23rd Parliament · 3rd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.
– I ask .the Acting Prime Minister whether he is in a position to give the House any information about the reported withdrawal by South Africa of its application for continued membership of the Commonwealth of Nations after it becomes a republic on 31st May. My question is ‘based on something that I heard on an Australian Broadcasting Commission news session this morning. The Acting Minister for External Affairs does not know.
Government Supporters. - Oh!
– Well, that is what he said yesterday.
– May I comment and say that, on the contrary, the Prime Minister has kept us fully informed of all that has transpired in both the formal and the informal! discussions since the Prime Ministers arrived in London. My colleague, the Acting Minister for External Affairs, has of course been privy to all that the Prime Minister has told us and to the advice that we ‘have received and the comment that we have made. I, as Acting Prime Minister, have had the very great benefit of the Acting Minister’s wise and experienced advice on this matter.
It is true that the Prime Minister of South Africa has felt obliged to announce that, in view of what has transpired at the conference of the Commonwealth Prime Ministers in London, South Africa will not persevere with its proposal for approval of the continuing membership of that country in the Commonwealth of Nations after republic status is achieved on 31st May next. At the conclusion of yesterday’s discussions in the conference, our Prime Minister made in London a public statement which he immediately cabled to me, and I think it proper to read it now to the House.
– That was what we wanted yesterday.
– He had not made it when you asked your question, because the discussions had not concluded. I think it will be recognized that this is a very delicate matter. The Prime Minister said publicly in London -
This is a very unhappy day for those who attach value to the Commonwealth as an association of independent nations each managing its own affairs in its own way, but all cooperating for common purposes. The criticisms which we all had to make of South African policies were plainly expressed in the conference in a debate which took place with the complete concurrence of Dr. Verwoerd. The debate was of a frankness and intimacy which, in my experience, is possible only in a meeting of Prime Ministers. It is, I think, deplorable that it can never be conducted in such a forum and atmosphere again. What the implications for the future nature of the Commonwealth may be we do not as yet know. For myself, I am deeply troubled.
Commenting on ‘the question put by the Leader of the Opposition, Mr. Speaker, I say that my advice from the Prime Minister is, as I have indicated, that after days of very frank discussion by the Prime Ministers about South Africa’s internal policy the Prime Minister of South Africa, Dr. Verwoerd, has finally felt obliged to announce that South Africa will not proceed with her proposal that she remain a member of the Commonwealth after the republic is established on 31st May. Mr. Menzies has kept us informed of the discussions, formal and informal, that have taken place on this issue since the arrival of the Prime Ministers in London. A great divergence of views has been apparent to the world. I can only say that the Prime Minister of South Africa has been most forthcoming in his ‘Willingness to participate in a completely unrestricted debate on this issue among his fellow Prime Ministers. It is not to be forgotten that he could have taken the point that the internal policies of a member government have not been regarded hitherto as matters for debate by other Commonwealth Prime Ministers. The final point was reached at which the Prime Minister of South Africa found himself unable to accept a declaration along such lines as might have left South Africa a member state of the Commonwealth virtually under direction in respect of its internal policy, or a member state openly defiant. He has chosen a course which, I hope, tolerant people in Australia will recognize as completely straight-forward, and we can reecognize and respect his decision without in any sense subtracting from our serious disquiet at the policy of apartheid as practised. That disquiet has been made perfectly clear on behalf of the Australian Government and people at all times. This is not an occasion for recrimination. This is an occasion for the quality of tolerance to be exhibited, and for the hope to be with us, and to be expressed by Australians-
– Whose side was Menzies on?
– Whose side was he on?
– Order! The honorable member for East Sydney roust remain silent. I should like the Acting Prime Minister to resume his seat for a moment. Interjections are always out of order, and when a statement of this kind is being made, or an answer is being given to a question such as that asked by the Leader of the Opposition, it would not be unreasonable to expect all honorable members to allow the Acting Prime Minister to proceed in silence.
– I was making the point, in conclusion, Mr. Speaker, that notwithstanding the most serious disquiet which I think all Australians feel at the racial policies that have been practised in South Africa, we must remember that all of us, in turn, are liable to be judged by others. With that knowledge in our minds we recognize that this is an occasion for tolerance. It is not an occasion, I am sure, for any of us to contribute to widening a fissure or breach within the Commonwealth, but an occasion for us to express the hope that the last word has not been said, but that there may be some basis upon which the Commonwealth can sustain eventually the integrity that has been so beneficial to us all as individual countries, and to the peace of the world.
Mr. CALWELL (Melbourne- Leader of the Opposition) - by leave - In my view, it is most regrettable that South Africa has chosen to leave the British Commonwealth, and I hope that the position so created will be rectified at a later date when South Africa is prepared to meet the requests of the Commonwealth Prime Minsters that she subscribe to the der.h~&- tion of the principle of racial equality. I believe that South Africa cannot stand alone as an independent republic in a sea of colour, and that for economic reasons, if for no other, and possibly under a new Prime Minister, she will renew her application for admission to the British Commonwealth, as a republic, at a later time. I sincerely hope so, because nothing should be done to weaken the British Commonwealth, and everything possible should be done to strengthen it and increase its influence in world affairs. I do not agree with Dr. Verwoerd. I have not agreed with him at any time. I do not agree with him that if South Africa walks out of the Commonwealth disintegration of the Commonwealth is at hand. It is a tribute to all the Prime Ministers that, apparently, whilst maintaining their own points of view, which differed greatly both in outlook and in detail on different aspects of the question, there was no concerted move to refuse South Africa membership once it became a republic, and no attempt to impose conditions, other than to require it to do what every other country is prepared to do in this day, surely - that is, to acknowledge that all men are created equal, and that all have certain God-given inalienable rights.
– I ask the Acting Prime Minister whether it is a fact that one of the means proposed by the Prime Minister of overcoming Australia’s overseas balanceofpayments problem is to encourage more overseas tourists to visit this country. As Australian tourists ‘travelling abroad reduce our overseas balance, will the Acting Prime Minister undertake also, as part of the Government’s plan, substantially to reduce or to eliminate ministerial tourism during the present financial crisis?
– The honorable member for East Sydney, oddly, is right. The Prime Minister has announced that the Government proposes increasingly to encourage tourism as an earner of overseas income for Australia. Indeed, throughout the world, tourism is one of the greatest exchange earners of all, and Australia wants to participate more in those earnings. As we hope that other countries will have their citizens visit us, they may reasonably expect that we will visit them. 1 believe, as the honorable member for East Sydney did when he was a Minister, that there are occasions when a Minister can, with great advantage to the country, go overseas, as he did. I do not know whether his question arises from the news item that I read in this morning’s press that the Australian Labour Party yesterday chose some private members to go overseas on a visit.
– Has the Acting Minister for External Affairs any information concerning the statements of Prince Souvanna Phouma since his recent visit to the Pathet Lao? Has the Minister any information about the Russian-Viet Minh build-up on the Plaine des Jarres? Even if newspaper reports are only half correct, does he not consider that Parliament and the people should be kept in close and constant touch with the situation which does more to threaten the security of Australia than any event since Pearl Harbour? Why have we been left with the impression that Russian-Viet Minh aid to the Laotian Communists was relatively unimportant instead of a threat of an armed takeover as it can more accurately be described? Did Prince Phouma take two American newspaper men with him to Hanoi and the head-quarters of the Pathet Lao? Does the Minister consider that what Prince Phouma saw helped him to decide to take off on a world trip? Will not has absence have a marked effect on a most explosive situation?
– Of course, the Government has very precise information about what is going on in Laos. If I were to try each day at question time or any other time to keep this House up to date on the many kaleidoscopic changes that are taking place in this area, I imagine that I would be, quite properly, subject to criticism. I have had it in mind to make a statement on Laos when I could usefully tell the House something of a situation which was, at the time, sufficiently stable to make a statement worth while. I do know the facts about Prince Souvanna Phouma, but I do not propose to comment publicly on his action for the reason that the current situation in Laos is delicate and I am not going to add to difficulties by making, at the present moment, any public evaluation of the Prince’s conduct.
– 1 ask a question of the Acting Prime Minister, supplementary to the question asked by the Leader of the Opposition. I ask the right honorable gentleman whether he has received the text of the declaration which it was proposed should be issued by the Commonwealth Prime Ministers, and which the Prime Minister of South Africa found unacceptable. Will he publish the declaration? If he has not already received it, will he seek it and publish it? I also ask him whether the Australian Prime Minister subscribed to the declaration or was prepared to do so.
– I have beer, kept constantly informed by the Prime Minister of a variety of texts that were proposed, amended or substituted for others at this conference that has been going on during the last few days. Whatever may finally have been the conclusion, or the last point arrived at in the discussions, it is clearly for the Prime Ministers themselves to decide what official statement regarding their discussions shall be published. It is not for the Australian Government to do so, and certainly not for me.
– I wish to ask a question of the Postmaster-General. I have complained on several occasions, as have other members of the House, concerning the delay in the receipt in Canberra of mail from other capital cities. Can the PostmasterGeneral explain to the House why it still takes two days for air mail letters to reach Canberra from Melbourne? Has any action been taken to eliminate these annoying and recurring delays?
– I am glad to be able to inform the honorable member for Isaacs and the House that, as a result of statement made from time to time that there have been delays in the transmission of mail to and from Canberra, the Postal Department is at the moment in the process of carrying out a most extensive survey of the time taken for mail sent from certain cities in Australia to reach Canberra, and of the time taken for mail from Canberra to reach various destinations in Australia. I expect within a week or so to have a very comprehensive report available, and I will be quite happy to let the honorable member, and other honorable members, study it. lt will disclose the true position and will cover the whole situation. It will not be concerned with just one or two incidents.
– My question is directed to the Acting Prime Minister. Is it a fact that the conference of British Commonwealth Prime Ministers has discussed a proposal to by-pass the United Nations Organization and invite continental China to attend a summit conference on disarmament, which France, the United States of America and Russia would also be invited to attend? Would such a conference be approved by this Government and be in accordance with its foreign policy? In the event of continental China insisting that her attendance at the conference would depend on whether that nation was admitted to the United Nations, would this Government be prepared to concede China a place in the United Nations if it meant the achievement of disarmament, safeguarded by an adequate system of international inspection, supervision and control?
– The honorable member’s question proceeds from speculation to speculation.
– The newspapers are full of it.
– The newspapers are full of speculation; that is my point. This question, with its implied thoughtfulness for the interests of red China, comes oddly to-day, when the Labour member who sits next to my questioner yesterday showed that he did not want red China to get a handful of wheat.
– My question is directed to the Treasurer. I preface it by saying that reports have been published that our overseas reserves have now fallen to £300,000,000. Will the Treasurer explain how these reports are incorrect? Will he say whether the next occasion on which our overseas balances will be determined precisely will be after 30th June? To what extent have our contributions to the International Monetary Fund affected our overseas balances?
– The figures which are published each week refer to the gold and balances of the Reserve Bank, and they fall considerably below the total international reserves of the country. At the 30th December last, these stood at £376,000,000. My information is that they have not fallen appreciably below that figure since then, but they are published in total each six months, and the next publication will be at the end of June.
The honorable member asks by what amount our reserves have fallen as a result of our membership of the International Monetary Fund. We do not normally publish weekly figures. Our drawing rights on the International Monetary Fund stand at a total of £211,000,000. As a contribution towards those drawing rights, an amount of £33,000,000 in gold has gone from Australia, and this transaction would have the effect of reducing our overseas balances by that amount.
– I ask the Treasurer whether he believes that, when unemployment reaches about the 100,000 mark, he will consider that his credit squeeze policies have been wholly successful. Did the right honorable gentleman hear the Minister for Labour and National Service say last night that the Government found it difficult to live comfortably with full employment? Is the price to be paid for stability a vast army of unemployed persons with sloweddown and closed-down industries?
– The honorable member should know by now - he has heard it often enough from this place - the policy of this Government in relation to employment in this country. Our policy is directed to ensuring that there are jobs adequate in number for the people able and willing to work and, to an extent unsurpassed by an industrial country anywhere in the free world, we have, throughout our period of office, sustained that policy as no other Australian government has ever done.
Inevitably, in a country which is so much subject to fluctuations in its terms of trade and the movements of exports of its primary products as is Australia, there will be fluctuations in its economic situation. For most of the time that we have been in office, the pressures of demand have been greater than has been the under-employment of resources. There have been times when our resources have not been fully employed, but they have been relatively short periods, and action has been taken by the Government to stimulate demand. More frequently, we have been concerned, as I believe any Australian government which is pursuing a dynamic policy of development would be concerned, with the excessive pressures of demand.
I know that honorable members opposite have been looking - I believe hopefully - to the day when there will be sufficient unemployment in this country for them to make political capital out of it, but they have found their hopes frustrated by the policies of this Government. We do not look to any level of unemployment as being satisfactory. What has to be looked at is how far job vacancies match the resources available to fill them. The objective of our policies will be to ensure that, over the long haul, the vacancies available will approximate the number of people able and willing to work. To take one illustration, at one time last year in the building industry there were five times as many vacancies as people offering for employment. We know the kind of industrial evils that a situation of that kind produces, and we set out to correct it. We hope to have the economy in balance as a result of our measures.
– - My question is directed to the Postmaster-General. Have sites been approved for all country television stations to be established in Queensland by the government authority and commercial organizations? Is there any indication yet when these stations will be brought into operation?
– The position regarding the choice and allocation of sites for the third phase of television development is this: With the exception of two areas in Queensland, sites have been determined, frequencies allocated and licensees notified, and the work generally is proceeding quite satisfactorily. The two areas in Queensland to which I have referred are those in which the problems of site determination and road and power access are most difficult. They are the Rockhampton and Townsville districts. In both these areas several si Les are available, and in each instance one is infinitely preferable to the others because of the greater coverage that it would give, but unfortunately in each instance it is also the site which is the least accessible and in relation to which road costs are highest. Investigations into this problem have been carried out by engineers of both the Australian Broadcasting Control Board and the Postmaster-General’s Department, and I expect to have a final report as to cost and availability within a couple of weeks.
Mount Mowbullan has been chosen as the site for the third station in Queensland - the station on the Darling Downs - and the licensees have been informed.
– My question, which is addressed to the Minister for Territories, arises out of the recent resignation of two elected members of the Administrator’s Council, which forms part of the Legislative Council for the Northern Territory. Will the action of these two members have any effect on the working of the Legislative Council? Can the Minister inform the House what action the Government intends to take in respect of the future of the Administrator’s Council?
– With respect, I suggest that the honorable member is not quite exact in describing the Administrator’s Council as forming part of the Legislative Council. As honorable members will know from the act which they passed in this
Parliament, the Administrator’s Council provides means by which some members of the Legislative Council are being associated with the executive side of government in the Northern Territory. Two of the members of the Administrator’s Council, although still members of the Legislative Council, are sharing in executive duties.
The future operation of the Administrator’s Council is a matter which is at present receiving the personal attention of the Administrator, who still remains primarily responsible for executive action in the administration of the Northern Territory.
– I address my question to the Postmaster-General. I note that his department has selected a few districts which come within the extended local service area telephone system: - including the Hills district within my electorate of Mitchell - in which to impose a time limit of six minutes on telephone calls, while in other areas there in no restriction. As this is a clear indication that these districts are being penalized because of an overloaded service, will the Postmaster-General do his utmost to ensure that the areas so affected will receive special consideration in the allocation of labour and material to enable a proper service to be provided as quickly as possible?
- Mr. Speaker, the problem referred to by the honorable member for Mitchell is one which was envisaged at the commencement of the Elsa programme. It arises from the fact that, as a result of the extension of the local call areas and the provision that the local call may be untimed in certain areas, sufficient channels are not available to enable every one to speak for as long as he wants to. Recently, in a tour of my electorate, I found that some people want to talk for as long as on and a half hours, which amounts to an abuse of a privilege. It was realized that this could only be rectified by an increase in the number of channels available throughout Australia; and the department determined that the increase would ultimately be of the order of 25 per cent. We are therefore proceeding as rapidly as possible to increase the number of channels available and have determined an order of priority of putting them in on the basis of our experience of the operation of the Elsa scheme.
Apparently there are some areas in the district of the honorable member for Mitchell - as there are in the districts of all other honorable members - in which there is some delay. In those instances we have applied a limit of six or ten minutes until further channels become available. It is expected that in the areas referred to by the honorable member, by July there will be a considerable increase in the number of channels available. If he sees me later I will give him details of the actual number of those channels.
– My question is directed to the Minister for Social Services. Will he consider paying an extra 5s. a week to all age and invalid pensioners who are unable to work or earn any money and are dependent on the pension of £5 a week or less? I appreciate the effect of the merged means test, but nothing has been achieved for the base pensioners, who comprise 65 per cent, of pensioners in this country.
– Mr. Speaker, if I may be permitted to answer that part of the honorable member’s question which I heard and leave the rest to a conversation which I hope to have with him at some convenient time, could I say that the question of social service benefits is determined each year when the Budget is being framed, and this Government will continue that procedure. The whole scheme of social services will be examined when the Budget is being framed and consideration will be given to the suggestions that the honorable member now raises.
– My question is addressed to the Postmaster-General, and is supplementary to that asked by the honorable member for Mitchell. Is the PostmasterGeneral aware that since the introduction of the extended local service area system the department has increased the charges for telephone calls from outback areas in relation to charges in more closely settled areas? Can he have this aspect of the Elsa system investigated in the light of the necessity for decentralization?
– It is correct, as stated by the honorable member, that since the introduction of the Elsa system there has been an increase of charges in a comparatively small number of cases. As I stated, when this system was brought in, the department, realizing that certain anomalies must develop in the early stages of a scheme as wide as this, would be prepared to consider anomalies in relation to local call access or in relation to certain variations in trunk line charges. We have already dealt with a considerable number of applications for relief and are putting into effect the promise that all such cases would be investigated. 1 should be glad to have details of any particular cases which the honorable member has in mind - I believe I received one from him during the last three or four days. Having regard to the undertaking I gave that anomalies would be investigated, it will be of interest to the House to know that of 320 applications for relief the proportion of approvals to disapprovals was about 2 to 1 .
– 1 direct a question to the Minister for Defence. Is it a fact that Australian defence experts have suggested to an American technical mission that an atomic reactor foe used to provide power for a radio station in northern Australia? Is it a fact that such a station would not need as much power as would foe generated by an atomic reactor? If such a reactor were built, would it not be economic only if its power could foe used for other purposes, such as to supply nuclear power for Polaris missile-carrying submarines?
– There has been no request from the United States Government to this Government for any station of any sort in the north of Australia.
– 1 direct a question to the Leader of the House. In view of the dangerous threat to the future of the British Commonweath, will the right honorable gentleman consider allowing in the legisla tive programme adequate time for a debate on any statement on this matter that is made by the Prime Minister on his return from the conference of Commonwealth Prime Ministers in London, so that honorable members may be given an opportunity to express their views, even if this means extending the sittings of ‘the House beyond the time already planned?
– I am sure that the Prime Minister, on his return, will wish to give as soon as is practicable a full account of what has transpired. I know that he, above all people in this House, recognizes the tremendous importance of the issues which have been under discussion in London. I can assure the honorable gentleman that if the Prime Minister makes that statement - as I believe he will - adequate opportunity will be provided for a general debate by the Parliament.
– Will the Acting Prime Minister inform the House when the Government proposes to announce the salary levels for 1960 for the staff of the Institute of Advanced Studies at the Australian National University? Does the Acting Prime Minister realize that considerable difficulty is being experienced in recruiting and retaining officers for the institute because of the delay in making this announcement? Will he do whatever he can to hasten the announcement?
– I recognize that this is a matter of urgency. Cudgelling my mind. J have an impression that I made some approvals in the last couple of days. I shall make a statement for public purposes at an early date.
– I direct a question to the Acting Minister for External Affairs and state, by way of explanation, that it has been reported to me from a reliable source that a certain number of lathes supplied to the Polytechnic - in our terms, the University of Technology - at Singapore under the Colombo Plan are, or were in January of this year, not being used for teaching purposes in the metalworking and electrical sections, either because they were obsolete or otherwise not adapted for the purpose, or in one case because the machine was dangerous. Unhappily, I am informed, they bore the inscription “ Gift of the Commonwealth of Australia “, whereas it would have been better for the reputation of this country if they had carried the insignia of the hammer and sickle.
Will the Minister obtain a full report on this matter? Will he inform his mind, and the House, regarding the procurement and inspection procedures of the department concerned, especially having regard to relevant technical advice on technical matters? Will the Minister put himself in a positron to assure the House that no Australian manufacturers are making hay at the expense of the country’s reputation so far as the Colombo Plan is concerned?
– May I first say that the designation of the material to be supplied or the assistance to be given under the Colombo Plan is made by the receiving country and not by the Commonwealth. The supervision of the articles supplied is by the Contract Board. There is a procedure for inspection. I will look at what the honorable member has brought to my attention. At the present moment, this part of the work of the Department of External Affairs is being done by my colleague in another place. However, I will have a discussion with him, and after I have informed myself I will speak to the honorable member.
– My question is directed to the Acting Prime Minister and refers to a letter that I addressed to the Prime Minister some considerable time ago in connexion with a proposed nuclear weapon explosion at Kerguelen Island. Will the Acting Prime Minister have this matter investigated for me and if possible furnish me with an early reply?
– Yes. If I have been discourteous in delaying a reply to the honorable member, I regret it. I will have the correspondence looked at immediately and furnish him with what reply I can.
– I direct my question to the Acting Prime Minister. Is it not a fact that the people who have looked most deeply into the meaning of the Commonwealth relationship have regarded the principle that members should not sit in judgment on one another as one of the most fundamental principles underpinning the whole relationship? Has this principle now been violated for the first time? Is it not also a fact that if the principle which has previously enabled the Commonwealth to function is violated, the Commonwealth must change in character, and that we have almost certainly seen the destruction of one of the most hopeful attempts at cooperative international organization the world has ever seen?
– I would not like to be drawn into a discussion on this difficult but very important matter, but could 1 make this comment in reply: I am sure none of us would judge anything to be more important than a proper assessment of human rights, nor in sovereign countries can anything be more important than their own sovereignty. Thus, in a corporate group of sovereign countries, as the Commonwealth is, a very grave difficulty is revealed. The issue must be resolved and I believe it will be resolved.
– I raise a point of order, Mr. Speaker. May I respectfully suggest that you have a further look at the sequence of calls from the Chair to see whether I have been inadvertently deprived of an opportunity to ask a question?
– Order! There is no substance in the point of order. However, I assure the honorable member that he has not been overlooked.
– I have asked only one question this session.
– I address a question to you, Sir, as the custodian of this House and of many other things that come under the eye of Mr. Speaker. Have you seen or heard of the remarks of a senator, Senator Benn-
– Order! The honorable member will not be in order in making any reference to a member of another chamber.
– Have you been informed that there is alleged to be a Communist cell amongst Government senators in the Senate itself, as reported in the newspapers, and is there a cell of the same nature in this House-
– Order! The honorable member is out of order. 1 ask him to resume his seat.
Mr. SPEAKER (Hon. John McLeay).During the Nigerian independence celebra tions held in September of last year, the President of the Senate, Sir Alister McMullin, who was leader of the Australian delegation, took the opportunity, on behalf of the Commonwealth Parliament, to present to the Nigerian Parliament a traditional sand glass for the timing of divisions.
In addition to the thanks expressed to Sir Alister when he made the gift, the Speaker of the Nigerian House of Representatives has now written asking this Parliament to accept the sincere thanks of the entire membership of the Nigerian Parliament for the gift. Mr. Speaker Waziri stated that he wished to place on record that Parliament’s appreciation of the value of the gift, and he expressed the hope that it would remain a lasting symbol of the friendship between our two parliaments.
Debate resumed from 15th March (vide page 275), 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.
.- In supporting the want-of-confidence motion proposed by the leader of the Opposition (Mr. Calwell), I should like to deal with two matters of vital concern to our present and future progress in Australia - our overseas credit balances and our international trade. Let me deal first with our overseas credit balances. In the financial year 1949-50, when the Chifley Government went out of office, our reserves stood at £650,000,000. In addition, Mr. Chifley had made three grants totalling more than £45,000,000 to the Government of the United Kingdom when that country was badly in need of funds to enable it to buy food. The Chifley Government had also paid off £116,000,000 Australian of our overseas debts. I point out, also, that in 1949-50 imports into Australia amounted to £537,000,000. With our overseas reserves standing at £650,000,000 at that time, we had in reserve enough to enable us to purchase imports at that rate for fourteen and one-half months. Let us contrast with the situation in 1949- 50 the position to-day, more than eleven years after the Menzies Government took office in 1949. We have overseas credit balances of approximately £300,000,000. The estimated flow of imports into this country in the present financial year totals £1,050,000,000, and our overseas credit balances are sufficient for imports at this rate for only three and one-half months. This is the one and only basis for comparing the value of our overseas credit balances in 1950 with the value of our present balances.
The total of £300,000,000 in reserves overseas does not paint a true picture, because this Government has borrowed £308,000,000 outside Australia since it was elected in 1949. There has also been a capital inflow into this country in the last eleven years totalling £997,000,000. So, in all, we have obtained from overseas £1,305,000,000 in two major components. When we offset that amount against the present overseas reserves of about £300,000,000, we find that our trading balances have fallen more than £1,000,000,000 behind since this Government took office. The present Government’s haphazard methods of controlling our economy suggest that if the Government had been in control of a private commercial organization, that organization would have gone into liquidation some years ago.
The precarious position of our overseas reserves has been accentuated by the Government’s stupid blunder in abolishing imports control in February of last year - a step which has resulted in the flooding into this country of many unessential luxury goods which compete with the products of Australia’s primary and secondary industries, thereby forcing Australians out of employment. I should like to mention some of these unessential luxury items. Only a few weeks ago, I saw in the Sydney newspapers advertisements for men’s wristlet watches which are offered on the Australian market for £220 each. I suggest that perhaps only people in the fortunate position of the Minister for Health (Dr. Donald Cameron), who is now at the table, could afford to buy one of those watches. Yet they are imported into this country in large numbers. We have also seen many other men’s wristlet watches offered for sale at prices ranging up to £200, and I have seen an advertisement for a lady’s diamondstudded wristlet watch at a price of something like £500. We see advertised women’s fur coats at prices up to 500 and 600 guineas. We also see being imported into Australia expensive limousine cars and many articles and goods which compete with the primary products of this country on the local market.
I refer particularly to imports of tinned chicken. Every table bird that is marketed by Australian poultry farmers requires 10 lb. or 11 lb. of wheat for feed. Therefore, for every bird by which the sales of local poultry are reduced, because of the imports of tinned chicken, the wheat farmers lose sales of 10 lb. or 11 lb. of wheat on the Australian market. We see being brought into this country also tinned ham, jam conserves, bread, breakfast cereals and many other goods that compete with Australia’s primary products on the local market. But so far I have not heard one member of the Australian Country Party protest in this House against the unfair competition to which Australia’s primary producers are being subjected. We often read in the newspapers that sugar cane is being dug into the ground because the farmers cannot sell it. Yet the sugar which could be obtained from that cane would have a ready market in Australia for the manufacture of con fectionery, jam conserves and other important foodstuffs if imports of such items were not selling on the Australian market in great abundance.
A comparison of the figures for our imports from the United Kingdom in the first seven months of this financial year - the break-up of the figures for February h not yet available - and the figures for the first seven months of 1959-60 shows an increase from £181,000,000 to £206,000,000- an increase of £25,000,000 or 14 per cent. Imports from the United States of America have risen in this period from £77,000,000 to £131,000,000- an increase of £54,000,000, or 70 per cent. The volume of imports from Japan in the same period has jumped from £22,700,000 to £45,100,000- an increase of £22,400,000, or only a fraction under 100 per cent.
It is interesting to note that the Treasurer (Mr. Harold Holt) has stated that one of the most important reasons for the application of the credit squeeze was the need to damp down the excessive flow of imports into Australia. The prediction that the credit squeeze would do this has not come true, and our overseas reserves are dwindling to dangerously low levels as a result. If we accept the thesis of the Treasurer that the credit squeeze provides an effective means of controlling our economy, we must accept the view that credit restrictions will be a permanent feature of government policy; for is it not only reasonable to assume that if credit restrictions are removed, we shall again see an excessive flow of imports into this country? I believe that that proposition is irrefutable.
On many occasions, the Opposition has offered constructive suggestions for the countering of this serious threat to our economic stability. The Leader of the Opposition has repeatedly stated that we must have selective imports control. The Australian Labour Party’s policy favours encouraging the expansion of our primary and secondary industries, and we realize that these industries must be afforded ample protection against unfair competition. We are aware that if employment is to be provided for our expanding population, including both the natural increase and the migrants whom we have brought from overseas, the protection of Australian industry is the one and only means of achieving our goal. We also believe that local industry must be encouraged to manufacture many essential goods not at present being manufactured in Australia, thereby making us less dependent on overseas sources of supply and conserving our overseas credit balances.
This Government has created a farcical position. It says that we must attract overseas investment in Australian industries, is it not foolish to suggest that any overseas firm would establish an industry in Australia, when the Australian market is already being flooded with imported goods? The big manufacturing concerns overseas can produce goods and because of our high costs can even sell them on the Australian market cheaper than we can produce the same goods. Our high costs are the fault of this Government because of its failure to implement that great votecatching statement made in 1949. We all remember the present Prime Minister (Mr. Menzies) saying, during the 1949 general election campaign, “ Our greatest task is to get value back into the £1 “. That was one of the things which won the election for honorable members opposite. But what has happened? We cannot compete with overseas countries because of our production costs. Other countries can produce goods by automation and with cheap labour and undercut us on our own market.
Recently, the Acting Prime Minister (Mr. McEwen) said that it was the intention of the Government to engage in a great export drive. But there were two things that he did not tell this House. He did not tell us what the Government’s plans are, and he did not tell us what and where we are going to sell. Those are the 64-dollar questions. There is not one person in the Government, from the Acting Prime Minister down, who can tell us what and where we are going to sell. Is anybody in this Parliament so naive as to believe that we can manufacture goods to compete with the Japanese, the West Germans, the British and the Americans in overseas markets? It is ridiculous to suggest that we can do so in the present circumstances. Admittedly, we export two commodities to the United States which have a firm grip on the American market. I refer to Aspros and Kiwi boot polish.
The Labour Opposition has stated, and I firmly believe, that our future prosperity depends largely upon seeking trade with Asian countries, particularly mainland China. This Government is trading with mainland China, but only by sneaking around to the back door hoping to conceal the fact that it is accepting red Chinese gold. Recently, we sold to red China 1,050,000 tons of wheat and 40,000 tons of flour, worth altogether £30,000,000. When I asked a question about this yesterday, the Acting Prime Minister was very evasive and introduced the technicality that this wheat was not sold toy the Australian Government but was sold by the Australian Wheat Board. We all know that that is tommyrot, because the Government must agree to the export of any commodity from Australia. So the Government condoned and encouraged this sale of £30,000,000 worth of wheat and flour, which is of great benefit to our wheat-growers.
The Labour Party believes that we should open the door to trade with mainland China or with any other Asian country. We should go in through the front door and not sneak around to the back, as the Government does, like a prowler in the night, worrying whether the Australian Democratic Labour Party will see it and cause Government candidates to lose a few preference votes in an election. Imagine what would have happened if the Government had sold this wheat and flour to any other country but mainland China. The Acting Prime Minister would have made a special statement claiming credit for himself and the Government for this big sale, which is the largest single sale we have made since World War I.
There is no doubt that it pays to be honest and realistic about trade. We have to sell what we can, where we can, and to whomever we can, provided they have the money to pay for it. Why should we worry about the politics of any other country? We do not accept other people’s politics, we do not accept their ideologies, simply because we trade with them. If it is going to benefit Australians, and particularly the primary producers, we should openly go in the front door, as I said before, instead of sneaking around to the back. Not one of the Country Party members, not even the one-track-minded member for Hume (Mr. Anderson), has been game enough to get up in this House, despite the red bogys which are introduced by members on the other side, and voice a protest about this trade being initiated with mainland China.
– Of course not. We believe in it.
– You believe in it?
– Of course we do.
– Listen to that, Mr. Speaker. They believe in this trade. We believe in it too, but when we say so we are classed as commos and fellow travellers. We hear honorable members on the other side of me House, including the honorable member for Moreton (Mr. Killen) and the honorable member for Mackellar (Mr. Wentworth), protesting about trade with red China, but do any Country Party members support the views of those two men? Of course they do not, because they know that they would lose the support of the farmers and graziers if they did so.
