX.P., with the implication that its members are fit to be the government of this country, is a farce. Honorable members who sit on the other side of the House know in their hearts that they are not fit to sit on the government benches. They know that they have a big job to do to clean up the mess their own organization has got into, and I think they will continue to lose seats in this Parliament until they clean rt up. Members of the Australian Labour Party in this Parliament should set a lead to the rank and file of the unions and the people in their branches, to get rid of this red control which has taken charge of the whole organization of the A.L.P. so effectively that even people like Chamberlain and Stout act as tools of these Communist organizations, and fulfil their policy. Let me say again to honorable members opposite, “ You will continue to lose seats until the A.L.P. realizes the danger it is in “.

This country is in considerable danger because we must recognize that under our Constitution there is only one alternative government for this country and that is a government consisting of members of the A.L.P. What would it offer the people? Clearly, it would act as stooges in this Parliament for the reds who exert control through the Trades and Labour Council and the trade union organizations and by the strategic placing of members of the Communist Party as shop stewards. These people will carry out the policy of the Communist Party. If honorable members opposite doubt my word they must argue against me in this chamber and defend themselves against charges such as this. But each and every one of them knows in his heart that it is absolutely true that the reason why the Labour Party has continued to lose seats in this Parliament is the fact that it has followed the red line. That is why the A.L.P. has split once and will split again-


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


– The business before the House, Mr. Speaker, is a motion of want of confidence in the Government. The honorable member for Lilley (Mr. Wight) has not set out to defend the Government. He has evaded the issue and has introduced matter not related to the business before the House and has sought, by this diversionary move, to take the minds of members and of the electors of Lilley away from the central issue which is the guilt of the Government and those who voted for the Government’s measures. Tt has become a habit of Government supporters when among their constituents to blame Mr.

Menzies, Mr. McEwen and Mr. Harold Holt and say, “ This is ministerial action. I would not have voted for it. I do not believe in it, but the Government has foisted this upon us. We are totally opposed to the increased sales tax on motor vehicles and to credit restrictions and the flood of imports. Those things are a horror to us.”

Let us look at the roll call of the guilty men who voted for the measures introduced by the Treasurer (Mr. Harold Holt) in November last. Not one word of protest was made by the honorable member for Lilley; not one whisper of protest came from any member on the Government side of the House against what had taken place. Surely to-day the honorable member for Lilley, as a Queenslander, should have been heard in this place saying something about the calamity that has overtaken the timber industry of Queensland and the fact that nine timber mills have closed north of Townsville, and about the problems besetting the people generally in that State. Unemployment is growing. Yet the honorable member for Lilley has done nothing and said nothing about it. In this war of attrition against the Australian people, it is a remarkable thing that backbenchers on the Government side have been so quiet. The silence of Dean Maitland is nothing compared with the silence of members on the Government side who refuse to protest in this place against what the Government has done and is doing. Yet when they go to their electorates they are very vocal in clubs and other places in objecting to the Government’s measures.

Parliament now has an opportunity to interpret public opinion and to censure the Government. The overwhelming view of tha Australian people is that the Government, has failed and has treated the Australian people in a contemptuous manner. The public is resentful about the manner in which the sharp increase in the sales tax on motor vehicles was applied and then withdrawn, causing hardship to those who paid the additional tax. The Government’s measures caused hardship to certain motor sales organizations which have been obliged to depend upon other means of raising finance for the purchase of motor cars. Some of them are to-day holding a number of vehicles upon which they paid the higher rate of sales tax and must now sell to the public at the lower rate. Representations have been made to the Government in regard to this fact, but, again-, the Treasurer has refused to act. He has done nothing to heed the point of view of the people in this matter. The public is resentful about the manner in which the sharp increase in sales tax was made and many members on the Government side of the House are utterly disgusted to think that their Government has failed them in this way. The credit squeeze has made many erstwhile supporters of the Government disillusioned and bitter, and that is not surprising. The motion proposed by the Leader of the Opposition (Mr. Calwell) has clearly stated the justifiable indignation at the Menzies-McEwen Government’s sabotage of the nation’s economy. What has happened was planned. It was a deliberate campaign and was announced to the Parliament on 15th November, 1960, by the Treasurer. It was the Government’s plan - a Liberal Party and Country Party plan. The public has become accustomed to the winds of change, under which the Government’s policy and attitude have changed from time to time.

We have had import restrictions and import floods, credit restrictions and credit booms, and we have had crippling taxation and taxation concessions to the favoured few. Both the horror Budget and the little horror budget stand out in this coalition Government’s black economic record of stops and starts, of expansion and contraction. This Government has no real policy, no clearly denned line of action to be pursued over twelve months or the life of the Parliament. It has done nothing but start and stop, twist and turn all round the compass to the north, south, east and west. But that is not surprising when we realize that this is a coalition government in which two sets of hands, those of the Australian Country Party and those of the Liberal Party, are taking the tiller in turn in an endeavour to steer the ship of State.

The 1960 plan of the Treasurer (Mr. Harold Holt) was said to be designed to arrest the run-down in our overseas reserves. But since its introduction, our overseas balances have continued to fall. At the time when the Treasurer’s plan was outlined, almost every one had a job. At that time, factories and mills were busy and our home economy was expanding. To-day economic insecurity and uncertainty hang like a pall over the nation. Uncertainty breeds fear, and fear in its turn is the breeding ground of depression. I warn the Government that its eccentric policy may be harder to reverse than its leaders seem to think.

Where will all these variations of policy, all this turning the heat on one minute, turning it off the next, all this steering north and then steering south, end? The result must be obvious to us all. This Government’s plan is causing internal chaos in Australia, and certainly it is not arresting the serious decline of our overseas reserves. But what has happened has been what the Government planned. For instance, the honorable member for Leichhardt (Mr. Fulton), the honorable member for Braddon (Mr. Davies), the honorable member for Bass (Mr. Barnard) and the honorable member for Wilmot (Mr. Duthie) have all directed our attention to the chaos in the timber industry, but this Government refuses to do anything about it. Of course, the closing of the timber mills and the unemployment of the workers in those mills are all in accordance with the master plan. Every honorable member on the Government side is guilty of having brought about the dismissal of each person who loses his employment under this master plan. Not one of them can be excused because each one has supported the Government’s vicious plan. This is the Government’s policy, this is the Government’s way of doing things. If it does not create unemployment, if it does not restrict the expansion of the economy, it is not doing its job. All this loss of employment in the motor and textile industries has been decreed in the Government’s plan, as is emphasized by the following extract from the speech delivered by the Treasurer in this House on 15th November last: -

Most of the measures which I shall now announce will be given immediate, or almost immediate, effect. Some will involve legislation; others will not. But they all belong to a general plan of action and are closely related to one another. I therefore propose to explain them together.

And all those proposals were supported by every honorable member who sits behind the Prime Minister (Mr. Menzies) and the Acting Prime Minister (Mr. McEwen), who is

Leader of the Country Party. The Treasurer went on to say -

Nevertheless, we have to conserve these overseas reserves, which are so vital to the functioning of our economy, because we cannot be sure what external conditions will be in time ahead. Placed as we are, we can never afford to be extravagant with imports.

What a contradiction! What an extraordinary statement! Despite the great inflow of capital from overseas, despite heavy borrowings by which Australians are being sold into bondage overseas, our overseas reserves have fallen to something like £300,000,000, the lowest point at which they have ever been in our history. No wonder, as the honorable member for Barton (Mr. Reynolds) has said, honorable members on the Government side are desperately endeavouring to talk about all sorts of subjects other than the matter now before Parliament. They hope to divert the attention of the people from the true position. The honorable member for Hume (Mr. Anderson) has said that we must encourage an inflow of capital. What climate is there for inducing an inflow of capital when we have such economic disturbance, chaos and turmoil in the country? Surely an expanding economy provides a much more favorable climate for the encouragement of capital from overseas. The Treasurer also said -

Plainly enough, to safeguard our overseas funds position, we must reduce the excessive internal demands which are the main reason why imports continue to run high.

The Government has closed down Australian industries while allowing the flood of imports to continue unabated. In this war of attrition, the Government is not prepared to adopt the obvious, clear, straightforward honest policy of imposing selective import restrictions by regulation. It prefers to allow financial considerations to determine what shall be imported. It prefers a policy under which the person who has the money may import all the luxury items he wishes while the person who is short of money is unable to buy those things essential to the development of the country. Under the Government’s present policy, our overseas balances will continue to decline until eventually we shall reach the stage at which we shall not be able to import even essential goods because we shall not have the money with which to pay for them. But the Treasurer goes blithely on his way, and I emphasize again that every honorable member on the Government side supported the proposals he put forward. In his speech on 15th November last, the Treasurer also said -

But to reduce excess spending is something we would have to do in any case . . . Spending has, of course, been strongly on the rise for a considerable time past, and the Government has, at successive stages, taken action to restrain it.

The Treasurer did say that some Industries were running along quite normally. But he was not satisfied with that! He had to sabotage, indeed, destroy them. For instance, he could not rest content until he had brought the timber industry of Australia to a standstill, while allowing a flood of timber to come in from overseas. Certainly, this Government has been outstandingly successful in promoting the trade of foreign powers, but it has failed dismally in promoting Australian trade. We are entitled to look for consistency in a government, but this Government’s policy has been wholly inconsistent. So worried have they become at the position that has arisen that certain members of the Liberal Party say to the people outside this Parliament, “ The eggheads, the bureaucrats in the Department of Trade are the people who want this sort of thing. This is McEwen’s policy, it is not the Government’s policy. We are against it. The Country Party, the freetrade party, has forced this on us.” On 17th March, 1960, twelve months ago, in speaking to the Address-in-Reply to the Governor-General’s Speech, the Acting Prime Minister said -

Are we to abandon our policy of full employment; our objective of expansion at as fast a pace as we can achieve, and our purpose of high prosperity, so that we may have the comfort of price stability in an atmosphere of stagnation?

He did not intend to be concerned about price stability; he was not going to have stagnation. He would not interfere so that there would be stagnation and price stability, but he was willing to have instability of prices and prosperity. He went on to say -

It is not the policy of this Government to avoid the problems of price pressures by embracing deflationary policies of stagnation. We prefer, and we have chosen, the more difficult course of saying that we will adhere to our policy of expansion; we will adhere to our objective of all-round prosperity and greater production, and we will face up to the problems that come with those policies.

The Minister for Labour and National Service (Mr. McMahon) is perfectly happy with the position. He has declared, “There is some unemployment here and there, but I have managed to transfer the unemployed “. The mixed farmer who finds that he cannot balance his accounts because of the competition from imported tinned chicken and tinned hams, can perhaps find a job on the wharfs handling the tinned chicken and ham that is imported, and everything will be all right. The employee from the motor vehicle industry will be able to go to New Zealand or somewhere else to find employment.

The attitude in Canberra is extraordinary. Like the back-bench members, the Ministers in the main have very little say in these matters. They are controlled by a few groups of bureaucrats with a few points of view. They have the opinions of the Department of Trade and the Treasury. They have the Prime Minister (Mr. Menzies), the Treasurer and the Minister for Trade, but over all this is the tranquillizing, sleepy effect of Canberra. The matters honorable members opposite know to be true and just and proper in their electorates disappear from their minds when they are in the balmy atmosphere of Canberra, sitting behind the Prime Minister, the Acting Prime Minister or whoever for the time being may be leading the Government. There is no reality and no facing the facts. The synthetic attitude of the Government is extraordinary.

Mr. Speaker, the Government has from time to time, tried to produce some ideas on these matters. The recent approach of the Acting Prime Minister is to give incentives to overcome our trade problems. What an extraordinary idea! I put it to the House that the Government is talking too much nonsense on this matter of trade. If Australian industry cannot survive when competing on even terms with manufactured goods imported from abroad, what chance have we when we try to export our goods? Yet we find that one of the proposals now made is to give tax concessions.

What are the industries in this country that have a chance of meeting overseas competition and standing on their own feet? The first is wool. Wool has its problems and if I have an opportunity, I will discuss them. The wool industry has been sold out by a government that has failed to provide a reserve price plan and to ensure that the industry is not adversely effected by such restrictive trade practices as wool pies. We are not getting the price for our wool that we should be getting. Another primary industry capable of exporting is the wheat industry. We are lucky this year that Communist China has been able to buy substantial quantities of our wheat. Then we have the question of metals. But what sort of a situation do we meet when we come to sell metals abroad? The United States of America is selling more and more of its goods to us but our sales to America are at a very low level. America has imposed an embargo and restricted the volume of metals that we can sell on that market. It has applied a tariff against our wool. But what is the Government doing to protect these industries? It is doing practically nothing!

As I say, only one or two industries have a chance of earning money on overseas markets. One of those industries is the iron and steel industry. The Acting Prime Minister said that he would introduce this tax concession scheme in an effort to boost our exports. Who will profit bv this scheme? Who can profit by it? The Broken Hill Proprietary Company Limited will profit. What will happen is that this company will export more iron and steel. The world is hungry for iron and steel and there will be little difficulty in obtaining a market for increased exports. But what will happen in Australia? Australia will be compelled to buy more iron and steel from abroad at higher prices and of doubtful quality. I have in mind Thomas quality steel and laminated steel. This will help to force up prices instead of reducing them.

This scheme will stimulate increases of costs because we will be importing dearer steel and will not be developing our own Australian industry. The information T have received from the Bureau of Census and Statistics shows that for the seven months ended January. 1960. we imported £9.724.000 worth of steel and we exported £19.544.000 worth. For the seven months ended January 1961. our imports were £37.648.000 and our exports dropped to £1 3.845.000. The more steel we export, the mo we will have to import at a higher cost, and our economy will suffer accordingly.

These matters should be receiving the attention of the Government. What can we do to live within our means? The Leader of the Opposition dealt with this problem. He put it on a weekly basis. What do we spend on goods from abroad? What do we export? What must we do to make up the difference? Surely in national housekeeping the time has come when the Government, speaking for the people of this country, ought to say that we cannot afford certain luxury items and will not import them, and wherever practicable we will manufacture in this country the goods that we need. A strong home economy would then be built, and that is necessary.

We have been faced with major problem. We have had a flood of imports which has been beyond our means, and many of these imports have been luxury, unnecessary and often shoddy goods. We have had a credit squeeze, and we know that the Government has failed to develop the country. The Government deserves the censure of the people for its failure in all these matters. The credit squeeze has hurt local government, primary industry and, according to “ Muster “, the cattle industry. All of this leaves no doubt at all of the Government’s failure.


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

Mr Malcolm Fraser:

Mr. Speaker, it is difficult to find any consistent argument in the speech just made by the honorable member for Macquarie (Mr. Luchetti), which was typical of the contributions made by the Opposition in this debate. The honorable gentleman, together with the Leader of the Opposition (Mr. Calwell), in part at least said that most of our present difficulties had been caused by this Government and by the flood of imports which the Opposition and its leader have represented as the main problem confronting Australia at the present time. I prefer to argue - I believe that the facts support me - that the difficulties confronting Australia now are caused by events that have occurred outside Australia, and, secondly, that imports - or a flood of imports, to use the term adopted by the Leader of the Opposition - are a symptom and not a cause of our present problems.

The Leader of the Opposition ignored four other factors, Mr. Speaker. He ignored the fluctuations in our export income and in the gross value of the production of our major export items. He ignored the effect of inflation. He ignored the effect of changes in the terms of trade. He ignored the effect that Australia’s position as one of the world’s great trading nations has in this regard. It is worth saying a word or two about each of these things.

First, let me deal with the fluctuations in export income and in the gross value of the production of our major export items. Over the last eight or nine years, the volume of rural exports has increased by 25 per cent., but the returns over that period, despite the increased volume, have risen by only £13,000,000 - from £716,000,000 to £729,000,000. If we look at the variations in the gross value of the production of our major export items over this period, we find that wheat reached a high point of £178,000,000 this year and that it reached a low point of £66,900,000 in 1957-58. Wool reached a high point of £615,300,000 in 1950-51 - a year of relatively low production - and a low point of £311,300,000 in 1958-59 from a clip that was 50 per cent, greater than that of 1950-51. The value of the production of butter has varied from £83,200,000 to £35,000,000 over the period, and that of beef from £187,100,000 to £69,800,000. These variations are caused in large measure by changes in export prices which are completely and absolutely beyond the control of this Government or of any one inside Australia. The variations are due also to changes in the volume of production caused by varying seasons in Australia, and these changes also are outside the control of this Government. But it is quite clear that these tremendous variations create in Australia difficulties that are unequalled in any other country. Other countries are able to forecast much more accurately than we can what the outlook for the future is.

