House of Representatives
27 April 1961

23rd Parliament · 3rd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m.. and read prayers.

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Mr. J. R. FRASER presented a petition from certain citizens of the Australian Capital Territory praying that the Government will take immediate action to defer the implementation of rental increases of government-owned dwellings in Canberra and conduct an inquiry into Canberra rentals at which evidence may be taken both from individuals and from community organizations.

Petition received.

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– I address a question to the Prime Minister. Is it a fact that the Australian Government has concluded negotiations with the New Zealand Government for the sale to New Zealand of Australia’s share in Tasman Empire Airways Limited, in order to facilitate the sale of that organization to Ansett-A.N.A.? Also, is it a fact that when this sale takes place to this private-enterprise company, at a bargain price, Ansett-A.N.A. will have a monopoly of the air traffic between Australia and New Zealand? Will the Prime Minister arrange for a full statement to be made on this matter, and on the position which arose at Easter-time this year, when Ansett-A.N.A. successfully defied the Department of Civil Aviation and introduced additional aircraft on its main traffic routes, to the disadvantage of TransAustralia Airlines?


– Order! I think the honorable member is introducing argument.

Prime Minister · KOOYONG, VICTORIA · LP

– As this matter does not happen to concern either of my departments, I will refer it to the appropriate Minister.

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– I direct a question to the Treasurer. Is it a fact, as was suggested by the Leader of the Opposition to the small handful of people who attended his rally in Brisbane, that money made available by the Commonwealth Government to finance the Mount Isa railway would have to be repaid by the Queensland Government, whereas the amount provided for the Snowy Mountains project would be in the nature of a payment, part of which was contributed by Queensland taxpayers, and would be an unrecoverable charge on Commonwealth funds? Is the suggestion contained in the Leader of the Opposition’s reported statement a further indication of his complete irresponsibility and appalling ignorance in financial matters?


– There can, of course, be no direct comparison between the Commonwealth’s Snowy Mountains project and the Queensland Government’s Mount Isa railway project. One is a Commonwealth project, the other a State project. They are both, however, thoroughly economic propositions, and it is certainly not correct, as a matter of substance, to say that the taxpayers’ money invested in the Snowy Mountains project is not recoverable. As is known, the charges to the electricity commissions of Victoria and New South Wales will be made on a basis which will cover the capital cost of the project and its maintenance. The Mount Isa project also will provide funds to enable the amortization of the expenditure. Indeed, it should prove a profitable investment for the Queensland Government and its railway system, as honorable .gentlemen who have studied this matter will know. T remind honorable members, particularly those who come from north Queensland, that the financial provision which the Commonwealth has made for the Mount Isa railway is in point of fact the largest provision that has been made by any Commonwealth government for a State project in the history of our federation. I hope that the Queensland people will appreciate that point and recognize that we are genuinely desirous of promoting this very valuable development that is occurring m their State.

Mr Calwell:

– I wish to make a personal explanation, Mr. Speaker.


– Does the honorable gentleman claim to have been misrepresented?

Mr Calwell:

– Yes. The matter referred to by the honorable member for Lilley needs some elucidation. The comparison 1 made was between this Government’s treatment of the request by the Queensland Government for financial assistance for the Mount Isa railway project and the favorable treatment it gave to Victoria and New South Wales in regard to standardization of rail gauges. I said, Sir, that the Commonwealth Government - now that the matter has been raised-


– Order! The honorable gentleman is tending to debate the subject, whereas he rose to make a personal explanation on the ground that he had been misrepresented.

Mr Calwell:

– I have been misrepresented. The honorable member for Lilley said that I had made comparisons between the expenditure on the Mount Isa railway and the expenditure incurred by Queensland taxpayers on the Snowy Mountains scheme. The comparison I made was between the miserable treatment of the Queensland Government by this Government and the favorable treatment given by it to South Australia, Victoria and New South Wales. There are other aspects of the matter-


– Order!

Mr Calwell:

– I suppose I shall have an opportunity to elaborate during the debate on the motion for the adjournment tonight. At least I am prepared to face up to the statements that I make. For the information of the honorable member for Lilley, I shall go back to Queensland this weekend and tell the story again.


– Order! The Leader of the Opposition is out of order.

Mr Menzies:

– You will not have as big an audience in Queensland as you have here to-day.

Mr Calwell:

– I have had a pretty good audience here to-day-


– Order! I remind the honorable member that it is question time.

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– My question, which is addressed to the Treasurer, also concerns the Postmaster-General. Is it a fact that because of the determination of the Government to run the Post Office on what it calls strictly commercial lines, the users of postal facilities are being charged an additional £15,000,000 to pay interest on capital expenditure, the bulk of which the Government has already raised from the community by way of taxation? In simple terms, does this mean that the community is being compelled to pay interest on revenue which the Government has already raised from it by way of taxes? If the Government is determined to run the Post Office on so-called business practice lines, does this mean that in future the Postal Department will pay to State and local government bodies taxes and municipal charges at the same rates as do other commercial bodies?