I have here some interesting trade balance figures, which were supplied by the Commonwealth Statistician, Mr. Carver. They cover the five and a half year period from 1st July, 1955, to 31st December, 1960, and show that our unfavorable trade balances with various countries were as follows: - United Kingdom, £402,000,000, or an average deficit of £73.000,000 a year in that period; United States, £331,000,000, or an average annual deficit of £63,000,000, giving the United States a favorable trade balance with Australia of two to one. I might add that these amounts which I am quoting do not include freights and other invisibles, which account for large sums paid to these two countries. We had an unfavorable trade balance of £80.000,000 with Canada in the same period, or an annual average of £13,000,000, giving Canada also a favorable balance of two to one. Our exports to British North Borneo over the same period amounted to less than £7.000,000 worth, but our imports from that country were worth nearly £80,000.000, an unfavorable balance of about £73,000.000. the trade exchange being thirteen to one in British North Borneo’s favour.
My motive in giving these figures is to point out the one-sidedness of our trade with these countries. Honorable members will recall that when the Minister for Trade (Mr. McEwen) introduced the Japanese Trade Agreement in this House a few years ago he said that because Japan was one of our best customers we must buy more goods from that country. Somewhat the same principle could be applied to the countries I have mentioned, which have such favorable trade balances with Australia. I believe, Mr. Speaker, that the Acting Prime Minister and Minister for Trade should tell those countries - the United Kingdom, the United States of America, British North Borneo and Canada - in accordance with the principle that he expressed when he introduced the Japanese Trade Agreement, that unless they buy more from us we will be forced to buy less from them.
It has been mentioned that many of the goods that we buy from those countries are essentials. That is a fact, but not all of them are essentials. About 20 per cent, of them are not essential. Leaving that particular argument, let us get back to the Japanese trade treaty. Japan does not buy our wool simply for sentimental reasons. It buys our wool because it is essential to its economy as a raw material for the manufacture of exports.
– Are you against the Japanese Trade Agreement?
– I am not talking about the agreement. I am giving an analysis.
– Are you against the agreement?
– If the honorable gentleman is so gullible as to believe stories like that he must be softer than sorghum. I am trying to state the argument that was used for the introduction of the Japanese Trade Agreement. The point is that Japan was buying Australian goods because it needed them. We are buying goods from the United States of America and the United Kingdom because we need them. Should we not apply the same principle to these countries as was applied to Japan? Is any one in this House so n:ive as to believe that Japan would buy our wool if it could buy similar quality elsewhere more cheaply? Should we not say to the United
States of America, “ Unless you buy more from us we are certainly going to buy less from you “?
The Labour Opposition, at various times, has been accused of not having any constructive suggestions but I believe that the Leader of the- Opposition has been quite constructive in stating what should have been done to conserve our overseas credit balances upon which our standard of living depends. He said, time after time, that to conserve our overseas credit balances we must have selective import control and that we must manufacture more goods in order to make us less dependent on overseas countries. In a cheer-chasing speech the Minister for Trade said last year - he also said it in the two previous years and we are forecasting that he will say it again this year - that the United States was being vary unfair to us. He was reported as having told members of the AustralianAmerican Association on 24th February last that no great trading nation had obstructed Australia’s battle for overseas trade in the past eight years more than had the United States.
We buy many commodities from the United States which has a favorable trade balance with us on a two to one basis. Does the United States of America reciprocate? Certainly not. It has a prohibitive tariff on Australian wool. This prevents Australian wool from going into American markets and is designed, no doubt, to protect American synthetic industries. I believe that this is not a time for cheerchasing, empty speeches. This is a time for action and realism. We must tell these people who are living on the backs of Australians that they have to be fair to us and buy more from us. If they do not, we will have to buy less from them.
In the few minutes remaining to me, I should like to refer to the credit squeeze which is having a great effect on many industries rn my electorate. Several big industries are retrenching staff and working short time. Chattanooga Tufted Carpets (Australia) Proprietary Limited, a subsidiary of Felt and Textiles of Australia Limited, is sacking men and is working on a skeleton staff due to the credit squeeze and imported carpets. Standard Telephones and Cables Proprietary Limited is retrenching men as are Australian Paper Manufacturers Limited and Austral Bronze Company Proprietary Limited. Other employees are working short time. It has often been mentioned that the reason for the credit squeeze is inflation. Now it is said that the inflationary trend is due to the rise in the workers’ wages. Let me quote what one very great economist said -
Many people go as far as saying that the Arbitration Court judgment is responsible for this inflation. I would like to point out, however, that whilst this move is inflationary, it is not the cause of the inflation, but merely the result of inflation.
Do you know who the economist was? None other than the honorable member for Richmond (Mr. Anthony). His statement was reported in the “ Northern Star “. published in Lismore. The honorable member is not here at the present time, but his statement indicates that even some Country Party members know that the workers’ wages are not responsible for inflation. We cannot compete on world markets because our costs are so high. That state of affairs has been initiated, condoned and encouraged by this Government. Inflation we have, but it certainly is not a workers’ inflation; it is a profit inflation which has caused the reduction of overseas credit reserves and the economic instability that we have in Australia to-day.
.- If the Opposition wanted to introduce a wantofconfidence motion which could be justified by the facts, instead of using the irrelevant rubbish that it has mostly used as arguments up to date, it would have done much better to have taken the Government to task for its failure to encourage the development of north Australia, where there are such tremendous opportunities to step up production in several major industries and to increase our export income. This debate has been of more than usual interest to me because so many honorable members have drawn attention in one way or another to the need to develop our empty north in order to boost our export income. Some honorable members speak with a good deal of knowledge of the subject - others with very little. But I think that most speak with sincere conviction that this country must face up to its responsibility, which it has shirked and side-stepped for far too long - the development of north Australia. That we can side-step it no longer is becoming more obvious day by day.
Responsible people inside this Parliament and outside are making statements almost daily on the need for development. There is a considerable variety of opinion on what could be done. I think that this variety of opinion emphasizes the great need for a properly constituted authority, such as a commission to be established in order to collate the information which is readily available in many places and to collect other information in the form of reports by various committees which is lying in many dusty pigeonholes scattered all over the country. Information would also be available from people and organizations which are closely associated with and interested in the development of the north and who know a good deal about this problem.
This Government has given far more attention to the development of Australia than has any previous government. But in doing so it has followed the familiar pattern, so that we see the gap widening between northern development and southern development. Whilst we have witnessed extraordinary development in the southern half of a continent where there has been vastly increased expenditure on production in primary industry and an unparalleled flow of very necessary investment capital from overseas, the gap is widening, because the situation has changed little in the northern half.
For decades we have been giving only lip-service to this problem of development in the north. The simple truth is that at least 95 per cent, of the members of this House live in and represent electorates in the southern half of Australia and 95 per cent, of our population is in the southern half. It is also true that there is room for many millions more people in the southern half. But we should be displaying a great deal of concern at the fact that only 500,000 people live in the northern half of the continent.
We must agree with what the honorable member for New England (Mr. Drummond) has had to say on many occasions about the need for decentralization. Millions of words have been written and spoken on this subject, and no doubt when it is raised again, as the honorable member for New England will certainly raise it, there will be plenty of other honorable members ready to jump on the band-wagon and put forward their favorite theories. The honorable member for Mallee (Mr. Turnbull) wants another dam on the Murray River to serve another great irrigation project. This, he says, is the most deserving case of any for developmental expenditure in order to boost our exports of primary products. I should think that every honorable member in this House could rise at very short notice and put forward a scheme which could be considered, of tremendous benefit to the nation as a whole. The plain, inescapable truth is that we have not the financial or physical resources to carry out more than a mere fraction of these great schemes.
Of course we should decentralize, but let us be fully aware of the fact that we have done nothing at all worth while as yet to encourage decentralization. What is more important, we have not yet made the major decision on the question whether we should place emphasis on the narrow, parochial kind of decentralization, such as that advocated by the honorable member for Mallee, or whether we should widen our initial planning and devise a bold and imaginative long-term national plan to establish population and industries in areas of known possibility, such as our northern areas. These northern areas are still regarded as remote. The very fact that in 1961 almost half the total area of Australia, the northern half of it, is regarded as remote is a pretty disgraceful reflection on the way our National Parliament has carried out its responsibilities since federation. We do little more than maintain the short-term parochial view here in the south by adopting the simple old principle of reinforcing success in our endeavour to hold our stability and boost our export income. This is a handtomouth policy to suit the present needs, and it keeps widening the gap between northern and southern development. The longer we postpone the fulfilment of our responsibility the more difficult it will be to justify economically the implementation of a plan for northern development.
The effects of our economic policies are felt very differently in different areas throughout the Commonwealth. It is often not fully realized that what is sufficient to dampen and restrain some industries in the south, where we have our major field and range of activity, may be a crippling blow to normal activity in another area. No one denies that some action had to be taken, but in areas like north Queensland, where there is an almost complete absence of alternative opportunity within the narrow range of industry, the effect of credit restrictions, at a time of the year when there is already a high level of unemployment in seasonal industries, this being a normal state of affairs, is most damaging and disheartening. It is quite useless to talk of moving men from one industry to another. The opportunities to do so do not exist in the north. Men are employed in a profession or in an industry. If the particular industry retrenches or closes down they are simply not employed at all.
There is little or no incentive to establish any industry in the north which must rely on major markets in the south. The cement industry provides an example of the difficulties. It is impossible for our cement industry in north Queensland, despite the fact that it is most efficient, to compete with Japanese imports. Japan can land cement in Cairns, a short distance from the location of our own cement manufacturing plant, for £4 a ton cheaper than we can produce it. The timber industry provides another illustration of the difficulties. We are told that in north Queensland, with present milling capacity, our reserves will last for about 200 years. The present credit restrictions will add a few years to that. With its principal markets in the south, it is quite impossible for this industry to compete and survive, under the present tariff and import arrangements and with crippling freight costs. Would it not be worth while for us to step in and provide some incentive to keep the industry alive, if we were satisfied with its standards of efficiency? I do not advocate that we should ever subsidize inefficiency, but if inefficiency exists in remote areas we should try, with industry co-operation, to eliminate it.
Industries already established in the north have mainly been based on the exploitation of natural resources. In the case of mining, the value of most minerals being mined is such that distance from markets is of relatively minor importance. Sugar is a protected industry, whilst meat, although a great deal of it is exported, suffers a price differential in comparison with meat produced in the south which is often quite unreasonable.
The major obstacles to development of industry in the north are, first, distance from main markets and restricted local markets; secondly, in general, large areas are only partly developed, and in parts they are undeveloped; thirdly, our knowledge of natural resources is inadequate; fourthly, freight rates operate against decentralization, except in the case of restricted local areas around particular centres; fifthly, very little, if anything, is offered by State and Commonwealth Governments to offset the disadvantages of decentralization or of setting up new industries; sixthly, in many areas transport problems are completely unsolved; and seventhly, living conditions in some centres are unattractive, the cost of living being high compared with that in southern centres, whilst there is often a marked lack of amenities.
Honorable members should bear these points in mind when they consider northern development. It is quite unrealistic to expect any great flow of private or risk capital into the north without proper incentives. We are now offering incentives to those who would explore overseas markets for Australian products; we are holding out incentives to any who will provide a greater financial return for the country in .the way of export income. Is it beyond our capacity to work out and offer some real incentives to those who would be prepared to establish new industries and put some risk capital into our undeveloped north?
Let us be realistic about this matter. At the present time practically every conceivable obstacle, both natural and man-made, stands in the way of further progress and development in the north. I have enumerated many of them. Any one foolish enough to endeavour to transport cattle from the northern rivers, where shipping points are nonexistent, to our export meat works on the north-east coast, as the Clausen shipping line endeavoured to do, must surely realize that the official attitude is, “ Have a go if you like, but if you do not survive it is your own fault “. There cannot be one valid excuse for allowing that shipping line to leave our shores when we are talking of boosting our export income. A commission or other authority for northern development, even with only the smallest powers, would have encouraged and retained it.
Then there is the case of the Le Tourneau off-road transport. Who in this country or in this Parliament can say that this type of unit would not be a success for moving cattle in remote areas where conventional transport cannot operate, and where onthehoof movement is sometimes impossible, uneconomic or even shockingly wasteful? We have established a principle with regard to these machines by spending many hundreds of thousands of pounds on equipment of this ki’d, or embodying a similar principle, for our Air Force. Yet, when a few individuals are prepared to put up some money, asking for State and Commonwealth support to try one of these machines, there is nothing but backing and filling and buckpassing. Here again is a chance to boost our export income. Our lack of imagination and reluctance to take even the smallest risk is, I think, most lamentable.
Now we talk of Commonwealth assistance for developing and constructing roads in the north, where it is clearly beyond the capacity of the State to construct them. These roads will obviously be, in the main, beef cattle roads. We welcome this development, but we realize that it must be some years before the roads can be constructed, and. therefore, effective. In the meantime, we must have fifteen or twenty shipping points in the north for shallow draft vessels such as those that the Clausen line would operate, inexpensive shipping points like those established at Burketown and Normanton, costing about £2,000 each or less, to move cattle out as required. We should, as a matter of urgency, secure an off-road transport vehicle, such as the Le Tourneau, and give it a trial. I feel sure that it would succeed. If any honorable member has ever walked cattle over the Murrami track, he would know why I advocate this form of transport. There is a tremendous scope for it in Australia, if only as a feeder to conventional transport on good roads.
The construction of a sealed road system across the north, from Townsville right through to Wyndham, with similar access roads north and south, is vitally necessary. I have pointed out in this House many times that we have not one all-weather road or railway linking the north of Australia with the south. There are, therefore, periods in every year during the wet season when we have no road or rail communications for defence or trade. We certainly need roads, but they must be designed on a plan calculated to do the utmost good for the industries they will serve. We must not accept the thesis put forward with a great deal of vigour that cattle from the north must move over a system of roads to the southern States for fattening and slaughter as being the answer to the problems of our beef cattle industry. We have a clear responsibility to develop this industry around permanent fattening areas in the north. We have a responsibility to north Queensland to support any scheme put forward by the State which aims at year-round killing at our meat works and at eliminating the curse of seasonal unemployment which, unfortunately, we have grown to accept as normal.
We welcome the decision by the Minister in charge of the Commonwealth Scientific and Industrial Research Organization (Dr. Donald Cameron) to establish centres for plant and animal research at Townsville. I congratulate the Minister upon his early decision. I have always advocated that the key to the establishment of a sound and prosperous beef cattle industry is the raising of the level of nutrition. Any one who has any knowledge of the problems of the north knows full well that native pastures fail completely in the dry season of each year, that 50 per cent, of all calves branded never reach a market and that even if there were a sealed road to every major stockyard across the north we would not get sufficient cattle for a day’s kill at any of our meat works in the off season.
We have vast opportunities for expansion in our beef cattle industry to the point where Australia will become the world’s greatest producer of beef. T emphasize that this opportunity is staring us in the face, but if we are not prepared to give encouragement and assistance where they are needed to existing industries, and to attract others by using our own financial resources, then we should be looking to other countries to help us out. At our present rate of progress, we are missing out on a great opportunity, and we are showing little justification to the rest of the world of our claim to hold this vast area of rich, undeveloped land. Our right to hold it can best be demonstrated by the establishment of an authority or commission whose aims and terms of reference are simply the progress and development of northern Australia.
I believe that this censure motion is weak in the main. On the points upon which the Government has been attacked, it can show justification for its actions. I could not support the motion, but do believe that the Government would have a difficult task to justify its lack of encouragement to the establishment of industry in the north and the movement of population to that part of Australia.
.- The honorable member for Herbert (Mr. Murray) has made a splendid plea for the development of northern Australia, but he cannot get away from the fact that he is a supporter of a Government which, in its eleven and a half years of office, has done little or nothing to encourage the development of northern Australia. I suggest, therefore, that it is time he took some action against his Government for its neglect of the north. Any development that has taken place there has been achieved with the aid of overseas capital. In other words, the great assets of the Australian people are gradually being sold to overseas interests. The honorable member for Herbert is guilty of hypocrisy, for he knows that in the last eleven and a half years his Government has done nothing at all to develop the north. But his was only one of the many hypocritical speeches that we have heard from honorable members on the Government side.
The only government that will develop Australia in the best interests of the Australian people is a Labour government. If the Austraiian Labour Party were in office, it would develop and use the great wealth of Australia in the best interests of our own people. The Leader of the Opposition (Mr. Calwell) has emphasized this in the many speeches he has made in which he has amply demonstrated his great love for Australia and his earnest desire to see it developed fully in the interests of the Australian people. The honorable member for Werriwa (Mr. Whitlam) and the honorable member for Macquarie (Mr. Luchetti) have also amply demonstrated their love for Australia and their keen desire for its development.
Let us examine the opportunities for developing northern Australia which this hypocritical Menzies Government has had during its eleven and a half years of office. It was elected in 1949 on its empty promises to put value back into the £1 and to remove restrictions. Instead of removing restrictions, this Government has been imposing them from the day it came into office. It has imposed restrictions upon the great masses of Australia, the working people of this country, whose wages were frozen in 1953, and who have had little or no wage justice since.
This has been a dishonest Government, because it has created inflationary conditions. Whereas, under the Chifley Government, the greater part of revenue was raised by direct means, this Government has resorted to the dishonest, indirect system which automatically sets off an inflationary trend, and the workers of Australia have been required to bear the full burden of that inflation. By its first horror Budget, this Government extracted another £100,000,000 from the people by the dishonest method of increasing indirect taxation. Then, by its little horror budget, it increased indirect taxation still further. In February of last year, it sought to cure inflation by opening the gate to a flood of imports, with disastrous effects upon our balance of payments. Never in the history of Australia has our balance of payments been so low as it is now. Since this Government came to office, Australia’s balance of payments has deteriorated by £1,800,000,000. In 1949, our overseas balances in London stood at £650,000,000. To-day, they stand at something less than £300,000,000. Again, in November, 1949, the average basic wage for the six capital cities of Australia was £6 9s. a week. In November of last year, it was £13 16s. a week, which gives some indication of the deterioration in the value of money since this Government attained office. Had the Australian £1 retained the value it had in 1949, instead of being £650,000,000, our overseas reserves would have been worth £1,300,000,000 to-day.
The Government has sought to meet the deficit of £1,800,000,000 in our international trade balances by borrowing capital from overseas. This has increased our foreign debt by £174,000,000. Further, our internal public debt has increased by £1,050,000,000 during this Government’s term of office. As against this Government’s record, I point out that the Chifley Government, at a time when it was fighting a war, was able to reduce not only our internal national debt, but also our overseas indebtedness. That is the record of the Chifley Administration as compared with this Government’s record. This is a government of inflation.
The Government has advanced six proposals which it hopes will solve the problems that confront us. First, there is the credit squeeze; but the only people who are being squeezed are the small businessmen and those who want to build homes of their own. The same position applied in 1951 and 1956. Once again the Government has set the basis for a recession. The pool of unemployment has become larger and to-day something like 80,000 people are registered for employment, The Menzies Government, by its actions, is creating unemployment, but it does not concern itself with the section of the community which is struggling for its very existence.
The Government increased the overdraft interest rate by 1 per cent. Is not that an indirect tax? Do the companies that have to pay this additional 1 per cent, not add it to the cost structure and pass it on to the consumers who, once again, have to pay? This indirect tax will add its weight to the burden of inflation.
Then we come to the wage freeze. When the Australian Council of Trade Unions approached the Commonwealth Conciliation and Arbitration Commission seeking an increase in wages and three weeks’ annual leave the Government, as it did in the margins case last year, sent its advocates to the court to oppose the application. Although the advocates said that they did not oppose it and merely wanted to give evidence for the information of the court, they did, in fact, oppose the application. The judges were instructed not to give wage justice to the workers of Australia. Then, as a handout to certain judges, the Government passed legislation at the end of the last sessional period providing for an increase of up to £40 a week in the salaries of the judiciary. That is an example of the way in which the Menzies Government works. It refused wage justice to one section of the community and increased the wealth of the privileged classes.
Sales tax on motor cars was increased last year from 30 to 40 per cent. Under the Chifley Administration sales tax on motor vehicles was only 8 per cent, but this Government has increased it, during its term of office, to 40 per cent. In the last year of the Chifley Administration sales tax amounted to £39,000,000, but the estimated revenue from this source this year is £180,000,000. That is the way hi which this Government works. It imposes indirect taxes so that the great mass of the workers will have to pay them. Sales tax is a dishonest tax and this Government is a dishonest government. But it will be brought to its knees at the end, of this year because the people of Australia have had it. It is a fourflusher. No matter how much it squirms and twists and turns, it cannot extricate itself from its difficult position. We know that when we return to the treasury bench we shall have great difficulty in solving the problems that will confront us. We are not screaming calamity but we know the real problems that exist. The Menzies Government has put this country in pawn.
We shall have to face up to the issue of priorities on which this Government has turned its back. I remind the honorable member for Herbert that nothing has been done to develop the north. Instead, there has been great speculation by certain monopolistic interests. The people should be told about the existence of these monopolistic interests within our country and of the manner in which our wealth is controlled and distributed. Costs are passed on to the workers. The report of the Commissioner of Taxation, which was tabled in the House this week by the
Treasurer (Mr. Harold Holt), discloses that 39,572 companies made a profit. Of those companies 94.99 per cent. - near enough to 95 per cent. - made only 24.09 per cent, of the total profit. So the top 5 per cent, of companies received 75 per cent, of the £670,000,000 profit which was made by all companies last year. If we go still further, the top one-fifth per cent, of all companies - 79 in all - made 33 per cent, of that £670,000,000. It is quite evident that monopoly capitalism increasingly is taking over this country, but the Attorney-General (Sir Garfield Barwick) in his hypocritical way says, “ 1 have to consult with my State Attorneys-General “.
– Order! I suggest to the honorable member that he does not follow that line any further.
– Maybe honorable members opposite do not like a bit of honest talking or a bit of honest criticism about them and their actions. This country that we love, this country that belongs to us Australians, has to be developed in the best interests of Australians, but this Government is doing nothing about it. Only the people on this side of the House will govern Australia in its own best interests. We are the only people who will make sure that wealth is distributed more equally. The people who have the wealth will have to distribute it amongst their fellow men. In a speech last year I disclosed that between 1954 and 1960 the Myer family in Melbourne, by means of bonus shares, watering down of stock and capital appreciation, gave itself a further £20,000,000, tax free. Just imagine that! One family has increased its wealth by £20,000,000 while this Government has been in office. But the wage-earners cannot get wage justice. The railway workers, the postal workers and other people working under federal awards have been refused wage justice although great wealth is being handed out to certain sections of the community.
I have said time and time again that this Government is a 5 per cent, government - it represents the top 5 per cent, of the wealthy section of the community. The farmers - the hay-seeds - in the corner on my left are interjecting, so I shall deal with them. Let us analyse the wealth that the farmers have accrued while this Government has been in office. In the last year of the Chifley Administration farm income was £321,000,000 and company income - the income of the monopolies to which I have referred- was £214,000,000. And yet we find that under the Menzies Administration to-day farm income is £466,000,000, an increase of a little over £100,000,000 in a period of eleven years. But we find that in the same period monopolistic companies have increased their profits to £672,000,000 from £214,000,000, an increase of nearly £500,000,000. That is the record, and I say to the hayseeds in the corner who claim to represent the farmers of this country, although most of them are auctioneers or salesmen of some description who do not understand the basis of the farmers’ requirements, that only a Labour government is capable of representing the interests of the farmers and of all Australians.
Two policy decisions brought down by the Government on 15th November reflect some progressive thought. One of them was to restrict the large public companies and great financial interests which I have mentioned from raising money through debenture channels. If we examine the way in which capitalism has manoeuvred unrestricted under this Government we find that debenture raising in June, 1955, amounted to only £27,000,000 and share capital amounted to £59,000,000. To honorable members who are not aware of the fact - and the Minister for Supply (Mr. Hulme) was not aware of it, because when I mentioned it during the Budget session last year he contradicted me - I point out that the pattern changed because by the end of June, 1960, share capital amounted to £48,000,000, and debenture capital had risen to £193,000,000. We pointed out that as company tax was increased to 8s. in the £1 in the last Budget, the fact that interest on debentures was paid before company tax meant a saving of at least 8s. in the £1 to these organizations which, consequently, raised capital by the issue of debentures instead of shares.
On the morning of 15th November last I asked the Treasurer (Mr. Harold Holt) a question. That was the day on which he brought down the restrictions in respect of debenture capital. On that day I asked the Treasurer - 1 preface a question to the Treasurer by directing the right honorable gentleman’s attention to the increase of 6d. in the £1 made in company taxation last year, bringing the maximum rate of company tax to 8s. in the £1. This has given great assistance to companies which raise money by the issue of debentures, in order to evade company tax, because, as the Treasurer knows, such companies pay interest on the debentures before paying company tax. Does the Government intend to take action against this type of capital raising?
These matters have been raised by the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Yarra (Mr. Cairns) over the past two years. We have warned the Government of this position and of the actions of this speculative section of the community which, in fact, was diverting money into land speculation and luxury building instead of the building of homes for the people. Even the banks, the insurance companies and commercial enterprises were erecting luxury buildings when there was insufficient money for the building of homes, schools or hospitals. That is the way in which money was being diverted, and this is the issue of priorities which we must face.
This Government has imposed certain restrictions, but we say it has been too long in taking this action and that it has not gone far enough, because even now these organizations can borrow up to the amount available to them as at 15th November last, namely £200,000,000 a year. In the few minutes remaining to me I want to give some thought to what we, in this country, have to do to face the issue of priorities. T was interested to note in the “ Sydney Morning Herald”, of 27th September last, a report of an interview with Mr. Khrushchev at the United Nations, and I think we can learn a lesson from what it says. The reporter asked Mr. Khrushchev how he could say that by 1970 the Soviet Union would have a standard of living equal to that in America when last year America produced 7,000,000 motor cars and Russia produced only 30,000. Mr. Khrushchev replied, “ We could do it to-morrow, but it means freezing our capital. You go ahead and do all that foolishness. It’s to our benefit.” If my hayseed friends who are interjecting will quieten down I will explain the position to them, because this is our country and we want to develop it as we think best. The United States has sufficient steel to build its motor cars and sufficient petrol to run them, as well as sufficient rubber for tires, but with all that Mr. Khrushchev’s statement about priorities is correct. In Australia, the motor car industry has been eating the heart out of our steel industry, and every time a car goes down the street it eats the heart and soul out of our export earnings. We have no synthetic rubber for motor tires-
– Order! The honorable member’s time has expired.
.- We have just listened to the product of confused and muddled thinking which, perhaps, has resulted from the trip which the honorable member for Reid (Mr. Uren) took to China in the middle of last year. Let us dismiss such muddled thinking and get on with a bit of constructive thinking. One thing which has impressed me during this debate has been the burial service attitude and gloomy prophecies of members of the Opposition. Listening to them one would think that Australia was facing a catastrophe at the moment and that our overseas reserves position was irrecoverable. But the position is not so critical. We still have very healthy reserves overseas, and 1 do not think there is any necessity to reimpose import licensing at present, although if the situation requires us to re-impose import restrictions, the Government will do so.
It is very important that a government should be flexible in its economic policy, particularly the government of a great trading nation like Australia, which is influenced by so many factors that we can do little about, such as seasonal conditions and terms of trade. We can do little about those things and, therefore, as these adversities affect us, we have to adjust our economy accordingly. This is true of every country in the world. Even the great socialist countries which some members of the Opposition try to make out to be impeccable in their economies have to make tremendous adjustments from time to time. Only this year Mao Tse-tung, with a stroke of the pen, diverted 20,000,000 workers from the industrial side of the economy to the agricultural side. Russia is doing that also.
They are regimenting labour in a military manner, but we in this country try to adjust labour under the free-enterprise system.
Price is a factor that encourages certain developments. As all honorable members are aware, our exporting industries at present are seriously affected by ever-increasing costs. That applies particularly to primary products. If this situation is maintained, primary producers will be deterred from increasing productivity because the degree of profit will be diminished. All other countries are having problems as well. The United States of America is experiencing a tremendous drain overseas on its gold reserves and has had to take action to counteract that situation. West Germany is faced with inflation and a booming economy is causing costs to rise. What has West Germany done? It has depreciated its currency. Holland is in a similar position. France went through a crisis of this sort for about fourteen years and almost reached the verge of revolution. It had to introduce sane economic policies and had to adjust its economy to curb inflationary tendencies.
So. too, we in Australia must try to adjust our economy when there is need. Last year, the Government saw that there was a tendency for inflationary pressures to develop in Australia and took early measures to try to counter that development. All of us are familiar with the four point plan that was introduced in February of last year. About the middle of the year, at the meeting of the Australian Loan Council, the Government tried to restrain members of the Loan Council from over-spending. There was only a moderate increase in loan allocations. The Government budgeted for a surplus of £15.000,000 in an attempt to ease inflationary pressures and it increased company and personal taxes. All these measures usually are successful, but in the existing circumstances, the inflationary pressures continued.
What were we to do? Were we to let the economy go? Were we to live in a daytoday economy or, with an eye to the future, try to stabilize it? The Treasurer (Mr. Harold Holt) said only recently that if the Australian economy had been left to run its own course, we would have had a classical boom-and-bust depression about the middle of this year. What did we do? We had the courage to go forward. We had the integrity and the determination to try to correct the position. We did many unpleasant things which politically we did not like doing, but, because of our integrity, we did them in the face of unpopularity.
I want to refer particularly to the members of the Liberal Party, who must have felt the bumps of these economic measures very severely; but all of them have been right behind the Government and supported it to the fullest extent, irrespective of how it might have affected them personally. We in the Australian Country Party could see great justification for these economic measures because of the need to curb increasing costs. We know that this consistent spiral of costs has been putting a squeeze on our primary industries, and so we were able to justify these proposals a little more easily than were the members of the Libera] Party. They were not deterred, however. They have gone forward with great determination to see that the Government carried out its plans, and I thank them for doing so.
On the other side of the House, there is a rabble screaming calamity and trying to build up a psychological reaction so that everybody will tighten up and depression will grip the country. It is possible to achieve that psychological reaction. It was the forerunner of the depression in 1930, when everybody became worried and tightened up. It did not matter then whether the Government made money available or not.
Last year, a boom was developing in Australia. Let us examine the facts. We had intense speculation. The stock exchange was running foolishly. The velocity of the circulation of money was tremendous and the volume of money was increasing rapidly. Withdrawals from the savings banks had increased by £130,000,000 in August and by £150,000,000 in November. The hirepurchase companies had increased their lendings by £50,000,000 and the lendings of the pastoral companies had increased by £20,000,000. So those who say that credit was not available cannot be following the figures. Actually, there was excess finance in the community. We are trying to reduce some of that liquidity that has put us in the grip of an inflationary boom.
I should like to trace the history of Australia since this Government was first elected to office. Let us go back to the first crisis that faced the Menzies-Fadden Government in 1950. That was the time of the beginning of the Korean war, when wool prices absolutely boomed. It appeared that inflation would run away with Australia. What did we do to try to curb this trend? We, the Country Party, supported the most politically unpopular thing this party could ever possibly support - the wool deduction scheme. It hurt us politically; in fact, we lost the honorable member for Hume (Mr. Anderson). But by the time the reasons for those measures had penetrated to the Australian public, the people were with us 100 per cent, and our vote has been bigger and stronger ever since because we had the courage to do what we honestly believed to be right.
At the moment, we have the advantage of time being on our side. The more Australians can learn of the reasons why we have put these economic measures into effect, the more support we will get ultimately. When these measures were introduced and for a few months afterwards, we were very unpopular; but as the people are learning the wisdom and sanity of our measures, they are coming our way.
There must be some re-adjustment of labour in the community from time to time. We do not want to see a severe readjustment by any means. There will be a minor degree of unemployment. No honorable member likes that; we all dislike it very much. It might be a very wise thing if the Government could increase substantially the unemployment benefit, particularly for a married man with a family. We have to accept the facts of life, however. There will be re-adjustments of labour from time to time and these will hurt people, but it is the overall economy that matters. If we allow things to run away in the boom period, ultimately we will all be affected and misery, hardship and degradation will descend upon the whole community. We reached another crisis in 1952. This was brought about by the big increases in wages following the prosperity loading that was granted at the time. That was an extra £1 because wool prices had gone up and one section of the community was enjoying great prosperity. But now that we face difficulties, have the trade unions, particularly those associated with the wool industry, agreed to reduce that prosperity loading? Of course not! It must all be one way with them.