The second factor ignored by the Leader of the Opposition was the effect of inflation. It is quite clear that in the period from 1950 to 1953, inflation marched at a much greater rate in Australia than in other countries. But it is clear, also, that this was due to the wool boom, and that control of inflation in those years would have been beyond the capacity of any government. Since 1953, inflation in Australia has not been out of line with inflation in the other major countries, Mr. Speaker. France has had a much greater degree of inflation. New Zealand, South Africa and the United States of America have had a degree of inflation that is comparable with the inflation in this country. The Government has been consistent in its fight against inflation over its period in office, and primary producers and the exporting sections of industry in Australia should be thankful that the Government has been consistent in its fight. If it had not, the position in Australia would have been much worse now than it is. But the exporting industries should realize that their difficulties are largely brought about not by inflation but by falling overseas prices.

The Leader of the Opposition ignored, also, changes in the terms of trade. The International Monetary Fund has taken the year 1953 as the base year with an index of 100. We find that by 1960, the index of Australia’s terms of trade had fallen to 65. The figures for New Zealand and Canada - two countries in circumstances not dissimilar to our own - had fallen only to 94 and 97. The terms of trade moved in favour of the manufacturing countries - the United States, the United Kingdom and Japan - where the index figures are 108, 113 and 116 respectively. Put in plainer terms, Mr. Speaker, the export income of £880,000,000 that we expect to get in 1960- 61 would be £1,350,000 at 1953 prices. If that were the case, we would certainly have no problem in front of us at the present time. Putting the position in even plainer terms, I could say that we need two bales of wool to do what one did in 1953.

When we see the indices for the export prices of our major export products, we realize that it is no wonder that the terms of trade have moved against us. If 1952-53 is taken as the base year with an index of 100, we find that the indices had fallen by the second half of 1960 to 60 for wool, 76 for wheat, 79 for butter, 81 for metals, and 91 for sugar. Meat shows the one bright spot in the outlook at present, the index for that commodity having risen to 149. The average of the indices for all the items in this group had fallen to 71. In the light of these facts, and having regard to what Australia is trying to do in the way of development, it would be a miracle if we were not confronted by difficulties at the present time.

Australia’s position as one of the great trading nations emphasizes and multiplies the effect of adverse trading conditions. Australia, despite its small population, is among the first ten trading countries. In 1961, we exported 27 per cent, of our gross national product. This is a much higher proportion than is exported by any other country that I know of. All members of this House know how important it is that our position as a great trader be maintained. They know, also, how vulnerable this situation makes Australia to .changes in economic conditions overseas.

In these four things, Mr. Speaker - the fluctuations in export income, inflation, changes in the terms of trade and our position as a great trading nation - can be found the causes of our present difficulties. These difficulties are not caused by the flood of imports, which is a symptom and not the cause of the present situation. I have mentioned inflation as one of the four factors in which can be found the causes of our problems, but as inflation since 1953 has not been greater in Australia than in most other countries, inflation since that time, I believe, should be disregarded.

Since the Opposition, in its censure motion, has made such great play on imports, it would be worth while to examine the imports position both before and after the relaxation of licensing. Before licensing was ended, more than 50 per cent, of imports were running free. These were items which were essential to industry. But it could surely not have been foreseen that when licensing was ended by far the greatest increase - an increase of more than 30 per cent. - would occur in the imports that were running entirely free before. This could not have been expected, and it can be explained only by boom conditions in certain sections of Australian industry and by the activities of people who, quite clearly, have been hedging against what they believe is the possibility of the re-imposition of control. It is quite true that a certain amount of tinned chicken from the United States and a few Californian oranges have come into this country, but in total items of this kind do not amount to much, and they certainly do not cause our present difficulties.

The Government has been blamed for ending import licensing. but those who blame it for this forget the reasons of thirteen months ago. There was then incipient inflation in Australia. Increases of the basic wage and margins had just added more than £150,000,000 a year to the annual wage bill. Our overseas reserves were strong because of the Government’s action, and they had been built up in the circumstances of thirteen months ago for the occasion when the Government would find it possible to get rid of this kind of control, which is contrary to the philosophy of people on this side of the House. The removal of licensing in the circumstances of thirteen months ago was an important step in combating inflation. It meant the opening of Australian industries to some degree of outside competition and the placing of restraint on Australian manufacturers, thereby preventing them from raising prices as they would have done if import licensing had remained.

Other policy measures were adopted in the fight against the inflation which was incipient in the economy. The Government engaged counsel to appear for it before the Commonwealth Conciliation and Arbitration Commission, and argued sensibly and correctly that a further increase .in the basic wage at that time would benefit no one but would jeopardize the exporting industries - that such an increase would have been of no benefit to the wage-earner since prices would inevitably have risen because productivity was not increasing then and could not match the increase in money wages. The Government also announced a credit policy which provided for some restriction of bank advances by the trading banks, and it announced that it would budget for a surplus when the Budget was introduced in August as an anti-inflationary measure instead of for a deficit, as had been done for some years previously. These measures, Mr. Speaker, would have been successful, I am convinced, and no further measures would have been necessary, but for circumstances which came to light after the Budget was introduced. The first of these was the lower prices overseas for wool. I believe that the Government was quite justified in budgeting in expectation that wool prices would continue to be the same this year as they were last year. I know that wool futures, since their opening in May in the Sydney market, were consistently lower than spot prices by about 6d. per lb. Because of the demand for wool overseas, the Government had no reason to expect a fall in wool prices to an extent which will cost Australia this year about £70,000,000 in overseas income.

Secondly, it was only after the Budget had been introduced that it became evident that there had been a great expansion of bank credit. Advances ‘had increased by over £150,000,000 in about seven months, lt appeared that most of this had gone to finance additional imports. Perhaps because the Australian system of overdraft limits had quite clearly got out of control of the banks their estimate of the amounts that people were going to take up of the unused overdrafts were unrealistic in the circumstances. These two matters were not in evidence when the Budget was introduced. If they had been, the Budget would have been a much more severe document. It was because these factors did not become evident until after the Budget had been introduced that the November measures became necessary. These were, increased sales tax on motor cars, credit restrictions on some sections of industry, a tax on debentures, and an incentive to life assurance and superannuation funds to invest in Government bonds. The purpose of these measures is to prevent inflation and bring demand into line with what we can afford, so as to bring balance into our economy.

Sitting suspended from 5.58 to 8 p.m.

Mr Malcolm Fraser:


Speaker, before the suspension of the sitting I sought to show that the difficulties confronting the country are caused, not by the flood of imports, as the Opposition has sought to argue, but by changes in the terms of trade which are beyond the control of any government, and which have occurred because of falls in prices overseas rather than inflation inside Australia. I then went on to describe Government measures that had been introduced to combat those trading conditions and to give the reasons for them. When the sitting was suspended, I had just mentioned four policy measures which were introduced last November. I should like, briefly, to say a word about two of those measures.

The measure which has appeared most controversial in the public eye has been the additional sales tax on cars. The reasons for this increase were clear and sound. For the four months ending October, 1960, motor vehicle registrations were 26 per cent, greater than those for the same period of 1959, and 49 per cent, greater than those for the same period of 1958. In 1959-60 hire-purchase companies put £35,000,000 more into purchases or sales of cars than in the previous year. The increased rate of car sales was adding an additional £50,000,000 to the import bill which, under the circumstances, this country could not afford. Therefore, sales tax was increased as a temporary measure as the Treasurer had foreshadowed in his speech and it was removed when conditions in the industry warranted it. But the industry was also affected by other matters. It was affected by hire-purchase restrictions - by having the flow of finance to hirepurchase companies drastically reduced. Of that I approve. But the motor car industry was also affected to a great extent by Its own over-expansion. The introduction of the Falcon was a part, but not the whole of the over-expansion in the motor car industry.

It is quite true that at the present time the capacity of the motor industry is far beyond Australia’s annual requirement. The Government has given the various motor car companies an excuse to blame the Government instead of themselves for some of the reductions that are occurring in the industry. The industry was also affected by the very real thought that the increased sales tax was only temporary. Any one who intended to purchase a car would obviously consider waiting until the tax increase was removed. It should not be thought that this industry has not profited, as other industries have, under the policies of this Government over the last ten years. Australia is one of four countries in the world with a car to every four people or fewer. In the four months ended October, 1960, over 112,000 vehicles were sold while in the whole of 1949, the last year of Labour administration, sales were not much greater - 125,000 vehicles.

Credit restrictions were designed clearly and precisely to curb the speculative enterprises inside the economy and to restrict the excess operations of hire-purchase companies. Credit for the legitimate requirements of exporting industries has not been reduced and it is right that credit to these industries should be maintained. Only one exporter has told me that his credit has been reduced under Government policy, and I believe that this has been the result of a mistaken interpretation of Government policy by a bank manager, and that matter is being reviewed. Credit for the exporting industries has been maintained.

The Government’s programme represents a vigorous attack on the cause of the present problems confronting Australia, which is that the demand for imports is greater than our present overseas income can sustain. This attack is especially in the interests of primary producers and other exporters. Primary producers in particular suffer if inflation is allowed to go uncurbed. They are already in difficulties, not so much because of inflation, but because of the drastic fall in many of the prices that they get for their products overseas.

In this debate the Australian Labour Party has shown that it is interested in tackling only the symptoms of present difficulties by re-imposing arbitrary restrictions on imports. They say that this is necessary because of balance-of-payments difficulties, but an analysis of speeches from the Opposition members clearly indicates that their idea is to protect industry. This shows some turning away from traditional means of protection, the tariff, and there may be implications in this implied change of policy which the Labour Party itself has not thought out to the full. Opposition speakers have further argued that licensing alone will solve the present problems without any effort to cure the imbalance in the economy caused by changes in the terms of trade and changed trading conditions overseas. It is quite clear that any such approach to the present situation is nonsensical.

The Government policies have been hampered over the last twelve or fourteen months by people hedging against what they believe to be a possibility of the reimposition of licensing. It is quite clearly part of Labour’s plan to create as much uncertainty as possible, hoping that this uncertainty will boost further the demand for imports while licensing is not imposed and so force the Government into some kind of drastic action. The sooner importers realize that the Government means what it says in connexion with licens ing, the sooner the success of the Government’s measures will be evident. I believe that the next two or three months will be the testing time for Government policy because I believe that the figures for this month will show that imports have been quite heavily reduced. I believe that they will be reduced even more in the month of April. If that occurs it may open the way to some relaxation of credit restrictions.

While many of the Government’s measures are short-term ones, the Government is also interested, as it always has been, in long-term approaches to the difficulties confronting the country. The Minister for Trade (Mr. McEwen) has foreshadowed certain measures which will encourage secondary industries in particular to export and to seek markets for new exports. The honorable member for Melbourne Ports (Mr. Crean) argued that Australia, instead of doing this, should concentrate on expanding traditional exports. This is exactly what has been done over the last ten years, and it will continue to be done while this Government is in office.

The volume of rural production has increased by 20 per cent, over the last seven or eight years. The volume of wool production has increased by 50 per cent, during the decade. Exports of rural products have increased by 25 per cent, over the last seven or eight years. On 1953 values, this year’s exports would be worth £1,350,000.000, instead of the estimated £880,000,000. Had those values been maintained, there would be no problem and no difficulties confronting Australia at the present time.

The present moves do not in any way indicate that the rural sector of the economy is being neglected. Other steps have been taken to assist rural industries in many directions. The latest measures merely indicate that the Government is exploring every possible avenue to increase export revenue, though it may be too much to expect the Opposition to understand this.

Once it becomes evident that the import position is under control, the price task of the Government will be to maintain Australia’s pre-eminent position in the employment field, as has been the case over the last ten years. It is worth noting that whilst

Canada’s terms of trade have fallen from 100 to 97 and Australia’s from 100 to 65, Canada has 750,000 unemployed at this moment and Australia has less than onetenth of that number. To-day’s report issued by the Minister for Labour and National Service (Mr. McMahon) has indicated that although dismissals have been reported in many industries, this labour has been taken up by other industries throughout Australia. I have every confidence that the Government will watch this factor, as it has for the past ten years in which it has given Australia unrivalled progress and a sense of well-being. I strongly support the measures that have been introduced over the last twelve or fourteen months to combat the situation arising from changes in the terms of trade which have moved more adversely against Australia than against any other country. I am convinced that the Government’s measures will prove to be successful and that all honorable members will see for themselves that they have been successful before too long.


.- Every good Australian, in this Parliament or out of it, must be perturbed at the position of the Australian economy to-day. I have heard it said unworthily in this debate by several honorable members on the Government side that the Labour Party would like to see unemployment grow out of the existing crisis. I repudiate that allegation. Nobody with any human instincts would want to see his fellow citizens suffer the horrors of unemployment simply to gain political advantage. The suggestion to which I have referred is not worthy of those who made it. The Labour movement was the advocate and planner of a policy of full employment. In an attempt to cope with the current financial situation, the present Government has deliberately and admittedly initiated economic measures that, in their very nature, must result in some unemployment in Australia. To be fair to the Government, it must be said that it claims the unemployment will be only temporary and of a passing nature. But in my electorate, I have seen 500 men dismissed from the Ford motor works and they have nowhere to go for employment. Hundreds of workers in other electorates have suffered the same fate, and I know from experience that as a few men lose their jobs, there is a snowball effect and ultimately many thousands suffer the pangs of unemployment.

The Labour movement adopted a policy of full employment, lt began when the Labour movement and the trade unions adopted the slogan of “ the right to work “. The policy of full employment grew from that. In 1945, the first white paper on full employment was issued by the Chifley Government. Subsequently, Dr. Evatt was sent to a United Nations conference in San Francisco with instructions from the Chifley Labour Government to try to have incorporated in the United Nations Charter a declaration by all member nations that they would endeavour to implement, by every means possible, a policy of full employment within their own countries. That step was of immense psychological and practical importance. It has even influenced this Government, which knows only too well that if unemployment should grow, its future is not very bright, nor is the future of anybody else.

Why is Australia in its present economic situation? When this Government was elected to office late in 1949, it announced with a flourish of trumpets - and has continued to announce ever since - hs abhorrence and detestation of policies involving controls. It is antagonistic to planning. But inevitably, as a result of that attitude and, until recently, the practice of that policy, Australia has drifted into very serious economic difficulties. After all. the nation is not so very different from an individual or the head of a household. The moment he becomes too deeply involved in debt, he faces grave difficulties. A study of events shows that when Sir Arthur Fadden - who was then Mr. Fadden - delivered his Budget speech in this Parliament on 20th October, 1950, he said that Australia’s overseas reserve funds totalled £650,000,000. That was a very healthy figure. It followed twelve months of this Government’s occupancy of the treasurybench and, in reality, was a balance standing to the credit of the Australian people as a result of the administration of the Labour Government in the immediate postwar period. That was the most difficult economic period that the country had experienced. To-day, our overseas reserves, compared with £650,000,000 in 1950, have dwindled to less than half of that amount. On to-day’s money values, Australia’s overseas credit balance in 1950 was worth £1,300,000,000; to-day our balance stands at less than £300,000,000. It has dwindled progressively as this Government has refrained from doing the things it should have done. The exact figure is about £299,000,000, but for the sake of easy arithmetic, let us call it £300,000,000. In terms of purchasing power, that £300,000,000 is worth only £150,000,000 compared with the value of money in 1950 when the Labour Government handed over the management of the country’s affairs.

Mr Anthony:

– What currency are you using?


– The £1 to-day under this Government is worth 10s. or less compared with the £1 in 1950. That is all. No one will argue otherwise. A balance of £300,000,000 to-day in terms of the purchasing power of the Australian £1 in 1950 is worth only £150,000,000. It will buy only half the labour, the goods or the services.