In 1952, we had a crisis and the Government introduced what has been called the horror Budget. The people eventually decided that we had done the right thing and were pleased that we took that action. The years went on and we had a relatively stable period in 1953 and 1954. In 1954, we had the beginning of the crisis for 1956. That was brought about by a tremendous increase of margins. I am not against increased margins, but I think that this increase may have been a little excessive. There was such an increase in prices that within a year the New South Wales Government had abandoned annual adjustments in wages and had gone back to quarterly adjustments, using the C series index. This in itself is self-defeating, because as wages go up so do prices and instead of prices increasing yearly, they increase quarterly. Why should one government try to disrupt the whole of the economy by not falling into line with the other Australian governments? That is what has happened in New South Wales.
What is New South Wales doing at the moment to help in this situation? The Sydney City Council, which is controlled by Labour councillors, has supported a claim for four weeks’ annual leave and is talking about a 35-hour week. Just introduce those measures into the whole of the Australian economy and you will have complete breakdown. What about the coalmining industry? Here is an industry that has a chance to get on its feet and earn money overseas. But the New South Wales Government supported a claim for a 35- hour week in this industry. How can we hope to compete against other countries? Let us face realities; we cannot live in isolation in Australia. We must always remember that our costs are other people’s prices. If we inflate our costs, other people cannot afford to pay the prices that we must charge to keep an industry going. This also applies to our import replacement industries. If internal costs are inflated, the local import replacement industries can no longer compete with goods importer’ from abroad.
– What did you do it for?
– Surely nobody can be more to blame for this than the great industrial unions of this country who have demanded higher wages irrespective of the consequences that higher wages may have on our exporting industries.
– You are a tory!
– I do not think I am a tory. I am a conservative and can see sense. Every time wages have been increased in the past ten years, there has been an immediate increase of prices. We need only compare the C series index with wages to find that the purchasing power of the employees who have received increased wage allotments has not improved. But on the other hand these wage increases cruel those thrifty people who have saved money. They also cruel the wage-earner because they put him into a higher income bracket and they also cruel his superannuation.
We must have a little moderate and conservative thinking if we are to develop our country along practical lines. The whole national security of Australia depends on developing the country as fast as we possibly can and populating it. But if the trade unions demand a shorter working week - how can you produce more in that way - and higher wages that will strangle our exporting industries - believe me, the wool industry is in a difficult position now - where will we end? I think the Commonwealth Conciliation and Arbitration Commission in its judgment on the claim for three weeks’ annual leave used most sensible economic wisdom on the matter of national productivity. Productivity is the great lever that is used by trade unions. Every time the national product increases the unions claim that wages should increase. In its judgment the commission said -
Dealing first with the Gross National Product, we find that the use of this figure by itself to ascertain a measure of productivity is of no value to us in our task of wage fixation or of fixing award conditions. As has been pointed out in earlier judgments, the figures are subject to substantial revision from time to time but more importantly the Gross National Product is itself increased by wage increases. We consider it is inappropriate to use, as the basis on which to increase wages, figures which themselves will be increased by the very decision made.
That is sound wisdom, and it is as simple as one could want. The Opposition and the
What has been the degree of profit in the Australian economy during the last year? I have figures here from the Australian Industries Development Association, which give the profits of 520 companies listed on the stock exchange. The highest profit is in the mining industries with an average of 14.8 per cent. I ask Opposition members whether they think that it is not good that the mining industries can make a profit to plough back into the development of the industry and so be able to increase our exports. The profit after taxation for retail stores was 8.9 per cent. Is that exorbitant when we know that a person can buy debenture notes at 7 per cent, or 8 per cent., or even 9 per cent.? Why build up class hatred on the basis that profits are exorbitant? Yes, profits may be exorbitant in individual enterprises, but if a free economy is allowed to run, others will soon enter those industries and by increased productivity reduce the profit margin. That is the very thing we are trying to do by abolishing import licensing.
The monopolies and the home luxury industries which grew when they had a super-tariff of complete protection have been able to charge whatever prices they liked and have made large profits. If import licensing is re-imposed now on what may be termed luxury or non-essential goods, the development of these industries will be stimulated all over again.
– Are you in favour of the free import of bananas from Fiji?
– I do not think we need worry about Fiji; we are a pretty efficient country now. The Opposition does not like to hear these rather pertinent facts.
I come back to profits. The farmer at the moment has a very small margin of profit. Primary industries are our major exporting industries and earn about 80 per cent, of our overseas revenue. If costs are allowed to increase, something must happen in these industries. First, they will no longer be able to increase their efficiency and so meet the challenge of other countries. Secondly, the incentive will be destroyed and people will be deterred from engaging in primary production. As an alternative, they would rather go into these luxury industries that have been afforded the benefit of absolute protection, and that rs what import licensing means.
Sitting suspended from 12.45 to 2.15 p.m.
– Before the suspension of the sitting, I had been pointing out the folly of the policy of the trade unions and the Australian Labour Party in seeking wage increases without relating them to real increases in national productivity, to skill, to the unpleasantness of the job, or to seasonal conditions. In conclusion, I want to emphasize a number of points in respect of which the Government merits credit for the unpleasant economic measures which it adopted last year. I refer not just to its measures of November, but to those taken during the whole year - the four-point plan adopted in February, the Budget and its associated measures, and the economic measures adopted in November. All those measures have averted a boom-and-bust depression which was facing this country.
We have curbed the speculation which was running rife. Huge office and flat buildings were going up in all the large cities merely for speculative purposes. We have adjusted the supply of labour and diverted some of it from the booming industries, such as the motor car industry and that part of the building industry which was concerned with the construction of large buildings for speculative purposes, into more essential basic industries. We have stabilized share prices on the stock exchanges, which were moving very erratically las: year. We have attacked the
Australian people psychologically, with the result that every Australian is now reviewing the rate at which he has been spending his money and is turning more to thrift. The whole essence of the sound development of a nation is thrift, a good, sound, banking system and support for the bond market. Those are the requirements for a developing economy. We have curbed the rapid increase of prices which seemed to have Australia in its grip. We have made local industries which were producing goods that were not previously being affected by imports review their efficiency in order to compete against imports. Above all we have given Australia an international reputation as a country in which we are trying to fix up the mess which has caused the inflation of costs. We have tried to adjust ourselves because the terms of trade have gone against us. We have made adjustments because we were caught in a scissorslike movement, with export prices going down and internal prices going up. This Government has acted responsibly, and I believe that the people of Australia, when they realize the facts, will give it great credit in due course.
.- Mr. Deputy Speaker, in view of the rather amazing and misguided remarks just made by the honorable member for Richmond (Mr. Anthony), I think that at the outset I should quote again the terms of the wantofconfidence motion proposed by the Leader of the Opposition (Mr. Calwell). They are as follows: -
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.
If we needed any indication of the weakness of the Government’s answer to the Opposition’s case, that indication was given in the speech made by the honorable member for Richmond who, almost at the conclusion of his address, stated -
How true that is. Since 1949, the Government which he supports, and which is a coalition of the Liberal Party of Australia and the Australian Country Party, has been in office with unlimited power in this chamber and in another place, lt is refreshing to find a Government supporter who represents a country electorate honestly admitting that the Government, after being so long in office, is endeavouring to clean up its own mess. We certainly agree that the mess is of its own making. Everything that is wrong with the economy as a result of the failure to implement policies of benefit to the people of Australia, and the implementation of policies which have led to unemployment, the closing of industries, the transferring of men and women to positions which do not suit them, and the like, is the responsibility of this Government which the honorable member for Richmond supports.
My time is limited, but I want to deal at some length with the honorable member. Let us not forget that he is a member of the Country Party. Members of that party, throughout its history, have never believed in anything but low wages and long working hours for the workers, and the highest possible profits for those who control the country’s wealth. They believe in poor wages and bad conditions for the men and women who work in industry. Had it not been for the Australian Workers Union and the other great trade unions, some of the graziers in the electorate of Richmond who support the honorable member to-day would still be paying less than the basic wage to their employees, because they do not believe in a fair return for the man who sells his labour.
The honorable member stated that import restrictions were removed in order to bring down prices in the Australian community and that this Government has no time for imports control. This is what we hear from the honorable member for Richmond, who personally and through his family, and as the representative of the Richmond electorate, is closely associated with the banana industry, which shelters behind tariff protection against the importation of bananas from Fiji. This is what we hear from a member who is supposed to favour free enterprise. He is supposed to believe in competition and free enterprise. I do not complain about these tariff measures. In many respects, they are necessary. I am merely demonstrating the hypocrisy of the honorable member, who condemns imports control when it is used to protect the interests of people in the timber industry and other industries and says that he espouses the policy of free enterprise. The honorable member knows as well as I do that butter producers in his electorate are protected against competition by New Zealand butter by the tariff imposed on imported butter. Yet the honorable member says that he does not believe in this sort of thing. And what about the sugar industry? Our sugar industry lives under tariff protection and price-fixing, which are designed to protect the people in it.
The honorable member says that he does not believe in tariffs. He says that he is a free-enterprise man and that this Government favours a policy of free enterprise. He knows as well as I do that, since the Second World War, no government has introduced more measures restricting industrial and company activities than has this Government which he supports. Even some of the most bitter tories who usually support this Government have condemned it for breaking every promise on which it was elected and ignoring every policy proposal which it put before the people prior to its being elected to office. I think that the attitude of the honorable member r. Richmond towards these things should be shown up. Will he admit that since imports control was removed, the market for Australian timber has declined by more than one-third and that timber mills are closing in his constituency and all over the country? Will he say that he does not think that the people who own the timber industry and the men and women who work in it and depend on it are not entitled to a measure of tariff protection? If the honorable member were fair-minded in these matters, he would admit these things. But he prefers to see men and women in his electorate walking about unemployed. He has no time for the workers and he wants to bring to bear against them the most vicious weapon at the Government’s disposal. He is rontent to see unemployment and want throughout his electorate. He condemns the wageearners and he supports the Government’s action in appearing before the Commonwealth Conciliation and Arbitration Commission to oppose an increase in wages on the ground that the country could not afford it. Last year, we increased the salaries of judges, in one instance to £10,000 a year - about £200 a week.
The honorable member for Richmond is prepared to allow unlimited profits to become the order of the day in this country. He says that the workers get too big a return for their labour. But he should have told the people that every increase in wages is rendered ineffective by those who control industry increasing their profit margins out of all proportion to what they are entitled to. It is quite clear that the honorable member does not believe in fair wages for men and women working in industry although those in control of industries are allowed to make unlimited profits. Would not one expect him, as a member of the Australian Country Party, to rise in this House and attack the shipping companies for charging exorbitant freights for the transport of primary products and other commodities? Would not one expect him to say something about the profits of £15,000,000 a year earned by General Motors-Holden’s Limited and the huge profits of the Broken Hill Proprietary Company Limited and other companies? How can the honorable member say that the workers of this country are not entitled to additional income when the balance-sheets published by the Broken Hill Proprietary Company Limited and General MotorsHolden’s Limited show that these companies are able to make almost unlimited profits and, in one instance, transmit them to shareholders thousands of miles away from this country?
It is no wonder that this Government faces an economic crisis. It is a bigbusiness government, which believes only in monopoly control. The Attorney-General (Sir Garfield Barwick) is not prepared to legislate against monopoly and restrictive trade practices as has been done in other countries, because practically every member on the Government side who was elected in 1949 owes his presence in this House to the expenditure of funds which came from the great monopolies and the private banks of this country. Those funds were contributed in order to defeat the Labour Government, which stood for the interests of the Australian people.
The honorable member for Richmond went on to say that the Government had had to face a series of crises. What is more, he was quite decent about it. He listed them all. The first crisis was when the Government was elected. That is true. Everybody was horrified, and the Government was also amazed when it was elected in the 1949 election. There was another crisis in 1952, he said, when the Government introduced the horror Budget. This is the statement of a Country Party member that I am repeating. The Government introduced the horror Budget in 1952, and everybody has had a nightmare since then. He went on to say that there had been another crisis in 1954, and another in 1956. To-day, we have still another crisis. One crisis after another. What more could one expect, he said, when we are endeavouring to save ourselves from ruin - ruin brought on us by the actions of this impossible and irresponsible Government. So, when the honorable member for Richmond stands in his place in this Parliament, let him remember that he shelters behind a tariff policy that gives protection to people in his electorate in many respects, although at the same time he opposes protection for other sections of industry which are well entitled to it, because they have been forced to meet difficult conditions and are in danger of being driven out of production by the flood of imports.
I think it is well to remind the Government of these matters. Many Government supporters are to-day speaking in a way which I know does not sincerely express their beliefs, because they are shuddering at the thought of what will inevitably happen at the next election. I was looking for some support for what I am saying from an honorable member who has just been elected to the Parliament - the honorable member for Higinbotham (Mr. Chipp). He won what was regarded as a safe Liberal seat in Victoria, and he is lucky to be on the pay-roll in this Parliament to-day because he scraped home by a few hundred votes only, for the simple reason that the people in his electorate know that the Government has not carried out its stated policy. So, the electors are expressing their feelings at the ballot-box at every opportunity that is given to them, and showing that they have no confidence in the Government.
We do not need to go to the Labour Party’s records in order to find support for our case against the Government. We can find support for it elsewhere. For instance, the Sydney “ Daily Mirror “, of 22nd February, 1961, had something to say that I shall read to the House. I think that the man who wrote this leader in the Sydney “ Daily Mirror “ is entitled to a rise in pay for placing on record what is the real outlook of the Government. The editorial was headed, “Bewitched, bothered and bewildered “. Everybody is, and there is no doubt that the honorable member for Richmond is. The editorial states -
We confess to utter bewilderment at the latest snap decision out of the Federal “ Government “.
Just before boarding his plane to play statesman overseas,-
He is not going so hot overseas, honorable members will agree. The editorial continues -
Mr. Menzies drops the increased sales tax on cars and foreshadows modification of other recent controls.
Half frivolously, half contemptuously, he throws his Treasurer’s policy overboard - within 24 hours of poor Mr. Holt’s endorsement.
Talk about government by fits and starts! This is closer to government by poker machines.
Is that not right? It goes on -
It is not that Mr. Menzies’ parting shot is necessarily a bad thing, in itself.
The savageness of the November curbs, especially on the motor industry, has been pressed on the Government from many sides.
Then the leader writer said -
With a reckless abandon typical of the man and his Cabinet, he has flown off once again leaving the nation bewitched, bewildered and bereft of any planning or policy on which to build in confidence.
Half in sadness, half in anger, the Mirror last week arked: Where the devil are we going?
All we can do to-day, with fading hopefulness, is to repeat our challenge.
Then, to show the fact that the Treasurer does not know what he is doing and what is going to be done, below this editorial the newspaper publishes an article under the heading “ Cabinet shocked “ which begins -
Prime Minister Menzies did not consult Treasurer Holt before asking Cabinet yesterday to reverse its policy on car sales tax.
Mr. Menzies had very brief talks with some Cabinet members, but apart from that took no one into his confidence.
Of course, when you look at the Ministry you cannot blame him for that. The fact of the matter is that there is the Treasurer, supposed to be the man in control of financial policy, but when the Prime Minister is in the country - which, honor able members will agree, is only rarely - he does not even bother to consult the Treasurer on matters pertaining to the nation’s economy. Is it any wonder that this newspaper said what it did?
And what do we get from the Minister for Labour and National Service (Mr. McMahon). The “ Sydney Morning Herald “ published an article by Ross Gollan, who is not exactly beloved by the Labour Party, but in days gone by, at least, he was the darling of the Liberals. After reading statements by the Treasurer (Mr. Harold Holt) and the Minister for Labour and National Service, he wrote -
You pay your money and you take your pick - -Childe Harold or Sunny Bill.
Is not that so right? Their policy changes every hour of every day. The honorable member for East Sydney (Mr. Ward) this week asked the Acting Prime Minister whether it could be arranged that the Government’s policy for the day would be bro- dcast over television stations along with the weather forecast so that people would know what the policy for the day was.
In November the Government brought in measures which, it said, were to stabilize the economy. Before we had debated these measures the Treasurer had left for Tokyo on a trip in the middle of the Budget session. The Government then increased the sales tax on motor cars to 40 per cent., and two Liberal members of the Government parties who believed in being independent decided that they would vote against this measure in another place. One would have thought that the Liberal Party would have been proud of having these men of independent mind in its ranks. But no! They were threatened with expulsion from the party, and their fellow party members would not speak to them. Members of the Country Party said that the sales tax on motor cars must be increased to 40 per cent. They were not concerned about the effect that that increase would have on costs to be met by the people whom they are supposed to represent in this Parliament. Then, almost before the ink was dry on the document signed by the Governor-General, the Prime Minister himself repealed that measure without even consulting the Treasurer. I wonder whether the people who blandly gave approval to the measure in the first instance realized its repercussions. It is impossible to run a family budget without knowing what expenditure is going to be. How can anybody expect to run a country, which has an annual Commonwealth Government expenditure of £1,600,000,000, by stops and starts so that nobody in business or industry, worker or employer, knows from day to day what the position is or will be?
The Government lifted import restrictions. It now says that they were unnecessary and should not have been imposed. I am one who believes that at a time when we expect people in industry to produce more and, as they should, pay more in wages and give good conditions to their employees, these people are entitled to a measure of protection from the Government. But just as the policy enunciated on sales tax on motor cars was changed, policies in regard to imports and other things have also changed. I cannot for the life of me see how we can tolerate economic measures that produce such things as Professor Copland mentioned when he said that 150,000 persons might lose their jobs before this thing is over.
We find these things happening day after day because of the changing policy of the Government. One can go down a long range of economic measures from the sales tax on motor cars to the threat to force life assurance companies to invest 30 per cent, of their investment money in government securities, and find the same stop and start policy. Pressures are brought to bear. The insurance companies are among the outside interests who support this Government, so what does the Government do? It announces that it may not proceed with this measure. Its masters have spoken. The proposed policy under which earnings from interest were not to be exempt from tax has been changed. The financial interests have told the Government what to do. General Motors-Holden’s Limited and other companies quite rightly complained that they were having to put men off because of what the Government was doing, and they brought pressure on the Government with the result that the increased sales tax was removed. While I know that General Motors-Holden’s Limited and Broken Hill Proprietary Company Limited have the right to say that they cannot keep men on because of the Government’s policy, I think that companies that earn £10,000,000 or £15,000,000 a year should not help to bring this country to a condition in which men are sacked overnight in order to keep up profits.
They support the Government which has imposed crippling credit restrictions on all sections of industry. At a time when importers and others in a genuine way of business cannot obtain credit to buy the materials they need why does not the Treasurer answer a charge, made in this Parliament, that touches a matter verging on a public scandal? The other day, the honorable member for Parkes (Mr. Haylen) raised the question of a loan of £1,000,000 from the Commonwealth Superannuation Fund to David Jones Limited of Sydney. No doubt this money will be used to pay for more imports. The matter was also raised by the honorable member for Lang (Mr. Stewart). This should be repeated again and again because the press of this country, paid off by the Government with television licences, has failed to publicize this matter. I am informed that under caveat 8737960, signed on 29th January, 1961, David Jones Limited was granted a loan of £1,000,000 by the Commonwealth Superannuation Board. As security, the firm has given its Market-street and Castlereaghstreet property.
Why does the Treasurer (Mr. Harold Holt) tolerate £1,000,000 being loaned to David Jones Limited by the Commonwealth Superannuation Board to subsidize the importation of frog legs, chicken and other commodities which will put workers out of work? Why does he refuse to answer questions on this subject? If this is not a scandal, why is the press playing it down? The newspapers know that there is a lot behind it, yet they refuse to ventilate the matter. They have been paid off, and so they will not publish opinions expressed in this Parliament or requests by the Opposition for a full inquiry. There is no money for farms, no money for industries, no money for men and women to build homes, no money for re-employment, and no money for schools, hospitals, and local government works. The Government sits idly by while £1,000,000 is invested in David Jones Limited by the Superannuation Board and other people are denied money to carry on essential industry.
Is it not nearly time that some of the senior members of this Government stayed in the country long enough to administer the affairs of the country? The disastrous excursions of the Prime Minister (Mr. Menzies) and his role as a fall guy in various international conferences has almost become a public joke abroad. The Prime Minister went abroad on the occasion of the Suez crisis and made a laughing-stock of himself by his intervention with Nasser. Last year, he went to the United Nations and Australia, unfortunately, in the eyes of Asian nations and others was humiliated by his actions. Now he has mediated in the South African crisis and the South Africans have left the Commonwealth of Nations. Is it not time that the prestige that we are losing abroad by these excursions of the Prime Minister was retrieved and this Government tossed out of office and replaced by a Labour administration?
Honorable members opposite, who are interjecting, may whistle in the dark as much as they like, but I notice that the honorable member for Higinbotham (Mr. Chipp) is not laughing his head off. He is a terribly lucky man. The honorable member for McMillan (Mr. Buchanan) will not be in this House much longer. His electorate is in Victoria, like Higinbotham, in which the Government’s majority of 9,000 was reduced to 700 at the recent by-election. He has reason to be worried. The honorable member for Griffith (Mr. Chresby) will need more than a mystic fire to save him when the next elections take place. We have heard the Minister for Labour and National Service (Mr. McMahon) say that the Government is pursuing a dynamic policy. It may be pursuing such a policy, but it is a long way behind it, because, as the honorable member for Richmond (Mr. Anthony) has said, the Government is endeavouring to clean up its own mess which has resulted from its incompetence and inability.
I am sorry that time does not permit me to go further into the activities of this Government. I summarize by saying that the Government’s record should never be forgotten. Since 1949, it has repudiated every pledge on which it was elected. At a time at which this country should be expanding and developing, rising prices, inflation, unlimited profits, and the growth of mono polies have become the order of the day. In addition, imports are unlimited, and you can bring into the country anything except “ Lady Chatterley’s Lover “. People are going out of business. Industries are being destroyed and men and women are being paid off by the thousands throughout the length and breadth of Australia. Why, therefore, should this Government not have a censure motion moved against it? No member opposite, whether a Minister or a back-bencher, has put forward a case to show that the Government has the confidence of the country. Australia should be expanding and developing. A great future lies before this young nation, and our progress should be at a rate at which we will lead the world. Yet we have dropped back more than a decade or so because of the incompetence of the Government and its downright inability to govern.
The Government has failed everybody from the pensioners to the men and women in industry. In the field of social services, and in the economic structure generally, the Government has destroyed the things that this country had achieved and to which it was entitled. No government in the last 20 or 30 years has ever deserved the censure of the Parliament, and of the people, more than does the present Administration. With complete confidence and sincerity, I support the motion moved by the Leader of the Opposition, because the Government has demonstrated in every possible way, by its actions, its incompetence, its inactivity and its downright failure to honour the pledges on which it was elected, that it no longer possesses the confidence of the people of this country.
– The motion before the House is one of censure against the Government and relates to the economic measures which were introduced by the Treasurer (Mr. Harold Holt) in November. If a censure motion is to be moved, it is not enough just to say that what the Government is doing is wrong. The Opposition has to show why it is wrong and must be prepared to state the right course to pursue. With one exception with which I will deal, the Opposition has put forward no alternative whatever.
I think that most honorable members would agree that the speech made by the honorable member for Fremantle (Mr. Beazley) was the most effective Opposition speech in this debate, not excepting those made by the Leader of the Opposition (Mr. Calwell) and the Deputy Leader of the Opposition (Mr. Whitlam). He spoke, as he generally does, with thought, feeling and sincerity. But I think that although he did more than any other member of his party to put forward some alternatives to the Government’s measures, he fell into two errors. The first one was his statement that all the Government’s measures had one objective, which was to restore the balance of payments. Having made this error to start with, he was led into making further errors as he went along. In fact, this was not the whole objective of the Government’s measures. Let me remind the House of the words used by the Treasurer when he introduced these measures. He said that their purpose was -
That indicates that there was a very great deal more than a mere attempt to redress the balance of payments. It is important that our minds should be clear about that. The second error into which the honorable member for Fremantle fell was to put forward, on behalf of his party, as other Opposition members in the midst of a great many other irrelevancies have put forward, the suggestion that troubles began with the lifting of import restrictions and that they would be redressed if import restrictions were re-imposed. As far as I can see, after listening to this debate and reading “ Hansard “, that is the only alternative that any member of the Opposition has put forward.
I want to spend some time in discussing this question of import restrictions. In fact the whole question involves very much more than merely improving the balanceofpayments position. To imagine that our present economic difficulties can be overcome by re-imposing import restrictions betrays a lack of understanding of what is happening in the economy. The stability of costs and prices, of course, is an even more important matter, and its achieve ment must, in fact, have priority over efforts to overcome the difficulties associated with the balance of payments. I hope that members of the Opposition can bring themselves to understand, although they do not give much indication of being able to do so, that on our ability to trade, which in turn depends on our level of costs and prices, depends not only the improvement of our standards of living, but even the maintenance of our present standards. Therefore it is essential that we preserve to this country its ability to trade.
The Opposition, as I have said, has one suggestion, and that is that we restore import restrictions. Many people, and not only the members of the Opposition, think that this would provide a solution to our problems. Persons other than members of the Opposition in this Parliament have put forward this suggestion. The kind of argument that is produced goes like this: When we had import licensing we were not experiencing these troubles; as soon as we abandoned this system the troubles began; therefore, if you bring back the system of import licensing you will get rid of our troubles. This is a completely superficial point of view, and, in fact, it does not accord with the facts. Let us consider what actually happened, and put the picture into perspective. In February, 1960, when import licensing was removed, if not completely, then to the extent of about 90 per cent., a tremendous increase in imports occurred - in that very same month. It was so large an increase in that month that, if maintained throughout the year, we would have had imports running at the value of about £1,000,000,000 per annum. But this increase was not brought about by the removal of import licensing regulations. The increase occurred at the same time. It was the result of a banked-up demand, of a tremendous number of orders placed before import restrictions were in fact removed. The flow of imports does not start immediately or within a week or two of the removal of import licensing. In fact, the demand for imports was already there, and this additional flow of imports was the result of orders placed long before.
To ease the supply position in the face of rising demand, and following the price rises of 1959, it became necessary to remove the system of import licensing. What would have been the result of not doing so? Obviously there would have been a much greater increase in the cost and price structure, As it was, costs in 1960 rose by about 4 per cent., but without the flow of imports to satisfy the demand represented by this rise, of course the increase would have been very much greater still. Would that have done the country any good? Would it have done the working man any good? Of course it would not. The first point I want to make, therefore, and a point I hope all of us will understand, is that it was necesary to remove import licensing, and that the cause of the flow of imports was not the removal of import licensing. In fact, I have demonstrated that it could not have possibly been the cause. The cause of the flow of imports was the enormous demand for additional goods, a demand incapable of being satisfied by internal production.
Let me give the House one example of a commodity for which this demand existed. T refer to steel. Between the second half of 1959 and the second half of 1960 our balance of trade in steel changed from an export surplus to a large deficit, the extent of deterioration during that period being £58,000,000. If this excess demand had not been allowed to satisfy itself by a free access to imports, we would inevitably have been faced with disruptive shortages and a much steeper rise in internal costs and prices than we have in fact experienced. The fact was that demand had spilt over into imports in this way,
I am building up a case to demolish the Opposition’s suggestion that we should reimpose import licensing.
– Of course we should.
– Yes, of course that is what the Opposition wants. I have given the House an outstanding illustration of the build-up of demand, by referring to our trade in steel. We have to deal with causes, not with symptoms, and the cause in this case was demand.
– I thought you said it was costs.
– The costs were the consequence of the demand, of course. The Opposition wants to have import licensing back. What would be the result of re-introducing import licensing now? The first thing that would happen, of course, would be that we would have a shortage of supplies. This would increase still further the gap between the demand and the volume of goods available. Let me say this about import licensing: Whenever it has been applied it has never been sufficiently effective of itself.
The other point that Opposition speakers have made in this debate is that credit restrictions should not have been imposed. This is what they say: Put back import licensing and take off credit restrictions. Let me remind these gentlemen that import licensing has never been effective by itself. It has always had to be supported by restrictions of one kind or another. In fact, when import licensing was imposed in 1952 it was by no means the first occasion on which the system had been used in Australia. It was used - and, of course, quite properly used - during the war and in the post-war years, but with accompanying restrictions to make it effective. There were all sorts of restrictions - not just restrictions of credit, but also restrictions of exchange and rationing. In fact, the Labour Party wanted to nationalize the banks to impose further restrictions. It is a fact, of course, that import licensing was necessary in those days, but do not let us delude ourselves into imagining that it operated without a great many supporting controls and restrictions, or that we can re-impose it now and make it effective, while taking off what is popularly called the credit squeeze. We could not do so. The Labour Party’s plan would put us into a far worse position than we are in now.
Import licensing, moreover, brings its own problems. Let me read to the House what the present Leader of the Opposition (Mr. Calwell) had to say about import licensing when it was introduced in 1952 -
Import restrictions require administrative and arbitrary decisions, which afford vast opportunities for inefficiency and human failings. Import licences are always based upon a “base” year, and small businessmen are thereby placed at a grave disadvantage compared with big importing houses.
Yet the honorable gentleman wants to re-introduce it -
Direct controls of this kind make goods scarce without raising their import prices, so that either big profits can be made by those importers who have licences, or goods at a low price become scarce, which creates a need for queues, rationing, waiting lists and purchases by preference. An importer may try to sell his quota and make his profit in that way. Import restrictions give rise to a temptation, if not an easy opportunity, to indulge in black marketing.
So much for the system that the Leader of the Opposition now wants to have reintroduced. What would happen, of course, is that factories would not be able to work to capacity, because we would have to ration the goods going to them. Would that be a good thing for the working man? It is no use talking about selective import licensing. If we were to attempt to apply what is called selective import licensing we would select out of this £1,000,000,000 worth of goods that I mentioned perhaps £200,000,000 worth. In fact it would be less than that; it would be something less than a fifth of our total imports. Out of that we would have to take perhaps a half for absolutely essential items on which import licensing could not be imposed, such as tea, pharmaceutical substances, antibiotics, surgical appliances and things of that kind. They would all have to be taken out, so that finally there would be far less than one-fifth of our total imports to which selective import licensing could really be applied. During this debate, we have heard a great deal of rubbish about frogs legs in aspic and so on. Such things are the mere minutiae - they have no effect on the situation at all. If the Labour Party cannot think of anything better than that to talk about, it has not much of an argument at all. The plain fact is that if this so-called selective import licensing were imposed, there would not be enough room in. the nonessential area for reducing the import bill to an extent that would make any real impact on overseas balances. import licensing would have to be spread into those areas where, inevitably, manufacturing and employment would be affected.
The honorable member for Fremantle (Mr. Beazley) had something to say about employment under import licensing the other night. Let me remind the House that when import licensing was imposed in 1952, one of the Labour Party’s great complaints against it was that it would create unemployment. All that the suggested alternative policy would do would be to add to the internal inflation. It would cut at the roots of our export drive. I have already pointed out that if we cannot export and trade, our living standards will be in danger. The
Opposition has not offered any constructive alternative policy. It has not given any thought to the problem at all. The only suggestion honorable members opposite have been able to make is that we ought to do something of a restrictive nature. The Opposition lives in a world of restrictive and constrictive thought. It is not possible to foster prosperity behind a great wall of import protection erected on top of our tariff system.
Let me refer now to tariffs, about which the honorable member for Grayndler (Mr. Daly) had a good deal to say. Of course we believe in tariffs. The Australian industrial system operates behind a wall of tariffs. Every government believes in tariffs. This Government has pointed out over and over again that the proper protection for Australian industry is the tariff, not import licensing. If there are industries in this country which are convinced that import licensing will surely be re-introduced and, because of that belief, neglect to take the proper precaution of using the tariff procedures and find themselves in trouble because of that neglect, they will have only themselves to blame. The tariff procedure is there for industry to use.
Nar is it true to say that the tariff procedure operates slowly. There are at least 50 industry panels operating under an accelerated procedure, through which industries can approach the Minister for Trade. As he pointed out to this House the other day, all they have to do is make out a prima facie case for their requests to be urgently considered. That is the proper mechanism, the proper way to protect Australian industry. That is the proper way to safeguard employment in Australia.
Of course, nobody likes to apply the measures that are being applied at the present time. If there were pleasant measures that could be applied, then, of course, we would be applying them. To talk about the present measures as if there were real alternatives is completely incorrect. Even the Opposition knows that there are no real alternatives to the measures which the Government has been taking. Every one knows at heart that they had to be taken. The Government does not impose them merely for the fun of doing so. Mere common sense would demonstrate that in an election year no government would be doing such a thing if there were another and easier way out. There is, in fact, no pleasant way of reducing a boom. We have before us the historical facts of the cycle of boom and slump, and they make quite plain to us what happens to countries where governments are afraid to take action when boom conditions upset their economies. There are no pleasant measures that can be taken. If measures are to be taken, then they must be measures which are effective. If a government refuses to take effective measures, then, of course, the economy must be left to go through the cycle of boom and slump, which produces consequences much worse than anything that will come out of following the measures which this Government is now putting into operation.