Since 1950, inflation and depreciation have continued apace. Fortunately for the Government, until recently we had ten long years of good harvests, ample supplies of primary products and reasonable prices overseas. To-day, because of two developments - first, the increase in inflation, and secondly, some substantial falls in the prices of exported products - the Government finds itself in serious economic difficulties. Some say that these difficulties are due to inflation; some say they are due to falls in the prices of goods exported. Some say they are due to a combination of both. Let us see what some of the leaders of the Government say.

Mr Fox:

– What do you say?


– Never mind what I say; I will tell you what some of your leaders have said. The Acting Prime Minister (Mr. McEwen), as Minister for Trade at that time, said in an address to the National Farmers Union on 11th November, 1960 -

Our problem is not the pace of the rise in costs at the moment-

He qualified his statement in that way - but the fall in the value of the products that we sell in export markets. If our wool had not fallen as sharply as it has, a cost increase of 1 per cent, per annum as it is running at the moment would not be talked about as something threatening to the existence of the wool indusrty. This fall in value is the real problem, the one vital thing in our existence over which we have no control at all and can only seek to influence.

In other words, he dodged the real problem of inflation in our own internal economy. He said that the only real problem “ at the moment “ - he isolated the present period from the remainder of the eleven years during, which the Government has been in office - is the fall in the price of export products.

Let us examine the right honorable gentleman’s statement. I have told the House of the gallop in inflation. When the Minister claims that our problem in 1960 is due only to a fall in export prices, let me remind honorable members that it costs 4s. 3d. to produce a pound of butter in Australia to-day, while in 1949 it cost 2s. 2d. It costs 15s. 4d. now to produce a bushel of wheat, while the cost was only 7s. Id. in 1949. These figures prove my statement that inflation has resulted in an increase of internal costs of the order of 100 per cent, since 1949-50.

If honorable members opposite are disinclined to believe my statements. let me quote for them some remarks made by the honorable member for Bradfield (Mr. Turner), a Government supporter, who said recently in this House -

At the present time, of course, governments are perpetuating a gigantic swindle in borrowing good money and returning bad. I imagine no government would find the Treasury prepared to give up the profits of this fraudulent transaction. Fear and anxiety are gripping at the hearts of tens of thousands of thrifty people in this community, as they watch the erosion of their savings.

The economist for the “ Sydney Morning Herald “ then comes into the picture. In discussing the situation in the wool industry he refers first to fifteen years of inflation. That is twelve years of this Government’s and three of the Chifley Government’s, so that the odds are all for the Chifley Government and against this Government. Could not this Government halt Chifley’s inflation, or the inflation of which it accused the Labour

Government? Could not it check that inflation in twelve years? Of course it could not, although it maintained that it was going to cure that inflation. The economist for the “ Sydney Morning Herald “ said -

Fifteen years of inflation, together with the readjustment of export prices to the lowest levels since 1957 have brought this industry to its present state.

Let me make a comment with regard to the Government’s assurance to the Australian people that it abhors controls, that it does not believe in them - although my belief is that what it does not believe in is planning. What did the Government do? Soon after it came to office it called the bankers in and said to them, “Now, boys, things are blowing up a bit. Inflation is on the way. Let us have an agreement amongst you people, so that you will not over-lend and will not increase overdrafts.” They said, “ All right, Bob “, and away they went. Then the Bank of New South Wales, or the Australia and New Zealand Bank Limited, or whichever one it was, scabbed on its mates. It started to let the money go. Then they all bolted, and away she went. The next thing that happened was that the Government said again, “ Let us get the hirepurchase boys in; they are making it a bit of a welter.” The Prime Minister called them together and said, “Now, boys, it is getting a bit tough. You are over-doing it. A lot of money is getting loose. What about an arrangement? “ They said, “ Good-oh, Bob “, and then some of their members scabbed, and away she went again.

Mr Bryant:

– That is free enterprise.


– Yes, that is what they call free enterprise. But worst of all is this Government’s inactivity in the credit crisis situation. This is something for which it should be indicted. Whereas in 1949 the Labour Government had exercised some fairly rigid control over interest rates, after that time interest rates have gone ever and ever onward and upward. The Government has found, as we found, that it has no control over interest rates charged outside the banking system. The Commonwealth Treasurer controls the rates of interest charged by the various private enterprise banks, but the private enterprise banks set up lending and borrowing organizations at the other end of their counters, as it were, over which the Commonwealth Treasurer has made no effort to exercise control. The Government probably excuses itself by saying that it has no constitutional powers. It should be remembered, however, that when we sought constitutional powers and endeavoured to bring all banks under the control of the nation, the then Opposition, which later formed the present Government, opposed us.

What has been the result? I will show the House what the result has been by referring to various advertisements in one of to-day’s newspapers. First, there is an advertisement by the Industrial Acceptance Corporation Limited. I believe that the new member for Calare (Mr. England) told the House when he came into this Parliament that as a result of the Government’s new policy the Industrial Acceptance Corporation Limited is not lending any more money in his electorate. But if you look at this newspaper you will see what that company does to get money. It advertises registered first mortgage debenture stock at 8 per cent, for ten years, or 7 per cent, for six years. Then there is an advertisement by Esanda, which is a subsidiary of the English, Scottish and Australian Bank Limited, outside the control of the Government. It advertises an interest rate of 7 per cent, on registered first mortgage debenture stock for six to ten years, or 7i per cent, over the same period on registered unsecured notes. Then we turn to an advertisement by Cox Brothers (Australia) Limited, which says, “Investment opportunity, 8 per cent., deposit investment plan.”

Then I turn to an advertisement by Waltons Credit Corporation Limited. I notice that since the Government’s credit squeeze came on and the banks were allowed to increase interest rates, these organizations outside the banking system have started to offer the public higher interest rates for their money. We have the Waltons firm offering Si per cent, on registered redeemable notes. There is another advertisement by Reid Murray Acceptance Limited, offering registered first mortgage debenture stock at 9 per cent.

Then I come to Pinnock Manufacturing Company Limited. This company has hit the limit, with registered fixed deposit notes at 10 per cent, for five to ten years, or 9i per cent, for four years. The Australia and New Zealand Bank Limited, which, of course, is just scratching, publishes an advertisement which commences, “The wise way to secure your nest egg”, and then shows a chain and a lock around a great big egg. This bank is able to offer, according to the policy of this Government, only 4i per cent, on interest-bearing deposits, for twelve months, but that is substantially more than any bank or other lending institution should be offering to anybody. I have another advertisement here by the Melbourne and Metropolitan Board of Works, offering an interest rate of 5i per cent. In that case the money is wanted for public utilities.

What does it all amount to? When these people offer such high rates of interest and, incidentally, attract a good deal of money, the result is that instead of investing their money in loans to the Melbourne and Metropolitan Board of Works or -in Government stocks or bonds, or putting it in the Commonwealth Bank or in private banks at the rates of interest fixed by the Government, the people are lending to institutions such as those I have mentioned. This inflates the whole economy, because in whatever direction the money is invested, whether it be in home-building or in manufacturing industry or in any other kind of enterprise, the payment of these high interest rates forces ever upwards the prices of commodities, labour and services. The end effect on wool growers and other primary producers, and on everybody else in the country, is disastrous. But the Government cannot see this. The Government knows that costs are increasing; that interest rates are pressing ever upwards, so further increasing costs, but all it can see is the working man who needs a higher wage because the interest on his loan has risen, and the farmer who is in difficulties because the interest on his advance from, say, the Industrial Acceptance Corporation has risen. The wage and salary earners have to approach the court for an increase in their pay to enable them to keep pace with the situation that has developed under this evil system. Then what do we find? At present our Prime Minister (Mr. Menzies) is in the vicinity of Buckingham Palace.

Mr Harold Holt:

– He is in the vicinity of every other Commonwealth Prime Minister, and you know it.


– This is funny. This is the only opportunity that Government members have had to make a gibe at me. They have not been able to say anything about the other statements that I have made because they know them to be true, and this statement is true, too! The Prime Minister is in the vicinity of Buckingham Palace. What is wrong with that?

Mr Opperman:

– The way you said it.


– The way I said it! The Prime Minister leaves his Treasurer (Mr. Harold Holt) to take the kicks that have been directed at him by the Australian community for the way that he has mismanaged our economy. The Acting Prime Minister, like the Prime Minister, also has spent a good deal of his time touring the world and interviewing all kinds of people. I am not saying that they do not do some good things and I am not saying that the trips have been wholly unnecessary, but they have overdone it.

Mr Harold Holt:

– You did not have a bad record yourself.


– I have never said that I disagree entirely with overseas travel, but I do say that it is most unsatisfactory for a Prime Minister, a Minister for Trade and a Treasurer to be touring the world when their own house is on fire; when there are serious economic difficulties in their own country; when the Treasurer has had to implement policies with which the Prime Minister agreed and which are causing serious unemployment and disturbance in this country; and when our international reserves are diminishing so rapidly. By the end of this financial year our overseas reserves will be in the vicinity of £300,000,000 or £400,000,000 which, added to the deficit of fi, 125,000,000 already accrued from 1953-54 up to and including 1959-60 will make the positron very serious. It is all right, from the Prime Minister’s point of view, to pin-point the working class and to have his representative appear in court and, in effect, say to Their Honours, “We do not think that wages in this country should be increased “. In other words, the Government’s argument is, “ We do not think the workers should be given a sufficient income to enable them to catch up with the increases in the cost of living for which we, as a Government, are responsible “.

The Government has had the report of the Constitutional Review Committee for the past eighteen months. The committee recommended that a referendum be held to seek additional Commonwealth powers to control interest rates and capital issues and to seek a more effective marketing system to enable wool-growers and other primary producers to get a better deal. That recommendation was subscribed to by the six Government supporters on the committee, but the Government has not done one solitary thing about the report, and it never will. It rs in the invidious position that whatever measures it takes to-day will hurt one or two sections of the community. If it hurts its own supporters, they will kick it at the next election; if it hurts the working class it will not receive from the Australian Democratic Labour Party the solid preferences that it has received in the past because the old hip-pocket nerve will be touched and the workers’ votes will go to the Labour Party which, every time it has had the opportunity, has inscribed for itself in the annals of this country a record of progress, prosperity and sound government. I join with the Leader of the Opposition in the censure motion which has been launched against the Government.

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.

Suspension of Standing Orders

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

That so much of the Standing Orders be suspended as would prevent the right honorable the Treasurer (Mr. Harold Holt) and the honorable member for Werriwa (Mr. Whitlam) each speaking for a period not exceeding 45 minutes.

HigginsTreasurer · LP

Mr. Speaker, the Opposition has moved a motion of no confidence and I wish, even with the indulgence that the House has already extended to me, that I had a great deal more time at my disposal to deal not merely with the positive side of this story - which I am certain both the House and the country expect of me - but also to deal as effectively and at as great length as I would wish, with some of the criticism which has come from honorable gentlemen opposite. The essence of a no-confidence motion is that the public is invited to say that the Government of the country should be removed from office and that those proposing the motion - the present Opposition - should be installed as the government.

In those circumstances, one would have thought that in the course of the lengthy speeches which have been made by the Leader of the Opposition (Mr. Calwell), and others behind him, some inkling would have emerged by which the public could have judged what kind of policy it might expect from the alternative government which is being recommended to replace the Government now in office. But no listener to this debate could find any policy in the speech of the Leader of the Opposition or in the remarks of any of his supporters who have followed him. One can assume that this is because they have no policy to offer, and indeed I for one believe that to be the case. Because of the warring factions and the personal rivalries which we know are rampant, not only in the ranks of those sitting immediately opposite, but also in the organizational structure of the party - the kind of rivalries which have produced the worst split in any political movement in the history of this federation - Labour, as at present composed, is utterly incapable of governing this country.

One would say that that is the reason why Labour has not been able to produce any constructive policy for what it admits to be a very difficult economic position. But the honorable member for Lalor (Mr. Pollard) has just told us that no good Australian could fail to be disturbed at the situation or fail to do what he could to help. Well, must we assume from the absence of any policy from the Labour Party that it is incapable of offering any policy? Perhaps the true explanation is to be found in a statement which was made by the Leader of the Opposition, in Hobart, on 1 2th February, when he was asked what the Labour Party’s remedies were for the current economic difficulties. He stated that it was not the duty of the Opposition to put the Government right, but to expose the Government’s incompetence and maladministration. He continued -

Then when the election time comes around it is for- us to offer an alternative policy.

This is the heroic stand-point of honorable gentlemen opposite who, in the words of the honorable member for Lalor, cannot fail to be disturbed by our present difficult economic position. I can remember when we were in opposition and the approach that we made to the problems of government at that time. Of course, we were critical when we believed criticism to be necessary, but at least we tried to propose to the government of the day remedies that appeared to us to be necessary, and when we felt that the Government was moving along the right track we gave our firm support to the policies that it was adopting. This rabble opposite can produce no policy, yet it has the effrontery to urge this Parliament, and the people of Australia, to dismiss a government which has given Australia the greatest decade of progress that it has known and to replace it with a government composed of Labour supporters who to-day are completely incapable of offering any line of policy to meet our current situation!

The Leader of the Opposition was so carried away with the responsibility of making a case without having any policy on which to base it that he offered the following incredible statement, which is recorded in “ Hansard “. He said -

Ever since this Government came into office-

That is the Government of which I am spokesman at the moment - it has increased rather than relaxed controls. We have more controls operating to-day in Australia than we had at any period during the war.

That is echoed by the honorable member for Lalor (Mr. Pollard). The Leader of the Opposition says we have more controls operating to-day than at any period during the war, but has he forgotten price control, capital issues control, commodity control and control over buildings? Because it means nothing in the eyes of Labour, he has completely forgotten the conscription of labour, which most Australians would regard as the worst control of all to which to be subject. Those were the controls operating in this country in the years of war. They were necessary, no doubt, in the circumstances of war, but whether all the extremes to which the Labour Government lent’ itself at that time - the control over the length of a shirt or the colour of the icing on a cake or absurdities of that kind - were necessary is another matter. But at least the country did surrender its freedom in a period of war in order that we might do what was necessary to make our contribution to the war effort. But here, in a period in which Australia is enjoying a degree of prosperity and freedom, over this last decade, which makes us one of the envied countries of the world, we are told by this alternative government that we have been subject to worse controls than applied at any period during the war.

By the irony of circumstances, the honorable gentleman, having said that, immediately proposed another control, over imports, which this Government jettisoned in February of last year; and I will come to that a little later. The honorable gentleman took us back to the halcyon days of 1949. What a wonderful state the country was in, he said, when his party handed over government, by the decision of the electors, to a government from this side of politics. Some of us can recall - I know the people can recall - the events of 1 949. They can recall the blackouts, strikes, shortages and the rationing of commodities. They recall the rationing of petrol and butter and other items which are sMH vivid in our memories, when we had to wait for a ship to struggle around the coast in order that the housewife might get enough coal to cook the roast for dinner. We have not forgotten the inflation of those days. Honorable members opposite talk as if inflation was some new event. In the last two years in which Labour was in office inflation was running at 9 per cent, a year and it had reached 10 per cent, in the last year during which Labour was in government before we took over. Now, members of the Opposition try to hold this up to us as an ideal state of affairs which we inherited from them. The Opposition has found a new champion these days in Sir Douglas Copland, although he used to attack members opposite in those days because of what he described as “ a milk bar economy “ with plenty of froth and bubble at the top but no solid foundation. We used to have to import coal to meet our needs but now we export millions of tons of coal. We were short of steel, of bricks and timber and all the other basic necessities to go into an expanding economy. That was the state of affairs when honorable gentlemen opposite were in charge.

I am not going to devote more than a small portion of my time to-night to dealing with the kind of criticism we have had from those sitting opposite to us; but that is a fair sample and I have given direct quotations of what the honorable gentleman has said. We have other critics, and sometimes they tend to cancel out. The honorable member for Lalor has just been attacking us because we allowed interest rates - he says - to go too high. We have another group of critics - financiers and editors and spokesmen for some particular interests - who attack us because we have not allowed interest rates to go higher than we have. There are spokesmen for sectional interests also. The Chamber of Manufactures wants one thing and the Chamber of Commerce wants the opposite, when it comes to import control. We have the professional critics and, of course, we have the press. A government is always fair game for the press, but the press, or some sections of it, does not always play the game fairly.

We have no more harsh or persistent critic than the “ Australian Financial Review “, a subsidiary of the “ Sydney Morning Herald “, and I will give one illustration of the kind of criticism which I say is quite dishonest and is designed not to help the public to an understanding of our present situation but to hinder that understanding. I have here the issue of the “ Australian Financial Review “ of 2nd March. Here we see the headline, “ Victims of the Squeeze “, and under it runs the passage, “ The table below shows how industrial production fell in the last two months of 1960. On the left it shows by what proportion production fell between November-December, 1959, and 1960. The right-hand column makes the same comparison for December months.” It is all set out in these columns. Anybody reading that article would assume that what had happened to production in December was a fall in all these directions and that that was- the general story of production in December. Indeed, the table is a virtually incomplete listing of the items in the Statistician’s monthly bulletin of production statistics. Those items show decreases between the periods concerned, but no increases in production are shown.

Worse still, no hint is given that there were any increases, and the majority of the readers of the “ Australian Financial Review” were left with the impression that it was clearly indicated that output had declined in a widespread and comprehensive fashion towards the end of 1960. In fact, total production in November and December undoubtedly continued to run well ahead of that of the year earlier. There were many individual declines, as is mentioned, and as there always- will be in a flexible economy. If production of items for which demand was slackening did not fall it would be impossible for there to be a large increase in areas where demand was running more strongly, but the significant thing is that in the period under review there was a bigger list of rises in production than of falls and they were largely in the more basic items of production - steel, coal, electricity and chemicals - which are absolutely basic to the industrial expansion and development of a country.

I have given only a few of these illustrations of criticisms to show that it is by no means easy for the public to get a fair and accurate picture of what is happening; and part of our difficulty, in what honorable gentlemen opposite acknowledge to be a complex and difficult situation for Australia, is to get the facts clearly and fairly over” to the people of this country. The Government has access, as it should, to more authoritative and accurate information than any of its critics can hope to have. Indeed, it would be an indictment of the Government and of its administration if that were not the case. We have information from all the various Government sources. We have the resources of the Statistician and of all the organizations which supply us with material - organizations either privately or publicly conducted - and from the State governments, and a vast amount of material from overseas. We are able to draw on some of the most experienced administrators to be found anywhere in the world in the realm of financial administration of government. We have, ourselves, no small experience now, going back over many years, of the business of trying to keep the economy in balance; and so I say that we are at least entitled to claim that the judgments which we reach are based, first, on the best information available to any group of people in this country. They are assisted by advice from the most able and experienced administrators to be found in this country; and when we come to apply our own judgment we bring to bear experience now going back, in the case of the Prime Minister (Mr. Menzies) and the Minister for Trade (Mr. McEwen) and one or two others of us, over the best part of a quarter of a century of government in this country, of which more than half has been spent actually in the administration of the affairs of government in Canberra. I say that not without some sense of pride in what has been achieved, notably in the last ten years in which Australia has surged forward in such a remarkable fashion. The economy of any country is never easy to hold in balance, as I am sure any Treasurer would agree, and certainly the economy of Australia is rather more difficult than that of most other countries to keep in balance. And we do not have to seek far for the reasons for that. We are a great trading nation, despite our comparatively small population. We rank amongst the first ten or twelve trading nations of the world, and we rely largely for our export income upon the products of our primary industries. They, in turn, are subject to wide fluctuations in volume of produce - it varies according to the seasons - and they are subject to wide fluctuations in price. It has been our uncomfortable experience over the last ten years that the prices we have been getting for our export commodities have been moving steadily against us.

The people have not been made to feel the full effect or discomfort of this in Australia because we have been assisted over those years by a strong capital inflow, by some overseas borrowings and by a process of internal adjustment of policy designed to lessen the shock from time to time. But the process has been going on. and when we talk of a decline in terms of trade from a base of 100 in the not abnormal post-war year of 1953 to a base of 65 in the September quarter of last year, it represents a decline not surpassed by any substantial country that one could point to anywhere around the world. To get any sort of comparison on unfavorable movements in terms of trade over that period, we turn to the South American countries where they stand at a base of 83 as compared with a base of 100 in 1953. I think New Zealand is at about 93 or 94 as compared with that year. The United Kingdom is well over 100, as are the United States and most of the countries of western Europe.

Mr Cairns:

– Are you trying to correct it by bringing in unlimited imports?


– No. The honorable member will please not try to distract me from my line of thought because I believe it important that every Australian should appreciate the fact that when we, as a government and a nation, have to adjust our economic situation to movements in terms of trade of that sort the process is no more painless than when an individual is required to adjust himself to a decline in income from, say, multiples of £1,000 a year to multiples of £650 a year. Such a person might soften the effect of the process by doing some borrowing, or by obtaining assistance from friends or by some other piece of good fortune, but, basically, his situation has changed from a relativity of £1,000 to a relativity of £650.

Putting it in another way, the £880,000,000 which we expect to obtain from export income this year would have been £1,300.000.000 had we sold the same volume and kind of goods in 1953, and we would not be arguing about balance of payments problems at the present time. To put it in still a third form, it takes us 50 per cent, more by way of exports to-day to buy the same volume of goods that we could have bought in 1953.

Mr Cairns:

– That is because of inflation.


– The honorable member cannot get around it that way. It is not the product of inflation. I am speaking hi terms of the same kind of currency. I mention these things as some background to our study of the situation.

This Government has experienced a type of criticism which says that the Government is constantly changing its policy. That kind of criticism reveals a lack of awareness of just what we have set out to do. What must be clearly understood by the Australian people is that this Government has never wavered in its economic objectives from the time it took office in 1949, and ours are objectives which commend themselves to every thinking Australian. I believe they are objectives which would enjoy the unanimous support of honorable members opposite.

After the war, the Australian people were determined to grow in strength and in numbers. The then Government set about achieving that objective, and set about it briskly. We have continued with the task, and this country has grown and developed. We have maintained a planned programme of immigration, and that is what the people of Australia expect of us. They know that this imposes some strain upon us, but they recognize the great benefit the country will derive from it.

Secondly, we were determined - and the honorable member for Lalor (Mr. Pollard) need not think he has some copyright over this - that employment should be kept high. Indeed, even the ambitions of honorable members opposite did not reach the point we have succeeded in maintaining in the years in which we have been in office. The honorable member for Lalor talks about his party’s producing a white paper on full employment. I remember that white paper. I remember a prominent spokesman - he is now on the front bench of the Opposition - who announced at that time that the Labour Party regarded as a reasonable standard of full employment a position at which employment was within 5 per cent, of total employment. I do not criticize him for looking upon that as being substantially full employment. In the light of our experience in pre-war years, that seemed a very successful achievement. But would he or any other honorable member opposite have thought that we would experience a period during one government’s term of office in which unemployment registrations alone - not just unemployment because, against unemployment registrations are also registrations of vacancies waiting to be filled - did not go beyond 2 per cent, at any time in ten years? Of course we have pursued a full employment objective, and we have succeeded in getting employment up to a sustained level not surpassed by any industrial country in the world over the last ten years. Furthermore, we have no intention of marring that record, whatever the difficulties confronting us now may be.

There are some of us - I for one - who came into this Parliament in the years of depression when a Labour Government had been trying to cope with a boom and bust experience that we are determined to avoid on this occasion. In those days, too, the Labour government had railing export income. It had a loss of confidence inside Australia, and it experienced a drying up of overseas borrowing. Out of that situation Australia experienced a boom and bust which produced a great deal more discomfort and hardship than is being experienced to-day. At that time, the hardship was a thousand times greater than any being felt to-day. As against the relatively minor registrations to-day, 30 per cent, of registered trade unionists were unemployed at that time. We have learned some lessons, I hope, from that unhappy past, and certainly no government representing this side of the House intends to allow such a situation to recur.

But we have other objectives as well. For instance, we ‘have had as an objective higher social standards, and we have succeeded in achieving them. We have also had as an objective an adequate rate of home construction. Recently I invited a deputation from the Australian Council of Trade Unions to tell me of any country where a greater number of homes is available to the people than in Australia or where there is a more rapid rate of home construction in relation to population than we have had in these last ten years. I invite any honorable member opposite to name one country where home construction has been at a rate more rapid in relation to population than in Australia.

Mr Bryant:

– What does that prove?


– It proves that we have been getting on with the job and doing the things that the Australian people want tis to do. Finally, the Australian public has expected of us that somehow. within this framework of declining terms of trade and of great aspirations which the Australian people were determined to have fulfilled, we should at the same time keep a grip on costs and prices. If over the years we have been found to have erred, it has not been in the direction of falling down on these other objectives which have spelt human happiness and great progress for the nation. We have allowed some inflation to occur. We regret that. We have been doing our best to hold inflation in check. But we have had no help from honorable gentlemen opposite in the performance of that task. Every time we have brought down in this House a measure designed to check inflation, it has been savagely attacked by honorable gentlemen opposite, who have tried to make some political capital out of it.

Mr Ward:

– What measures have you brought down?


– The honorable member for East Sydney asks what measures we have adopted. I mention this because we have been told that our November measures were a belated attempt to correct the situation. We could see inflationary pressure getting under way towards the end of 1959 or early in 1960, and we announced four important measures. The first was to avoid deficit finance. The second was to intervene to tell the Commonwealth Conciliation and Arbitration Commission of the reasons why we felt there should be no increase in the basic wage and therefore no costs pressure. The commission saw where that process was leading and made the announcement then that it would have been dangerous to have granted at that time an increase in the wage level.

Thirdly, Sir, we announced that we were removing import licensing from a body of imports which at that time were under licensing control. Already by February more than 50 per cent, of our imports were running virtually free of control. We freed a great many more. We also said, though, knowing that these things could not be done unless they were associated with a programme of internal restraint, that we gave support to the policy of bank restraint which had been announced by the Reserve Bank. I stress this, because the Leader of the Deposition in his speech said that we did nothing about bank advances, that we suddenly awoke in August to the fact that matters were going wrong, as far as bank advances were concerned. In February, we made it clear that we supported the policy of bank restraint. From then on we kept in contact with the banking system.

Mr Ward:

– The banks took no notice of you.


– It was not that they took no notice; but just as we .have learnt some lessons from the depression experience of the ‘thirties, we have learned at least one lesson from our experience of last year. We have learned that when banks have large, outstanding overdraft commitments, which have not been drawn upon sometimes for a lengthy period, they are not able to maintain the same control over their advances as they would wish to maintain and certainly as the Reserve Bank would wish them to maintain. In the result, bank advances increased by over £150,000,000 between January and October - the highest increase over that period in any year since our records have been kept.

Then, in the Budget of August, we introduced the measures which were to have some deflationary effect. We increased income tax on companies and on individuals. But such was the boom psychology and the strength of optimism in the commercial community at the time, that this was just swept aside by the tide of speculation, the demand for imports and the other features of that period which are so familiar to honorable gentlemen. We decided in November, therefore, that even firmer measures of restraint had to be applied. We have had no assistance from honorable gentlemen opposite in that task. It is true that they have been very vocal in their criticism, but they have made no attempt to suggest any positive remedies. Indeed, the only remedy that they have proposed is that we should restore import restrictions. That is very interesting, coming from a party - I remind the Leader of the Opposition of this - which, at the 1958 election, announced as its policy on this point the replacement of import restrictions with the application of tariff measures. That is precisely what this Government set out to do when it removed import restrictions in February of last year.

We believe that we should not have such an arbitrary control as import licensing - a bad control which was acknowledged by every one as working unfairly, which produced all sorts of anomalies, which led to racketeering and which is contrary to fair practice, except in the exceptional circumstance of balance-of-payments difficulties, in our arrangements with other governments around the world. The Acting Prime Minister, in his capacity of Minister for Trade, has repeatedly stressed that few countries have a greater interest than Australia in ensuring that fair trade practices are maintained around the world. We, as one of the great trading nations, want the channels of world trade kept as free from artificial restriction as can be contrived. We cannot expect other people to do these things if we are not prepared to play our own part.

Now, Sir, we do have the obligation under the General Agreement on Tariffs and Trade not to maintain import restrictions except for balance-of-payments purposes. It is clearly contemplated under that arrangement that any such restrictions shall be of a temporary order only. Indeed, we have to consult with the Gatt organization annually while such restrictions last. We are constantly under supervision to see that we are taking the necessary corrective measures. These obligations cannot be lightly brushed aside. Honorable members, spokesmen for the Chamber of Manufactures and others seem to believe that all we have to do is to re-impose import licensing, that all will then be well and that licensing can remain indefinitely. Of course, it cannot remain indefinitely unless we are prepared to divest ourselves of the arrangements T have mentioned, and that certainly would not suit Australia.

We have made our position very clear. The Government has said, through the Prime Minister, the Minister for Trade and myself, that having rid ourselves of these restrictions to the extent that we have, it is not our intention because difficulties confront us at this time to return to a process of import control. I understand something of the psychology that is abroad at this time. I know, as do my colleagues, that there are businessmen and spokesmen for these business organizations who say that some return to import restrictions is inevitable. So they say, “ We will increase our imports and so build up the basis on which we will be allowed to operate at some future time “. There are importers who are doing that, we know, and there are manufacturers who are building up stocks against the day when they think import restrictions will return. I say that the Government will do everything humanly possible, having got rid of these restrictions, to ensure that this country is able to stand among the great trading nations of the world - and not in a sheltered and artificial situation which offers no promise for national expansion.

Those who think that if ever a government were required to introduce import restrictions because of a balanceofpayments situation of a temporary or other character it would be impressed by the fact that in our hour of difficulty they made our situation worse by importing to a greater degree than was necessary, or holding stocks to a greater degree than was necessary, are guilty of committing a folly which they will find working painfully against them should they ever have to be measured by their deeds of the past.

Mr Cairns:

– ls not that free enterprise?


– We in Australia live in a situation in which there is a large measure of government activity, of course, but the great difference between Opposition members and ourselves is that they are dedicated socialists. They want the regimented state. They want to put industry in shackles. They regard controls of the sort that operated during the war years as normal - so much so that, as I said earlier, the Leader of the Opposition lightly says that what is happening now is worse than what we knew in the years of war. We, on the other hand, know that within the Australian economic and administrative situation there is a place for government enterprise in the great public utilities that are conducted here. But, at the same time, there is much scope for a spirit of enterprise and for the energy, vigour and drive that the individual can bring to bear towards meeting the needs of this country. It is our purpose to sustain that spirit of enterprise. It is the purpose of honorable gentlemen opposite to crush it and shackle it so that the state shall be all-powerful and the individual shall count for very little in our affairs.

The test of what we did in November and earlier is this: Are these measures working out? There is nothing comfortable about bringing a boom to a halt. Many people are put to a disadvantage and many are hurt when a boom is brought to a halt but, as I said earlier, if a boom is allowed to go on to a condition of bust, for every person who is put to disadvantage by this Government’s measures, there will be thousands subjected to hurt and hardship. That would have been the position if we had allowed a condition of bust to emerge from the boom crisis which was developing around us. As a result of our measures, we have been able to reduce the pressures which were evident in the economy.

Time will not permit me to go into the details, but it was clear that boom conditions existed in the motor industry. It was clear that boom conditions existed in the building industry, particularly in some States. It was clear that boom conditions had developed with respect to speculation in land and other forms of speculative activity. Share prices had rocketed because of these speculative processes. We found that even commodities so basic as are steel and timber were being imported because the supply could not be sustained in this country. We found that labour had reached a point at which job vacancies exceeded the supply of labour in great areas of the economy. The flow of imports had mounted to flood proportions which we could not hope to sustain, and bank advances, as I mentioned earlier, had reached record levels.

All these are very important factors in the Australian economy. With respect to all these factors, the pressure has now eased. We have been able to bring the situation under a greater degree of control, and I am quite certain that the thoughtful Australian who looks about him at this time will agree that we have a very much healthier tone in the community and a much sounder base for the kind of continuing progress that this Government is determined to ensure. We have not introduced these measures in order to halt the steady expansion of the last ten years. What we have been determined to do has been to produce conditions under which that progress can continue.