Now let me sum up the position. What we are debating to-day is a motion by which the Opposition, in effect, seeks to declare that the Government’s measures are wrong. I hope I have demonstrated this afternoon that not only are the Government’s measures right, but that they are inevitably necessary when the economy of a country is approaching a boom in the circumstances in which our economy was moving at the end of last year. Not only are they the right measures, but they are the inevitable measures. This Government, which has the interests of the country at heart, had the courage to take them, and I have no doubt that, having done so, the result which will come - perhaps not quite as quickly as one might like - will put the Australian economy on a firm, stable basis for future expansion. Do not let any one forget that during the period of almost twelve years for which this Government has held office the expansion of the Australian economy, and the improvement in the conditions of the labour force and the living standards of the people, have been immeasurable. This is not the first time we have taken unpopular measures to ensure that we consolidate the base for future expansion. I have no doubt it will happen again, just as I have no doubt that when the time comes for the Australian people to decide whether this Government was right or wrong, they will once again affirm their confidence in a government which has looked after them so well for the last twelve years.
.- I rise to support the motion moved by the Leader of the Opposition (Mr. Calwell). Those of us in this chamber who have come to know the Minister for Health (Dr. Donald Cameron) very well have great confidence in him as a medical practitioner. I would say that if we had some bodily ill that required good medical attention, the Minister for Health would be the man to whom we could go for the best advice. But when it comes to giving advice for remedying the ills of the economy, all I can say is that the sooner the Minister decides to confine his activities to medical matters the better it will be for Australia. The Minister for Health took the Opposition to task, complaining that we had offered no plan, and that we had merely criticized the Government’s actions. Then he went on to criticize the Labour Party’s plan. What does he mean? First, he says that we offer no alternative and then he promptly speaks about how futile and useless is the plan put forward by the Labour Party. He spoke about symptoms and causes, and one might have been pardoned for feeling that he was speaking about matters relating to the medical side of his activities.
The Opposition has submitted a protest by way of this no-confidence motion. By that motion, we are protesting at the way in which the Australian people have been forced to suffer, and we are speaking not only of those who are suffering the hardship of unemployment. I remind honorable members that the Minister failed to mention that in Australia to-day there are nearly 100,000 people who are unable to find work.
– That is not true.
– It is estimated at nearly 100,000, and the economist whom honorable members on the Government side are always praising - Professor Copland - estimates that before the effects of this Government’s brutal policy are felt to the full there will be 200,000 people looking for work in this country.
– Why not promise them something?
– Never mind what we should promise. Our job is to point out where the Government has gone wrong. If it had taken notice of us during the last few years it would not be in the position in which it is to-day. But it is the Government’s responsibility to keep the economy in shape; it is the Government’s responsibility to care for the people of this country, and it gets no marks for saying to us, “ What did you do when you were in office?” It has the job to do and every Minister and every back-bencher who supports this Government will be judged on the job that has been done.
No wonder Government supporters are feeling uneasy; no wonder they are ready to jump and squeal and complain about the position! They know full well that they are just living in hope. They have no idea what will happen. They proved that they did not understand the Government’s policy when they voted to increase the sales tax on motor vehicles, otherwise they would not have done so. When the fruits of that policy showed clearly that unemployment was developing in the motor industry the Government panicked and over-night reduced the tax. There was clear proof that it never should have been imposed.
Then the Government hit upon this idea of trying to control imports by credit restrictions. Every one knows that our basic problem to-day is our diminishing overseas balances due to the everincreasing flow of imports into this country. Some time ago the Government eased the import restrictions, but it was not content with that. It closed the book and disbanded the organization that had taken years to build up. It had no further use for the special officers who after many years of experience had reached the stage of being able to handle the business. The Government knows now that eventually it will have to re-impose import licensing, but it is hoping and praying that something will turn up to get it out of its present difficulties.
– Another prophet!
– It is not a matter of prophecy, it is a matter of the position that exists to-day - something that we shall have to face up to in the future. We have been pretty right in the past when we have criticized the Government. It would not believe us when we said what would happen in the motor industry. It waited until men and women had to walk the streets looking for work before it was prepared to think about doing something; and by then it had waited too long. Apart from the sales tax, the Government’s restrictive financial policy is crippling enough to slow down not only the motor industry but also all industry.
The Government talks about the need to fight inflation. It has only just discovered that inflation is with us. Who is responsible for the inflation? Who has been in charge of this nation’s economic affairs? The Prime Minister (Mr. Menzies), the Treasurer (Mr. Harold Holt), other Ministers and Government supporters have just realized how stupidly they have managed the affairs of this country. They now are confronted with the crisis that their actions have brought about.
The Government tried to restrict imports by adopting this policy of credit restriction. It decided not to advance money any longer for the importation of goods. On the surface, that policy looks as though it will work. When it was announced, Myer’s of Melbourne made a very generous gesture by stating that it would voluntarily cut its imports by 9 per cent, or something of that order. Probably it was quite sincere when it made that offer, but Myer’s, like every other business undertaking, lives by profits. Pounds, shillings and pence are what count, and if a buyer in London or anywhere else reports that there is a product that will be a good profit-maker in Australia, that product will be imported. Can you blame Myer’s for doing that?
– Who buys those imported goods?
– Never mind who buys them. The Government has forced the workers and those in the lower income group to buy the cheapest goods that are available, not because they want them but because the Government’s policy is crushing them. Has the Government not some responsibility? Does it always have to ask, “ Who buys the imported goods? “ Has the Government not some control over what comes into this country? No member of the Government is game to answer the charge that has been made by the honorable member for Parkes (Mr. Haylen) and others about the Commonwealth Superannuation Fund loan of £1,000,000 to David Jones Limited. I wonder if there is a Minister in this House who will say that the board was not directed to make the loan? Why did David Jones Limited need the £1,000,000? Was it to buy imports? Will any Minister deny that this huge amount was passed over to David Jones Limited to enable that company to bring goods into this country? The small legitimate importer who has been depending upon a bank overdraft is finished. As soon as the Government’s credit restrictions became effective he could not operate because he could not borrow on overdraft. But the Government goes out of its way, as it has in the past, to give its great friend a loan of £1,000,000. Unless we are told the exact reason why David Jones Limited wanted this sum, we are entitled to assume that it was to bring imports into this country.
– What rate of interest does the loan carry?
– Eight per cent.
– That will be passed on.
– Without doubt, especially as the company finances its own hirepurchase transactions. The effect of unrestricted imports was brought home to me very clearly recently. During the warm weather in Adelaide a sponsored television programme was boosting air coolers which have become the rage. All one afternoon we saw and heard advertisements boosting these air coolers which were obtainable at Myer’s and other stores. The weather was warm and people wanted air coolers. Naturally, if one brand is £1 cheaper than another and if they look as though they both do the same job, people will buy the cheaper one. You cannot blame them for that, because that is the way one has to live these days. But the point about it is that the imported article was cheaper than the locally manufactured one. The Government should have had some foresight and should not have allowed these air coolers to be imported and to undersell others of equal or better quality manufactured by Australians and just becoming established on the market.
– Does the local article cost more than the imported one?
– Yes. The honorable member for McMillan would prefer to see imported articles selling at a cheaper rate than locally manufactured ones and to see our men and women walk the streets without work. That is what is happening. The Australian manufacturers of air coolers naturally cannot continue to operate and to compete against the article that the Government has allowed to be imported.
– What about the tariff?
– The Minister for Health said that it is quite easy to approach the Tariff Board. The olive oil industry has been trying to get before the board for twelve months or more, but it has been unsuccessful. The Government is allowing that industry to die because the big men are not associated with it. Imported olive oil is available in large quantities. The people engaged in the local industry are neglecting the trees that they have nurtured for years because they can compete no longer with the imported product. The Government is not concerned about them, so honorable members opposite should not talk to me about a tariff. The Government’s latest policy is forcing Australian manufacturers out of business and Australian men and women out of employment. That is a most serious matter.
Recently the honorable member for Barker (Mr. Forbes) chided Labour members and said how gleeful we are when there is unemployment. He need not talk like that, because if anybody knows all about unemployment it is the men on this side of the chamber. We are entitled to be concerned about it, because most of us have suffered unemployment. Very few men on the Government side of the House have had that experience. Certainly the honorable member for Barker (Mr. Forbes) has not had such an experience. He need not criticize us, because we will always be concerned, no matter what the number of the unemployed may be. We do not want to see even one man in this country forced out of work let alone 200,000. We will always be concerned about unemployment, and I would sooner we remained in opposition for ever than that we should get into office as a result of men and women being out of work in this country. We do not want to trade on the misery of the people; but the Government’s actions have forced us back to the grim days of the depression.
It is all very well to be a member of Parliament and sit back and smile as honorable members opposite do when unemployment is mentioned. But if they had been dismissed from General Motors-Holden’s, the rubber mills in South Australia, or the timber mills that have been mentioned, and had to pay rent and keep their families while out of employment they would not merely be saying “ Oh “ or be comforted by the Minister for Labour and Natrona! Service (Mr. McMahon) when he says that industries will open up and that jobs will oe provided for the unemployed. For us, unemployment is a serious matter, and we are deeply concerned about it. The honorable member for Griffith (Mr. Chresby) will not be saved by the D.L.P. or the Q.L.P. at the next election. He can take little comfort from that. The honorable member will certainly be unemployed after the next election, whenever that may be.
Reverting to the £1,000,000 loan to David Jones Limited by the Commonwealth Superannuation Fund, if that fund can loan that sum to a merchant firm, I wonder why £1,000,000 cannot be made available to Commonwealth public servants, who in every State are struggling to obtain loans to enable them to build homes. In South Australia - I suppose it is the same in the other States - one can borrow direct from the State superannuation fund to build a home, but Commonwealth public servants, who are often transferred interstate, cannot borrow from their superannuation fund. That £1,000,000, which was probably lent to David Jones Limited under Government direction, could have been made available to public servants for home building. The Government could have taken the initiative and seen to it that the money was made available for loans in the housing field, even if it was made available only to Commonwealth public servants. As they would then be assisted by funds which they themselves contribute there could be no complaint about that procedure, and the Commonwealth Government would then be doing with its superannuation fund what the State governments do with their superannuation funds.
The honorable member for Scullin (Mr. Peters) has repeatedly pointed out to this
Parliament the struggles of the textile industry. He, more than anybody else in this Parliament, has pointed out what was going to happen in this country. During his address in this debate he stated that the Government will have to re-impose import controls, whatever it says at the present time. We know that just as the Minister for Social Services (Mr. Roberton) practically stole the idea of the present merged test from the honorable member for Port Adelaide (Mr. Thompson), the Government is hoping that some one will now put up a proposition that will help it out of its difficulties.
The Government’s policy is resulting in unemployment and an ultimate total of 200,000 unemployed has been prophesied. Yet the Government is boasting that its policy is having the effects it anticipated. The effects of its policy are unemployment, fewer homes for the workers, inadequate hospitalization and the threat of bankruptcy to businesses because, despite what the Treasurer (Mr. Harold Holt) said to me yesterday, the trading banks have told manufacturers and traders that they must be in credit at the end of March. I know for a fact that that instruction has been given to many people in business in South Australia. Maybe the Government will say that bank managers do not understand the Government’s directive, but they will tell you they have had that instruction and that this Government is to blame in that respect.
The Government is making the little people suffer. Its supporters jeer and sneer at the Opposition, but they are hopelessly incapable of dealing with the problems of the present time. This want-of-confidence motion will be defeated because all Country Party and Liberal Party members will vote against it. On that score they must take their share of blame for the present position. But if we could bring into this House the thousands of small businessmen and others who are suffering to-day and facing bankruptcy and unemployment, the Government would be hopelessly outvoted, as it will be outvoted - there is nothing surer - as soon as it cares to bring on an election and seek the decision of the people. As I said earlier, the D.L.P. will not save the Government on this occasion. It will be judged on its economic policy, which is completely ruining this country. The Government has brought bankruptcy, misery and hardship to the people of Australia and will pay the penalty for it. The honorable member for Grayndler (Mr. Daly) pointed out that the Prime Minister (Mr. Menzies) had failed abroad. We can say he has failed at home and abroad. The honorable member mentioned Suez, and the Prime Minister’s appearance at the United Nations where he left his reputation tattered and torn on the floor of the General Assembly after Pandit Nehru, the Prime Minister of India, had dealt with him. He has failed again at the current Conference of Commonwealth Prime Ministers as he has failed continuously in handling the affairs of this nation. At the next election the people of Australia will support this motion of want of confidence in this Government.
.- The honorable member for Kingston (Mr. Galvin) in his closing remarks alleged that this Government had brought Australia to economic ruin. I do not know to which part of the Australian Labour Party the honorable member belongs, because at the present time the Deputy Premier of New South Wales, Mr. Renshaw, is about to set off overseas to advertise that State, in particular, as a good place for overseas investment and to tell people overseas of the high standard of living we enjoy in this country, how fortunate we are to have such a strong economic basis and that Australia is indeed a developing nation. That is what Mr. Renshaw will do, supported by his Government, overseas. Does he belong to a Labour Party different from that to which the honorable member for Kingston belongs?
This censure motion, as moved by the Leader of the Opposition (Mr. Calwell), alleges that the Government has failed to protect and develop the Australian economy. As I understand it the two operative words in that motion are “ protect “ and “ develop “. This Government has always shown a true sense of responsibility in protecting the Australian economy. I realize that at times its measures have been criticized and have been unpopular for a short time. However, when their good results have become obvious, people have changed their minds and have indeed praised such measures. On no other occasion, perhaps, has criticism of our economic measures been so strong as that which followed the introduction of the 1952 Budget. Since that time, and even in this debate, it has been referred to as the horror Budget; but within twelve months of its introduction most people realized that the economic stability of Australia was being protected through that Budget. Their criticisms ceased and a large number of people praised the Government for the action that it had taken. The same pattern is evident now. When the economic measures were first announced in November, there was a sudden wave of criticism throughout Australia. Now, more and more people are realizing that action was necessary, and that once again the Government has shown wisdom and courage in protecting the Australian economy.
– Who told you that?
– I shall answer the interjection of the Leader of the Opposition by giving him an illustration. This is an example of many conversations I have had with people engaged in many jobs during the past few weeks. I have selected this example because the man concerned runs his own business, and it was affected by the Government’s measures. I remind the Leader of the Opposition that it would be useless to introduce measures that had no effect at all. Obviously, some people are going to be affected. The first thing that this man said to me was, “ Obviously, you did not introduce these measures to win votes “. At the time, the measures were unpopular. However, he added, “I have given the matter some thought. These measures are hurting me personally, but I can understand the reason for them. There is one other thing T want to say: Thank goodness we have a Government that has the courage to put into operation what it thinks necessary and does not worry about popular opinion of the time being.” I think that illustration answers the interjection of the Leader of the Opposition.
– What is this man’s occupation?
– He is an estate agent. He has been hurt, of course. The Labour Party wants to panic the Australian people into believing we are in the depths and dangers of a depression. One had only to listen to the honorable member for Kingston (Mr. Galvin) to understand that to be so. We know that the honorable member and his colleagues have a vested interest in unemployment and depression, and that only by working the Australian people into believing that a depression is imminent can the Labour Party have any hope of gaining power in this Parliament.
The need of some important industries for skilled and semi-skilled employees is well known, and I shall give one example. I refer to the supplementary report of the Broken Hill Proprietary Company Limited dated February, 1961, some months after the introduction of the Government’s measures. The report states, at page 6, under the heading, “ Availability of Labour “ -
The obtaining and retention of an adequate number of skilled employees continued to be a major preoccupation. Considerable assistance continues to be received from the Commonwealth Government immigration scheme and the Company is conducting its own recruiting campaign in Britain and Western Germany.
I emphasize this passage for the benefit of the honorable member for Kingston -
However, the need for additional labour, both for construction and operation, is an everexpanding one and all of our major centres report serious shortages. Unless the position can be relieved it must have a materially adverse effect on the carrying out of our plans.
If you relate that statement to what has been said on both sides of the House on the need to increase the output of steel products, both for consumption in Australia and for export abroad, one realizes the need that is underlined in that report and how wrong, therefore, is the Opposition’s description of the situation. The aim of the Government - which realizes its responsibility Co protect the economy - is to ensure that our economy follows a more even way than the path we experienced in pre-war days. Perhaps I might refer to some of the experiences of those days. The honorable member for Kingston mentioned the depression. The aim of the Government in introducing these economic measures from time to time is to ensure that we will never experience again the type of economic upset that we had before the Second World War. Honorable members will .recall that the Australian economy, like the economy of other nations, was left free by governments. As a result, the economy would progress slowly to the peak of prosperity, stay there for a little while and then drop suddenly into the valley of depression. We would stay in that valley of depression a long time until we gradually started to work up to a prosperity peak again.
Because of our experiences, the research we have done and the knowledge we have thus gained, this Government, with wisdom and courage, does what any responsible government would do: It takes measures to iron out the groove I have described. No longer will we allow the economy to rise to a peak of prosperity, then break and fall almost immediately into the valley of depression. The graph has been evened out. In the process, as I have said, some people will be hurt. It is obvious that economic measures would be useless if they did not have some effect; but the great advantage of the measures we have taken, and will continue to take if the need arises, is that they ensure that the least number of persons is hurt, and that economic stability will prevail for the greater proportion of the Australian people. Having protected our economic prosperity - to use a phrase that is written into the motion - we will encourage overseas investment to help in development.
I wish now to say briefly something about national development. Honorable members will recall that this motion of want of confidence refers to the Government’s alleged failure to develop the Australian economy. It seems strange to me that the Leader of the Opposition used that phrase within 24 hours of the making of a statement by the Acting Prime Minister (Mr. McEwen) in which he set forth positive proposals for the further development of the Australian economy. I remind the House that the right honorable gentleman spoke of taxation incentives to increase our exports overseas, and promised co-operation with the State governments concerned for the development of roads in Queensland, the Northern Territory and Western Australia. He also promised to aid the beef and mining areas in that part of Australia where we can produce for export. Those are only two matters that “re mentioned in the right honorable gentleman’s speech.
I do not think the Opposition is taking this motion of want of confidence seriously because little interest has been shown in the debate by members of the Opposition. This is evident from their speeches, and from the smallness of their numbers in the House. I think it is only wise to see what the alternative proposals would be. It is difficult to judge what the alternatives offered by the Opposition would be if we consider the seeches of honorable members opposite. I except from that statement the speech of the honorable member for Fremantle (Mr. Bramley). In the circumstances, therefore. one has to turn to the policy laid down by the federal conference of the Australian Labour Party. I find among its proposals stringent banking controls, control of prices, profits and rents, control of interest rates other than banking, capital issues controls an’i import controls. I ask honorable members to notice how the word “ control “ keeps coming up all the time. The statement of policy also proposed control of marketing in Australia, restoration and c”l:n’;on of Federal land tax, savage discriminatory taxation, excess profits tax, increased death duties, capital gains tax and possibly capital levies.
The two main points that come out of this statement is the increase of controls of all sorts and the heavy increase of taxation. We can compare this with some of the statements of the Leader of the Opposition. One of his famous sayings was, “ Capitalism is the No. 1 enemy in Australia and Communism only No. 2 “. Another was that he hoped he might live to see a one-party state in Australia. We find, also, that the Deputy Leader of the Opposition (Mr. Whitlam) said in this House on 22nd February, 1956-
In suggesting the abolition of the Senate one is not doing anything that has not been suggested and, indeed, put in operation, in most other parts of the world … the abolition of the Senate would merely bring Australia into line with enlightened political practice in other democracies of the English-speaking world.
When Labour was in power in Queensland, it did indeed abolish the upper House, the Legislative Council, and on 29th April there will be a referendum in New South Wales, organized by the Labour Party there, proposing that the New South Wales upper House be abolished. We can see how much control there will be over the people if the democratic socialists, the Australian Labour Party, have their way.
I emphasized in reading the proposals enunciated by the Federal Conference of the Labour Party the number of controls that Labour wished to introduce. If Labour does that, the Australian economy, which is particularly mentioned in this censure motion, will have a sharp downward trend for all Australians. Not only will we have the types of control that I mentioned but we will have other controls, and I refer the House to the speech of the honorable member for Isaacs (Mr. Haworth) when he quoted what Mr. Chifley had to say about the Labour Party’s objective concerning the control of labour.
The next point about the proposals and objectives of the Labour Party, the alternative government, is in relation to overseas policies. The Labour Party has said that if it were to get into power it would withdraw Australian membership of Seato and it would withdraw our Australian forces which are at present in Malaya as part of the Commonwealth Strategic Reserve. The Labour Party either does not realize or does not wish to realize that in one sense we are and have been fighting World War III. for some time. If we do not stand firm as members of the free world, we will certainly lose more and more. When we do have a victory in this battle, we have only maintained the status quo.
– That is better.
– I remind the honorable gentleman who has interjected that when the Communists have a victory in this fight, they always gain new ground, as they did in Korea, Indo-China, Czechoslovakia and Germany. Yet these woolly-headed thinkers believe that all is well, that we can withdraw our forces and allow the enemy free activity in countries close to us. I have had the opportunity of being near the Communist border in North Viet Nam in company with the honorable member for Macquarie (Mr. Luchetti) and the honorable member for New England (Mr. Drummond). Outside the town of Hue, which is the largest town close to the Communist border, we had the opportunity of interviewing refugees who had fled in terror from the Communists and who had undergone great privations in so doing. I suggest it would be a good thing for the parlour pinks, the left wing leaders of the Labour Party, if they undertook the same journey and learned the views of people who have had the experience of living under Communist control. The honorable member for Macquarie must have great difficulty in the Australian Labour Party as it moves more towards the left in its leadership. 1 want to draw the attention of the House to a document that was published by the International Commission of Jurists. As is well known, this is a non-party political organization formed under the United Nations. A special committee was established to go into the question and report on Tibet. Included in the Labour Party’s policy, as announced by its new secretary, Mr. Chamberlain, is a reference to the handing over of Formosa. That is part of the official Labour Party policy as announced by its Federal Secretary.
– Where did he say that?
– I will give you the quotation in a moment. We know what has been said by honorable members opposite - I will not go outside the House - regarding the recognition of red China and the withdrawing of support from Formosa so allowing it to come under the domination of the Communist Chinese regime. That is one reason that we have no confidence in the Labour Party as a fit organization to govern Australia. In the speeches that have been delivered to us in the last few days, honorable gentlemen opposite have made constant reference to human rights. I want to refer them very briefly to the publication “ The Question of Tibet and the Rule of Law”, which is the report of the International Commission of Jurists. In Section B, “ Violations of Human Rights “, the report reads -
Article 3: “ Everybody has the right to lite, liberty and security of person.”
The killings referred to in the evidence on religious persecution show a wanton disregard for the right to life. This is not the only evidence of killings, and there is the following additional evidence of slaughter by the Chinese:
The report then gives the evidence. I mention this only very briefly hoping that honorable gentlemen opposite will read it in full. If they do consider themselves to be the fit and proper persons to be the alternative government of Australia, they will amend points in their policy.
I wish to conclude by saying this in relation to the Australian Labour Party’s policy as compared with the policy of this Government: As is well known, the basis of our Liberal philosophy, which helps to form the aims, objectives and policies of the Government, is the concept of free enterprise. Though we may realize from time to time that it has its faults, we also know that it is the best that the mind of man has yet been able to devise to ensure that each person living within his own country has the freedoms in which we all believe - our freedom of association, of employment, of speech and of religion. We believe that by allowing man these freedoms, he will, using his own ability and intitiative, develop his way of life and his country to the full. On the other hand, we feel the deadening weight of democratic socialism on us. I have referred to the controls and to the extra taxes. I can say only that honorable gentlemen opposite have taken very lightly this censure motion on the Government; their speeches have shown that they do not really have much heart in it.
.- Mr. Speaker, I support very sincerely the protest by the Leader of the Opposition (Mr. Calwell) against the Government’s handling of Australia’s economy. I would say that in making this speech, I represent 95 per cent, of the voters in my electorate. I believe that the Leichhardt constituency is the one which has been hardest hit by this Government’s recent economic measures. I have been rather astonished at the way in which Government back-benchers have tried to vindicate their action in voting in support of the legislative proposals by which the Government’s recent economic measures were effected. Prior to the recent parliamentary recess, Government back-benchers were very much down in the dumps. During the recess, many of them sought visits to their electorates by Cabinet Ministers, not for the purpose of convincing the voters generally, but for the special purpose of convincing their own supporters, that the action they had taken was right. They seem to have had a brain-washing since they returned to this Parliament, and they now state all the reasons they can find to establish that the Government’s actions have been best for the country.
Every local government authority and every chamber of commerce in my electorate has telegraphed or written to the Treasurer (Mr. Harold Holt) and the Acting Prime Minister (Mr. McEwen) explaining the drastic effects of the Government’s measures on the timber industry. So drastic have these effects been that they have put a damper on the whole of the development of the north. Government supporters have accused honorable members on this side of the House of trying to paint a gloomy picture. There is no need for us to paint a gloomy picture. One has only to visit the north to see how gloomy the picture really is. I should like to read to honorable members several extracts from a statement by the chairman of the north Queensland section of the Queensland Plywood Board, which was published in the “ Cairns Post “ this week. 1 know this gentleman personally. He does not support my policy, but he has done a great deal to help develop the north. He has given a lot of time to this task and he is a supporter of this Government. How he can have the intestinal fortitude to continue to vote for the Government after having made these statements which appeared in the “ Cairns Post “, I do not know. This gentleman stated -
Further retrenchments in the North Queensland plywood industry bring the total number of unemployed in the industry to 489 . . .
This is only in the plywood industry. A total of 860 men have been dismissed from all the timber mills in the north of Queensland. Nine mills have closed completely. This man went on to explain the whole position of the timber mills, and he concluded -
The stringent credit restrictions imposed by the Federal Government are having a serious effect on the building and allied industries throughout Australia and it is hard to understand why the Government continues to believe the unemployment position is not getting out of hand. Some very urgent measures will have to be taken by the Government to arrest the serious trend in the building, timber and plywood industries. Action needs to be taken now.
This situation presents a very serious problem when its effects are added to those of seasonal unemployment. The Minister for Labour and National Service (Mr. McMahon) often talks about seasonal unemployment in Queensland. We know perfectly well that restrictions like those imposed by this Government aggravate the effects of seasonal unemployment. The timber industry in the north, without these restrictions, could absorb some of the seasonal workers in the off season, as it has always done, and mills would not have to be closed and timber workers dismissed. The restrictions imposed by the Government will double the number who are usually unemployed seasonally in the north.
The Minister has the audacity to say that there are plenty of positions vacant in the south. How docs he expect any man who has gone into the north to help develop our country, worked hard for years, obtained a home and established his family, to pick up his chattels and take his family south away from the area which his children after him could have helped to develop, and sacrifice the home that has cost him so much money and so many years of effort to obtain, to say nothing of buying extra clothes and paying fares to enable him to go south in the search for ordinary work? These things cause double dissatisfaction. We cannot expect people to go to the north and help develop it if these things happen. The unemployment situation in north Queensland is now worse than I have seen it since the last depression. I was only a lad then, but I remember what things were like.
The flood of imported plywood into Australia since the removal of import restrictions is the main cause of the decline of the plywood industry. It has no earthly chance of getting its product to the market on terms on which that product can compete with Japanese plywood, which is produced in a country with a very low standard of living, and which can be shipped by direct shipping services from the port at which it rs produced to the port at which it will be used. We are up against it in the north, because the forests are owned by the Crown, and the State collects royalties on the timber. Every mill in the north cuts native timbers and the lack of roads and shipping services, as well as the great distances to markets, makes marketing very difficult and adds to costs. The timber has to travel by rail or road, and the high cost makes rt very difficult for the industry to keep going. It is not only the owners and employees of timber mills who suffer; the timber cutters and hauliers also have been affected by this credit squeeze and the removal of import restrictions.
I was very pleased to see on the noticepaper the notice of motion with respect to decentralization standing in the name of the honorable member for New England (Mr. Drummond). I know that the honorable member’s interest in this matter is shared by the right honorable member for Cowper (Sir Earle Page). I have been much concerned about decentralization for a long time, and now these two supporters of the Government are beginning to wake up to the need for it. Yet they have no hesitation in voting for measures which will result in the direct reverse of decentralization, which they claim to favour. They have the temerity to say in this House that they want decentralization although they vote for legislation which promotes centralization more than ever.
I mentioned earlier that the Minister for Labour and National Service had said that unemployed timber workers in the north could find plenty of vacant jobs in the south. But let us consider the immigration position. Most of the migrants who have gone to the north have since drifted to the south, although there are quite a few who firmly believe that there are prospects of great prosperity in the north if the Government will only allow it to be developed.
– For many people, there are no alternative opportunities for employment.
– For many, there is no alternative. This Government has made it absolutely impossible for a man willing to remain in the north to maintain his family there, but, at the same time, the Government and its supporters do not hesitate to talk about development of the north. We must remember, too, that we have been spending a lot of money in order to help Asiatic countries to develop their tropical areas ?nd improve their land in the hope that the people of those countries will have enough land to maintain families and will stay in their own countries as a consequence. For how long can these hopes be realized? The populations of Asiatic countries are growing faster than is the population of Australia, despite the rate of natural increase and the immigration programme in this country. Why cannot the Govern ment and the people of Australia set an example to the world and show the countries of Asia how to develop tropical areas? Would it not be far better for us to set an example and show what can be done in tropical areas? But our own tropical country is absolutely neglected and the Government introduces legislation which hinders the few people who are in the north from developing it and thereby contributing greatly to Australia’s economic well-being. The measures adopted by this Government force people to leave the north and go to the cities, and this retards the development of our tropical areas, which, as I have said, should be developed in order to show other countries what can be done in the tropics. With treat pride, we. point to northern Australia as the only sugar-producing area in the world where the industry relies entirely on white labour. At the same time, we hope that the people of Asiatic countries will stay within their own boundaries and not come into northern Australia.
The other day. the Leader of the 01)position said something which I have been saying ever since I first began to play a part in local government. He said that we have no right to hold the tropical north unless we do something with it. Nor shall we hold it unless we do something with it. We also have not the right to deny any people outside the area the chance to develop its natural resources and its great potential in timber, minerals end so on. in the north we have a good natural rainfall which is allowed to run waste into the Pacific Ocean. If that water could be trapped in the way that water is being trapped in other places - for instance under the Snowy Mountains Scheme - these areas could be developed and made to produce anything. You could feed the world with the products of this region, because there is nothing that cannot be grown in a tropical area provided the Government adopts the right policy and encourages development.
– It was a Labour Government that put in the Snowy Mountains scheme instead of starting a similar scheme up north.
– Instead of putting artificial lakes in Canberra the Government should put lakes up in the north. During the debate we heard the Treasurer say that
Australia has the confidence of overseas investors, and he invited them to help to develop this country. How can honorable members justify their support for the Government’s measures when such things happen as are reported in the “ West Australian “ of 10th March, 1961, as follows:-
Hilton Hotel Corporation, the vast Americanbased international hotel chain, has dropped out of a £32,000,000 expansion scheme in Australia.
A joint announcement by the Chevron and Hilton groups today blamed the recent drastic changes in the Australian economy for the split.
– Is that why they stopped building at Surfers’ Paradise four years ago?
– 1 am not interested in Surfers’ Paradise or in hotels, though I drink the commodity they sell. The people in my electorate will not be satisfied with the Government’s explanation of its measures to curb the economic trend, because it is the people in such areas who suffer most from such measures, lt is the people in the outback areas, with scattered populations, which are not so electorally important as the big centres are, who suffer most from the effects of measures such as the Government is taking. So the Government’s legislation could be said to be more political than economic. These people bear the brunt of the Government’s policy. They pay taxes to develop this country. They face natural hardships and work hard for our development. Why should they have to bear extra burdens imposed by the Government on top of all that? Honorable members know perfectly well that the people in the outback areas are getting the worst end of the deal altogether. Their taxes go into financing the broadcasting services. Their money helps to give people in the capital cities two national radio programmes to choose from, but they themselves have never had an alternative national programme available to them. Their money is also being spent on the development of television, which is enjoyed by city people, who have the choice of three television stations as well as two national radio stations. Considering all these things, how can honorable members who support the legislation claim that they want to see a policy of decentralization followed in this country? Every economic measure brought down by the Government has an effect that is opposed to decentralization. If people are to be encouraged to develop Australia the Government must be sympathetic to them instead of making their task harder. They need encouragement for the big task that they have undertaken.