I believe, Mr. Speaker, that just as the fifties produced the most fabulous decade in the history of this country so far, the sixties will see even greater achievements for the Australian nation. But we have to recognize that there must be a shift of emphasis. In the ‘fifties, we were able to look to a rapid expansion of our manufacturing industries to absorb most of the new labour coming on the labour market, whether from migration or from the natural increase of our population. But we do not want to see the same measure of building-up about Melbourne and Sydney, and even other capital cities, that was apparent in the rapid industrial growth of the 1950’s. We want to see a greater spread of industrial activity throughout Australia. We recognize that our manufacturing industries are now drawing so heavily on imports for the purpose of sustaining themselves as to make it necessary that we build up our export income. So an important and, indeed, major element in the policy approach of the Government at the present time is the decentralization of development and of industrial achievement in this country in order to encourage our export industries to grow and to produce a bigger income for us. Therefore, we have announced major developmental projects, most of them with an important export objective which will immediately be realized when we get them going. These projects will have useful effects on export income in other directions also.

This is the kind of advancement that 1 am sure the Australian people generally, and not just those who live in a few capital cities, want to see achieved. This kind of advancement sustains faith in Australia’s future in the eyes of commentators abroad while our critics at home are doing their best to preach calamity and to knock the efforts of this Government to find a cure for our economic situation. I invite honorable gentlemen opposite to produce one notable overseas commentator who has studied the Australian scene in recent times and who has not commended what this Government has been doing in order to keep the economy in balance. The flow of capital into this country remains strong despite the cries of the calamity howlers. In the last couple of days we have been granted a loan by the Swiss banking system, the Swiss being some of the most canny and observant investors to toe found anywhere in the world. Does that suggest any lack of confidence either in Australia’s longterm future or, indeed, in our immediate capacity to handle the current situation in this country?

Finally, Sir, I say this: The Leader of the Opposition was glad to quote the London “ Times “ in order to bolster his case. Let me quote from the issue of 2nd February of the “ Financial Times “ - an even more authoritative journal in these matters. Dealing with import restrictions, it stated -

Any attempt to tackle the problem by the reimposition of import controls would merely deal temporarily with the symptoms while aggravating the disease in the longer term, a fact which is well appreciated in Canberra.

The “ Financial Times “ concluded - . . whatever economic difficulties she may be facing at present, Australia remains a highly prosperous and in the long run an expanding market.

That, Sir, is the verdict of the knowledgeable critic overseas. It is the verdict of thoughtful Australians, and while they believe that and have faith in this Government, the motion of no confidence which the Opposition has produced will receive the treatment it deserves, not only, as I confidently expect, from this House, but also from the people of Australia when they come to give their judgment.


.- The speech made by the Treasurer (Mr. Harold Holt) to-night was a remarkable one. It is the first speech that he has delivered in the House since February of last year in which he has not announced either the introduction of a new policy or the abandonment of a recent one. A very chastened Chancellor he is to-night, Sir. He has hazarded no guesses as to when his policies will now succeed. He has not told us how many more people must lose their jobs before we will achieve equilibrium in employment, how many more houses must be postponed before we achieve equilibrium in the building industry, or how much more our overseas balances must go down before we achieve equilibrium in trade. He does not say how many will be out of work, how many houses will be postponed, or what figure will be reached in our overseas balances. He does not give any time-table for these things. Nobody in the House or in the country is any wiser after listening to his 45-minute-long harangue.

He started out by saying that the Government does not believe in controls. Of course it believes in controls, and in the last four months has implemented the same controls that it implemented in March, 1956, and in September, 1951. It has implemented the credit squeeze, it has put up interest rates, and it has put up sales tax. The only difference is that on those two previous occasions it made import controls tighter, but on this occasion it has refused to re-implement import controls. However, in all these other respects it has implemented these same controls, and we are experiencing the same effects now as we experienced then. People who depend on credit for the two biggest things they ever buy in their lives - a house and a motor car - are being affected now as they were in 1951 and 1956. If one looks at the graph of car registrations or house approvals one will see a very big dip in 1951-52, in 1956-57, and again in 1960-61. The result of the Government’s controls is unemployment, and that, of course, is the harshest of all economic controls. This Government believes in freedom for the corporation but not in freedom for the individual. Every one of its economic measures involves control, but the Government does not frankly acknowledge the fact and does not consider the hardship it is causing. This is the third time it has carried out this pattern.

The Treasurer had to go back to the war years to quote similar controls. He did not object to the conscription of labour and the other controls during wartime, and no member of the Parliament did. The difference between the Labour practice in wartime and the Liberal practice to-day is that Labour gave efficient administration. At least the Treasurers of those times, unlike the tattered Treasurer of to-day, knew where they were going.

On this occasion the Treasurer has hidden behind his advisers. He said that the advisers available to the Government are so much better, so much more informed and so much wiser than those available to the public that we should trust the policies based on their advice. This is what he said after the November measures last year -

Indeed, I think the public, when it is considering some of the criticisms directed against the Government’s policies, may take some comfort from the fact that because of the wealth of information that is available to the Government but not to its critics, no one is better placed than is the Government and its advisers to assess the trend of economic events.

Who went astray, then? Why is it that of all the plans that were brought down in November on the advice of some of the advisers, all but one and a half have been abandoned? Who shall decide when doctors disagree? When Dr. Wilson and Dr. Westerman, disagree, who shall decide? The Treasurer - not only the Treasurer, but the whole Government - made a decision, and they decided wrong. And now, of course, the Treasurer no longer gives any decisions or estimates or time-tables in those matters. The plain fact is that nobody takes him seriously now. The Treasurer ought to be the economic spokesman of the Government, and to-night is one of the occasions when he is still allowed to be the economic spokesman for the Government. Let us recall some of the things he was saying quite recently. In September, just on the eve of the November measures, he was saying, “ Confidence is in the air in Australia. Who can resist this confidence when on every side there is such evidence of growth? “ Less than three weeks before he brought in this plan-

Mr Harold Holt:

– What are you quoting from?


– This was at Lausanne.

Mr Harold Holt:

– Yes, to a collection of businessmen.


– You were trying to mislead them, were you?

Mr Harold Holt:

– They have confidence in this country. Have you?


– Apparently you were trying to mislead them almost as much as you tried to mislead the Australian public, because you brought these measures down on 15th November without any inkling being given of them, and after having come out with this optimistic and euphoric pronouncement-

Mr Hasluck:

– How do you spell that?


– You would be one of the few Government members to know. After these measures were brought in, the Prime Minister (Mr. Menzies) said that no hasty decisions were reached, nor was there the slightest atmosphere of panic. He said, “ We devoted weeks to this matter “. The Government was already considering this matter at a time that the Treasurer either did not know what was going on here or was misrepresenting it. Again, on the day before the Prime Minister, on the eve of his departure on his last trip, announced the volte face on sales tax, the Treasurer was still propounding and justifying these very measures to the Australian Council of Trade Unions deputation in the presence of the press. Then within three weeks he was asserting to his own caucus that the measures for compulsory loans from life assurance companies were necessary and would go through. The Prime Minister, only a couple of weeks later, said they would be revised. Last Wednesday we had the Treasurer stating that they would take a different form. Sir, nobody takes his prophecies with any faith now, and nobody accepts his explanations for the past.

While one is dealing with the question of controls, one may say that the Government’s attitude to controls is shown very clearly in the relative speed and decision with which it has carried out the two methods of control it announced in February last year. The Treasurer said that, first of all, as regards employees - wage and salary earners - the Government had decided to ask the Arbitration Commission to refuse any increase in the basic wage or in margins. The Government successfully made these submissions to the commission. Honorable members will have noticed the way the Treasurer halted at that point in his speech to-night. He was about to say, “ We told the commission “, but he pulled himself up and said, “We told to the commission “. Again, in the present basic wage hearing, counsel appearing for the Attorney-General, who is intervening in the hearing, has said that he is not asking the commission to reject or to grant the application of the trade unions. He is sitting on the fence. But, of course, he ceased his- case, and put his brief back on the table when he had finished giving the argument against an increase. He has not yet given any argument in favour of an increase.

When the Governor-General was opening the Parliament in March last year he forecast that there would be restrictive practices legislation. Then, on 10th April last, the Prime Minister himself sard that he hoped to have the legislation on monopolies and restrictive practices in the Budget session - that is to say, about last August, September or October. When the Administrator opened this Parliament we found that the. whole of this subject is being postponed until consultations had taken place with the States. One can imagine how effective on big business- will be. a control which commends itself to the Legislative Councils of Western Australia, South Australia or Tasmania. We will proceed, in such legislation, at the pace of the slowest, and the legislation will have no more teeth in it than the rather gummy members of those upper houses will permit to be put into it.

Controls for people on wages and salaries are, in the Government’s view, easy and urgent; controls- for big business, restrictive practices, and monopolies are difficult and leisurely.

One knows that in this country, more than any other country, those who engage in restrictive practices and monopolies rule the field.. They control the prices, they ration, they tie up the sources of raw materials, they put common bids or they ban tenders. The Government is admitting that it is powerless in this field or is deferring action indefinitely. The Government believes in controls but it believes only in those controls which affect wage and salary earners and people who can increase their business only by borrowing money from the banking system.. The Government does nothing to control people who live on investments such as shares. The income and the credit facilities available to the bulk of the Australian people are more rigorously controlled by this Government than they have been before in Australia. But the corporate concerns in Australia are uncontrolled by this Government.

The Treasurer asked us to cite one overseas commentator who has commented adversely on this country’s economy in recent years. As he was saying rt 1 recollected that the London commentator, Lombard, had said only six or nine months ago that, during the preceding ten years approximately, Australia’s export earnings had increased by only half the world average but that its imports had equalled the world average increase. Lombard pointed out how steadily we were going down the drain.

The Government did nothing about the import position then. Not until November did it do something about it. Instead of dealing with the import position, among others, m the way it did in 1951 and 1956 when it got out of hand, that is, by tightening import controls, it has relied on this occasion on the remaining measures - those which impoverish the Australian people by reducing our capacity to buy all things, both items of local manufacture and those which are imported. In other words we are being put out of the market. Instead of having the selective and discriminating form of control which is achieved under import controls, and which some of the largest countries of the world such as Japan still maintain, we are being given an indiscriminate method of pricing us out of the field.

The Government acknowledges that we are importing too much and all these economic measures are calculated to prevent us from importing so much. But, in the process, a very great amount of hardship and very many injustices are being perpetrated. I have quoted some of the statements by the Treasurer on this matter. I think his reputation has been damaged in the last few months second only to that of the Minister for Labour and National Service (Mr. McMahon) - the Minister who has to release these roneoed rigmaroles every few weeks concerning the employment positron. The Minister for Labour and National Service had the courage or the hardihood, on the night when the Treasurer introduced these measures in November, to congratulate him on the series of measures that he was taking. He said -

I believe the measures being taken are wise and that they will be successful . . . We think that in the changed circumstances the remedies adopted will be adequate, and we expect the economy to continue to prosper.

Further famous last words by the Minister for Labour and National Service were as follows: -

As to industry in general, I think it ought to be known that we are suffering from overfull employment.

He also said -

So I think we are entitled to say that a considerable amount of excess demand would have 10 be wiped off before any difficulties about employment in the motor vehicle industry could be thought of.

A couple of weeks later, he was more specific. He said that in only about four factories - he was referring to motor car factories - had problems arisen. Two of them were the factories of the Ford Motor Company of Australia Proprietary Limited in Queensland and in New South Wales The Leader of the Opposition interjected -

How many do you expect to be retrenched?

The Minister answered -

Certainly no more than 250. There will be about 170 at Homebush and probably 70 in Queensland but they will all find jobs quickly.

The Minister was referring to Ford factories, but in actual fact, those factories have laid off seven times as many workers as the Minister predicted. He also said -

T have also read of the position of the Standard Motor Car Company in Victoria, where there are about 80 retrenchments.

On the next day he said - 1 think I should say … we can all rest assured that the economy of this country will continue to develop at a very healthy rate, assisted by the measures which have been taken by the Government, and that as a consequence the opportunities for employment will also continue to increase.

Mr Curtin:

– Who said that?


– The Minister for Labour end National Service on 30th November, I960. He is another false prophet.

I would not have expected the Minister for the Interior (Mr. Freeth) to interject as he is doing. He is the man who last year wanted to expel Senator Wood from the Liberal Party and who cut Senator Wood in the dining room.

Mr Freeth:

– That is perfectly untrue.


– On television in Western Australia, the Minister stated that

Senator Wood should get out of the Liberal Party as the sales tax increase was a matter of prime Liberal policy. The Minister can eat crow in public or in private, whichever he likes, but I hope that he has apologized to Senator Wood, the only member of the Liberal Party or the Australian Country Party who has come with credit out of the last four months.

The only complaint that Liberal members made here or in another place or outside, concerned the compulsory loans from life insurance societies and superannuation funds, and the taxing of interest on fixedinterest securities with hire-purchase and other companies. I have never heard one Liberal or Country Party member complain at any stage about the increase in interest rates, and I have never heard a Liberal member complain about the restriction on credit. Certainly they have not complained since last November any more than they complained in March, 1956, or September, 1951. They accept the decision that wages and bank credit should be restricted. The only time that they complain is when the entrepreneurs or the landowners are affected. When the Minister for the Interior interjected, perhaps I should have been as gracious as the Treasurer and said, “ Please do not distract me “.

The Minister for Labour and National Service gave these optimistic forecasts about the employment position at the end of last November. He should have known what the Government meant by these measures. One recollects that the Treasurer said that, as a result of these measures, the Government expected to receive no additional revenue at all from sales tax. He realized that the credit restrictions and the one-third increase in sales tax would produce a reduction in sales of at least onequarter. If sales are reduced by onequarter and sales tax is increased by onethird, the revenue remains constant. The Treasurer knew and the Minister for Labour and National Service knew that these measures were intended to reduce the sales of cars by one-quarter, that is to render a quarter of the plant idle, to retrench one-quarter of the employees and - to give a good capitalist argument - to repudiate a quarter of the income of the investors in this field.

I now give the figures for unemployment in Australia. I will compare the period between November, 1959, and February, 1960, with the period between November, 1960, when these proposals were announced, and February of this year. In the earlier period, the number of unfilled vacancies registered with the Department of Labour and National Service declined by 3,500. In the latter period they declined by 20,000. In the earlier period, the number of persons seeking employment through the department increased by 10,300. In the latter period, they increased by 30,000. In the earlier period, the number of persons receiving unemployment benefit went up by 1,000 and in the latter period it rose by 9,200. Ordinarily, January is the month when the number of persons receiving the unemployment benefit and applying for jobs is greatest. The last year before this in which there was a significant increase in the number of persons seeking work and receiving unemployment benefit in February above January was 1952, the year of the horror budget. In each case, the increase from January to February was 3,000. That

Was most exceptional, because in most other years there has been a reduction of that number or more.

One of the difficulties we meet in Australia is that the Commonwealth Statistician no longer produces unemployment figures. The Department of Labour and National Service produces figures which are valid only within the terms of its definition. No other country is content with such restricted figures. I quote Mr. H. P. Brown who said in the “ Economic Record “ of April, 1959-

Hunches based on union pressures, the flow of migrants and prejudice seem as reliable a guide to unemployment as public statistics.

Only last year, the Treasurer told me that the Statistician had ceased publishing figures on unemployment because he thought they were unreliable. The concluding feature of this field is that only yesterday Sir Douglas Copland, a notably optimistic commentator on economic affairs, forecast that in this year, we would reach 5 per cent, of the work force unemployed or 200,000 persons. He is not a Labour propagandist or a Labour supporter.

Mr Stokes:

– Your colleague, the honorable member for Parkes, said that that was a good figure.


– Everybody in the country is quoting it except Liberal members of the Parliament. It is significant that Sir Douglas Copland has said that. Are you going to impugn his calculations in that respect? You are happy to quote them on other occasions.

I shall deal now with the question of the motor industry in general. It is a very clear example of the way the Government never anticipates trouble and never gives advice in advance. If it had been prudent or fair to this industry, the Government would have told it years ago how many cars the Government thought should be sold in Australia.