Every politician and every visitor to this country declared that Australia is a great land, a land of opportunity, a land fit for development and with great potential. Yet the Government goes humbugging around bringing in restrictive legislation whose effects are exactly the opposite of what we need if we are to develop this country.
The last honorable member who spoke talked about controls. We have to have controls. How car. anybody justify having no controls if we are to keep an even keel. Even in a small ordinary business there must be controls over buying and selling, otherwise the business would end up in the bankruptcy court. We cannot do away with controls. Big business in Australia is no different from ordinary small businesses. If exports do not pay for imports we cannot just say that we will produce more and at the same time apply a credit squeeze which will prevent increased production, because it will stop people from getting the money that they need to make the products that we want to sell overseas.
What is going to happen as a result of the proposed legislation to give tax concessions to people who increase their exports? Steel mills, for instance, will be encouraged by that legislation to produce more steel, but they will send all the steel they can overseas, not only because they can get higher prices for it there but also in order to earn the tax concession. The local building trade will suffer, and we will have to import steel to keep it going. So how are we going to benefit? We will be importing steel to replace cheaper steel that we have exported. We cannot balance our trade that way.
All these points must be considered. Although it may be thought that we are painting a gloomy picture, it is indeed a very dark picture for the people to whom we look to develop this country’s outback, and who have hardship with them all the time. The Government’s credit squeeze will affect these people seriously, because they will not be able to obtain the money needed to carry out the task of development which they have undertaken. If the credit squeeze were applied as was proposed to the young tobacco industry in Mareeba that industry would not be able to harvest its crop, yet it is an industry which needs development and encouragement. The people who are developing that industry are doing a service to the nation by helping to develop the area in which the industry is centred, because after all they could just as easily have invested their money in the metropolitan areas. Instead, they have gone to the outback to make their homes and raise their families, and encourage their children to stay in the area and develop it. But they are being subjected to the credit squeeze.
– That is not correct.
– It is correct. Go up there and see what is happening.
– You should read the banking regulations.
– Never mind the banking regulations. No regulation is any good unless it is carried out properly. A regulation that is not correctly interpreted according to the spirit as well as the letter, is worth no more than the paper on which it is printed. The young people in outback areas who are attempting to make a future for their families there are penalized by the Government’s restrictions. Yet at the same time honorable members who support these restrictions talk about the need for decentralization. They do not know where they are going and neither do the people of Australia, but in December I think that the people will tell honorable members opposite in a strong voice where they are going. Government supporters will need a lot of brain-washing before they go back to their electorates to try to justify their support of the economic measures.
– Every member on this side of the chamber has supported the Government so far.
– Members of the Country Party are the biggest squealers that I have in my area. I believe that members on this side of the chamber are very sincere in supporting this censure motion. It was very necessary to move this motion because if it had not been moved we would have not been able to tell the people what is happening. Nor would we have heard the squeaky voices from the backbenchers opposite trying to vindicate them selves for opposing the motion. They still have to go back to their electorates to do the same thing. I heartily commend the Leader of the Opposition for moving this want-of -confidence motion. It has given us an opportunity to express our dissatisfaction with the economic position in Australia to-day. We trust that, in the near future, better legislation will be brought down by a better party now on this side of the House.
– I was quite interested in the remarks of my friend, the honorable member for Leichhardt (Mr. Fulton), a fellow Queenslander, regarding the north. First, I would like to deal with the credit squeeze which he said is affecting particular primary industries in the north. I suggest to the honorable member that, if he can, he should get something in writing regarding the credit squeeze on these industries and bring it here. As I go through my electorate I throw out that challenge to businessmen and primary producers, of whom I am one. Any one who has a reasonable proposition and who is credit-worthy has no trouble whatsoever in getting financial assistance.
My area is one of the biggest tobaccogrowing districts in Australia. Our difficulty there is to get labour to harvest the crop. The tobacco-growers are not asking for credit to pay the men. They are advertising over the radio and through the press to get labour to harvest their crop. They have the money to pay the men but they cannot get them. Why? They are offering good wages. They are compelled to pay above the basic wage in order to keep their men. Of course, all these things add to our cost.
– For how long do you want men?
– For three months. I appreciate the position in the timber industry in north Queensland as mentioned by the honorable member for Leichhardt (Mr. Fulton). I think that he put the case fairly well. However, at one point of his speech he complained about import restrictions while, at another point, he said that the trouble was the credit squeeze. After the lifting of import restrictions, the plywood industry in north
Queensland was in trouble because of importations into this country. Last session, an emergency measure was introduced to permit the imposition of a temporary tariff to protect any industry that could put a reasonable case to the Tariff Board for relief. The Opposition voted against that measure. I should like the honorable member for Leichhardt to inform me whether the industry to which he referred asked the Tariff Board for a temporary increase in the tariff until its case for permanent protection was heard.
– It is too late now.
– This was long before credit restrictions were brought in. lt was six or eight months ago. It will be interesting to know whether the industry took advantage of that avenue to try to protect itself.
I listened with very great interest to the want of confidence motion moved by the Leader of the Opposition (Mr. Calwell). I read his speech and then I went into the party room and read similar addresses that have been delivered by the honorable gentleman very year since 1951 when I first came here. The speech which he made on this occasion was practically the same as those he made in 1951, 1952, 1953 and so on. But he left out one thing this time: He did not tell the people of Australia to spend all the money that they had in the savings bank because we were going bankrupt. He did say that we were bankrupt but he omitted his earlier advice. The worst panic merchant that we have is the Leader of the Opposition. He did not put forward one alternative proposal for rectifying the position. I think that the Minister for Health (Dr. Donald Cameron) put the position plainly. He said that if you present a charge against anybody you should be able to prove it. So far no member of the Opposition has bolstered his argument with any constructive proposal except the reintroduction of import licensing. It is very interesting to note the muddled thinking of the Opposition. Not very long ago, the honorable member for Scullin (Mr. Peters) when we were discussing import licensing, said -
The most hideous control ever introduced into any country is the restriction of trade.
A few months later, on 12th May, I960, he proposed the discussion of a matter of urgency, using the following words: -
The damage likely to be caused to the Australian economy by the Government’s decision to lift restrictions on imported goods.
In a few weeks, he had changed his mind. This is interesting, too: Referring to the Government, one member of Parliament has said -
Now it states that it is determined not to re-introduce import licensing. In that regard, 1 stand beside the Government. I hope import licensing is never re-introduced.
What can we expect from this muddled sort of thinking?
– Who said that?
– A Labour senator - Senator Benn. These are the kinds of arguments that the Opposition puts forward out of its muddled thinking. Yet members of the Opposition ask the people to believe that they are sincere in proposing this motion of censure. I think the people have enough intelligence to realize, after all the years that we have been in office, that we are quite prepared to take drastic steps when necessary to ensure that Australia’s economy is kept on an even keel.
What suggestions do we hear from honorable members opposite? They say that it is not their job to tell us what we should do. They say, simply, “ You are wrong “. But they do not try to tell us why we are wrong. They say that we should not do this and we should not do that, but they do not tell us why. To my way of thinking, they have put up a very poor argument.
Let me say a few words about the credit squeeze. The honorable member for Richmond (Mr. Anthony) showed what the Government was prepared to do when the economy of the country was getting into a position of imbalance. As the honorable member said, we were prepared, as we are at all times, to take the necessary action to remedy the situation. We have taken action that we have considered necessary throughout all the years that we have been in office, and we have kept the economic position reasonably sound.
I say again that this Government did noi introduce its economic measures for the purpose of reducing the volume of money available. One of the main purposes of these measures is to order the flow of money so that the greatest benefit will go to those industries that are making a contribution towards increasing our export income. I think it was timely for the Government to take such action. I believe that what we have done represents no departure from the policies that the Government has followed since it came to office in 1949. I was reading the other night in “ Hansard “ speeches made by Ministers of this Government, particularly the Acting Prime Minister and Minister for Trade (Mr. McEwen), at the time when import restrictions were introduced in 1952. He set out the policy of the Government, and he said that we were prepared to deal with a position as it arose. He said that the Government’s policy was a flexible one. Well, it is still a flexible one and we will meet problems as they arise.
I have little more to say, Mr. Deputy Speaker. I believe that the people are beginning to understand that the Government has done the right thing. There was some confusion when these measures were first introduced. That confusion was increased by people who had vested interests, and who thought their profits might be interfered with. It was aggravated also by the press throughout the Commonwealth. I contend that the press misled the people with regard to the reasons for the introduction of these measures. I believe that the press is now beginning to realize that the action we have taken has been in the best interests of the country.
I want to refer to one other matter before 1 conclude. The Acting Prime Minister, in a speech a few nights ago, told us what this Government is prepared to do to ensure a continuance of our national development. I ask the Government to urge the conference of State and Commonwealth representatives on developmental projects to try to speed up certain projects, and to give priority to those that will show the quickest returns. I agree with the honorable member for Herbert (Mr. Murray) that one of the projects that should be given top priority is the development of our transportation system, particularly for the benefit of the beef industry. There is no necessity for me to go over this ground again. I have mentioned the matter in the
House time and time again. It is absolutely necessary for us to encourage and assist the beef industry. I support the honorable member in his remarks, and I add this: The Government must look closely at proposals for the development of this industry, and they should treat the matter as urgent. We cannot afford to wait for adverse seasonal conditions to overtake, as they have from time to time throughout our history, particularly as this is an industry that is making a valuable contribution towards increasing our export earnings. I therefore ask that priority be given to developmental projects to assist the cattle industry.
I feel sure that the people of Australia will not be misled by the-
– We could use that word - they will not be misled by the ranting and muddled thinking that has been displayed by honorable members of the Opposition during this debate. The people have had experience of their radical socialistic approaches to our economic problems, and they will never forget those experiences. As time goes on I am sure that the people will realize that our approach is the right one, and that it will be in the best interests of everybody. True it is that some people will be adversely affected. Whatever measures are introduced, somebody must be adversely affected. We believe, however, that the overall objectives of these measures will be achieved, and that they will be in the interests of Australia and all of its people.
I leave it st that, Mr. Deputy Speaker. I ask the people who have listened to this debate to try to analyse the situation. In fact, I think they have already done so. I have directed attention to the hazy thinking that is indulged in by the Opposition, the alternative government - and I have demonstrated that it does not know where it is going. Its members have not a common approach to the matter. I feel sure that the average person who has listened to the debate will agree that the Opposition has merely drawn a smoke screen over its own internal troubles, and that it is merely seeking to divert attention from them to the economic situation and to make whatever party political capital it can out of that situation.
.- I rise in this debate on behalf of the electors of Bendigo, because they, like all other Australians, have a big stake in the struggle for economic security that looms ahead. This debate, after four days, is nearing its end. Member after member has added his contribution, until a nation-wide picture becomes clear. It is a picture of rising unemployment, of dislocation of industry, and of confusion and loss of confidence, evidenced by the bewildered query from businessman and worker alike, “What will happen next? “
A dispassionate review of the situation discloses that shattering blows have been dealt to the timber, building, textile, paper and motor vehicle industries, and to allied industries that are struggling to maintain their levels of employment. The Victorian Minister for Housing - a member of a Liberal government, mind you - a month ago gave this Government facts and figures relating to the smashing blow dealt by the credit squeeze to the building industry in his State. In Victoria at that time, he said, production in the brick industry had been reduced by 50 per cent., and in fibrous plaster factories by 25 per cent. He said that timber mills were in a desperate plight, while all over the State dealers in builders’ hardware, plumbers and the like, were encountering a disastrous drop in trade. All this is happening in a State in which the waiting list for Housing Commission homes is around the 18,000 mark. The pattern throughout the Commonwealth was similar. The position worsens as time passes!
My colleagues on this side of the House have drawn attention to the plight of numerous industries, and several honorable members on the Government side have had the courage to follow suit. Even the leader of the Country Party in the Victorian House of Assembly was moved to state that the credit squeeze was, to the primary producer, worse than a flood, a fire or a drought.
For the underlying causes of this unfortunate situation we must look back first to February, 1960, when, without any real notion of how our export income was to compensate, the Government opened the floodgates and allowed a torrent of imported goods to flow into this country.
Then, in November, with imports running at a tremendous level, came the credit squeeze, together with other restrictive measures. The Government had found that our overseas reserves were dwindling fast, with no prospect of improvement - a state of affairs forecast, I might say, by honorable members on this side many months ago. In addition, the Government considered that some industries were too prosperous and that their labour requirements needed dampening down. So the economic restrictions had a twofold purpose. A glance at the growing total of unemployed bears witness to the success of the measures against what the Government termed the too-prosperous industries.
But the Government’s measures, designed to dampen down the demand for labour, came at a time when a downward trend in the labour market was already apparent. A Department of Trade survey completed recently indicates that the shortage of skilled tradesmen was no longer a threat to production in key industries, while a recent Australia and New Zealand Bank index showed that the general slow-down had occurred before and independently of the Government’s November credit restrictions. So we can say that a bludgeoning blow was dealt at the time when a gentle touch would have achieved the same purpose.
In his speech on this motion, the Acting Prime Minister (Mr. McEwen) said that he did not believe in controls, that he desired the maximum business freedom. After eight years of import controls, those words must have caused the businessmen, struggling to salvage their business undertakings from the Government’s credit control, some ironical laughter indeed. We have been repeatedly told in ministerial statements that the dislocation of industry is, in effect, only a redistribution or redeployment of labour. Such a statement gives little consolation to the unemployed and the tens of thousands to whom the Government’s measures have brought only the spectre of possible unemployment.
The Government likes to parade its socalled abhorrence of controls. I ask: What is the credit squeeze but a control? What is the re-deployment of labour other than sheer economic conscription? What was the proposal to force life assurance companies and superannuation funds to contribute to Government loans - about which the Government possibly had second thoughts - but a control? In the crisis of wartime, man-power controls were accepted, but in times of peace it takes a Liberal-Country Party Government to destroy so-called uneconomic or, at the other extreme, flourishishing industries in order to conscript labour to other fields of employment.
One of the major targets of this socalled re-deployment of labour is the Australian textile industry. One of the tragedies of the rapid decline in recent months of this industry is the fact that so many country communities depend upon textile factories for their livelihood. Courageous enough to challenge their city competitors, who have so many economic factors in their favour, many firms have set themselves up in the country, trained their staffs from scratch and become essential to the economic life of their respective country towns. These were truly decentralized industries. But what now? Completely disclocated they are forced to retrench many of their skilled staff and keep the remainder on a part-time basis. The flooding of cheap imported textiles into this country was serious enough, but then the Government decreed that the overdrafts of these manufacturers must be drastically reduced, not by 10 per cent, or 20 per cent, but by 90 per cent. Any one who knows the textile industry must realize that in many cases the summer and autumn period is the period of peak production, the period of production designed for winter sales, the period when carry-on credit is essential for the provision of raw materials, the payment of labour and the payment of many other costs of production. Without this carry-on credit our local industries are not given even a fair chance to compete with the imported goods. So that, doubly hobbled, our textile industries are not in the race and, inevitably, men and women are denied their just right to work and maintain their families.
To ascertain the true employment picture in country towns and provincial cities, a realization of the situation in normal times is essential. Ministers have said on several occasions that Australia’s economy is balanced on a razor’s edge. Because of the over-emphasis on expansion in the capital cities, the economy of country towns and cities is always balanced on a razor’s edge. In normal times, employment is never plentiful. In normal times, our country youngsters join in the drift to the cities to get jobs, not because they want to, but because of sheer economic necessity. Any recession, mild or otherwise, is felt immediately in country communities, where opportunities for alternative employment are limited indeed.
The situation in the City of Bendigo is typical of that of any provincial city. More than 100 persons have lost their employment in recent weeks, whilst a greater number of others work only four days a week. In several weeks’ time, the summer seasonal employment will end. This will mean the addition of from 200 to 300 to the list of jobless persons. At Wangaratta, the major part of the town’s work-force - nearly 700 textile workers - are forced to accept part-time employment, whilst other country towns face the worst winter for many years. To their great credit, the majority of country employers, whether manufacturers or shopkeepers, have retained their staffs despite the serious drop in trade. Many have sustained losses for weeks on end in the hope that relief will come, and I earnestly suggest to the Government that sufficient carry-on credit be made available to country industries so that the otherwise inevitable drift to the cities will not once again make a mockery of the term “ decentralization “.
Our balance of payments problem is noi new. In reality, as a nation, we have lived on money borrowed or invested from overseas for many years, and the Government, knowing this situation, deserves strong criticism for having taken all this time to formulate a drive for additional exports, it is now making a belated effort when the wolf is at the door. It is generally accepted that, in addition to the flood of imports, the other factor influencing our imbalance of payments has been the fall in overseas prices for our basic export commodities. The question then arises: Are we doing all we can to promote higher prices for our vital primary exports? Our major commodity, of course, is wool, and in this sphere we must surely be looked on with amazement by the other trading countries of the world. We market an essential commodity - wool - under an open auction system with no reserve price! In other words, we sell our most important export item without asking a price. Surely that is something unique in world trade. Surely, for the sake of our national solvency, and for the sake of the small wool-growers, who are squeezed between the lowering wool prices on the one hand and high costs of production on the other, such a situation cannot be allowed to continue. I repeat what 1 said during the Budget debate last August: The institution of a reserve floor price scheme for wool marketing is inevitable.
Any businessman knows that to increase demand is to assist in increasing prices. Wool promotion has been a subject of interest and of lively discussion for some time. We are aware of the tremendous bid for world markets that has been made - with success - by manufacturers of synthetic fibre interests. We cannot expect any lessening of their activities, and unquestionably, while we cannot match the colossal sums that they spend, we must endeavour to increase our expenditure on wool promotion but with this qualification: I agree with many wool-growers who say, “ No reserve price; no increase in the wool levy “. To me, any increase in promotional expenditure without a change in the auction system would be folly indeed. When that change comes, as I am sure it will, the wool-growers would be unwise to refuse to help themselves. Of course, in helping themselves they would be helping the nation. As a positive gesture, I suggest that when they do decide to increase their contributions to the promotional fund the Commonwealth Government should make a contribution in proportion to the additional amounts that the growers contract to pay.
In view of the announced incentives for the promotion of our export trade, an investigation into the freight rates that are charged by shipping lines which carry our products overseas seems to be overdue. Our exports depend entirely upon overseas shipping companies, and their high freight rates are a great deterrent to the further development of Australian export markets. For instance, British exporters with diverse cargo classifications are, in many instances, charged lower freight rates than those which Australian exporters have to pay for only one-half the hauling distance. Japanese exporters, too, pay rates that are far less than Austraiian exporters have to pay for equivalent distances.
The overseas shipping companies claim that rates from Australia are high because of the comparatively low density of traffic offering from here. Surely that is an argument which has very little foundation. Like the pies or rings which operate against the wool-grower, the shipping lines get together to defraud our exporters of both primary and secondary products. About eight or nine shipping lines operate to Asian ports where the Government holds hopes for new markets. Only one-half are conference lines, as we call them, yet all offer the same general cargo rate of 249s. per cubic ton to Singapore. There is no competition, and the action of these companies is nothing more nor less than a gang-up on Australian producers and exporters. The wide-awake exporter who seeks a cheaper rate by tramp steamer is gently reminded by the conference lines that he may have to use their vessels one day and it would be unfortunate if space were not available for his urgent cargo.
If the Government genuinely desires to explore every avenue for increased export earnings, it should smash the shipping monopoly on our all-important export trade. Nearly 4,000,00 tons of shipping lie idle in the world’s ports - an ideal situation for the establishment of competition, whether by private enterprise or by the Australian National Line. The time is ripe for action.
Unquestionably the Government is gambling that its economic squeeze will eventually reduce the cost of imports to a manageable level. If we examine the respective costs of various items on our import bill we find that one stands out - the tremendous cost to this nation of its continually rising imports of crude oil and petroleum products. In the financial year 1959-60 our import bril for crude oil reached the staggering figure of over £100,000,000. The import of crude oil and its products is increasing in volume at the rate of more than 6 per cent, per annum, and it should be plain to all that in both the economic and the defence spheres, the fact that we have not discovered our own supplies of oil will continue to react against our self-sufficiency and our safety. lt is plainly evident that far from there being increased activity in the search for oil - as is greatly desired - there is a lessening of activity by the major oil companies. A few years ago three seismic parties were operating in Western Australia where now there is only one. At Port Campbell near Warmamboo! in witera Victoria a sensational gas discovery fourteen or fifteen months ago lifted hopes, but since then only one hole has been drilled. In Papua the major partners in the oil search have announced their withdrawal. Why? Have they lost hope of success? I doubt it! Rather, I suggest that the surplus stocks of crude oil in the hands of the major companies overseas, and their inability to dispose of those stocks, are adequate reasons for their present luke-warm approach to oil exploration in Australia. Naturally, a new source of supply would embarrass them further.
The discovery of oil in economic quantities would not only wipe off a substantial part of our import bill, but also would lead to additional export earnings from petroleum products. We earned £17,700,000 in 1959-60 in this way, and that figure could be increased considerably. The very thought of oil and our precarious supply position in time of war must give our defence chiefs nightmares. In the economic sphere the discovery of oil would certainly assist in lowering the cost structure. It is said that the cost of transport in Australia is 33i per cent, of all costs, and Australian oil, especially if discovered on the eastern seaboard, would surely lower the cost of transport. With so much at stake, we can well ask what is being done. After consideration, the answer must be, “ Not nearly enough “.
Briefly, we can summarize our efforts to date in this way: About £80,000,000 has been spent in Australia and its Territories in the search for oil, but, in the light of its tremendous importance, the Commonwealth Government’s contributions can be regarded as insufficient. Both the French Petroleum Institute and our own Bureau of Mineral Resources admit that little geological and geophysical information is available. In effect, many of the bores to date have been stabs in the dark and if oil is discovered next week or next month it will be colossal good fortune. One would think that a government that was ready to gamble on its relaxation of import restrictions would make a far greater investment in a field in which success could go a long way towards solving our balance-of-payments problem. Only this week the Government announced subsidies to companies engaged in the search for oil. This is certainly encouraging, but again it is far short of a dynamic approach to the problem. There is much to be done. The French drilled more than 2,000 wells in the Sahara before striking oil in commerical quantities. In Alberta, in Canada, it took more than 3,000 wells to reach the pay-off. Our total is less than 500.
The Commonwealth Government should set the pace and not be merely what amounts to an interested bystander. A statutory corporation, or a commission similar to the Snowy Mountains Authority should be set up to play a major part in the search for oil. If that suggestion proves to be too much for the free-enterprise purists, then the very least that is needed is an additional annual investment of from £5,000,000 to £10,000,000 in partnership with the companies engaged in oil exploration. I believe the oil subsidy should be paid only on a footage-drilled basis and only on wells sited on locations determined by geophysical survey to hold the possibility of oil in economic and commercial quantities. With all the aids of modern science at our disposal wild-cat wells should be strongly discouraged, whilst subsidies on a footage-drilled basis are the nearest thing we can get to a programme of payment by results. This country, in the interests of its economy and its defence, needs its own oil supply. I have no doubt that our vast continent harbours oil, and the Government must provide the shot in the arm which the exploration programme needs so badly.
To summarize, our national balanceofpayments problem needs broadly two approaches. In the short term, selective import controls appear unavoidable, whilst in the long term a reserve floor price scheme for wool marketing, allied with an increased promotion drive, an attack on shipping freight rates and a dynamic oil search programme, all combined with the Government’s export incentive plan, could help to provide a basis for economic security in the years to come. Only time will prove whether the Government’s taxation incentive plan alone will provide sufficient inducement for industries to strive for additional overseas trade. But time is not on our side, and I say again that the reimposition of import controls, however undesirable, will be inevitable.
This Government has been a drifting government, relying not on economic planning but on the good fortune of good season after good season; and now, with the economic tide turning, it has become a gambling government. Its failure to combat the evils of inflation and its failure to foresee and plan for the rainy days ahead deserve the censure not only of this Parliament but also of the Australian people.
– I would urge upon the honorable member for Bendigo (Mr. Beaton) that although he is a comparatively new member of this place, before he chides the Government on any action it has taken he should make sure of his facts and of the history of the matter he is discussing. He said that the Government has just - this last week - announced the subsidy for oil search. I remind him that the oil search subsidy has been in existence for at least two years and that, when it came before this Parliament and the Government asked Parliament to support this scheme, which w. s to intensify the search for oil and help in discovering oil, the members of his party opposed it in every form they could in this House. Everywhere along the road they said, “ We will not have a bar of this oil search subsidy “. I urge the honorable gentleman, as a new member, to bring himself up to date on this matter and enlighten his party about it. I was refreshed to bear the honorable member talking in this way and only wished he would talk to the socialists around him and convince them that they should have done what he is advocating should be done now.
The other point I wish to make is that we as a government, and Government supporters, are under the fire of a traditional censure motion - a want-of-confidence motion - and yet to-day, throughout the whole of this debate, there have not been at any time more than one dozen Labour members in the House, even when a member of their own party was speaking. There is no enthusiasm among them and no great evangelistic approach to this debate at all. This shows itself, after a few days, to have been a cynical approach, a mere political manoeuvre. It has fizzled out and has failed to gain any support not only from the public but also from members of the Labour Party itself. Nothing could exemplify that fact more than to sit on this side of the House and look across at the empty benches of the Opposition when its own motion is being discussed. The Opposition is broken and dispirited, and its motion has fizzled out. lt was rather interesting to-day to note the number of Queenslanders who participated in the debate. I listened to the honorable member for Herbert (Mr. Murray) and found myself very much in accord with what he had to say. I listened to the honorable member for Leichhardt (Mr. Fulton) in his sincere approach to the problem and found myself very much on common ground with him. Although in saying so I rather put the kiss of death on him, I did agree with him. The honorable member for Maranoa (Mr. Brimblecombe) also spoke. We all have schemes for the development of the north of Australia, and it is refreshing to see this Parliament devoting some of its attention to these problems.
– The north of Australia does not consist of Queensland only.
– The honorable member for Perth has recently shown some interest in the north and, as I was going to say. the Western Australian Government has perhaps shown the best approach to the problems of north Australia by appointing recently a Minister for the North-west. Great benefit has come to Western Australia as a result. The honorable member for Kalgoorlie (Mr. Browne), in cooperation with the State Minister for the Northwest, has been able to bring about quite a remarkable change in the approach to the problems of the north-west of Australia. That brings us to the crux of the whole matter. Before this Government can interfere or help a State in any particular way a request has to come from the government of that State. In the past, there have been no such requests in respect of the northern parts - from Western Australia and Queensland.
Western Australia has set a good example to Queensland by appointing a Minister for the North-west; I wish the Queensland Government would appoint a Minister for northern Queensland. In addition to that, what we need for the development of the whole of the northern part of Australia is a co-ordinated approach to sort out the problems. I have my own scheme, which I think could be of great benefit. The honorable member for Herbert has a scheme which is somewhat similar, but in some ways different. Each person who lives up there has a different approach to the problems, but I believe the problems are common throughout Australia. What I would like to see is what I advocated previously in this place and in many other places - the setting up of a northern development commission which would be a full-time commission, comprised of fulltime members. The chairman would be a man who has resided in the northern part of Australia and who comes from any part of it. There would be two members who would be regional commissioners living in Western Australia, one for the northwest and one for the area south to the Gascoyne River. There would1 be one member for the Northern Territory, one for central Queensland and one for northern Queensland.
It would be the task of the members ot this commission to gather all the information they could about the development of their areas, and the commission would meet regularly and bring down, in order of priority and as a matter of great urgency to the State governments and the CommonGovernment, reports which would, of necessity, have to be acted upon to bring about the co-ordinated development of the whole of northern Australia, because 1 cannot see how we can develop it by any other means. While we have governments in Perth, Brisbane and Canberra trying to work out the destiny of the land, the agriculture and the people of the northern part of Australia, we will have schemes starting up here and there, without any proper co-ordinated drive.
In addition, each regional commissioner in the five areas I have set out should have the assistance of a development committee based on community of interest and comprised of trade unionists and business men who would meet with him and bring to his notice schemes which they considered would be of greatest advantage to their districts. Unless we make this unified approach I cannot see that we will ever get on with this task which is so urgent. It must be done in co-ordinated fashion and we must have full-time men on the job. I urge the Commonwealth and the Governments of Queensland and Western Australia to give sympathetic consideration to this question as a matter of great urgency, having full-time men devoted to their tasks in each of the areas I have mentioned - central Queensland, northern Queensland, the Northern Territory, the north-west of Western Australia and the area down to Carnarvon in that State. I believe those people, sitting together under a wise chairman, could bring to the three governments concerned a co-ordinated plan which would pay off handsomely not only for the development of northern Australia but also for the safety and security of the people residing in the southern parts of Australia.
While the honorable member for Leichhardt was speaking, the honorable member for Herbert (Mr. Murray) interjected and said. “What about new States?”. I thought the honorable member for Leichhardt side-stepped that one rather well. It is a long time since ‘I first got myself wrapped up in the New State Movement, and I firmly believe that the development of Australia depends, not only upon the creation of new States in the northern part of Australia, but also upon the creation of many more new States throughout the Commonwealth. I find myself completely in accord with the Leader of the Opposition (Mr. Calwell) in his desire for numerous new States.
In addition to the development commission, I believe that, for the time being, people who reside in a particular district should have some control over the money spent for the development of that area. If we cannot have new States, I believe we should have advisory councils such as the Commonwealth Government has set up in Darwin and Port Moresby to look after our territories. A State government could then say to the advisory council of central Queensland or north Queensland: “ Here is your allocation for the year. Spend it or advise us how to spend it.” lt is an elementary fact of government that the nearer the government comes to the people, the better it is; the further away it is, the worse it becomes. That is what is wrong with the northern part of Australia. We have no government there, and the people in that area have no chance of a real say in the government of the area.
So I urge on all governments - not only the Commonwealth Government, but also those of Queensland and Western Australia - that they pay particular attention to the suggestion that we have regional commissioners under a northern regional commission. In that way, we would have a system of development committees operating throughout the north of Australia and in addition, in the field of straight finance, we would have advisory councils set up in particular areas similar to the advisory councils that have already been set up in the Northern Territory and the Territory of Papua and New Guinea.
– Many development committees already exist.
– That is so; but the difficulty with development committees is that there is no central point where they can direct results. If you have a central point, you must have some authority there that can say with the authority of the government concerned, “ This is a matter of urgency, and we believe that these development schemes should be carried out in this particular way “. It is useless talking in grandiose terms about the great north and about spending millions of pounds there, because Australia is not likely to have all the money that is needed to do all that is necessary for twenty years, and there must be a system of priorities. The first priority should be given to the north of Australia. Money having been allotted for this task, the decision on its expenditure should be made by those who know the area and who live there. They should suggest the priorities for the expenditure of the money on particular schemes for development.
I wish to turn now to the motion of want of confidence in the Government, and the Labour Party’s attitude towards it. We have heard many speeches from the Opposition, and many were couched in terms of condemnation of the Government’s policy. The Opposition wants import restrictions re-imposed, although over the years honorable members opposite have complained about import licensing being in operation at all. While we have had from the Opposition these warnings, this calamity howling and this knocking of Australia, we have not yet heard from supporters of the Labour Party any constructive suggestions for the future of Australia, lt is frankly admitted that not only Australia, but also all the other countries in the free world are facing times of crisis. We move from one crisis to another, and the devoted attention of men in all the parliaments of the world is needed to get all the people who are free out of their troubles from time to time.
As I have said, the Labour Party has not brought forward any positive plan. Of course, the reason is quite obvious. Labour’s approach to all problems of government is the socialist approach. Honorable members opposite know what their answer is to the various problems facing us, and we know their answer, too. The Labour Party has shown us the socialist approach to the problems of finance. Of course, honorable members opposite have been soft-peddling this aspect of their policy. The Leader of the Opposition was interviewed on television in Brisbane, and he came out with a statement about what the Labour Party would do to solve the nation’s financial problems. The honorable gentleman made no bones about it when he spoke on television, though he has not repeated his suggestion since. In Brisbane, he supported firmly a capital gains tax. I listened to him very attentively as I watched television. The capital gains tax he had in mind was not merely a matter of putting a tax on business; it meant also a tax on a man if he bought a property, held it for a while, and sold it at a profit.
– Even his own home.
– That is so. If he owned any property at all and it increased in value, he could be taxed under a capital gains tax and deprived of the increment that would normally come his way. So we have one plank of the Labour platform plainly enunciated to us outside the Parliament but not spoken of here. The reason is that you do not get votes by talking that way in the Parliament. Labour’s policy is to keep socialism away from the eyes of the people, because in 1949 and at every election since, the people showed that they did not like socialism.
So, first of all, we have the capital gains tax in the Labour Party’s platform. Then we come to the fringe financial institutions. Honorable members opposite have shown us that in their proposals for capital issues control they have the typical socialist approach to that branch of finance. The Labour Party still believes in those controls. There is not the slightest doubt that Labour’s method of solving the problem of fringe banking institutions would be to control capital issues, and that would be the end of it. Honorable members opposite may protest, but Mr. Stout and Mr. Chamberlain would say to them, “ If you become the government, bring down a capital issues control bill “ and they would do it. It does not matter what name you would give to your legislation - it would still be capital issues control, and you would stifle industry just as you did during the Second World War and after the war. The whole country was stifled by the capital issues control policy introduced by the Labour Government.
The Opposition talks about reducing interest rates. It is easy for a socialist government to reduce interest rates. It compels the people, by restrictive acts of Parliament, to put their money into Commonwealth loans at low rates of interest. The Opposition if it were in government would not let the people put their money into anything else. That is how the Labour Government induced people to put their money into Commonwealth loans after the Second World War. There was no other course open to the people.
The Labour socialist approach to the economy is quite plain for all to see. First, it would not have people making investments and owning their own homes. It would ensure that if they sold out, they could not make a profit. A socialist government would take the profit away in taxes. Then a socialist government would impose an excess profits tax and deprive people of the incentive to develop their businesses. The Labour Party would introduce capital issues controls if it were elected to office. Then it would reduce interest rates, and compel people to put their money into Government loans. I respect members of the Labour Party who stick to their socialist principles, but I have no time for those Labour supporters who pledge themselves to support socialist principles and then mount the stump and deny their pledge.
The problem of the motor industry is exciting us as a nation at present. This is the industry that boomed. The Labour Government had no problem with the motor industry in the years after the Second World War when the people wanted to buy motor cars, and the pressure was on. The Labour Party socialists did not want the people to own motor cars and it retained petrol rationing. No doubt the answer that the Labour Party would give to the people, if ever it came into power again, would be to re-introduce petrol rationing. It is as simple as that. If people were allowed only six gallons of petrol a month, as they were in 1949, there would be no trouble about the sale of too many motor cars or about the importation of spare parts and so on. That is the typical control attitude of the socialists and it is the simple socialist answer to our present problems.
I hope that the people will remember that the reason why Labour has not put forward any concrete proposals in this debate is that it wants to hide its intentions. There is no doubt that Labour’s intention is to re-introduce controls because that has been Labour’s action in the past.
– I can see the look of doom on your face.
– I cannot have a cheery expression looking at you.
We have become accustomed in this place to hearing the term, “ Re-deployment of labour “ bandied around. The Labour Party if in office would have no problem about the transfer of labour from one industry to another. A strong socialist plank, to which the Labour Party subscribes, is the conscription of labour. Every one remembers that Mr. Chifley made it quite clear, in unmistakable terms, that this was so. He said, “ We may have to move whole communities “. He also said, “ We will not develop this country if every man thinks he will be able to hold his wife’s hand every night, walk down the street and look at the town clock “. Of course, it is Labour’s policy of conscription of labour to take a man away from his wife and from his home town. The solution of the problems is relatively simple in Labour’s eyes, because it adopts this socialist approach.
The problems arising from the construction of homes also disappear with Labour’s approach. All that is needed is again to introduce building controls and make people queue up for a permit to build a house. It is as simple as that. That is the socialist approach. The honorable member for Yarra (Mr. Cairns) told us that there is a socialist answer to any unsatisfactory press. All that is needed is an Australian press commission and the press can be gagged. Labour would take over the newspapers and the newspapers would then say what Labour wanted them to say.
Labour’s answer to economic difficulties is to introduce a capital gains tax, an excess profits tax, and capital issues control; to reduce interest rates; to re-introduce petrol rationing; to conscript labour; to reintroduce building controls; and to stifle the press by setting up an Australian press commission as the honorable member for Yarra said. The whole country would then be wrapped up tightly in the hands of the socialists once more. If Opposition members would only come out and say these things instead of trying to cloak their socialist ideas from the people, we would have a great deal more respect for them. The reason why their heart is not in this debate, the reason why there is never more than a dozen of them’ present in the House at any time, whoever may be speaking, and the reason for their lack of interest and their apathy towards their own motion is that they are all muzzled. In this election year they are not able to stand up and say, “ We are socialists. We believe in the socialist principles and we will introduce socialism when we have the chance.” Sir, it will be a sorry day for Australia if ever the socialists get back into power here.
We have come a long way and developed this country a great deal since Labour was last in office. But Labour will find it a great deal harder to conscript the labour force of a nation of 10,000,000 people than it did to conscript the labour force of 7,000,000 people. It will find it hard to bring in a capital gains tax to rob the worker of any profit that he may have when he sells his home, because the worker is already awake to what socialism means and what the controls mean. Labour will find it hard to smash the motor industry with petrol rationing. It will find it hard to bring in building controls and to stifle the press, even though it may set up its own Australian press commission.
There is no room in the advancing, progressive Australia we have to-day for the stifling, miserable policies of socialism. The people will not have it, and Australia will not have it. I urge Opposition members to throw off the leaders that they have outside the Parliament and to act as parliamentarians. They should look to the development of the country and not to what Mr. Stout and Mr. Chamberlain may say. After all, we are members of Parliament. We are supposed to be free and unfettered, and it is within the power of honorable gentlemen opposite to kick off the chains that their executive has placed around their legs and to be parliamentarians instead of party hacks.
.- In supporting the motion of the Leader of the Opposition (Mr. Calwell), we take advantage of the opportunity to express our opinions on the policies of the Government, and in particular the extraordinary policies which are alleged to be in Australia’s best interests but which have been criticized by the vast majority of citizens and organizations of all kinds as well as by Opposition members. It is interesting to hear some of the speeches of back-bench members. The honorable member for Capricornia (Mr. Pearce) commenced his speech with a tirade against socialism. It is rather humorous to hear honorable members criticizing socialism, because government itself is socialism. When backbench members criticize socialism, they are either ignorant of the concept of government or they are trying to drag a red herring across the trail.
The motion of the Leader of the Opposition can be considered under three headings - first, the Government’s failure to safeguard our overseas funds; secondly, its policies which have caused confusion, dislocation and hardship to many sections of production and commercial enterprise; and thirdly, its financial policy which has caused human suffering and mental anguish by depriving thousands of good Australians of their means of livelihood.
History now shows that the Government last November suddenly discovered that Australia was going through an economic crisis. It brought forth a four-point programme. The first point was a credit squeeze involving the calling in of existing overdrafts and the refusal of new overdrafts. The second point was the imposition of an extra 10 per cent, sales tax on motor vehicles, raising the tax from 30 per cent, to 40 per cent. The third point was the compulsory investment of surplus money of insurance companies and superannuation funds in government securities. The fourth point was the discontinuance of tax deductions for borrowed money used in hire purchase and allied businesses. These four points were supposed to cure Australia’s economic ills, but instead they caused confusion, dislocation and hardship and the community generally is in a state of uncertainty and insecurity.
It is rather remarkable that only three months after this action was taken, the Government abandoned two of its four points. There is no doubt that public opinion forced the Government to somersault. Before long public opinion may force it to abandon the remaining two points.
The Government has shown a lamentable weakness in attacking the problem of our overseas funds. Instead of improving the position, it has actually worsened it. The real test of government policy is the effect it has. Had the policy of this Government been effective, it would not have been vulnerable to the criticism so freely voiced in many quarters. On the other hand, Opposition members have urged the Government to use selective import licensing, which has been effective in the past. I grant that the system has some unsatisfactory aspects, but they are by and large quite infinitesimal when compared with the overall benefit that is derived from the system. Import licensing has been used by both Labour and Liberal governments, but for some reason which this Government has not disclosed, it now stubbornly refuses to use import licensing to control our balance of payments. lt was painful to hear the Acting Prime Minister (Mr. McEwen) last week use the domestic scene as an illustration. He said -
We can understand it in the domestic scene. If domestically there were these violent fluctuations in the wage packet, the dreams of buying a house and furnishing it would became a nightmare for the average person.
Has the Acting Prime Minister no knowledge of the fact, that, as a result of this Government’s policy, that nightmare has been experienced in many Australian homes? Does he not know that the dreams of buying a house and furnishing it have been shattered by the very policy that the Government has outlined and which it has inflicted on the people? I only wish the Government would attach more importance to the dreams of buying a home and furnishing it. If it did, we might see a different approach to this very problem. Many thousands of Australians who are on the scrap heap of unemployment have had their dreams shattered. Their mortgage and time payment commitments will become ghosts which, in time of financial need, will haunt them. The Government should consider the physical suffering and mental anguish that are the product of unemployment. The sudden cessation of the receipt of pay envelopes means cutting down on food and clothing and a dislocation of housing mortgage and time payment contracts made at a time when full employment appeared to be a continuing policy of the Government. These difficulties are the by-products of the foolish, ineffective policies that were adopted by the Government and which have aroused the hostility of the majority of our Australians.
On the question of controls, the Government exhibits a false front. It holds up its hands in horror at the suggestion of import controls, yet it has no hesitation in supportting the control of wages and salaries. It had no hesitation in supporting the pegging of cost of living adjustments in 1953. It assured us on that occasion that such action would stabilize our economy and halt inflation. Its policy to-day is just as effective as was its policy in 1953. Honorable members opposite display a great deal of hypocrisy in debating the question of controls. A favourite technique of supporters of the Government is to use the word “ control “ only when it suits them. On other occasions they use other words and phrases which, when analysed, still mean that controls are being applied in varying degrees. In point of fact, all our laws contain controls. Almost every bill that comes before this Parliament tells the people what they can do and what they cannot do. In essence, such bills impose controls. The controls in which the Labour movement is interested are socially desirable. They have been referred to in the various arguments that have been advanced by honorable members on this side of the House from time to time.
The Acting Prime Minister, in his capacity as Minister for Trade, told us last year that we had to increase our export earnings by £250,000,000 annually if we were to maintain our standard of living. But we did not hear of any specific plans that would achieve the goal set by the Minister. Instead, some three weeks ago he issued a press statement in Canberra in which he suggested a few ideas for improving our export trade. He said that the Government had in mind the construction of new roads in northern Australia, which should result within a few years in the addition of £15,000,000 to our export income. He also referred to increasing our earnings by £10,000,000 by exports of coal - not by 1961, but by 1965! Of course, that was subject to the improvement of berthing facilities at ports. He also suggested an expansion of the steel industry, but here again certain provisos were mentioned. This expansion was subject to the erection of a new steel mill in Western Australia and the construction of a standard-gauge rail link from Kalgoorlie to the coast. We have fallen far short of the target that was envisaged by the Minister last year when he told us that we had to increase our export earnings by £250,000,000 per annum.
There has been no evidence of any longrange planning by this Government. That is why the public has coined such phrases as “ fits and starts “, “ stop and go “, and “ put and take “ to describe this Government. The Government has performed so many somersaults during the last twelve months that it has deserved those appellations. We can accept a lot of the Government’s statements as being purely press propaganda and as placards and hoardings designed to soothe the disturbed mind of the public.
The next important matter is that of inflation. In this connexion the Government has a sorry record. One of the promises it made before it was elected to office in 1949 was that it would put value back into the £1. Every one knows that value has not been put into the £1 but has been drained out. Inflation, which was mild at that time, was not halted but was allowed to continue. That has been the pattern over the last eleven years, with no effective government action having been taken to halt the trend. The Government’s new-found concern about inflation does not impress us when we see its failure constantly to safeguard the economy against the evils of this problem. Many people are embittered because of the robbing effect of inflation. Pensioners, persons on fixed incomes, wage and salary earners and primary producers have suffered while sheltered sections of the commercial world have reaped record profits from inflationary processes.
Early in 1960 Dr. Coombs, the Governor of the Reserve Bank of Australia, issued warnings about inflation. He pointed out that much of our inflation was profit inflation which had been brought about by price fixing and restrictive trade practices. But his warnings were not heeded at the time. Only in the dying hours of 1960 did the Government bestir itself and take action. As I have indicated, primary producers, who rely mainly on export trade, have been badly hit by inflation. They are required to produce at a time when the internal cost structure is affected by creeping inflation, and to sell their products at world parity prices. At the present time low prices are being received. These people are now experiencing the full blast of the Government’s failure to halt inflation during the years it has been in office.
If our internal cost and price structure could be taken in isolation, perhaps we could regard inflation in another light. But as the export section of our economy is tied to the internal section, we must apply controls and give guidance where necessary. The Menzies Government claims to support a policy of free enterprise. The tragic fact is that it is free enterprise only for those who influence price and profit levels. It certainly is not free enterprise for citizens whose incomes are controlled, such as wage and salary earners, pensioners and superannuated persons. Nor is it free enterprise for the army of unemployed.
Many examples of factory retrenchments have been given in this debate, and some establishments have even closed down, particularly in the timber industry. Furthermore, dismissals in the motor industry have now reached a total of some 7,000 workers. It is amazing that Government supporters can pass over this tragic situation in an airy-fairy manner as if depriving a breadwinner of his livelihood were only a minor matter and of no account. Unemployment is an economic disease and those who allow it to occur are guilty of a crime against humanity. If the Government saw the matter in this light, we might get a different approach from it. Statistics, expressed in percentages of the work force, are meaningless to the unemployed. Since our society is so fashioned as to deprive man of access to the fruits of the earth, he has a moral right to employment and a moral claim on those who control the means of production and1 distribution. Reliable estimates now put the level of unemployment at 80,000. and it is still rising.
Accepting the official figures showing the number of workers registered as unemployed is pointless, because we know from experience that many thousands of people do not register as unemployed. It is strange. Sir, to hear Cabinet Ministers say that they believe in full employment, because, in practice, they are creating unemployment. How many unemployed must we have before the Government will admit that we do not have full employment? The Government still clings to the statement that we have full employment. It often throws up another favorite smokescreen by emphasizing that jobs are still listed as vacant. But what it does not point out is that only a small proportion of the vacant jobs can be filled by the men who have been retrenched. Most of the advertised vacant positions are for highly skilled, experienced persons who can do special kinds of work. Many vacancies are for juniors and females, and these, therefore, are unavailable to the average unemployed worker. In many instances, a new job would mean the uprooting of a family from its home and its transfer to another locality, usually to one of the capital cities. This sort of thing does not result from good government, and any government that allows it deserves our censure.
Two other vital matters that I want to mention briefly are housing and education. Despite the quoting of statistics and percentages shown on graphs, we know that the construction of homes has been seriously curtailed. Any one who cares to move about among those engaged in the building industry and obtain first-hand knowledge will find a marked reduction in the number of new homes being built. In fact, reports from Sydney indicate that some finance companies have repudiated contracts for home finance to which they had committed themselves. Builders’ organizations in all States are complaining about the position, and the situation of many builders is becoming precarious indeed. Added to this, there are general confusion and dislocation of continued planning which is necessary if the industry is to maintain the building programme without interruption and without violent fluctuations. The financial squeeze is having a marked effect on home building, and the Government cannot evade this fact. In my own State - South Australia - only the work being done on large new industrial and commercial buildings is preventing a collapse of the building industry.
The housing position was bad before the credit squeeze. It is infinitely worse now. We need to provide not only for the demand resulting from the natural increase of the population but also for the demand created by the annual intake of some 120,000 migrants who need homes. So the problem snowballs and it will become progressively worse under the Government’s present policy.
Another permanent burden that the home purchaser must bear is the increased interest rates. Unfortunately, this burden will not be removed as was the additional 10 per cent, of the sales tax on motor vehicles. Home purchasers are not organized to the point at which they can influence public opinion sufficiently to make the Government modify its policy. They must carry this greater financial burden simply because the Government refuses to try to control interest rates in our secondary banking structure. Instead of controlling interest rates, the Government meekly tries to compete with the secondary financial institutions in the rat race for investment funds.
With respect to education, the Government continues to bury its head in the sand. As a consequence, there is now being widely circulated throughout Australia a petition the purpose of which is to bring home to the Government the urgency of the need for more finance to promote technological education and thereby provide for technological expansion, as well as to emphasize the need for adequate financial provision in other fields of education. For years, our educational leaders have tried to impress on the Government the urgency of the situation, but they have tried in vain. Even the added weight of the influence of the State governments has not brought the desired results. These educational crusaders have been encouraged to continue their fight by the knowledge that President Kennedy has recently announced a spectacular increase in the funds to be voted for education in the United States of America. Since this Government often is influenced by American policy, we may hope that it will be moved to follow the lead given by President Kennedy. Better educational facilities are just as urgent a requirement as is balancing our external trade, and whatever influence can be brought to bear on the Government should be used in order to move it to expand our educational facilities.
Summarizing the immediate situation, Mr. Deputy Speaker, I see this picture: In overseas trading, we are buying more than we are selling. Our overseas reserves have run down and are at a dangerously low level. The Government is faced with the responsibility of balancing our trade, and, if possible, building up our reserves by increasing our export earnings. Two main approaches are open to it. First, it could, by selective imports control, allow only essential imports into Australia until the position was rectified and the future placed on a sound footing. Secondly, it could so depress our interna] economy by creating unemployment and reducing purchasing power as to retard the demand for goods, both imported and locally produced, to the point at which we could balance our external trading budget. The Government has chosen the latter course, which brings with it unemployment, hardship, commercial and industrial confusion, and a general state of fear and loss of confidence. This Government has broken the high human principle of full employment and to-day about 80,000 Australians are denied their weekly pay for the sustenance of themselves and their dependants. This fact alone warrants this motion of want of confidence in the Government. Only yesterday, the Australian Council of Churches organization in Sydney, in a letter to the Acting Prime Minister, condemned the unemployment which has been caused by this Government’s policy. It described 71,000 unemployed as a human tragedy. That is an appropriate description, and I hope that it will impress itself on the minds of Ministers and Government supporters generally.
The motion before the House is justified. We would be vindicated if the Parliament were dissolved and a general election held. Therefore, the motion should be carried.
– Mr. Deputy Speaker, fortune has favored me on this occasion in that I am privileged to follow the mild-mannered honorable member for Adelaide (Mr. Sexton), who could never be described as a violent protagonist of socialism in any of its forms. I have listened with a great deal of interest to much that he has had to say. One must respect the views of a mild-mannered man, but I would that he could look at the problems that confront the nation to-day in a way completely divorced from party politics.
I can understand the chagrin that the Opposition felt when the Government took effective measures to restore stability to the Australian economy. The only hope that the Opposition has ever had since that fateful day in 1949 when the Australian community rejected socialism has been that the Government would neglect to correct the fault, frailties and weaknesses in our economy as they are revealed in this most dynamic period of our history when our population is increasing and when development is progressing continuously throughout the whole of the Commonwealth.
The Opposition has nothing to gain from stability. That has been its bitter experience during the last eleven years. At regular intervals it has sought signs of the instability, unemployment, wretchedness and woe that were visited on an innocent community largely because a government did not have the political courage to take appropriate action when it was required. The Opposition has nothing to gain from Social progress and the contentments that are inseparable from that progress. So the Opposition has sought to condemn social progress and to do all that lies within its power to impede it. The Opposition fears development and all that development means to an advancing community that now approximates 10,500,000 people - a community that has become one of the great trading nations in the world. The Opposition attempt! to stifle such development. It searches in vain for fractures in the social and economic structure of our country that may precipitate a depression, but there are no fractures. Her Majesty’s Opposition is chagrined. This censure motion is a confession of desperation. The terms of the motion can be described only as a subterfuge.
The Leader of the Opposition (Mr. Calwell) has moved -
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 Ito 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.
In the course of the next few hours this Parliament will decide the fate of that want of confidence motion. Socialists, I must remind the House, have a complete solution to the balance of trade problem. The Leader of the Opposition did not refer to the socialists’ solution of that problem. Wherever there is an imbalance of trade in any socialist country it is the primary duty of the socialist government of that country to march the workers into the fields, the factories and the workshops, to put them to production and keep them at production until the imbalance is corrected. But the Leader of the Opposition did not mention that device - a device that is in common usage in every socialist country to-day. When the exports of a socialist country are inadequate to pay for the imports into that country, no socialist government hesitates in demanding the exportation of the total production of the fields, factories and workshops to the point of local starvation. How many times has that happened in the course of the last few years in a great many socialist countries? When the imports of a socialist country become greater than the productive capacity of the workers of that country can pay for in terms of exports, those imports are prohibited regardless of social or economic consequences. That is not what might happen; it is what is happening to-day wherever a socialist government in a socialist country meets with these particular difficulties.
These are the procedures followed by every socialist government in every socialist country, and they are the complete solution to the problem of the balance of trade. They are the procedures which would be adopted by a socialist government in this country, but the Leader of the Opposition failed to make that point clear. Nor was he assisted by any of his supporters. The costs of production are never a problem in a socialist country. Whenever costs of production threaten to rise they are arbitrarily reduced to the point - and frequently below the point - of a bare subsistence level. That is the experience of the workers in every socialist country to-day. It is an experience that is clearly remembered by people now living in this country who have escaped from socialist countries during the last decade.
Inflation is not a problem in a socialist country. The monetary system is geared to meet the needs of government and it has no other function. The liquidity of the banking organizations is never in doubt in a socialist country. It is maintained by the socialist state at a level designed to serve the socialist state, since there are no depositors and no banking accounts as we know them. Nor does any person in any socialist country own any property, be it a home or personal possessions of any kind. That is the fundamental difference between the ideologies of those who support socialism and those who support free enterprise.
In spite of all that has been said to the contrary, it must be admitted that the Leader of the Opposition has a complete answer to all the problems that confront the Government to-day or have confronted it at any other time, although he has consistently refused to provide that answer when it has been sought by honorable members on this side of the House. Also, his supporters have consistently refused to provide the answer to the problems that confront the Government to-day. The Leader of the Opposition has a complete answer to all those problems. That answer is expressed in explicit terms in the pledge that he is required to sign before he is permitted to represent the Australian socialist party in this place. He is pledged to support the socialization of the means of production, distribution and exchange, and as far as Her Majesty’s Opposition is concerned, that policy is the complete answer to all our vacillating, bewildering and perplexing problems. But with a skill worthy of a better purpose the Leader of the Opposition and his supporters did not care to mention this matter.
May I now refer to the problem of conserving a favorable trade balance, which has been referred to by almost every honorable member who has spoken in this debate. There is a popular delusion that a favorable trade balance places large sums of money at the disposal of the Government and that there is a special virtue in their conservation at an ever-increasing level. There have been tears of lamentation because our favorable trade balance fell from £800,000,000 to £700,000,000, from £700,000,000 to £600,000,000, and so on. It should be remembered, Mr. Deputy Speaker, that exports are sold and paid for in full and that imports are bought and paid for in full. That is the beginning and the end of both those sets of transactions as far as both the exporter and the importer are concerned. It is folly to imagine that the exporter has to wait for the transfer of funds from the importing country before he is paid. It is equally folly to imagine that the importer has to wait for the transfer of funds to the exporting country before his transaction is closed. Favorable trade balances are created when exports exceed imports in terms of money values and, conversely, unfavorable trade balances are created when imports exceed exports in terms of money values. That is elementary. But the uninformed are encouraged to believe that a favorable trade balance is a manifestation of unexpended riches at the disposal of the Government and that an unfavorable trade balance is a manifestation of approaching international bankruptcy. Both of those statements are entirely wrong.
The truth of the matter is that favorable trade balances provide a facility for the extension of international trade and for the settlement of international debts - neither more nor less than that - and unfavorable trade balances deprive us of that facility and compel us to make other arrangements within the limits of our international credit worthiness, or reduce our imports to the dimensions that we can afford. The fact that we have a favorable trade balance is due entirely to the volume and value of our exports being far in excess of the volume and value of our imports thus far, with or without import restrictions, and it is to the people, men and women alike, who are engaged in our export industries exclusively that we owe credit for our most fortunate position as a great trading nation with a favorable trade balance.
If the people who are engaged in our great export industries cared to gear their production to meet the demands of the local and more remunerative market - and it would be within their competence to do that, as it has been done in a great many of our secondary industries - we would have no export industries, no favorable trade balance and no imports adequate to meet our basic needs. The people who are engaged in our export industries - and the vast majority of them are engaged in our primary industries - throughout the whole of our history have climbed to everincreasing peaks of production to meet the needs of the nation, no matter how great those needs might be. I am informed that the Australian work force is about 3,500,000 people, but fewer than 500,000 people are engaged in our primary industries. They are a mere handful of people scattered over the length and breadth of this vast country and they are producing commodities the value of which exceeded £1,486,000,000 last year. There are fewer people engaged in the pastoral industry than in any other comparable industry in the Commonwealth, but last year their production exceeded £538,000,000. It will be less this year, largely because the wool industry, like all our other primary industries, is subject to variations in export parity prices and fluctuations in international price levels.
The valiant men and women engaged in agriculture in all its forms lifted their production to £469,000,000 last year. That is a very great achievement for a handful of people. The dairy-farmers, who for the most part occupy the coastal strip that circles our vast continent, held the value of their production at no less than £200,000,000, or £45,000,000 more than was won from the rich mineral resources of our country by the primary producers engaged in the mining industry. A handful of people engaged in dairying and subject to all the hazards that are inseparable from that industry, last year produced more than £200,000,000 towards our favorable trade balance. These are great economic achievements, and when they are augmented by the men and women engaged in the less spectacular primary industries they approximate one-half of the total production of the nation. About 500,000 people produce nearly one-half of the total production of the Australian work force. As I say, Mr. Deputy Speaker, that is a great achievement.
For this Government to leave unchanged the rising costs of production is to imperil all our export industries and to endanger the entire economy. For this Government to fail to stem the rising tide of inflation is to visit degrees of ruin on all those who live on fixed incomes, including wage and salary earners, wherever they may be, who are in no position to defend themselves against the economic consequences of inflation in all their forms. For this Government to ignore the lack of liquidity in the banking system and allow the financial resources of the people and the nation to be drained away by commercial excesses and abuses outside the banking system would be an act of negligence that could never be condoned. For this Government to miss an opportunity to induce and encourage the secondary industries to stand up to their full industrial responsibilities and enter the export market and ease the burden on the primary industries would be a flagrant breach of faith. So, all of those things have been done under the economic measures introduced by the Government and now contested by Her Majesty’s Opposition through its censure motion. Those things have been done, but they are opposed by the socialists and people who have a vested interest in the status quo and resent the kind of action rendered necessary by the velocity of our social and economic progress. Because all our primary industries are expanding, they need additional credit facilities.
It is because these credit facilities are being frittered away by these spurious commercial enterprises that they are not available to our great primary industries. There is industrial expansion in the secondary and tertiary spheres; and that expansion demands additional credit facilities. It is because those credit facilities are being dissipated by spurious commercial enterprises that they are not available to our secondary and tertiary industries. lt was to correct that situation that these economic measures were brought down. They were brought down to restore the stability of our economy and to create the atmosphere which is necessary for progress and development on the scale which we have seen during the last eleven years. Ot course it is opposed by Her Majesty’s Opposition! The Opposition ha9 nothing to gain from stability. Its only hope is in instability, and instability is impossible so long as this Government retains the confidence of the Australian people.
Sitting suspended from 5.56 to 8 p.m.
.- It might have been expected that during this debate the Government would have made a precise statement as to what it intended to achieve by its present policy, the extent to which it intended to slow down development, and its intentions regarding the rapid depletion of our overseas reserves. Several Ministers have taken part in the debate and each of them has directed attention to certain steps that have been taken by the Government, but not one of them has told the House or the Australian community what the actual objectives of the Government are. They have denied that it is the Government’s intention to re-introduce import restrictions; they have said that it is not the Government’s intention to devalue the currency; but they have failed to tell the Australian community what the Government proposes to do if the rapid depletion of our overseas reserves continues. The public could have expected a precise statement in regard to Government policy.
Let us examine for a moment the indecision of the Government. We had an increase of sales tax on motor cars that lasted for 98 days. Never before in the history of this country has there been a taxation measure of such short duration. Every Australian who purchased a motor car during that period and who was obliged to pay that special tax has good reason to complain about the indecision of the Government. Then, we were going to have compulsory contributions to Government loans of surplus funds held by insurance companies and staff superannuation organizations. That proposal was stillborn. The compulsory loans proposal has now been abandoned. What the Government now hopes to do is to try to induce those organizations to invest their surplus funds in government loans by giving them special taxation concessions. According to the Treasurer (Mr. Harold Holt) the removal of taxation deductions in respect of the payment of interest on money raised by debentures, bills and so on by business organizations, was a temporary measure. The Treasurer has not said how long that measure is to remain in force. He has said that it is to be replaced by a more permanent scheme which may not necessarily bear any resemblance to the present scheme. Could there be any greater evidence of indecision than that? The Government itself does not know where it is going, and the members of the general public who have listened to the contributions of the members of the Government to this debate must be utterly confused.
Ministers rise in their places in this chamber and say that there is nothing wrong with the economy, that it is sound and that we are enjoying prosperity. If that is the case, what is the necessity for all these restrictions? On the other hand, we hear other Government supporters expressing concern about the current economic situation. Some say that it is serious. In my opinion, we shall rapidly reach what might be regarded as a critical situation unless the Government can make up its mind to do the things that it is obvious to any rightthinking, Australian citizen should be done.
The Prime Minister (Mr. Menzies) has said that all of our troubles arise from the fact that the nation has been living beyond its means internationally. After eleven years of office, the Prime Minister apparently has only just realized that the nation has, during the whole of that time, been living beyond its means. Yet, in seven out of the last eight trading years we have had a trade deficit, without taking into account the present year. Everybody knows that between 1949-50 and 1959-60, a period of ten years, we have been so far on the wrong side with our trading that it is down to the extent of £1,100,000,000. What is the position this year? For the eight months which ended in February, we were down £182,200,000. Last year, for the same period, we were on the right side by £35,600,000, which means that the position has deteriorated in that period by £217,800,000.
For twelve successive months there have been trading deficits, without taking into account what are known as the invisible items, such as freight, insurance, interest on Government loans paid overseas, dividends and so on. In 1959-60, those invisible items amounted to £233,000,000. That amount must be added to the trading deficit. This figure is £30,000,000 more than that of the preceding year. At the most conservative estimate, invisibles alone will cost us approximately £250,000,000 this year. If we add that sum to the £300,000,000 that we shall be down in regard to our trading, we will have a total deficit for the year of approximately £550,000,000.
How has the Government been able to get by? How does it hope to get by this year? It hopes to do so by means of further foreign investments in Australia. When it is assessing foreign investments, it includes in the figure the undistributed profits of the great foreign organizations that have established themselves in this country. But even on the most generous and extravagant estimate, it would get from those sources, including Government loans overseas, not more than £250,000,000. So, if we make allowance for that amount, despite the fact that we shall be in debt by an additional £250,000,000, we shall still be £300,000,000 short. That amount will have to come out of our financial reserves. Everybody knows that the financial reserves have been reduced to below £300,000,000. To be precise, they now stand at £299,000,000.
When the Treasurer speaks of overseas balances be puts everything in for good weight, and so he includes trading bank balances held overseas which, I understand, amount to approximately £50,000,000. By that means he brings the amount of overseas balances to £344,000,000. Then he says, “We have drawing rights in the International Monetary Fund amounting to £211,000,000”. We have nothing of the kind. We have drawing rights up to about £50,000,000, and for the rest, we have only borrowing rights. We have contributed £33,000,000 in gold to the International Monetary Fund, and in return, we are entitled, I understand, to draw up to £50,000,000 from the fund if we can establish that we have balance-of-payments difficulties. If we wish to draw on the balance of the £211,000,000, Mr. Speaker, let me tell you what we have to do. Incidentally, the loans would be for short terms, of from three to five years’ duration, to tide us over the difficulties. Unless we were able to repay the loans within the stipulated time the interest rates would be increased and other penalties would be imposed.
The amount of £211,000,000 will be made available to this Government only if it is able to satisfy the International Monetary Fund that the Government has taken the necessary steps within Australia to correct the situation. So, there is ground for the great fear that we expressed at the time we were discussing the International Monetary Fund in this Parliament some years ago, the fear that this super-financial body overseas might some day be placed in a position to dictate the domestic policy of the Australian Government. It might be able to say that the workers of this country, as the honorable member for Richmond (Mr. Anthony) has said, are not working long enough, that they are getting too much in wages and that their industrial conditions are too good. If the Government wants to draw the balance of the £211,000,000 from the International Monetary Fund it will be obliged to conform to the wishes of this world financial organization.