Mr Harold Holt:

– That is the regimented approach.


– What do you call the present state of affairs? What have you done to the industry now? What is it other than regimentation? Last November, you deliberately introduced a policy which would put a quarter of the work force in the motor industry out of employment.

Mr Harold Holt:

– You said we should fix a quota for every manufacturer.


– No. You have regimented them now as you did in 1956 when you last imposed a credit squeeze and also increased the sales tax on motor cars by 10 per cent. You have done it just as you did when you increased sales tax by 10 per cent, in September, 1951 at the time of the horror budget; in March, 1956, with the little horror budget. You have done it again through the measures introduced last November when the motor car industry was getting out of hand. You have regimented it by closing down the plant, retrenching the employees and repudiating the income of the investors in that field.

Mr Harold Holt:

– Have you had a look at your credit squeeze of 1948?


– I have repeated the point I made during the absence of the Treasurer. I thought it might make his interjections more relevant. The sensible thing would have been to have told the motor industry, when it started expanding after the 1951 blitz or the 1956 blitz, the extent to which sales would be welcome within Australia. The Government also failed to do something else: It failed to insist, when these companies invested in Australia, that they should be free to export.

The motor vehicle industry is the largest employer of labour in Australia. It contributes in indirect taxes more than any other industry in Australia. We do very well out of it. As I have said, the two biggest things that a man buys in his life are his house and his motor car. Credit restrictions operate on both of them. Three times the Government has hit at this industry. Since the Second World War, the Government has allowed to grow up an industry which makes no significant contribution to our export earnings. Proportionately, we are one of the largest manufacturing countries in the world, but of all the manufacturing countries, we get the smallest percentage of our export income from manufactures.

The only countries in the world which produce more motor cars than we do - the United States of America, Great Britain, Germany, Russia, Japan, Italy, France and Canada - export a very much greater part of their manufactures. We are a highly industrialized country; but the motor vehicle manufacturing sector makes no significant contribution to our exports. Our balance of payments situation is crucial. Every motor car company in Australia is wholly controlled overseas. When these investments were made in Australia, the Government should have insisted that some of the products would be exported. The Government failed to do that. It is true that the Parliament of the Commonwealth is the only national parliament in the world which does not have power over capital issues, but we do have control over the investment of imported moneys. We could have stipulated to these people when they set up industries here the conditions under which they could manufacture. We have never laid down those conditions.

Mr Howson:

– Did you do that when the Labour Government let General Motors in?


– We have learned from experience. You never have. None of the motor car companies in Australia which areowned in Great Britain exports any vehicles, at all. They are not allowed to do so. Their principals prevent them exporting the products ‘of (their Australian subsidiaries and branches. The companies which are owned in the United States df America and Germany export precious few. If you excluded the New Zealand and New Guinea markets you could .count them in double figures.

Let us compare our position with that of other countries. We export less than 1 per cent, of our motor car manufactures. Germany and the United Kingdom export 48 per cent, of the vehicles they manufacture. Italy exports 34 per cent, and France 27 per cent. Canada is in the same position as Australia in that its motor companies are controlled overseas. Still, it exports 5 per cent, of its manufactures. The United States of America exports 3 per cent., but that country is looking after its export markets increasingly by setting up subsidiaries overseas. As I have said, Australia exports less than 1 per cent.

It is quite plain that in future when people are investing in Australia, we ought to tell them that they shall make some provision for paying their way and for exporting their products. That was not done with the motor car industry. The motor car industry was only one of the industries which were affected by the Government’s credit squeeze. This restriction of credit was just the last of the Government’s measures, because the Budget measures were tough enough. The Budget, in fact, provided for a larger surplus than any Australian Government had ever previously budgeted for. In other words, applying the same definitions to this year’s Budget as were applied to the Horror Budget of 1951, we budgeted for a surplus of £10,000,000 more last August than was budgeted for in 1951. The effects of the Budget proposals were being felt in November, when the further measures were introduced.

The motor vehicle industry is simply the best publicized of the industries which have been affected. It gets good publicity because all the newspapers rely very largely on advertisements from motor manufacturing or distributing firms. The motor vehicle industry determined that its point of view should be given maximum publicity, and, of course, it was. But there are other industries which have been affected proportionately to just as great an extent. They include all the consumer industries, and particularly the electrical goods industry. They have been affected just as much, but because they are more dispersed than the motor vehicle industry the effect is not so obvious. The fact is, however, that just as large a proportion of employees are being retrenched in those industries as in the motor vehicle industry.

The housing industry is, for the third time, a victim of Government policy. In the year of the Horror Budget the number of houses commenced - and that is the proper test - dropped by 17,000. There was a large drop in 1956-57, and it looks as though the drop this year will be just as great as it was in the year of the Horror Budget. It is a very interesting exercise to study statements made on housing by the Minister for National Development (Senator Spooner). Three sets of figures are produced. One sets out the number of completions in each month, another the number of commencements, and the third shows the number still under construction. When times are bad and credit dries up, the Minister cites the number of completions, because when there is no other work to start on, builders naturally concentrate on finishing the jobs on hand, and you then see an increase in the number of completions. The Minister does not at such times cite the numbers of commencements or approvals, and these have gone down dramatically in the last few months. In January of this year the number of private flats and houses approved in Australia was 4,800, while in January last year it was 5,800. A similar drop is seen in figures showing values and other details of these approvals and commencements.

One can see a similar pattern developing now to that which developed after March, 1956, and September, 1951. Here again it is difficult to give a compelling picture of the numbers of people involved. If people are laid off in some hundreds, or, as in the motor vehicle industry, in numbers ranging as high as 7,000, everybody knows about it. There are twelve employers in the motor manufacturing field. If each of them lays off a few hundred employees the occurrence is dramatic and is well publicized. But if people are laid off in the housing industry, they are people employed on thousands of little jobs all over the country. The fact that they are laid off is not readily apparent. The jobs on which they are employed are finished, but they are not re-employed on new jobs. Half a dozen people at the most are engaged on the construction of a house, but if 1,000 fewer houses are commenced in this month than were commenced in the same month last year, it means, of course, that there are 6,000 fewer people getting jobs in the domestic building industry. The Government’s credit squeeze has affected all those people.

Commercial building is not so affected by the credit squeeze, which is directed principally towards people who borrow from banks or hire-purchase companies. People who borrow from those institutions for building purposes are domestic builders. Those who build large industrial premises are financed from shares and reserves, and there is no credit squeeze here. Commercial premises being erected in the cities by insurance companies or banks are little affected by the credit squeeze. Again, the finance is derived from shares or from reserves, and there is no squeeze in that direction. It is the small person, who has to borrow through the banking or hire-purchase systems, who is affected by the credit squeeze, as he was affected in 1956 and in 1951.

I have mentioned the credit squeeze as it affects the motor vehicle industry, the electrical industry and the housing industry. The credit squeeze policy has also affected the people engaged in industries supplying those three industries. It has affected everybody concerned with the steel, rubber, glass, timber and light metals industries.

Another notable feature of Government economic policy is its attitude towards interest rates. Australians now pay higher interest rates than they have paid at any time in the last 30 years. We pay higher interest rates than are paid in any other country in the English-speaking world. The consequences are felt not only by individuals, partnerships and firms which borrow from banks and hire-purchase companies; they are felt also by State governments and by localgovernment authorities. The effect on individuals can be gauged from the fact that if a person is financing house building or a business or any other project on a bank overdraft he was able to do so, when this Government came to office, at an interest rate of 4i per cent. In 1953 the rate rose to 5 per cent, and in 1956 to 5i per cent. It has now gone up to 6 per cent, average or 7 per cent, maximum, and if you borrow more than £3,000, of course you cannot get the additional amount at less than 6J per cent. In other words, there has been an increase in overdraft interest rates, under this Government, of 1+ per cent, average or 2£ per cent, maximum. We are now paying, as I have said, higher interest rates than we have ever paid in Australia in the last 30 years, and we are paying higher interest rates than are paid in any other English-speaking country.

Mr Harold Holt:

– Then you do not agree with the critics who said that we should have allowed interest rates to rise?


– Of course not. I concede that a good case could have been made out for fluctuating interest rates, in conjunction with other economic controls. But your Government does not simply vary the interest rates. You insist that they should always go up. There is no parabola under your policy, but just a steady line leading always upwards. If there is one consistent feature of your policy it is your belief in increasing interest rates.

If a person has money to lend, he will obviously be very grateful to this Government. But if, like most individuals in the community who seek accommodation, or who wish to expand their businesses, a person has to borrow money from the banking system, then he has no cause to be grateful to this Government, because it has placed a continuous and increasing debt on his shoulders. Bank loans from savings banks have gone up from 3J per cent, to 5i per cent, during the term of office of this Government. Interest rates on loans to building societies have gone up by the same amount. The yield on government securities has increased from 3£ per cent, to 5i per cent.

Let me give one illustration of the effect on the private home builder. If a person borrows for a period of 30 years he will now pay back an additional sum equal to onethird of the sum borrowed because of the increased interest rates introduced by this Government. Even if he has already built or bought the house he will now have to pay more, or make repayments for a longer period, because of this increase.

The increased rates have also affected State governments. In the last ten years the indebtedness of State governments has been doubled, but their annual interest payments have been trebled because of the increase in interest rates. But a quarter of the State debts are still attracting an interest rate of only 3i per cent, or less, ar.d when those loans are paid off still more interest will have to be paid. I remind honorable members that the State governments - on which we rely for all our power houses, our communications services, conservation, education and hospitalization - are paying much more than is indicated by the increase in the indebtedness.

A similar set of conditions applies in the case of local government authorities. The amount that local government authorities now owe is two-and-a-half times what it was when this Government came into office and the amount that they have to pay in interest is three-and-a-quarter times what it was then. Semi-government and other public authorities now owe five times as much as they owed when this Government came into office and they are paying each year in interest more than seven times what they paid then. That is the way in which they are affected.

The continuing trouble - ignoring for a moment the internal impoverishment which has been brought about by this credit squeeze and other Government measures - is our overseas balances. It is true that we cannot be certain of what we will get for our exports, but we can guide to a very large extent the amount of our imports. Since 1949-50, the average annual fluctuation in exports has been £90,000,000 per annum, but the annual average fluctuation in imports - the thing that we can controlhas been about £170,000,000 per annum. In the last ten years we have failed to pay our way by £1,800,000,000. There are only two previous years since 1951-52 in which we have had a current account surplus and they are 1952-53 and 1956-57, the last two occasions on which we had a credit squeeze similar to this one. On those occasions we tightened import controls, but on this occasion we are relying only on an increase in indirect taxes, a credit squeeze and an increase in interest rates. In all these respects we do not know when we will at last solve our problems. The Government does not know, and the Treasurer to-night has not told us. We are left to conjecture when the causes of these latest economic measures will be rectified.

The Treasurer concluded his speech with an evangelical and lyrical note on the developmental projects which his Government has in mind. The extraordinary thing is that all of these projects have either been stalled or postponed by this Government and should have been in operation before import controls were lifted. One of the proposals is to standardize rail gauges. There has been on the statute-book for the last twelve years an agreement in relation to this matter and the Government has done nothing about it.

Mr Harold Holt:

– Labour did nothing about it when it was in office.


– The last act that we put on the statute-book was in relation to it, and your Government has allowed it to remain a dead letter for twelve years. The Government at last is doing something about port modernization. In 1956 the Treasurer was the Minister who sponsored the measure cancelling the power of the stevedoring authority to carry out such projects, and the Government has hitherto refused to take action under the Coal Industry Act which permits it to modernize port facilities for the handling of coal. As to the provision of roads in the north, the Government has not re-enacted or made any further appropriations to carry out the provisions of the States Grants (Encouragement of Meat Production) Act which the Chifley Government passed in 1949.

Whatever one may think of the arbitrariness of import controls, the present credit squeeze is still more arbitrary than they. The Government recognizes that without import controls it has no alternative but to deflate and to impoverish us. Instead of going direct to the problem of controlling imports, the Government has adopted these indirect and underhand methods that have produced so much hardship in the country.

This is too high a price to pay for the Government’s refusal to reverse its decision as announced in February last year to abandon import controls. The Government has reversed practically every other measure that it announced in February, August and November last year. Why can it not reverse this last decision? Irrespective of who wins the election at the end of this year, import controls will be reimposed directly afterwards. The Treasurer’s reputation would not be affected. He has had to reverse and repudiate every other policy. Will he not repudiate this policy which is at the base of the hardship which has been caused to so many people who have been retrenched from their employment, or who have been denied credit or who have had their standard of living reduced by the Government’s other measures during the last twelve months?


.- I am always fascinated by following the speeches of the honorable member for Werriwa (Mr. Whitlam) because we all know that he is a very effective speaker. But what one has to do is to look very closely at what he says because although quite a lot of it sounds very good it is not very close to the truth. The Deputy Leader of the Opposition, following in the footsteps of his leader, has not made one constructive statement. The Labour Party’s argument is based on import controls and their effect. The honorable gentleman wants to reimpose import licensing. But the Labour Party has not said one word about how we can reduce the cost factor in Australia. It has relied on its present method of trying to make a good point that this Government is the one government which demands that labour, wages and salaries shall be kept down, but everything else is allowed to go up. The Arbitration Commission lays down the wage that shall be paid to the workers, but how many people analyse what the honorable gentleman has said. The court decides a minimum, not a maximum wage, and this places a completely new complexion on the matter. No ceiling is placed on a man’s wages. The court fixes only the minimum wage, and it is quite easy to forget this.

The honorable gentleman mentioned the motor car industry. Let us consider the points that he made. The car industry increased production from 700 vehicles a day to 1,000 vehicles a day. Think of the resources of labour and materials that go towards producing that number of vehicles each day! Can this country afford the imports that are necessary to maintain that production? Of course it cannot! The honorable gentleman knows this but his party has used the motor car industry for the purposes of its argument because men have been transferred from employment in it. We all know that it had to stop. The industry was paying over-award wages and attracting workers from essential industries. In addition, a large number of cars was being imported from overseas, so the 10 per cent, tax was levied to dampen down the industry.

What would have happened in the Old days of the business cycles which went up and down at regular intervals? Every time business became strong it would reach breaking point and go down into the trough. There would be two or three years unemployment and then slowly it would pick itself up again. While the production of motor cars was increasing essential industry was been starved of labour and, if the Government had not stepped in, essential industry would have fallen by the wayside while the car industry went on until it broke and collapsed. That is what would have happened in the old days when the philosophy of laissez faire - “ it will right itself “ - was held. But the Government prevented the unemployment that would have been rife. People tend to forget the old days of laissez faire, of which the capitalist system is always being accused, and the ups and downs. Modern government cuts across that, and that is why to-day we have regular alterations in economic policy. The United Kingdom Government has made seventeen changes in its economic policy in the last two years. We have made many fewer than that.

The honorable member for Werriwa spoke about cheap money and low interest rates, and stated that Labour is a “ low interest party”. But what is more inflationary than cheap money? It is one of the most inflationary forms of finance. Australia is expanding at a greater rate than any other country has expanded in the history of the world and these tremendous forces of inflation have built up because of that expansion. I think that the Treasurer (Mr. Harold Holt) must have seen some of my notes because we both have approached this subject along the same lines. A motion of no confidence is a very serious matter which one does not move lightly or wantonly. By moving a motion of no confidence the Opposition tells the people, “You are being governed by somebody who is not trustworthy. We will show you the Government is not trustworthy and suggest that you put us in.” I read the speech of the Leader of the Opposition (Mr. Calwell) three times; it is one of the penalties of being a member of Parliament that one has to do these things. 1 could find in that speech nothing whatever which was constructive. Apparently, the honorable gentleman did not understand what the motives behind the system governing this country were.