The Prime Minister has said, in effect, “ Of course, we have had adverse terms of trade. That has been one of our problems. We cannot control the prices that we receive for our commodities overseas, and therefore we cannot be held responsible for the present position.” Everybody knows that the real trouble has arisen because this Government has done nothing at all to control inflation within Australia. The National Bank, in attributing reasons for our adverse trading position, stated in its annual report -
Inflation in these countries to which we sell most of our exports has been brought well under control.
The Treasurer alleged that inflation was under way in Australia during the latter years of the Chifley Government. Let me tell the Australian community the real position. When we were in office we sought power to control prices, and in 1948, when the question was submitted to the Australian community, every member of the Liberal Party and of the Australian Country Party was out telling the Australian people that they had nothing to fear and that prices would actually fall if that power was denied to the Commonwealth Parliament. It was only in the last two years of the Chifley Labour Government’s regime, after we had been denied power to control prices - and this Government must accept its responsibility in the matter - that inflation began to move in this country.
Let us turn for a moment to a consideration of the important wool industry. In the last three years the price of wool has fallen by about 34 per cent., but if costs had been held, if the Government had held the inflationary spiral instead of allowing it to advance, these prices would have returned a handsome profit to the woolgrower. What has already affected the position of the wool-grower is the fact that this Government has failed to control inflation and has allowed prices to go on rising. I am told that with prices at their present levels, an investment of £40,000 in wool-growing to-day will give an annual return of only £2,000, and that only in a good season.
I want honorable members to keep in mind that from 1949-50 to 1959-60 the wool industry provided almost half of our export income. So that if you have balance-of-payments difficulties overseas, you have no possible chance of overcoming them if there is anything wrong with the wool industry. Mr. T. M. Scott, the President of the New South Wales Graziers Association, says that this is the situation in the wool industry to-day: -
Wool production is falling …. Expenditure on maintenance and improvements is lessening . . . . Already some capital is being withdrawn from the industry. lt is a well-known fact that anybody who invested his capital in wool-growing in the last ten years, with the inflated land prices that have obtained, could not possibly continue to operate at a profit with prices at their present levels.
Now let me refer to some other important export industries. I will take, first, the wheat industry. According to a reply to a question I asked the Minister for Trade recently, the guaranteed wheat price this year will not be reached overseas. The Wheat Stabilization Fund is in credit to the extent of £4,852,000, and the Minister tells me that in respect of pools Nos. 23 and 24, for the year 1961-62, the Government will have to provide out of its own revenues, to keep the wheat industry afloat, an amount of between £8,000,000 and £9,000,000. We all know what the present position is in the dairying industry. The Government is not prepared to announce its policy in respect of that industry. We can go from one export industry to another, and we must conclude that undoubtedly the difficulties of these industries can be attributed to the failure of the Government to deal with internal inflation.
The Treasurer (Mr. Harold Holt) said that creeping inflation is all right; if it is only creeping inflation you have nothing to worry about. He was asked to specify the percentage rate of inflation that he regarded as satisfactory, and he gave 3 per cent, per annum as the figure. Let me tell honorable members what creeping inflation will do to the people of this country, and why the Australian public refuses to make contributions to public loans to the same extent as it did in previous years. The Government could not fill public loans in this country if it were not for the fact that it sets large contributions from private banks, insurance companies and like institutions. The proportion contributed by the public to government loans in recent years has fallen to a remarkable extent, and if this creeping inflation continued anybody foolish enough to lend money to the Government for a period of fourteen years would lose by the date of maturity 52 per cent, of the value of the capital originally invested. How can we wonder that government loans in this country are failing to secure public support?
The Government proposes to correct the adverse trading situation by instituting what it calls an export drive. There are to be income tax and pay-roll tax concessions, and all commodities are to be included in the export drive. The years 1958-59 and 1959-60 are to be taken as base years. Expenses incurred in fares paid for business trips overseas are to be allowable deductions from income for taxation purposes. Does any member of the Country Party believe that this is going to be of any material assistance to the great primary industries of Australia, which provide 80 per cent, of our export incomes at a conservative estimate?
The Government also intends to expand the Trade Commissioner Service. We are told that this will bring very good results. Any person with any common sense at all can tell you that unless we can sell the right quality goods at the right prices all the trade commissioner services in .the world will not expand our trade. Most of our expenditure in recent years on the Trade Commissioner Service has been in the United Kingdom, and yet in 1960, although imports into Britain increased by 14 per cent., imports of Australian goods had fallen by 11 per cent., and our proportion of sales in the United Kingdom market had actually fallen by 20 per cent, since 1957. This happened despite all the expenditure on the Trade Commissioner Service.
It will be interesting to discover what industries the Government intends to encourage to export. Is the meat industry to be included? We remember that not so very long ago, when drought conditions and herd depletions adversely affected the cattle industry in Argentina, an extensive market for Australian meat was opened up in the United States of America. In that year we sold a good deal of meat in that market, but at the same time the Australian market was being neglected, and the Australian housewife had to pay greatly increased prices for her meat. As a result, the cost of living rose and inflation received another boost.
What industries are to be encouraged to export? To what degree are they to be encouraged to export? Will it be to the utmost limit, regardless of the requirements of our own Australian community?
Let me show the House how serious the situation is. The Export Development Council, which is a body established by the Commonwealth Department of Trade, issued a statement a year ago to the effect that in the next five years we will have to increase our export income by £250,000,000, simply to maintain our existing Irving standards and our present rate of development. The Minister for Trade made a statement in this Parliament in September last that rural production had increased by 11 per cent, in the last four years, while farm incomes were down 11 per cent., and he said it would be unreal to seek a solution to the cost problem in increased production. If that is the case, why did the Government call a conference, attended by representatives of various industries, with the declared purpose of increasing productivity? Why is it necessary to hold such a conference if the Minister for Trade believes it is unreal to expect our great primary industries to increase their production for export purposes?
Where does the Government hope to get additional export income? It says that it will get the income by expanding exports of manufactured goods. Is it not a rather peculiar fact that in February last the Government lifted import restrictions? Who were the people who suffered greatly as a result of the flood of imports that followed the lifting of import restrictions? All the extra imports were paid for with money advanced by the private banks. I believe the decision that was made on that occasion was precipitate and ill-considered. In every month that has gone by since then we have read statements by Government members to the effect that everything will be all right, and that we are now almost over the hump. Well, we are evidently not over the hump yet, because according to last month’s figures imports are coming in at a greater rate than the Government believes to be safe. Unemployment is rapidly increasing. The shorter working week has been introduced in many industries. The Treasurer said, when his attention was directed to the degree of unemployment in the country at present, “ lt is not serious “. The Minister for Labour and National Service (Mr. McMahon) said, “ There is no crisis in respect of unemployment “. I well remember that on a previous occasion when we had a degree of unemployment in Australia, and we directed Lord Casey’s attention to it, he being a member of the Government at that time, he said, “ It is chicken feed “. That is the attitude of Government members generally towards the unfortunate unemployed. Let us hear what the Minister for Supply (Mr. Hulme) had to say in reply to complaints about the great influx of imports. He said -
The retailers are unfair and are not giving the Australian manufacturers a fair go. Neither are the public in buying imported goods in preference to Australian-made products.
What a ridiculous statement to make, when the Government has repeatedly said that its purpose in removing the restrictions and allowing imports to be uncontrolled was to bring an increased flow of imports into Australia which, it claimed, would in turn bring about a reduction in prices and a fall in the cost of living resulting in a reduction in general costs. Everybody knows that the action has not had this result at all. Australian manufacturers have unused capacity in their industries to produce the many things that are required and which are at present being imported. Whilst the Government called manufacturers together and asked them to make a special effort to increase their exports, it met its own requirements of rolling stock for the Commonwealth Railways from Japan, and at the same time, Australian heavy industries were short of orders. The Commonwealth Government went to Japan for that rolling stock because, as the Minister for Shipping and Transport (Mr. Opperman) admitted, the Australian manufacturer could not compete at the price that was offered by the manufacturers of Japan who employed cheap labour.
As my time is running out, let me turn to the question of cost of production. Sir Leslie Gamage, a British industrialist, has stated -
Costs of production were Australia’s major problem in export competition with countries like Germany and Japan.
Away back in 1955, even the Prime Minister said -
It is quite clear that we can enter the great markets that are waiting for us only if we can do so at competitive prices.
The “Public Affairs Bulletin” of AprilJune, 1955, stated~-
One way to solve the balance of payments problem would be to drastically reduce effective demand. This would mean a serious lowering of Australian living standards.
Of course, it would. Is it not rather farcical that with growing unemployment in this country, I should be told by the Treasurer, in reply to a question to-day, that the Government has decided not to maintain the flow of immigrants at 1 1 5,000 a year but actually to increase the number by 10,000 to 125,000? Where are these people to go? As there is now a shortening of employment in Australian industry, they can only get work by displacing people who are already in employment. If they do not, they will have to go on Commonwealth relief.
In the couple of minutes remaining to me, I shall make one or two suggestions, because the Government has been very anxious to know what we would do. We say that import restrictions should be immediately restored on a selective basis. We do not regard that as a final solution, but we regard it as an urgent matter because of the rapid flowing away of our international funds. We say that there ought to be a review by the Tariff Board of the industries in this country that have unused capacity and can produce many of the goods that we import. According to the Australian Industries Development Association, there is unused industrial capacity which could produce goods which would replace imports and save £272,000,000 of our imports bill. We further believe that there ought to be an immediate appeal for constitutional powers for this Commonwealth Parliament over prices, profits, capital investment, and interest rates, and we ought to have a uniform company act.
I mentioned the extent to which invisible items of expenditure were increasing year by year. One thing that the Government could do would be to establish a national shipping line to carry Australian products overseas and thereby save this country an enormous amount of expenditure year by year on export freights. Let me tell the
Government, finally, that if it permits the shipping companies of this country to be foreign owned and controlled, Australian industries will be prejudiced further.
Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.
– It was very refreshing to hear the closing sentences of the speech of the honorable member for East Sydney (Mr. Ward), because those closing sentences contained - and I compliment him on it - the only forthright statement of Opposition policy that this House has been privileged to hear throughout the debate.
– This is the first time you have been in the House.
– I have been in the House almost continuously throughout the debate, and when I have not been in the House I have gone to the trouble of reading the “ Hansard “ record. I say that this is the first time we have had a clear and forthright statement, except for an occasional utterance by the honorable member for Lalor (Mr. Pollard) and others, about what the Opposition would do. The honorable member for East Sydney has said that the Opposition, if in power, would do four things. First, it would put import restrictions back. In reply to that, I say quite plainly that it is not the intention of the Government to follow that course. Secondly, he said, there should be a review of the unused capacity of industry in Australia. I think that that is a useful suggestion which would commend itself to the Government and is one that we would follow up. Then, the two most interesting suggestions he made were: Thirdly, that powers should be taken to this Parliament so that it could control prices, profits and capital issues; and there are obviously fellow socialists on the Opposition side who commend that suggestion. Fourthly, he said, we should form a national shipping line for overseas trade. In these two suggestions, he has pointed a very clear contrast between the Opposition and the Government, a contrast which the electors of Australia will need to note and on which the electors of Australia must be the final judges. He has put forward two intensely socialist proposals - proposals for control, proposals for State monopolies - which are not in any way acceptable to the present Government, as we are a Liberal-Country Party Government which rejects that form of socialist planning.
In order to try to draw together some of the things that have been said in this debate, I want to come back to the point that we are engaged in a debate on a no-confidence motion moved by the Leader of the Opposition (Mr. Calwell). I need not remind honorable members that a vote on this motion will be taken to-night. If by chance that vote be carried affirmatively, it would mean that this Government should resign; and the consequence would be either an attempt to form an alternative government from the honorable members opposite or an appeal to the electors of Australia. Because those are the possible final results of the vote that will be taken in this House to-night, we have to regard this motion in quite a serious and solemn way and try to see it clearly.
In moving the no-confidence motion, the Leader of the Opposition stated certain grounds on which he claimed the Government had lost the confidence of this Parliament and of the country. The first of those grounds - I think I am being completely fair to him in stating it in this way - was that the Government had failed to protect the Australian economy. I want to make two comments on that. The first is that this Government has never minimized, at any time during the past ten years, the difficulty of the economic situation with which Australia has to deal. We do not go in for any foolish optimism. We do not belittle in any way the difficulties that we have to encounter. The second remark I want to make is that the protection of the Australian economy is not something that can be done by a single act on a single day. It is a continuous process that has to go on year by year, patiently, wisely and courageously, so that we get changing methods for changing situations with a clear objective of protecting the Australian economy. If we look back on the continuous process that has gone on during the past ten years, we see that this Government can rightly claim that it has shown wisdom, courage and carefulness in protecting the Australian economy. The proof of my words is to be found in the state of the Australian economy to-day, for it is still fundamentally sound. If we look at the standing Australia enjoys overseas, and at our credit overseas, if we look at the expansion of industry in Australia, if we look at the increase in production, if we look at the rise in standards of living and the rise in real wages that have taken place in Australia, and if we look at the dividends that have been paid by companies operating in Australia both for the benefit of their shareholders and the good of the country as a whole, then we see an endorsement of my claim that the Menzies Government of Australia has successfully protected the economy of Australia.
The second ground stated by the Leader of the Opposition was that the Government had failed to develop the Australian economy. Really, when one looks back and becomes conscious of the statistical truth that during the past ten years, happily for its people, Australia has know an unparalleled period of expansion and growth, then one must be convinced that that demonstrable statistical fact makes nonsense of this second ground. I do not want to itemize everything, or to quote tedious statistics, but I do ask honorable members to look at the population growth, to look at the growth in cattle and sheep population, at the area under crop, at the growth in wool and wheat production, at the fact that the output of minerals, except gold, is higher, at the fact that the forestry output of Australia is the highest it has ever been in our history, at the fact that the number of persons employed in factories to-day is over 100,000 more than it was when we took office, at the fact that the value of trade is far higher than it has ever been in our history, at the fact that the number of overseas vessels being cleared from Australian ports is far greater, at the fact that in Australia to-day there are over 1,000,000 more motor vehicles of various kinds than there were when we took office, and at the fact that bank clearances are millions of pounds higher per annum than they were ten years ago. If all those things mean failure to develop the Australian economy, then, by all means let us have more of that sort of failure because it has brought prosperity, development and expansion that Australia has not known before - development which I believe lays the foundation for even more progress.
The third ground which the Leader of the Opposition stated was that the Government had failed to safeguard our overseas funds. This is a curious ground because part of the general complaint that he made was an attack upon us for the measures which we had taken to check the run-down in our overseas funds. He attacks and criticizes us for taking that action and then says we have failed to take any action! It is quite within his province, and he could, if he chose, try to develop some sort of convincing argument that the action which we have taken was not the right action; but, if he chooses to criticize the action we have taken to safeguard Australian funds overseas, surely he cannot at the same time make it a ground for complaint that we have not tried to safeguard them at all.
It is clear when one goes through those grounds - I have not the time to deal with them exhaustively - and asks whether the Opposition has proved its case that the verdict of the House and of the people of Australia must be that the Opposition has failed to produce convincing evidence in support of the grounds upon which it has put forward the motion of no confidence.
As we all know, the real purpose of a motion of want of confidence is to bring about a change of government. If it succeeds, it means either an immediate change of government, if an alternative government is offering, or it means an appeal to the electors on the question. So we and the electors of Australia are entitled to ask, “ A change to what? Where is the alternative government?” That seems to me to be the central and most immediately relevant question in the whole of this debate. If you tip out the present government-
– Hear, hear!
– I hear one voice on the opposite side crying “ Hear, hear!” But if you tip out the present Government what comes in its place? The Opposition presumably offers itself to the people of Australia as an alternative government. I submit that the weakness of the Opposition’s case lies in the fact that throughout this debate it has completely failed to analyse any of the causes of the change in the Australian economy. The Opposition’s case simply has been that the Government is at fault and that a change of government, of itself, will bring about an improvement. But a change of government will not, of itself, change the conditions in the economy. Those who believe it will ignore the fact that the conditions with which we are dealing include such questions as world prices for our exports, world prices for our imports, the nature of the demand inside Australia, the pressure of rising standards of living, the pressure of expansion inside Australia, and the pace of development in Australia. Whether one government stays or goes, those conditions will still be there and those are the things with which any government will have to deal. None of those things will be changed simply by a change of government. That being so, reasonable Australians - and I believe most Australians are reasonable - will want to know what the new government would do to meet the conditions that are prevailing in Australia at the present time. The honorable member for East Sydney (Mr. Ward) proclaimed a proud and defiant socialism. He was the only one to do so. The Labour Party leaders have been silent on this subject, but we know very well, because we follow politics very closely, what Labour’s policy is. We know what the policy of the Australian Labour Party, as declared at the Hobart conference, and elsewhere, is. We know it is the same brand of socialism p° that espoused by the honorable member East Sydney.
But let us confine ourselves to the debate on this motion before the House. Let us see what the leaders of the party opposite have actually said. I listened to the speech of the Leader of the Opposition, and I also went to the trouble of reading it over two or three times in a careful and analytical way when it appeared in “ Hansard “. He said much which he fancied was to the discredit of the Government, but when one searches his speech to find what he said about the economic situation of Australia, one finds only one diagnosis. He said -
The Government has one problem that transcends all others. It is the problem of the flood of imports . . . Unless we solve that problem we will solve nothing.
Later, when dealing with remedies, he said -
Something must be done and the only practical way to do it is to re-impose import restrictions.
It is a curious thing that when we had import restrictions the then leader of the Australian Labour Party wanted to remove them, and now that we have removed them the policy of the Labour Party is to put them on. It will be a terrible burden upon this Government if, when shaping its own policy, it realizes that it is also shaping the policy of the Opposition because all the Opposition will ever do will be to say, “ If that is what Menzies wants we shall oppose it “. Has the Labour Party really got down to such poverty of thought that all it can think of doing is the opposite to whatever the Government does? If that is the principle it follows, then it seems to me to be a very unsound principle.
The Leader of the Opposition made another contribution to the analysis of the general economic situation. If honorable members care to read his speech again - I doubt whether very many of them will - they will find a most remarkable sentence which contains seven “ ifs “. He said that if every one of these conditions were a fact - he mentioned “ if “ seven times - then we could slide into the treacherous sands of depression. Has the Labour Party become the party of the big “ if “? Has it become the party of a long succession of “ ifs “? Or has it no clearer view of the position with which it purports to deal? I suppose the only way of showing the weakness of the arguments of a man who bases his economic analysis on a succession of “ ifs “ is to go to the extent of four “ ifs “ and say, “ If the people will vote for the Labour Party, and if the Labour Party had a policy, and if the Labour Party were not divided among itself, and if the Labour Party could win an election, then it would be the government “. That improbability is just as great as the one which was stated by the Leader of the Opposition and which was preceded, not by four “ ifs “ but by seven “ ifs “.
Then we turn to the other spokesman for the party. I know that the honorable member for East Sydney carries great weight in his party and many of his colleagues stand behind him and revere his words, but in the order of things it is the Deputy Leader of the Opposition, the honorable member for Werriwa (Mr. Whitlam), who is the official spokesman for Labour on this occasion. I listened to him and read the account of his speech in “ Hansard “, and it seemed to me that he is developing a most remarkable skill as a skater. He made a very rapid speech on very slippery ground. I shall illustrate what I mean. Th? Deputy
Leader of the Opposition, speaking quite rapidly, criticized the Government for allowing interest rates to rise, but he got away too quickly to say what he would do himself about controlling interest rates. He spoke very darkly about foreign investment in our export industries, but he swept around another curve without saying what he would do to check foreign investment. Even on this central problem of the flow of imports he spoke at length, but was gone in a flash before he said what he would do about import controls. We all know that the honorable member for Werriwa has to walk on a very slippery surface, but if he is fulfil the very high hopes which he cherishes for himself - I wish he were in the chamber now to hear me - occasionally he will have to stand squarely on firm ground and state plainly to his own party and to the country at large what he believes ii> and what he proposes.
In contrast to the honorable member for East Sydney, who stated emphatically what he believed in, the Deputy Leader of the Opposition skated around every clear pronouncement and gave only some indication of what he thought were the faults of the Government without saying what he, as Deputy Leader of the party, believed should be done. But perhaps I am being a little unfair to him. He did say one thing quite plainly. He criticized the Government for the deterrent which was imposed on the motor car industry. He seemed to admit that there was a boom in that industry and that some action was needed. What action did he think would be useful? His only idea on that subject was that the Government should have told the motor car industry ten years ago how many vehicles should be sold in Australia.
Does that suggestion, carried to its logical conclusion, mean that the honorable member for Werriwa has some kind of economic system at the back of his mind by which the Government should fix production quotas for any industry that seemed likely to experience a boom? Does this mean that we should manage the national economy by carrying planning to the point where the Government itself prescribes the limits of each industry and hands out a production budget for every management?
This seems to me - and, I am sure, to the Australian people - to be a rather limited view of Australian development. It is putting a darg on progress. I wonder what Australian industry thinks of that kind of prospect under the alternative government - the prospect of waiting, at the commencement of each year, until the honorable member for Werriwa and his private secretary had issued a permit to make so many tins of this and so many boxes of that, for fear that in ten years’ time some kind of boom was likely and the honorable member would then be unable to take action on it.
He justified his philosophy by arguing that rather than take action to check a boom it is better to prevent a boom from developing. I think that there is a good deal of difficulty in predicting with certainty a boom in a particular industry ten years before it takes place, yet the honorable member’s contribution to the economic thought of this nation was that we could have saved ourselves trouble in 1961 if, in 1951, we had set a production quota for the motor car industry. That reveals the honorable member’s total lack of understanding of the whole situation.
The position with which the Government had to deal was basically not the level of production, but an extraordinary expansion of credit. We are not using a deterrent against the motor car industry because we think that a high level of production is bad. I am sure that none of us on the Government side would want to put a limit on production. What we are concerned about solely is the strong inflationary effect of the creation of credit. This effect happened to be clearly apparent at this point in the economy. Moreover, certain extraordinary demands for imports were also due to the boom in the motor car industry. In the long term we have no intention or desire to halt the progress of this great Australian industry, and we certainly reject the idea which has been expressed on behalf of the Opposition that we should try to declare production quotas for it. We are using the economic instruments which are appropriate in a free-enterprise economy to check certain tendencies which are clearly dangerous at present, and to encourage certain other tendencies in national activity.
There is the core of the difference between the Opposition and the Government, and it is a point that many businessmen in Australia might well ponder. We have no long-term intention of restraint of industry; the Opposition clearly has that longterm intention. Our policy concerns only matters affecting the stability of the economy. In the post-war history of Australia measures relating to bank advances, sales tax and credit have been used as the instruments by which economic policy could be served. We, ourselves, have used each of those instruments, and we are using them at present. We do not have any interest in using any one of them one moment longer than it serves its purpose as an instrument. The instruments are not objectives in themselves, and we will discard them just as readily as a workman lays down any of the tools that he has found it necessary to use.
There are some journalists in this country who, commenting on the economic situation, have really acted in the same way as if they had been watching a carpenter at work, sometimes using a hammer, sometimes using a saw, and sometimes using a chisel, and they had decided that that carpenter was a stop-and-go carpenter. Surely, we have to look further than the tools that are being used, and look at the building which we are endeavouring to erect. We surely have to try to understand the overall plan that we are seeking to follow and to serve, and not confuse the plan with the tools that we may use. It is only the people who find an inconsistency in the use of a saw, a hammer or a chisel to complete one building who complain that this Government’s policy is a stop-and-go policy.
In conclusion, I repeat the point that the central issue of this debate is: Who should govern Australia? Is the present Government to be trusted with guiding the national economy of this country, or is the alternative government, represented by a confused Opposition, to be preferred to it? We stand, in economic matters, on a record of eleven years of very careful and consistently successful management of the national economy. The Opposition stands on a lot of vague and empty pronouncements or on the socialist views of the honorable member for East Sydney (Mr. Ward).
-Order! The Minister’s time has expired.
Mi. RIORDAN (Kennedy) [8.50].- I do not propose to waste my time by replying fully to the lame apology just put forward by the Minister for Territories (Mr. Hasluck) as a reply to the speech made by the Leader of the Opposition (Mr. Calwell). The points made by the Leader of the Opposition are acceptable to more than onehalf of the people of this country, and that is good enough for me. However, the Minister made one or two statements to which I want to reply. He made reference to the rise in wages since this Government came into office. One of the cries which have come from this Government has been that we must do something to curb inflation, and the Government says that wage rises are inflationary. The Minister referred to a rise in wages, but he did not indicate what the rise in real wages was. The Minister spoke also of a rising population. The honorable member for East Sydney (Mr. Ward) pointed out to-night that the Government is bringing migrants to this country, but where are they to live and work? The Minister, in his speech, made no mention of the rising unemployed population of this country.
I turn now to the Government members from Queensland. Four of the fifteen of them have spoken in this debate, but not one of the three who spoke to-day or the one who spoke the other day dealt with this no-confidence motion. Each of them dodged the issue. The honorable member for Herbert (Mr. Murray) said he could not support the motion and made a speech about the development of northern Australia. Let me tell him that I have made speeches in this place to a government of the same political kidney as this one, in the days prior to the war, on the undeveloped north, on the undefended north and on the need for roads for the north. I asked that government to assist the Queensland Government to build roads in north Australia. I asked it to build defence roads there and it had the audacity to tell me that roads were of no defence value in north Queensland. It was no contribution to this debate for the honorable member to rise in his place and talk about the development of north Australia. The people of his own electorate want to know what he is going to do for the unemployed there and what he is going to do to boost business there, but he indulged only in this airy-fairy talk, in the hope of having it published and making propaganda out of it, so that he would not have to admit where he stands on the issue with which we are dealing.
The honorable member for Capricornia (Mr. Pearce) also made a speech about the development of northern Australia, but he went further than did the honorable member for Herbert and talked about establishing a regional committee. He has stolen that idea from the North Australian Geological and Geophysical Survey Committee, which was constituted of representatives of the Queensland and Western Australian Governments and of people from this place. That committee made a very valuable contribution towards the opening up of the uranium fields in Queensland, and I believe that a committee similar to it should be constituted to plan the development of the north. The honorable member for Capricornia said that there should be more new States, but if this Government continues in office there will be no people in Queensland to form new States; they will be squeezed out. I do not want to waste time in referring further to the honorable member.
I ask the honorable member for Herbert: What about the plywood mills and timber mills in his electorate? What has he got to say with regard to the 1,500,000 feet of plywood coming into this country from overseas and forcing our ply-mills in Queensland to close? He made no mention of that, of course. The honorable member for Maranoa (Mr. Brimblecombe) said, “ If you have any complaints about the credit squeeze, get a letter and bring it here “.
I propose now to deal with the issues before the House, which are the noconfidence motion, the credit squeeze and the economic policy - or lack of it - of this Government. I wish to refer particularly to the position in Queensland and will deal first with a statement by the Minister for Labour and National Service (Mr. McMahon) which was reported in the Brisbane “ Courier-Mail “ last Tuesday. The Minister referred to the fact that in Queensland we have 3.3 per cent, of the registered unemployed in Australia. The average for all States is 1.7 per cent., so the Queensland average is nearly double the Australian average. Of course, at this time of the year we have seasonal unemployment in Queensland. The cane cutters are not working and the sugar-mills and meatworks are closed. I want to read an extract from the “ Brisbane Telegraph “ of 14th March, headed “ 3,000 seeking first jobs “. It reads as follows:- -
More than 3,000 children who left school last year in Queensland have not found employment. This means that about one in every nine children who left school is out of work.
The honorable member for Herbert may laugh now, but he will go back to the mill after the speech that he made to-day. The report continues -
A Commonwealth Labour and National Service official to-day said that 6,015 of the 19,367 registered for jobs in Queensland are juniors. Al least half of these left school last year.
That is the position in Queensland with regard to juniors. We had a very distinguished visitor - the right honorable the Treasurer (Mr. Harold Holt) - in Queensland on 27th February last, and he was told by a deputation of union officials from the Queensland Trades and Labour Council that there were over 35,000 unemployed in Queensland. The unemployment position there is pretty serious and is the worst we have had since the days of the depression. The only reply that the deputation received from the Treasurer was that there had been increases in wages and in living standards. He dodged the issue, just as other members on the Government side of the House have dodged the issue in this debate. In the “ Brisbane Telegraph “ of 27th February appeared a statement by Mr. J. R. James, secretary of the Queensland Employers Federation. That was on the day that the Treasurer met the delegation. The report reads as follows: -
Mr. J. R. James, Secretary of the Queensland Employers’ Federation, to-day said a frank statement on Australia’s economic problems was needed. He said Mr. Holt last night did little to remove the atmosphere of doubt and uncertainty produced by the Federal Government’s vacillating economic policy. Also wanted was a firm decision on measures necessary to achieve stability and ensure orderly progress and development. Any such measures, Mr. James said, should be designed to distribute the burden of any sacrifices necessary as equitably as possible over all sections of industry and commerce.
To-day in Queensland people who normally support this Government are openly hostile because of its rapid changes in policy. They are demanding a frank and unequivocal statement, as suggested by Mr. James, who referred also to the doubts and uncertainty that had been produced by the Government’s vacillating policy. Honorable members might say that Mr. James is not a Labour man. I do not know him, and I do not know his politics, but by virtue of the position he occupies I would say that he is a supporter of the Government. I would go further and say that you can rest assured that what he has said would be the views of his organization. It is all very well for the Government to talk about the percentage of workers who are unemployed, but their future is pretty bleak and black.
During the Christmas recess I took the opportunity to travel extensively in the inland grazing areas of Queensland, and also along the coast. A large area of western Queensland experienced fairly dry conditions last year, with the result that graziers reduced their stock. In December, light rain fell over a vast area. After the Christmas period - early in January - most of the graziers who had lightly-stocked their properties during the drought went along to their bank managers and requested additional financial accommodation to enable them to buy more stock, but the bank managers knocked them back. One man to whom I spoke informed me that he had assets valued by the bank at £97,000. He said, “ I airily blew in to see the bank manager. I wanted a few quid to buy some stock from Starvation Corner.” That is the name by which a part of Queensland that has had very little rain during the last few years is known. He told me that the bank manager had knocked him back and so he was not able to purchase stock and bring them to a place where he had feed for them. If he had been able to purchase the stock, not only would their lives have been saved but production would have been increased. As he could not get the money, the stock died.
Graziers who have overdrafts have been told to reduce them by the end of March. For the information of Government members particularly, I want to quote from the Queensland “ Country Life “ of 9th March, the current issue of that journal. An article in it contains this statement -
Graziers in central coastal Queensland are more worried by credit restrictions than the prolonged effects of the early dry season on the cattle market. This was the feeling of members attending the annual meeting of the Gladstone District Branch of the C.C.G.A. last Friday. … The retiring ‘branch chairman, (Mr. P. V. Walker) said that in the last three months he had met cattlemen who ‘had been hamstrung by credit restrictions. . . . Mr. Walker said that he had been in touch with some of the biggest stock agents in the State but could not get a buyer to look at lines of cows and calves.
Where are they to get the money so that they can have a look at Mr. Walker’s lines of cows and calves?
When the Treasurer was in Queensland he addressed a meeting that was held in, I think, the Lilley electorate and the following report appeared subsequently in the Brisbane “ Courier-Mail “ under the heading “ Bankers going too far “ -
Trading banks in some instances apparently had sought to carry the directive on reducing overdrafts into areas where it was never intended to operate, the Federal Treasurer (Mr. Holt) said last night. This applied particularly to rural credit, he said … He had been asked if it did not appear trading banks had been overzealous in their efforts to reduce overdrafts.
Mr. Holt said: “ I do not know that I would join in judgment of that sort. What I would hope to find is that the banks have faithfully carried out the terms of the Reserve Bank directive, which is in line with Government wishes.
The Treasurer said that he hoped the banks would carry out the directive of the Reserve Bank. Hope springs eternal, but this hope business is not of much value to a man who has been told that he has to reduce his overdraft. Apparently from the Government’s point of view, the banks have gone too far. What action has the Government taken to force the banks to lift any restriction? The banks have been told, by direction of this Government, to reduce overdrafts by £70,000,000 by 31st March. In doing that they will hit every section of the community. It is just twaddle for the Treasurer to talk about the banks having gone too far in carrying out the directive of the Government. It is no wonder that he is known in Queensland as “ Pass the Buck Harold “, because he is trying to hide behind the banks.