One matter which he mentioned was import controls and he said that if the Labour Party came to office it would reimpose import controls. Under the protection of import controls or import licensing manufacturers had been waxing fat and not looking to their costs. Once we lifted import licensing Australian paper manufacturers put labour off because they cannot compete with overseas manufacturers sending paper to Australia. Why cannot they compete in their own country? Are they inefficient, or is their machinery out of date? The trouble is that their costs are too high, but no speaker on the Labour side of the House has ever pointed the finger at costs. The farmer has to accept his costs and export to competitive world markets, and unless he can do that we cannot survive or employ our people. That is one of the reasons behind the Government’s measures to reduce costs. What factors affect costs? They are profits, wages, hours of work, interest rates and so on. How can you bring those costs down unless somebody does something? It is typical of some Australians to say, “ Let the other fellow do it”. The final point is that we rely on exports of primary products to keep us going, and if the farmer cannot meet his costs, how is the nation to survive?

Two things are clear if one reads what the Leader of the Opposition said. He has no understanding of the methods employed by this Government or of how it seeks to achieve its objectives by indirect and impersonal means. The second point is that the approach of the Opposition has been made with the mind of a doctrinaire socialist. Their criticisms have come from that stand-point. I do not say that lightly, but I know it is so. “The Daily Telegraph “ of 3rd March allowed the Leader of the Opposition a couple of columns in which to put forward Labour’s point of view, and in that issue we read - “ Capitalism is anarchy plus a police force.” This opinion was expressed many years ago by James H. Scullin, long before he became Prime Minister. It is a true saying, even if some one before Mr. Scullin first said it.

Here is a point of view which I would like to take up, because it is one of the reasons why the Leader of the Opposition cannot understand the system which the Government uses. He says “ Capitalism is anarchy “, but capitalism is the Australian way of life. Say what you like, we are a capitalist society but, because capitalism has been given a bad name, we call it private enterprise. But it is the capitalistic society of the Western world. The accusation is made at times that capitalist society allows monopolies to form. The capitalist system demands free enterprise and free opportunity. Monopolies are part of the socialist system because under it you have the monopoly of labour and monopoly by State controls. Yet the Leader of the Opposition calls the Australian way of life “ anarchy plus a police State.”

When our people travel overseas they are proud to be called Australians and they are proud of their system of government and of the Australian way of life, but members of the Labour Party are pledged socialists. Their whole policy is socialist and although they are proud to be Australians when they are overseas, they are pledged to bring into this country the evils of socialism. We have it here in Labour’s objectives - the democratic control of industry, production, distribution and exchange. The word “ democratic “ is used in that context in order not to make it look like the Marxist Communist concept. There we have exactly the same system as operates in Russia, and that is the system which the Labour Party intends to bring into operation here if it is permitted to do so. Yet members of the Opposition are proud to be Australians.

I think one of the most stupid criticisms of this Government ever made is that it is a stop-and-go government. As I have said, it was necessary to correct the economy, as it was corrected in the case of the motor car industry, in order to divert labour which would have been diverted under the old system by complete unemployment, before the imbalance became dangerous; and that is what was done. Another sector of the economy where the position was dangerous was the building industry. In both Sydney and Melbourne there was over-employment of labour with demands for high wages and bonuses, and there was the pinching of men from this contractor by that contractor. The Leader of the Opposition referred to the home-builder. If there is over-employment of labour in commercial building, what is its effect on the home-builder? How can he compete in the matter of costs? The Leader of the Opposition said that commercial building had been paid for by premiums, shares and so on, but that is not entirely so, because a great deal of it was financed by bank finance and that was one method of weakening that field of employment. In the central bank directive to the trading banks there was an instruction not to increase some types of advances but that there should be no restriction of advances for social housing. That was the instruction and the bank can only work on the broad directive.

While on the subject of interest rates it is surprising to see how the Leader of the Opposition attacked this Government’sscale of interest rates, when the Government of New South Wales has its own banking institution, which charges the same interest rates as the ordinary commercial banks. Why does not the Government of New South Wales carry out the policy of low interest rates which the Opposition advocates here? This is an instance of a bank under Labour control following the policy of the Central Bank. We have been criticized to-day by honorable members opposite who say we are selling Australia to the foreign investor - and this on the eve of the departure of the Deputy Premier and Treasurer of New South Wales overseas to seek foreign investment. You cannot have it both ways. Honorable members opposite are really in a muddled state. No other country in the world has the same percentage of home ownership as we have, and” surely that is a sign of the tremendous improvement that has taken place since this Government took office. When we took office, there was a 50 per cent, home ownership, and the figure is now about 72 per cent, with a greatly increased population, whilst car ownership has increased to one car in every four of our population.

The other day, just outside Yass, on the Hume Highway, a man whom I had picked up was criticizing the Government. I asked him to wait for a moment and watch the traffic. Shortly after that a fine car towing a huge caravan and bearing a Victorian registration plate passed us. That was followed by another car bearing a South Australian registration plate. This, in turn, was followed by two trucks which were followed by a car with a boat on top of it. Then came another car towing a boat on a trailer. And that type of traffic is going through that area for 24 hours a day, 365 days of the year! Every weekend on every highway may be seen cars with boats on top, and cars towing caravans. Everywhere may be seen indications of high living standards for the people, and that is all to the good. I believe in high living standards, but I also believe that if we want to enjoy those standards we must be prepared to work for them. The greatest bugbear confronting this or any other government has been the premature introduction of the 40-hour week. I would have been pleased to welcome the 40-hour week had it been introduced later.

Again, if conditions are as bad as honorable members opposite say they are, why did the Labour Government of New South Wales legislate for the granting of three weeks’ annual leave? Is that the sort of thing to do when conditions are sticky? The building contractor who employs a band of men capable of building one house a week is able to construct 50 houses in a year if he is obliged to grant his employees two weeks’ annual leave. It takes no wizard of economics to understand that if the employees are to have three weeks’ annual leave, then only 49 houses will be constructed during the year for a cost of 50 houses. Again, it does not take a financial genius to appreciate the increase in the cost of housing which must result from the granting of the extra week’s annual leave. Who pays the added cost? It is paid by the man who buys a house. In other words, the worker himself bears the extra cost. That additional burden is passed down through society until it rests upon the farmer, who is already in a difficult position in that he is required to sell his produce on the world’s markets. No great economic knowledge is required to understand these matters.

We are asking manufacturers to seek export markets because, as other speakers have pointed out, one of our greatest problems is that the bulk of the produce we sell overseas is farm produce that has to be sold on a fluctuating market. We have to export anything from 14 per cent, to 20 per cent, of our gross national product. The older countries are not faced with that problem. They need to export only a small percentage of their gross national product. But our greatest difficulty is that our exports are products of the type for which prices fluctuate.

The honorable member for Werriwa (Mr. Whitlam) decried the fact that we are not exporting cars as France, Germany and Great Britain are doing. I have always found it wise to examine very carefully statements made by the honorable member for Werriwa. Usually after he speaks here I make it my business to go to the Library to check what he has said. I remind the honorable member that Australia did not start manufacturing motor cars until comparatively recently, while Great Britain, Germany, France and Italy have been exporting them for over 50 years. They are old car-manufacturing countries. The argument put forward by the honorable members for Werriwa sounds good, but when it is analysed, it is found to contain great weaknesses. After all, a lawyer’s success often depends on a smart presentation of his case. But not all lawyers are like that. Some lawyers make very good Treasurers, but I am confident that the honorable member for Werriwa would not make a good Treasurer.

Speakers at a regional conference of the Australian Labour Party held at Temora in my electorate recently, and attended by the honorable member for Werriwa, emphasized the point that socialism loses votes. One smart fellow there said, “ Let us call it competitive socialism.” That is even more amusing than democratic socialism because there can be nothing competitive or democratic about socialism because socialism is State control. That same conference passed a resolution that the Premier of New South Wales be instructed .to direct the Commissioner for Railways to grant the £2 industry allowance which railway workers are claiming. The honorable member for Werriwa also said at that conference that the farmers were the victims of all the legislation passed by the Menzies Government. Yet the conference passed a resolution seeking a £2 a week industry allowance for railway employees. I am not discussing the merits of that allowance.

Mr Bryant:

– What are you discussing?


– 1 am discussing the principle. After all, we have an arbitration system. The honorable member for Werriwa asserted, as I have sard, that the farmers are the victims of all legislation passed by this Government. But who would pay the industry allowance of £2 a week? The farmer would bear the full burden because he has to pay every penny of the freight charged for the transportation of his wheat, wool, beef, mutton or any other produce that he sends to Sydney or other big markets. The consumer pays for nothing; the farmer bears the whole freight cost and this must be increased if the Commissioner of Railways is to be required to pay his employees an industry allowance of £2 a week. Again, the farmer and other residents of rural areas are required to pay the whole of the freight charges on goods despatched to country districts. Therefore, this great defender of the farmers, the honorable member for Werriwa, would impose upon the farmers an additional £1,000,000 annually in freight charges, thus adding to the cost of producing the commodities which are required to compete on overseas markets. F find this very hard to understand, especially when we have an arbitration system in operation here. In fact, the more one examines Labour’s policy the more one realizes how foolish it is.

The honorable member for Blaxland (Mr. E. James Harrison) who has an association with the railways, says that the wool industry is in a difficult position and asks why the Government does not do something to assist it, but 1 remind the House that the honorable member for Blaxland is one of those who support Labour’s policy of directing the Commissioner of Railways to pay railway workers an industry allowance of £2 a week, thus by-passing our arbitration system. He supports payments by compulsion, just as his party preferred to obtain three weeks annual leave by force, and just as it used pressure to bring about the introduction of the 40-hour working week. No doubt his party will resort to force in an endeavour to bring about the introduction of the 35-hour working week.

The honorable member for St. George (Mr. Clay) complained that local governing bodies are being starved of finance. He comes from Sydney and I assume that the Sydney County Council is one of the bodies which he suggests are being starved of finance. Yet the council has agreed to give its employees four weeks annual leave and free dental treatment! Does he expect this Government to finance these things for that local authority?

I believe that the measures being taken by the Government are designed to bring about a re-distribution of our working population with a view to increasing and expanding Australia’s production. I believe also that the economy is basically sound and that it will remain sound and grow stronger provided the critics and people like the press do not destroy it. In this instance we have had fairly mild criticism from the press. The honorable member for McPherson (Mr. Barnes) was quite outspoken in this chamber, and so was the Treasurer, but I feel that more should be said. I feel that the attacks are more than critical; they are mischievous because the surest way to bring about a state of depression is to break down confidence.

The statistics relating to the reemployment of labour indicate that things are going reasonably satisfactorily, and as the broad basis of our economy is adjusted to meet the situation caused by powerful inflationary pressures, Australia can look forward to a bright future. But one thing that has to be understood is that the economy still relies on the work of the farmer. That being so, it is essential that the farmer be given a square deal. As to wages and labour cost, I believe in high wages, but I also believe that high wages must be accompanied by improved production. Already our manufacturing industries are increasing their output. The honorable member for Barton (Mr. Reynolds) suggested that Australia compares rather unfavorably with Germany, France and Italy, but he failed to mention that in Germany, France and Italy employees in industry are required to work a 46-hour week. He also neglected to mention that in Japan the employees are required to work a 48-hour week. In Germany, too, the people work hard. In my opinion, the Australian worker is one of the best workers in the world, but he must be led.


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


.- The honorable member for Hume (Mr. Anderson) adroitly side-stepped the whole purpose of this debate. In October, the Treasurer (Mr. Harold Holt) announced a four-pronged policy. It was not, as the honorable member for Hume suggested, to arrest internal inflation or to cany out any of the purposes that he mentioned; it was designed to redress Australia’s unfavorable trade balance. If the four-pronged policy of the Treasurer is to be discussed as a success or a failure, it must be discussed as a success or a failure in altering that unfavorable trade balance.

The honorable member for Hume spoke about costs and how they affect the farmer. I invite his attention to the fact that the export prices of Australian wool and wheat were very similar in 1949 under the Chifley Government to what they are today, that the basic wage was £6 9s. not £15, and that since the fall of that Government the level of costs and wages to which he has referred has developed.

It is interesting to hear Liberal and Australian Country Party spokesmen talk about hire purchase and interest rates. For years honorable members on this side of the House have begged the Government to do something about hire-purchase interest rates, first because they were usurious, but secondly because they were diverting money which otherwise might have gone into fundamental development works through Commonwealth loans and other means to a froth economy that was not important. The Government allowed that situation to drift for years, and then in October of last year, after seven or eight years of soaring hire-purchase interest costs and diversion of funds to hirepurchase activities, one of the four prongs of the Government was the removal of deductibility for income tax purposes of interest paid for certain sorts of activities. That prong of policy was directed at hire purchase. But the records of the Parliament show, as the honorable member for Hume knows, that for years we asked the Government to take action against hire purchase because of the way it was distorting the economy.

Let us have a look at what the Treasurer and honorable members opposite said last October and November was a new divine revelation and a policy that we must all support. As times goes on, back-bench members usually find that Ministers like them to come in on debates such as that of last October, but if the Government ever feels it is on a winner, the Ministers want to take all the debate themselves. Last October we had the honorable member for Moreton (Mr. Killen) standing and pledging that the Government’s action in connexion with the motor car industry would not lead to unemployment in that industry. Other honorable members opposite made assertions of a like character. Now we learn from the honorable member for Hume that what has taken place is a diversion of labour. Let us have a look at the four prongs of this wonderful policy proved up to the hilt as a splendid policy in almost the last debate in this House in the last session by every supporter of the Government who spoke, except for one Senator, Senator Wood, who proposed - I heard him being sneered at as he did so - much of what is now the policy of the Government in its new phase.

The first prong of the Government’s policy was increased sales tax on motor cars. That is now removed. The second was the proviso that 30 per cent, of the funds of insurance companies must be invested in Commonwealth loans. That is now removed. The third was the credit squeeze, which is still with us. The fourth was the adjustment in the deductibility for income tax purposes of interest payments.

The “ Financial Review “ of the “ The “ Sydney Morning Herald “ contained this interesting statement -

The Federal Treasurer, Mr. Holt, is to have more talks wilh the hire purchase industry as an attempt is made to unravel the tangle of Government thinking on interest deductibility.

So it appears likely that the fourth prong of policy will be removed or modified.

The point that is important is not whether the honorable member for Hume thinks it is good that a diversion of labour is taking place; the important point is what is happening to the external credit position. The policy is designed to meet this. Has it done anything to achieve its purpose? If it has not, the policy has failed. While we are all discussing what this has to do with Australia’s internal economy, the truth is that the external position of Australian trade is wholly untouched and the deterioration continues. Despite this Government’s credit squeeze, imports in February were worth £94,800,000 against exports worth £79,600,000. It was a further deterioration of £15,200,000, and it brought the visible overseas trading deficit for the eight months from 1st July to £182,200,000. In terms of sheer commodities, we have failed to pay for our imports in eight months to the extent of £182,200,000. That does not take into account freight and other invisibles. For the whole of the last financial year these were £127,000,000 or about £10,000,000 a month. They are running at more than that for this year, but if we take this figure for the eight months in question, we have another £80,000,000. So, in the first eight months of the financial year, we are failing to pay our way by £262,000,000. This compares with a favorable balance in the corresponding period of the last financial year of £35,600,000. For the eight months, our imports totalled £755,600,000 and our exports £573,000,000.

The four-pronged manoeuvre of the Treasurer has had no effect whatever on external trade. If this policy is to have an effect on external trade by the credit squeeze, what is the real theory underlying the Government’s activity? If this country is to cease importing at so great a rate by any other means than direct import controls, it must cease importing by a drop in the purchasing power of the Australian people. You may call it a credit squeeze if you wish, but it means that somebody becomes unemployed, has no income and hence ceases to be a purchaser - the situation that existed in the depression. The Australian demand for imports, therefore, falls. That is the policy of the Government through credit restrictions. It is not the policy of the Government, it says, to revert to import controls. However, that is a new departure in the Government’s policy; it was not the policy of the Government in the past.