Another case was brought to my notice concerning a grazier who had been banking with a certain bank for 47 years. He had an overdraft which at its peak stood at £40,000, but he had reduced it to £10,000. He went to the bank to obtain £350 to enable him to repay a debt. The bank manager told him that not only could he not get the £350, but also he would have to reduce his overdraft. The grazier then applied to a pastoral firm, the manager of which told him that he could not give him the firm’s money but that he would lend him a few bob of his own. Eventually, the man obtained the £350 he wanted. My point is that although this man had had a peak overdraft of £40,000, he could not obtain £350, and in addition he was told to reduce his overdraft. The Treasurer tries to hide behind the fact that the banks have apparently gone too far in carrying out the directive of the Government.
Everywhere I went during the recess, I made inquiries about the effect of the credit squeeze, particularly the unemployment it was creating. I visited many of the larger towns along the Queensland coast, including Gladstone. On 24th August last, during the adjournment debate in this House, I read a telegram that had been received by the Leader of the Opposition from the Trades and Labour Council at Gladstone. It stated that the council was facing a state of emergency in Gladstone. I did not go to Gladstone myself but I got in touch with a unionist in the town by telephone. I was told that 800 men were unemployed and that in January a job for a grave-digger was advertised and 29 men had applied. It is true that the bulk of the 800 men were seasonal meatworkers who had been unemployed since the end of August last. It is also true that a seasonal allowance is included in their weekly pay, but this disability allowance does not mean that they can remain idle for the other six months of the year.
I now desire to refer to the meatworks owned by Swift Australia Company (Proprietary) Limited. The following statement appeared in the Rockhampton “ Morning Bulletin “ of 8th March, under the heading “ Investigating Rumoured Meatworks Closure” -
The Central District sub-branch of the A.M.I.E.U. is investigating unconfirmed reports that Swift’s meatworks at Gladstone will not open this year.
I was in touch with the union by telephone to-day and I was told that the position is much the same as when the manager for Swifts made a press statement on 9th March to the effect that although no date had been fixed, the company would start operations when sufficient cattle were available. This is a case of “ live horse and you will get the grass “. The outlook in Gladstone is still pretty grim. It is obvious from the number of cattle that are available that the season is going to be a very short one. In Rockhampton I found there were 900 registered unemployed but 1 was told that the number of persons out of work was nearer 2,000. In Townsville there were 2,000 unemployed and 900 had registered. In Mackay, 1,200 persons of a population of 17,500 were unemployed; that is, one person in six was without work. All tocal authority and State public works had been closed down. A tramline that was being built to Farleigh mill was closed and if money is not forthcoming, work on it will cease altogether. This is all due to the credit squeeze.
That is the picture with which honorable members on the Government side should have dealt. There will be plenty of time in the future to talk about north Australia. The big problem now is what we are to do with the 35,000 persons in Queensland who have no work. This number includes 3,000 children who have just left school. The Government must answer for this situation to the man in the street.
In Queensland, it is not only the worker who has been hit. The businessmen have been affected because the workers are suffering. Business has never been worse in Rockhampton and Townsville. In Brisbane, Mr. Bruce Pie, one of the leaders of the Liberal Party in the Queensland Parliament, is reported to have announced that Bruce Pie Industries Limited will sack between 40 and 50 employees from its big Kedron textile mill. The “Courier-Mail “ reported yesterday -
This is the latest Queensland enterprise to be struck by the Federal Government’s economic squeeze.
The managing director of the firm (Mr. Bruce Pie) announced this last night following a serious slump in mill orders.
He blamed the Government’s abolition of import controls and “ uncertainty “ in business resulting from the credit clamp.
Mr. Pie said the sackings would take place “ within the next few days “.
The Bruce Pie mill employs 648. It operates two spinning and two knitting shifts daily.
The Chamber of Manufactures’ general manager (Mr. L. A. Suggars) last night said Queensland manufacturers were concerned over the business slump.
He said that if it continued more industries would face having to sack staff.
Mr. Suggars said manufacturers reported orders had dropped since the beginning of March and the fall-off was continuing.
The “ Courier-Mail “ is conducting a survey of the situation and it reported on 15th March -
Yesterday’s “ Courier-Mail “ survey of the economicclamp effects on Queensland showed: -
Northgate cannery daily has “ hundreds “ looking for work. Many wait all day in the cannery canteen hoping for casual jobs.
The Royal Australian Institute of Architects reports that of 100 Queensland architect firms circularised the 23 who have so far replied have had £9,000,000 worth of building jobs suspended or cancelled.
A Wickham Terrace doctor recently received 300 applications from all over Australia when he advertised for a woman receptionist.
That, briefly, is the position in Queensland. My final word to the Government is this: All sections of the community are condemning the Government for its failure to meet the problems of the last few years. The Government stands condemned for its incapacity, inactivity and complacency. It cannot blame a world depression for the morass into which this country is slipping. All aspects of the economic position have been dealt with by Opposition speakers. Queensland is the hardest hit of all the States. I believe that the observations of responsible people condemn this Government and support the Labour Party. The Government has lost the confidence of electors as election day will show.
– Order! The honorable member’s time has expired.
.- I have listened very carefully to the honorable member for Kennedy (Mr. Riordan) and had no difficulty in hearing him, but I found that he threw more noise than light on the subject. For every mumble, there was a grumble and a jumble. The theme of the honorable member’s speech was that there was seasonal unemployment in Queensland which, I understand, has been experienced each year for many years. I believe it recurred for many years under a Labour Government in Queensland. I understand, moreover, that special provision is made for that seasonal unemployment. All I could gather from the honorable member’s speech was a brief summary of seasonal conditions in Queensland.
The Acting Prime Minister (Mr. McEwen) and the Treasurer (Mr. Harold Holt) have given a very full, careful and detailed analysis of the Government’s economic measures. Therefore, it would be wrong for me to repeat them in detail. I do commend the speeches of those right honorable gentlemen to the people who had the opportunity to hear them. Unfortunately, only those who subscribe to “ Hansard “ will have an opportunity to read their speeches in full. In the existing conditions, it is a great pity that, with vital issues at stake, the leaders of our Government are not reported fully by any leading newspaper. The clear and concise statements of the leaders of the Government have been reported, sometimes in a biased way, with only brief extracts from their speeches. I am sure that thousands of people would like to read their statements.
I intend to devote my time to the psychological aspects of the Government’s measures and its future plans and what I believe is the real danger we have to face. Let me explain my point in this way: No one will deny that in 1960 we had boom conditions of prosperity. This was indicated particularly in over-employment and overaward payments in those prosperous industries which could pass on the costs to the detriment of labour in less prosperous but just as essential industries. These conditions were very apparent to our watchful Government, and at the beginning of 1960 the Government asked the banks to exercise restraint in their lending. This mild request was received with adverse criticism to the extent that every person who could not borrow to the maximum of his securities blamed the Government. Unfortunately, many of the institutions used the Government as an excuse to refuse advances. As a matter of fact, the banks increased advances in various quarters by £150,000,000 in that period. Nevertheless, the psychological effect of the Government’s request for restraint created great public resentment. Again many forms of fringe finance were available. The use of fringe finance and hire purchase was again blamed on the Government by those who wanted to obtain cheap finance.
The point I am making is that these psychological reactions of the people were such that those who had never borrowed before wanted to borrow and take the risk, and those who had never invested before, except in low-interest investments, were prepared to lend their money at high risk and high interest. Even small investors were putting their money into equity shares and housewives were gambling their savings on the stock market. In other words, every one was enjoying the boom of inflation caused by demand exceeding supply, except, of course, the poor old fixed income groups and the primary producers who were nailed to the cross of overseas prices.
I am sure every one will agree that no responsible government could allow those conditions to continue and to snowball with such great rapidity, but unfortunately every one wants the Government to take action that will not affect them individually. What an impossible situation that is, when the anomalies are considered. Just look at the thousands of newspaper editorials and feature articles which appeared in magazines and trade journals. All of them said that the nation must develop rapidly and we must have roads, railways, water supply, housing, hospitals and so on. I could go on for an hour citing a list as long as my arm. But the cry was that all these things must not be done by taxation. It was said that the Government was undertaking too much development with money obtained from taxation and that taxation should be reduced as an incentive. I agree that that is a reasonably sound suggestion. But then we must ask how we shall do it. We do it, of course, with borrowed money - the savings of the people invested in government loans and securities. The critics then say, “ But not from us; we must be free to lend where we like at high interest rates. Get it from the other fellow.” Publicity is causing this anomaly, and the Government must face that fact. Every one says, “ You must not an any account affect my spending rate. I must be allowed to spend at the same rate.” These people agree that the goods necessary for development must be produced, but they still want to buy their new motor car.
All this unbalanced criticism has a tremendous psychlogical effect on the public.
The public begins to believe that the impossible can be done. There is no doubt that what may now be called the mild restriction on purchasing power introduced in January and August of 1960 would not have been so mild and would have had a much greater effect except for the enormous overconfidence of the people who completely disregarded all the warnings. This was a confidence that completely overran the financial holding operations of the Government. It was like the driver of a modern luxury car overlooking the large corrugations and bumps in the road. This made necessary a much more severe financial holding operation in November. Then what happened? The flood of irresponsible critics started the reverse psychology of gloom and this was materially kicked along by those most affected - the interested parties - and the Australian Labour Party, whose very existence depends on a troubled nation. Opposition members want a depression. They would love thousands of people to be out of work. Their policy is so negative that they can only live and breathe in a troubled world and will go to the length, quite deliberately, of fomenting trouble merely to obtain power.
– Do you believe that?
– I do. I cannot believe anything else after I have listened to the speeches delivered by Opposition members in the last two days.
This policy of gloom creates a tremendous impression on the public mind and makes necessary financial measures that are more severe than they need be.
– Put a bit of life into it.
– I cannot compete with the honorable member for Grayndler. The controversial increase of sales tax is an example of what is in the public mind. I do not think there is any doubt that the addition to the price caused by the extra 10 per cent, tax was not the real basic cause for the huge drop in motor car sales. I think every manufacturer and motor car salesman would agree with that statement. Manufacturers could, and did on many occasions, increase their prices by a similar amount without making a dent in their sales. The decline is sales was caused purely by the enormous amount of publicity and criticism, particularly of the temporary nature of the additional tax. This caused a fall that much greater than would normally be expected.
Perhaps the most recent example of adverse criticism and its psychological effect came surprisingly enough from Sir Douglas Copland who predicted that unemployment would reach 150,000 to 200,000 next year. This is an amazing statement from a man with his knowledge of economics. He must know that it would have a tremendous effect on the public mind. Even if he believed it - with his knowledge of the Government’s policy, I very much doubt that he did - he could have approached the matter in such a way as not to create panic, depression and gloom, which leads to the outlook that we want to avoid. Any responsible person should know the dangers of financial panic, which can upset the most carefully planned economy. Sound and constructive criticism is always necessary and welcome; but thi irresponsible, extravagant language used by the Leader of the Opposition (Mr. Calwell) when he moved this motion of no confidence was amazing to hear. Let us look at some of his statements as recorded in “ Hansard “. He said that the country is in a desperate position, that from the Government’s bungling will come the misery of depression, and that the tragic conditions of unemployment are unbelievable. These impressions exist only in the minds of Opposition members and such statements, I regret to say, are an expression of their hopes. This country has never been so prosperous. I believe that it will continue to be prosperous unless the Labour Party and other self-interested critics succeed in their tactics of panic and gloom. They have been successful in forcing the Government to change its economic policy more often than otherwise would have been necessary. To obtain a more balanced view would be a tremendous help.
Undoubtedly inflation is the great enemy of our economy. Last year, when it was so clear, it was the main topic of conversation of leader writers and all thoughtful people. Members of the Liberal Party were continually referring to its dangers and the critics wanted to know what the Government was doing about it. Actually it was doing something at that time. As soon as the Government takes any direct action - in fact, any action whatever - to correct inflation it is bitterly attacked. There has never been a truer statement than that the Labour Party’s policy in relation to inflation is like Satan rebuking sin. Labour wants disruption. Members of the Labour Party want the people to be dissatisfied so that Labour will be provided with an opportunity to attain its own ambitions. But Labour will have a colossal task in trying to convince the people that this country is being ruined.
I recently drove from Adelaide and through Melbourne to Sydney and Canberra on week-days. What did I find? I found that the roads were crowded with motor cars and that motels dotted all over the country were full by 5 o’clock in the afternoon. In every town and village at which I called the shops were full of goods and hundreds of shoppers were buying those goods. In spite of the magnitude of the problem associated with our balance of payments, great quantities of goods are being imported and people have plenty of money with which to buy those goods. But if we were to believe the Labour Party, we would regard the country as being ruined.
I was interested a few days ago to see in a Sydney newspaper an article headed, I think, “ Give us this day our daily water “. That article contained statistics which showed that the daily consumption of water in New South Wales was 19 gallons per capita - 19 gallons for every man, woman and child in the State. The statistics revealed also the interesting fact that the people of that State drink 24 gallons of beer per capita per annum. I am not too sure whether the statistics covering the consumption of beer were included in those relating to the consumption of water, because beer is 95 per cent, water, but clearly there is nothing wrong with a country which can produce luxury commodities to that degree. Such articles can be read in the press daily. I repeat that the Labour Party will have a hard job trying to convince the people that we do not enjoy high standards of living.
Unfortunately, in the process of trying to convince the people Labour spokesmen scare them a little. That has a tremendous effect on our finances, which depend substantially on the confidence of the people.
As any one with a small knowledge of economics knows, our whole economic structure is built upon confidence - confidence in the belief .that we can put our money in the bank and draw a cheque when we want to. Whether we save or live up to our income, our financial affairs are based upon confidence. It is the task of the Government to maintain that confidence in the face of the predictions of the Labour Party and, unfortunately, of our great newspapers and interested group organizations which are producing publicity that confuses members of the public who have time to read only the headlines.
I believe that is why the Government is accused of being a stop-go government. The basis of such accusations is the psychological effect of the stop-go publicity that is directed against the Government. Therefore, any counter-action that is taken by the Government must be of a stop-go nature. I believe that it must be, and always will be, the task of the Government to counter undesirable economic movements as they become apparent. The Government has nothing to be ashamed of in having altered its policy in accordance with changing circumstances. The Government can be proud of what it has done, it can fully justify its actions, and the people of Australia will learn the wisdom of what has been done.
Let us face another fundamental fact. We cannot have it both ways; we cannot have boom conditions and at the same time curb inflation without controls. Nor can we have depressed conditions and control deflation without controls. To suggest otherwise would be just as stupid as saying that if we had some eggs we could have some bacon and eggs if we had the bacon. I believe that the controls that the Government has imposed are not contrary to Liberal-Country Party policy. Moreover, they are not the kind of controls that a socialist government would impose. So, I appeal not to members of the Labour Party - that would be a waste of time - ‘but to the responsible people and to the newspapers to remember the great responsibility they have to assist in maintaining a stable economy. Let them take note of the tremendous psychological effects of biased and selfish publicity, which could undermine their very existence.
Let me give another example of what can happen. Just recently, I met a few men at an hotel at about half-past five in ‘the afternoon. They were all talking about bank credit. One fellow said, “ By Heavens, things are bad with this restriction of credit. My friend has only £30 left in his bank account and they will not let him draw a cheque for £10.” That is an example of the psychological reaction that is caused by biased publicity. It illustrates the danger of irresponsible criticism of credit restrictions such as we have heard to-night.
– How did he manage to have £30 in the bank?
– He was more thrifty than you are. The newspapers know the real value of advertising and its effect on the minds of the people. Newspaper proprietors continually see the value of advertising to their customers, but there must be truth in advertising for the customer to continue to prosper.
The Labour Party endeavoured to make a point from the statement of the Minister for Labour and National Service that it was difficult to maintain full employment. Any fool should know that it is difficult to maintain full employment. Most other countries have found it impossible to do so. This is the one Government that has been able to maintain full employment, in spite of all the difficulties with which it has been confronted. The maintenance of full employment is so difficult that the Labour Party would find it impossible; but we can, and will, continue to maintain full employment no matter how difficult it is.
Strangely enough, I have found myself in agreement with a small part of an otherwise particularly biased leading article in to-day’s “ Sydney Morning Herald “ in relation to a statement by the Treasurer. It was stated in the article that the Government could not claim full credit for Australia’s wonderful prosperity. As 1 have indicated, I agree with that statement, because the greatest part of the credit must go to our primary industries, which have provided the real wealth for our high standard of living. But this Government has provided the political climate in which those industries have been enabled to provide that wealth. The average Australian is inclined to regard prosperity as being the greatest amount of money he can obtain for the smallest amount of work he can do. The prosperity that is enjoyed by the average Australian is derived largely from the huge wealth that has been created by our primary industries. But rising costs and falling overseas prices can kill, and nearly have killed, the goose that is laying the golden egg. Whatever else the Government may do, never let us forget that our standards can be maintained only by our basic primary industries.
Every Australian must think in terms of the long-range advantages and not allow himself to be obsessed with the short-term disadvantages. This Government is not prepared to allow a repetition of the booms and depressions of the past. Our critics exhibit a remarkable capacity to allow the past to become a bygone and not a lesson to be learned. They allow the past to become a memory and not a piece of useful evidence.
.- Mr. Deputy Speaker, I realize that we are now in the final stages of this debate on the want-of-confidence motion proposed by the Leader of the Opposition (Mr. Calwell), the purpose of which is to ask the House and the people of Australia to examine the Government’s performance and to determine the validity of the case which the Government has tried to make with assurances of its own perfection and continued assertions that it has never made a mistake and that the present condition of the Australian economy is as good as it could possibly be. The Opposition’s purpose in this debate is to ask the people of Australia and members of the Parliament to apply their minds critically to those propositions.
For some years, many people throughout Australia thought that this country was prosperous. Unemployment seemed to be gone for ever. The worker could get overtime or a second job and the businessman could rely on untaxed capital appreciation to keep him well ahead of inflation. But now things seem different. Unemployment is spreading, about 73,000 workers are registered as unemployed, overtime is disappearing, the two-job man is much more rare than he used to be, and the rate of capital appreciation has slumped very considerably. Even this situation would not really worry a great many people if they expected the usual sort of inflationary recovery. But
I think it is significant that business men in particular all over Australia do not expect the usual sort of inflationary recovery.
Why are we in this situation? What has happened? I submit that these circumstances are the result only of Government decisions. Before February, 1960, the economy was subject to a creeping inflation the pressure of which was increasing by about 3 or 4 per cent. a year. The overseas balances position was fairly well in control. If the condition in which we find ourselves to-day is the alternative to that, there is no doubt which alternative should be chosen. But that situation of February, 1960, for some reason or other, was not good enough for this Government. The balance of payments had been running into a fantastic deficit. In the financial year 1957- 58, the deficit was £174,000,000; in 1958- 59, it was £207,000,000; and in 1959- 60, it was £243,000,000- an aggregate deficit of £624,000,000 in three years!
The Government had been able to make good that deficit in part - at least in its own planning, if it had any - by borrowing overseas. But by February, 1960, overseas borrowing had been failing. At first glance, the overseas borrowing record of this Government suggests that overseas investment in Australia up to that time had been highly significant. Between the financial year 1947-48 and 1958-59, £596,000.000 had been borrowed overseas. This appears to be a great contribution to Australia’s balance of payments. But that represents merely the inflow of capital. What was happening on the other side of the account, to which hardly any one pays any attention? Between 1947-48 and 1958-59, £394,000.000 had flowed out of Australia in dividends actually paid to overseas investors. This means that the net addition on the credit side of our balance-of-payments account was only £202,000,000. Furthermore, in the last three years prior to February, 1 960, a very significant situation had arisen. In 1956-57, our net gain from overseas borrowing was only £15,700,000. In 1957-58, it was £10,700,000, and in 1958-59, it was £5,000.000. Over the three-year period, our net gain from overseas borrowing fell to only £5.000,000, which was an almost insignificant figure in this context. I point out to those who claim that this record of overseas borrowing is significantly good that our net gain from overseas borrowing in this three-year period was less than that in the last three years of the Chifley Government’s term of office.
With this increasing deficit in the balance of payments, and a declining net gain from overseas borrowings, the balance of payments was in a vulnerable and dangerous position, but the Government decided in February, 1960, to remove import controls. Import regulation is the one thing which has preserved the Australian economy since 1943.
– It has maintained you and your Government in office. If it had not been for import controls, the Australian economy would not have maintained the level of employment that it has maintained, and this Government would not now be in office. Import controls have been your shield and protector. In a situation in which the deficit in our balance of payments was increasing, and overseas borrowing, which was the only plug that you had for the hole through which our balances were draining away so steadily as to leave us in deficit, was declining significantly, you removed import controls. Only time will show whether a serious crisis over our balance of payments can be avoided and whether the Menzies Government can survive. If it does not survive and a crisis is not avoided, that will be because you removed import controls in February, 1960. If you are defeated, you will have committed political suicide. If you continue to do what you are now doing, you will bring your own Government to an end.
– The honorable member is supposed to be addressing the Chair.
– Why was this fantastic decision to remove import controls made? I know that the two humorous Ministers who have interjected will not regard what I am saying as significant.
– The honorable member ought to know that he is supposed to address the Chair.
– The Minister is an unpleasant old gentleman. I repeat: Why was this fantastic decision made? I think that international factors were involved. There was some undertaking about the General Agreement on Tariffs and Trade - something in the air, which was of no significance for Australia one way or the other. Then there are export seekers in commerce, and in the Department of Trade perhaps, who want to create an international atmosphere in which Australia will be regarded as releasing and freeing her trade. They hope that as a result she will be able to get her goods into certain other countries. But those countries will not buy our goods for reasons such as that. They will buy them because they need them. I can see no reason which is not purely doctrinaire for this fantastic decision in February, 1960, to remove import controls. The Government now says that there are other reasons. It says in 1961 that import controls are arbitrary and corrupt.
– Who changed the minds of the members of the Government?
– Who changed their minds about that? They now say that import controls are arbitrary and that nobody likes arbitrary controls. But credit restrictions are arbitrary. You have changed from one set of arbitrary controls to another. The difference is that the first set of controls was working and that the second is not. No one likes controls to be arbitrary, but they are. A country like Australia has to adopt arbitrary controls; let us stop living in a make-believe world. And what about the corruption that the Government now acknowledges? When we suggested from time to time that there was corruption in the field of import controls, the Minister for Trade (Mr. McEwen), with a great show of false indignation, denied those suggestions in this chamber. Now, of course, import controls have been removed - because there was corruption, the Government says. If there was corruption, why did you not deal with it in the proper way? Why did you not put somebody in court for once?
– I remind the honorable member that the Chair has nothing to do with import controls and the other matters about which he is speaking.
– I suggest, Mr. Deputy Speaker, that this debate has everything to do with those matters.
– On a point of order: 1 have noticed, Sir, as you have noticed, that the honorable member is persistently using the word “ you “ although he does not apply it to the Chair.
– I think that the honorable member for Yarra has mistakenly used the word “ you “ referring to the Government. I remind him that he should avoid doing so and that he should address the Chair.
– I am trying to make my statements precise, because otherwise the Ministers opposite do not understand them.
– The honorable member should remember to address the Chair.
– In the situation which I have mentioned the Government substituted for import controls an increase of 10 per cent, in the sales tax on motor vehicles. That increase applied for only 98 days, and it may be said to constitute the shortest-lived tax in the history of the Commonwealth. The Government substituted credit restrictions also, presumably because they were less arbitrary. The aim was to cut income and imports. You do it this way. By credit restrictions you ensure that business and industry have less money to invest. That causes unemployment, which cuts the income of the people who lose their jobs. These people do not have enough money to buy imported goods, and so imports are cut. You correct your balance of payments, but you do it at the expense of the 73,000 people who have been put out of work. You do it at the expense of the people who cannot get money with which to build houses. Under the Government’s policy, the impact is felt by a particular section of the community, but if controls were applied to imports the impact would be spread evenly over all the community.
The Government chose the course that it has adopted, and some fairly striking contradictions came to light. First, the Government said that the production of motor cars was too high, and an additional sales tax was imposed to cut production. But as soon as the tax began to take effect, the Government removed it. The Government’s aim was to cut the production of motor cars. As soon as production began to fall, the increased sales tax was lifted. In Victoria the number of new car registrations for the first month of this year fell by 40 per cent. Presumably the Government wanted that to happen. The brightest aspect for the Government was the fact that the number of ambulances and hearses registered in Victoria in January increased.
Another contradiction is seen when we look at the operation of the credit squeeze, which was designed to cut the rate of commercial building. The rate of commercial building was too high, the Government said, and the credit squeeze would be used to reduce the rate. But what happened? Commercial building is significantly financed from shares and from reserves, and so it continues. The Government said that it did not want to cut the rate of homebuilding, but the credit squeeze is cutting the rate of home-building because the building of homes is financed through the bank lending structure. So the Government is achieving exactly the opposite of its aim. The Victorian Minister for Housing has stated that the rate of home-building has fallen by 25 per cent, and is still falling, but there is no indication that the rate of commercial building is falling at all.
Let us look at another contradiction that is involved in the Government’s position. Let us deal with tax concessions designed to encourage exports. As the Deputy Leader of the Opposition (Mr. Whitlam) said when he spoke on this motion, when doctors fall out who is to decide? If by reducing the pay-roll tax in respect of companies engaged in export industries you succeed in exporting more iron, steel, timber and paper, what will happen? There will be less iron, steel, timber and paper in Australia, and in view of the demand for those things we will have to import them in order to fill the gap. This is shown clearly by the statistics. Comparing the last six months of 1959 with the same period of 1960, we find that the value of steel bars and rods imported into this country rose from £2,200,000 to £7,300,000. The relevant figures in relation to ferro-alloys are £1,100,000 and £2,200,000. For pipes the figures are £888,000 and £1,800,000. The value of tin plate imported rose from £1,700,000 to £4,000,000 in the relevant period and the value of other plate rose from £1,600,000 to £14,200,000. Structural steel worth £357,000 was imported during the first period in question compared with imports to the value of £2,800,000 during the second period. The value of the imports of all the materials to which I have referred increased from £7,800,000 to £32,000,000 in the relevant period. If by its tax concessions the Government succeeds in increasing exports from this country, we will be forced to import more goods. So how can the tax concessions benefit our balance of payments?
It is clear that the Government has failed and will continue to fail. The present situation exists, I submit, because of an absence of controls where they are needed and, in particular, because of an absence of controls upon imports, where they are essential. The Government has failed because its methods are contradictory in effect and cancel out each other. It has failed because some of its controls do not achieve the ends for which they were designed. The Government has failed, in effect, because it has relied on monetary policy and because it has relied on a tax and expenditure policy. It proposes to use at some time in the far distant future antitrust laws.
For some years the Australian Labour Party has said that a policy of this kind must inevitably fail. Recently distinguished economists in other parts of the world have supported Labour’s view. One such person is Professor J. K. Galbraith, who is the economic adviser to President Kennedy. In a book published only a few months ago, Professor Galbraith said -
The less reliance we place on monetary policy, the better off we will be.
Monetary policy is the keystone of this Government’s policy. Professor Galbraith continued -
Tax and expenditure policy will not of itself bring stable prices.
The Government has added a tax and expenditure policy to something that it should not rely upon. Professor Galbraith stated further -
There is no hope for an inflation remedy in the anti-trust laws, old or new.
Not only does the Australian Labour Party say that the Government’s policy of controls is impossible and will not succeed, but it has been joined now by probably the leading thinker in the field of orthodox economics - Professor J. K. Galbraith. We can, I submit, be satisfied that the Menzies Government has failed.
When the people are thinking of this matter at a time when a want of confidence motion is being debated, they need to look also to the Opposition. What would Labour do? That becomes a relevant question. I feel that Labour’s policy may be deduced from the circumstances in which we are placed. I feel that Labour will guarantee that fluctuations in the balance of payments will not be transferred into unemployment and low incomes in Australia. Labour will use selective import restrictions to ensure full employment and expansion and will ensure, by an effective system of selective import regulations, protection for Australian industry.
– That is socialism.
– If Government supporters can do nothing more than raise the cry of socialism, they must be bankrupt of ideas. Labour’s policy is fundamental to a healthy expanding economy. The Government’s stop and go policy, resulting in this fluctuating and vulnerable economy, is not socialistic. It is an utterly stupid policy, and is not good enough for the 1960’s. I feel that Labour will turn its attention to import replacements. It will not dabble in silly schemes of tax concessions designed to encourage exports - schemes that are unrealistic and will never work. Labour will concentrate on import replacements. In 1958-59 industries were allowed tax-free depreciation allowances amounting to £475,000,000. That amount represented 7.7 per cent, of the gross national product, and a few years earlier the figure had been only 3.8 per cent. That enormous and growing volume of allowances is allowed on some accounting basis. I submit that depreciation allowances must be geared to investment and that the kind of investment that we need to gear them to is investment that will replace imports. Our steel production capacity must be increased far beyond the level to which the Broken Hill Proprietary Company Limited is prepared to expand it. Chemical and engineering capacity must be expanded, and it will not be expanded if the Government allows depreciation allowances to accrue in the accounts of companies and be reflected in capital gains and appreciation as much as in investment.
I shall now refer to internal finance. Experience in all economies shows that money must flow evenly and that fluctuations are harmful. Money must flow to where it is needed to achieve national priorities. That has not been achieved in Australia. This problem has not been faced up to. It is no good for supporters of the Government to say that it cannot be faced up to. The future of Australia depends upon our facing up to this problem. For many years most people thought that those aims had been achieved by the 1945 Chifley banking legislation, but it is now clear that that legislation is not sufficient, because of the development of the so-called fringe institutions, which are now lending perhaps as much as 80 per cent, of the money that is lent in Australia. I believe that the Government has permitted those institutions to escape from control. Labour would bring them under control. Dr. Coombs, Governor of the Reserve Bank, says that the centra] bank has been made impotent because of this situation. I believe that when Labour comes to office it will subject those lending institutions to a fair, reasonable and satisfactory control. If they challenge our action in the High Court, saying that it is unconstitutional, we will go to the people and ask them to decide between us and those companies.
The Government appears to have just discovered the loose overdraft system. Overdrafts are given to people and they draw a certain proportion of them. We were told last year that the proportion was about 55 per cent. The Government, because of this looseness, did not know that £150,000,000 of credit would be put into the economy last year. The Treasurer (Mr. Harold Holt) came into the House and said in his Budget speech, “This is something, for which we did not plan “. Where did the money go? How long did it take him to find out? Overdraft policy must be regulated carefully. Labour would not use an interest-rate policy, forcing up on a ratchetlike system the cost of lending from the bottom to the top. We would regulate the fringe institutions and we would selectively regulate the trading banks.
The last point I wish to make, Mr. Speaker, is that inflation is disproportionate and distorted development or expansion. Dr. Coombs, Professor Galbraith and other people who are thinking objectively have recognized that under capitalism, in conditions of full employment, there is a section of the economy which can fix its own prices. The section which has the power to do that comprises the large and strong firms, as Professor Galbraith calls them. These large and strong firms can fix their own prices and there is no price competition in that section. The very essence of the system, the main reason for its existence, has disappeared; price competition has gone. These large and strong firms work on a cost-plus basis. That situation has to be dealt with. I believe that it can be dealt with, first, by changing the tax structure, by placing sales tax on the basis of selling expenses and not on manufacturing expenses. There is efficiency in the factory system. The reason for inflated prices is that the selling and advertising system is inflating the price structure. The tax system should be directed into that field in order to discourage that development.
Finally, Mr. Speaker, price competition can be given to such monopoly sectors only by public enterprise. Commonwealth Oil Refineries Limited must be restored so that oil can be bought at the best price in any part of the world and made available to Australian consumers. The Commonwealth Serum Laboratories must be freed from restrictions so that they can compete with the chemical monopolies. Australia needs a Commonwealth insurance corporation to compete with the private monopolies in the insurance business. We also need to extend the Australian National Line so that the Southern Cross can be carried on the oceans of the world.
Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.
Question put -
That the motion (vide page 90) be agreed to.
The House divided. (Mr. Speaker - Hon. John McLeay).
Majority . . . . 20
Question so resolved in the negative.
Motion (by Mr. Harold Holt) agreed to -
That so much of the Standing Orders be suspended as would prevent Government business being entered upon before the Address-in-Reply is adopted.
Motion (by Dr. Donald Cameron) agreed to -
That the House do now resolve itself into a committee to consider the Ways and Means for raising the Supply granted to Her Majesty.
.- I move- [Customs Tariff Amendment (No. 1).]
Cite as: Australia, House of Representatives, Debates, 16 March 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19610316_reps_23_hor30/>.