In a reply to a question asked by the honorable member for East Sydney (Mr. Ward), which appears at page 1837 of “Hansard” of 6th October, 1960, the Minister for Trade (Mr. McEwen) gives the Austraiian trade statistics for each year from 1950-51 to 1959-60. When the Government first had its most irresponsible burst in 1951-52 - this was where our sterling balances in London were first dissipated -it allowed £1,050,000,000 worth of imports, and this was the greatest volume of imports in Australia’s history. Australia could meet this with only £668,000,000 worth of exports. So it was £382,000,000 in the red. The Government then took fright and imposed import controls for the first time. Australia’s imports, which were £1,050,000,000 in 1951-52 fell to £510,000,000 in 1952-53. Controls more than cut them in half. They came back to about 48 per cent. As it happened, Australian exports rose from £668,000,000 in that year to £846,000,000. That £846,000,000, coupled with the great reduction in imports, went a long way towards adjusting the great deficit of £382,000,000 which occurred in the year before. Was there mass unemployment in Australia when import control was introduced in 1952-53? There was not. Was there acute suffering in Australia when import control was introduced in 1952-53? There was not.

Mr Halbert:

– Is there now?


– There certainly is for the people who are being dismissed. If you choose credit restriction and unemployment as a means of reducing imports by destroying peoples incomes, that is much harsher on those people than is a general import cut. We all remember that the present Prime Minister said in one of his broadcasts during the war: -

We will probably have poverty after the war, but what is the matter with poverty if it is honourably shared?

If we have to cut our imports and so reduce Australian living standards, what is the matter with import controls, which ensure that the reduction in living standards is honorably shared? A policy of credit restriction means that some thousands of people become unemployed and have their incomes destroyed. Then you have reduced purchasing power in the country and consequently a reduced demand for imports. That is, in truth, the approach that the Government is making to the problem at present.

The Treasurer tells us very airily that the level of sterling balances in London is not terribly important and that what you have to look at is the trend. If he had translated the word “ trend “, he might have said that what you have to look to are your liabilities. That is a very important point. In 1957-58, for instance, our holdings of gold and foreign currencies abroad amounted to £525,000,000. By December of last year they were down to £376,000,000 and now they are down considerably further. One of my colleagues suggests that the figure is £299,000,000. I do not think that the figure of £299,000,000 includes gold holdings. You will probably find that they account for another £60,000,000, which would bring the total to the vicinity of £360,000,000. But that is not the critical point. If we had had £350,000,000 in London in the depression of 1931, the country would have considered itself to be in a princely position. The critical point is that the Government is perpetually borrowing overseas - it is now in the market for a Swiss loan - and therefore we have increased liabilities.

In “ Hansard “ of 6th October, 1960, at page 1837, the Minister for Trade supplied Australian trade statistics to the honorable member for East Sydney. They show what the country must pay in private investment income, in interest on overseas public debt, in government loan repayments, in freight, in personal remittances, in overseas travel and in other invisibles. In 1950-51 those liabilities amounted to £231,000,000. In 1959-60, they amounted to £390,000,000. Private investment income in that time - the return to investors in this country - had risen from £24,000,000 to £58,000,000. Interest on overseas public debt had risen from £19,000,000 to £27,000,000. Government loan repayments declined from £21,000,000 in 1950-51 to £13,000,000 in 1959-60. They fell to £3,000,000 in 1951-52. They were £3,000,000 in 1952-53, £17,000,000 in 1953-54, £9,000,000 in 1954-55, and so on. The rate of repayment has never returned to £21,000,000. Freight had risen from £92,000,000 in 1950-51 to £126,000,000 in 1959-60. Other invisibles had risen from £57,000,000 in 1950-51 to £116,000,000 in 1959-60.

The tendency of freights and all the invisibles which have an effect on the Australian economy is to rise. The higher they are, of course, the higher should be our sterling reserves in London, because of the greater liabilities to be met. The more that our economy is owned by foreign investors, the more, of course, we must pay in interest. The invisible items I have mentioned amount to £390,000,000. At the present rate, our exports for this year will be worth about £840,000,000. These invisible claims are getting pretty near to half the value of our physical exports. I remember the late Mr. Scullin saying that at one stage during the depression one ship out of every three leaving this country was leaving to pay interest and that kind of thing. That is the situation that we seem to be getting back to. The Government speaks about its success in attracting foreign capital, but why will it not face the fact that many of the industries that have been established behind our tariff wall with foreign capital are operating under controls that ensure that they will not export? We were not given the report in the Parliament, but in “ The Economic Record “ for August, 1959, there is an article on the export franchises of Australian companies with overseas affiliations. The authors state that they are indebted to the Secretary of the Department of Trade for making the results of a survey available for publication. The article reads -

Recent emphasis on the importance to Australia of developing exports of manufactures has drawn attention to a disturbing feature of direct overseas investment in Australian manufacturing industries. This is the limitations which overseas principals are said to impose on the rights of their Australian subsidiaries or firms working under licence to sell their products outside Australia.

The honorable member for Hume always accounts for the non-export of Australian secondary products in terms of cost levels, but the parent companies do not take the risk of having competition from their subsidiaries in Australia. The article continues -

A recent survey by the Industries Division of the Department of Trade enables us for the first time to get a picture of the extent and nature of these restrictions on export franchises. Both American and British connected firms were covered by the survey.

The Minister for Trade has said that the Government deplores this practice, but he has had this report for more than two years. The Government’s deploring amounts merely to hand-wringing. I cannot quote at length from the report, but it goes on to say -

The restrictions take the form of limitations placed on the areas in which the Australian firms may market their products. A high proportion in both categories are limited to Australia, New Zealand and the Pacific Islands. A number of firms, usually members of world-wide chains, have been established to cater for the local market only and may not export at all. (The number may be much larger than the tables suggest if a proportion of those disclaiming any interest in exports ought to be included in this category.) . . . British restrictions on export to Asia are notably more wide-spread than corresponding American restrictions:

That is one of the interesting things. This is more a characteristic of British companies than of American companies. The report continues - 53 per cent, of British connected firms are limited, but only 40 per cent, of American. Two reasons may be given for the difference. First, the British principals are much more likely to have established connections of their own with Asian markets, or subsidiaries in countries like India, than are American companies. Secondly, during the post-war years of widespread dollar shortage, American companies, unable to sell their dollar products directly in Asian markets, have been more willing to allow their soft-currency Australian subsidiaries to supply these markets; this consideration has not affected British companies. For both reasons the difference in this respect between British and American practice may diminish, as American trade with the Asian countries expands and dollar restrictions are eased.

The report goes on -

So much for the facts which emerge from the Department of Trade survey data. The motives of overseas companies in imposing restrictions on the right of Australian subsidiaries or licensed firms to export are fairly obvious. From the point of view of the overseas principal, nothing is gained by competition from its Australian subsidiary in its home market or in established export markets in other countries supplied either by the parent company or by subsidiaries in these or neighbouring countries. From the point of view of Australia, however, it may be a serious matter if a significant proportion of the firms in its manufacturing industries, and not improbably the most up-to-date and therefore most competitive firms, are not interested in export or are hamstrung by franchise restrictions. There is here a clear conflict of interest between the overseas investor and the borrowing country.

If the industries that are built up as a result of the investment of overseas capital may not export, they become merely a means for getting behind the tariff wall, and in terms of international trade they are a total liability to this country, because dividends must be remitted to their principals.

Mr Hasluck:

– Do not those industries replace imports?


– They probably replace imports, but dividends must be remitted to them. They replace imports at the level, perhaps, of the profit of £15,000,000 recorded by a particular company, and they have claims on Australian exports which prevent those exports from earning imports. Dividends that are remitted to the overseas companies must go from Australia in the form of exports and those exports are not able to earn us imports. Clearly, it is much better for Australia to develop its own industries which are free to export than to have industries which are not free to export.

Mr Bryant:

– The Prime Minister has a colonial outlook.


– Possibly that is true, because he has defended colonialism in the presence of Nehru and many people abroad. There seems to be some idea that if the British own everything in this country, that is loyalty, and if the Americans own everything, that is security. What we have to do is get the investments that we want. We have to ensure, if we can, that overseas investors do not come here just to exploit the internal market. We must see that their investments have no strings attached.

I have not time to make any further points, because I understand that I have only three minutes left. But I commend to the attention of the Treasurer the issue of “ Time “ of 3rd March, in which there is a study of the economists around President Kennedy of the United States of America, beginning with Heller. The magazine comments on the policy which he advocates and1 which “ Time “ believes will be the policy of President Kennedy, and states -

Next to dropping the tight money policy Heller’s most important prescription for faster economic growth is increased government investment in our most valuable resource - the human mind.

In Heller’s thinking, education has an enormous economic value. He points out that the chronically unemployed are largely the uneducated and unskilled - that the economy has jobs waiting to be filled, but only for the educated and the skilled. Human capital - knowledge, skills and invention - contributes more to economic growth than does tangible capital - machines and factories. That is Heller’s viewpoint.

Mr Harold Holt:

– The United States of America is in a very different economic situation.


– I invite the Treasurer’s attention to the fact that Switzerland and Japan are countries which are almost wholly devoid of economic resources, but human skill in minds and fingers has put them among the most prosperous countries in the world. I recognize that the Government is investing in one form of education, in the university research departments, but it has adamantly refused to invest money in technological education. If the Commonwealth provided an institute of technology in every capital city - an institute properly financed and conducted - so that highly skilled labour was being trained for Australian industry, the Government would make one of the biggest contributions it could make. If it contends that that is a long-term scheme for getting over this imbalance, I point out that so also is the proposal for tax concessions for exporters. If money is invested in real training, skill and education, those things come on the market in four or five years. So an investment of that kind is not such a long-term one at all.

The article in “ Time “ which I have already mentioned refers to Milton Friedman, one of the most conservative economists in the United States. He has sard -

We have begun to see that stressing only physical capacities does not pay off. We have begun to question just how much of economic growth is based on increases in the quantity of physical capital. In the final analysis, the answer is technology, and this means the removal of ignorance.

Mr SPEAKER (Hon John McLeay:

Order! The honorable member’s time has expired.

Debate (on motion by Mr. Mackinnon) adjourned.

House adjourned at 10.55 p.m.

page 208


The following answers to questions were circulated: -


Mr Daly:

y asked the Minister for Health, upon notice -

How many cases of hepatitis occurred in (a) each State and (b) Australia during the last twelve months?

Dr Donald Cameron:

– The answer to the honorable member’s question is as follows: -

The following number of cases of infectious hepatitis were notified for the twelve months ended 25th February, 1961:-


Mr Whitlam:

m asked the Minister for Health, upon notice -

  1. Did the National Health and Medical Research Council resolve in November, 1958, that all types of leukaemia should be made notifiable in every State?
  2. When was this resolution transmitted to the States?
  3. Did he last month make all types of leukaemia notifiable in the Australian Capital Territory?
  4. Which States have made all types of leukaemia notifiable, and when did they do so?
Dr Donald Cameron:

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

  1. Yes.
  2. November, 1958.
  3. Yes. Leukaema was also made notifiable in the Northern Territory from 31st December, 1960.
  4. Victoria- 21st October, 1959. Queensland has amended the Health Act to permit leukaemia to be made notifiable. Certain other States have deferred action upon the ground that the information sought is already available from other sources and mandatory notification is not considered necessary.

Royal Australian Navy

Mr Ward:

d asked the Minister representing the Minister for the Navy, upon notice -

  1. What is the present strength of the Royal Australian Navy?
  2. What ships are at present under construction and what is the scheduled date of completion in each instance?
  3. What new construction, not yet commenced, has been approved?
  4. What ships are to be secured from overseas?
Mr Freeth:

– The Minister for the Navy has supplied the following answers: -

  1. In commission - One aircraft carrier, four destroyers, three A/S frigates, two frigates (oceanography and training), two frigates (surveying), one frigate (training), two auxiliary vessels (surveying), one auxiliary vessel (fishery surveillance), one boom vessel (special trials vessel), four search and rescue craft and one fast fleet tanker (on charter to Admiralty). In reserve - At three months’ notice: Three destroyers and one fleet tug. At extended notice: Six frigates, four boom working vessels, two boom gate vessels, one ocean minesweeper, and one aircraft carrier, and various harbour support and servicing craft and lighters.
  2. Four type 12 frigates, viz., Parramatta to join fleet in June, 1961; Yarra to join fleet in July, 1961; R.A.N. 02 (Stuart) to join fleet in January, 1963; R.A.N. 05 (Derwent) to joint fleet in May, 1963.
  3. One 2,000-ton survey vessel.
  4. Six coastal minesweepers.


Mr Ward:

d asked the Attorney-General, upon notice -

  1. How many bankruptcy orders were issued in Australia in the last financial year showing separately the number in each State?
  2. How many bankruptcies have occurred in each month in the current financial year?
Sir Garfield Barwick:

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

  1. Sequestration orders issued in Australia in the financial year 1959-60 - New South Wales and Australian Capital Territory, 813; Victoria, 395; Queensland, 211; South Australia and Northern Territory, 320; Western Australia, 119; Tasmania, 91.
  2. Sequestration orders issued in each month in the current financial year -

Territories of the Commonwealth.

Mr Daly:

y asked the Minister for Territories, upon notice -

  1. What are the (a) names, (b) dates of appointment and (c) periods of appointment of the Administrators of Nauru, the Cocos Islands, the Northern Territory, Christmas Island, Norfolk Island, and the Territory of Papua and New Guinea?
  2. What salary and allowances are paid to each of these Administrators?
Mr Hasluck:

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

The name, date of appointment, period of appointment and the salary and allowances of the senior government officials in the Territories mentioned are detailed hereunder. In the case of Cocos Islands and Christmas Island the senior government official is an “ Official Representative “ and not an “ Administrator “ as in the other Territories.

Northern Territory. 1. (a) James Clarence Archer, O.B.E., Administrator. (b) 1st July, 1956. (c) During the pleasure of the Governor-General.

Salary, £4,725 per annum. Entertainment allowance, £1,000 per annum.

Norfolk Island. 1. (a) Reginald Sylvester Leyden, O.B.E., Administrator. (b) 1st May, 1958. (c) During the pleasure of the Governor-General.

Salary, £2,750 per annum. Entertainment allowance, £300 per annum.

Papua and New Guinea. 1. (a) Donald MacKinnon Cleland, C.B.E., O.St.J., Administrator. (b) 23rd January, 1953. (c) During the pleasure of the Governor-General.

Salary, £4,725 per annum. Entertainment allowance, £800 per annum.

Nauru. 1. (a) John Preston White, Administrator.

1st May, 1958. (c) During the pleasure of the Governor-General.

Salary, £3,275 per annum. Entertainment allowance, £300 per annum.

Cocos (Keeling) Islands. 1. (a) Charles Ivens Buffett, M.B.E., Acting Official Representative. (b) 27th July, 1960.

During the period of the vacancy in the office of Official Representative.

Salary, £2,700 per annum. Entertainment allowance, £300 per annum.

Christmas Island. 1. (a) John William Stokes, Official Representative. (b) 1st September, 1960. (c) During the pleasure of the Minister of State for Territories.

Salary, £2,750 per annum. Entertainment allowance, £300 per annum.

In all Territories a fully furnished residence including light, power and water is provided free of cost, together with domestic staff. A travelling allowance is payable when an Administrator or Official Representative is required to travel in connexion with his duties.

Australian Agricultural Council

Mr Whitlam:

m asked the Minister for Primary Industry, upon notice -

What requests or suggestions were made at the meeting of the Australian Agricultural Council in Canberra in February last for legislative and administrative action by the (a) Commonwealth, (b) Territories and (c) States?

Mr Adermann:

– The answer to the honorable member’s question is as follows: -

The Australian Agricultural Council in Canberra in February last considered the following matters which require administrative action as indicated: -

Grains and flour for export - Inspection. - Commonwealth and States.

Removal of excess spray residues on fruit - Research. - Commonwealth.

Fruit fly sterilisation investigation. - Com monwealth and States.

Importation of live poultry into Australia. - Commonwealth.

Plant quarantine - Publicity. - Commonwealth and States.

Tractor testing. - Commonwealth and States.

Noogoora burr - Biological control. - Commonwealth.

Commonwealth Agricultural Bureau. - Commonwealth and States. “ Australian Journal of Experimental Agriculture and Animal Husbandry “. - Commonwealth and States.

Honey marketing plan. - Commonwealth and States.

Egg pulp marketing in Australia. - Commonwealth and States.

There were no matters requiring legislative action.

Cite as: Australia, House of Representatives, Debates, 14 March 1961, viewed 22 October 2017, <>.