– I point out first to the honorable gentleman that the matter which he has raised is covered by an item on the notice-paper, arising from a statement made by my colleague, the PostmasterGeneral. That statement sets out very fully the reasons why this action has been found to be necessary. I think that any one who has given serious thought to the problem of determining an economical, effective and realistic rate for charges to be made by the Postmaster-General’s Department will agree that the correct action has been taken.

In addition to reading this report, the honorable gentleman might take the opportunity to study a letter which was published in the Melbourne “ Herald “ on, I think, Thursday or Friday of last week over the name of Sir Alexander Fitzgerald, who was the chairman of the committee which thoroughly examined this matter. I believe that his reputation stands high with honorable members on both sides of this Parliament. His judgment and knowledge in these matters probably are unmatched in the Commonwealth. I commend what he has said to the honorable gentleman’s careful study.

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– I ask the Minister for Health whether the campaign to prevent foot and mouth disease in the Australian Capital Territory would benefit from the co-operation of that ever-constant odontopedalogist, the Leader of the Opposition, whose frequent incorrect predictions illustrate the point of this question.

Mr Beazley:

– I rise to order, Mr. Speaker. A few minutes ago the honorable member for Lilley ended a question by asking whether it proved the complete irresponsibility of the Leader of the Opposition. When the Leader of the Opposition sought to defend himself, you ruled that he was out of order. If you intend to permit questions that contain imputations against honorable members, will you also permit those honorable members to defend themselves during question time?


– The position is quite clear. The purpose of question time is to enable honorable members to obtain information on matters of urgency. A form is available for the guidance of honorable members in the preparation and submission of questions. I would say that we have departed almost completely from the correct procedure this morning. That is unfortunate. I ask honorable members to submit their questions in the correct form. If the question that has been asked by the honorable member for Stirling contains any reflection on the Leader of the Opposition, it is out of order.

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Mr Clyde Cameron:

– I address my question to the Minister for Immigration. To what extent, if any. has the migrant intake from South Africa increased since the Sharpeville massacre? Is it true to say that when South Africa leaves the Commonwealth, Australia will be bound no longer, in its dealing with that country, by the understanding that exists between Commonwealth countries that poaching of population will not take place without the consent of the country concerned? Finally, does the Government propose to grant the proBritish population of South Africa the same kind of assistance to escape from South African republicanism and the consequences of apartheid as it granted to displaced persons and to Hungarians and others who migrated to Australia to escape from communism?

Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– Some weeks ago, in reply to a question by my friend, the honorable member for Ryan, about the rate of growth of South African migration, I c:t”.d certain figures which, I think, were illustrative of the increasing influx of South Africans into this country over the last three years. I tell the honorable member for Hind marsh, as I told the honorable member for Ryan, that for the calendar year 1960 Australia received 1,390 migrants from South Africa, as compared with 579 in the previous year and only 379 in 1958.

The honorable member’s question as to the future raises a substantial matter of policy. I have made it plain from time to time that Australia will always give a very warm welcome to people from South Africa who desire to settle here. I refer particularly to those of British and European descent.

At the same time, I remind the honorable gentleman - as he probably is well aware - that already, and for quite a long period, Australia has been offering really quite generous migrant assistance to people from South Africa. The present rate amounts to something like half their fare. In saying that, Sir, I am using a very round figure.

If my honorable friend from Hindmarsh is suggesting that at this stage, with so many important matters affecting South Africa’s relations with other Commonwealth countries still to be determined, we should go beyond that, I suggest to him that he should proceed very cautiously until the general future of South Africa, and her relations with other Commonwealth countries, and indeed the countries of the Western world, are more clearly determined. If, for example, Australia decided to denounce immediately the gentleman’s agreement of non-poaching to which my honorable friend has referred, then we might well be faced with the situation that we would deliberately abstract into this country many of the people of the moderating forces which one hopes would care to remain in South Africa and, as a result of their own continued residence there, bring about - as all honorable members in this House, I hope, would want to see realized - a more moderate and more enlightened policy in that country.

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– I direct a question to the Minister for Trade. In view of the undertaking given by the United Kingdom Government that it would not join the European Economic Union without prior consultation with the Australian Government, will the Minister give consideration to the interests of our Asian neighbours whose developing economies, like our own. depend largely on profitable prices for bulk primary products?

Minister for Trade · MURRAY, VICTORIA · CP

– The issue as to whether the United Kingdom joins the European Common Market is, of course, one primarily for decision by the United Kingdom; but we nave clear understandings, recently fortified by arrangements which the Prime Minister made in the United Kingdom, that there shall be the closest consultation between the United Kingdom and Australia. Indeed, within two or three weeks, there is to be an important conference of senior Commonwealth officials in the United Kingdom on this matter.

As to the latter part of the honorable member’s question, on every occasion when the opportunity is presented, an Australian spokesman develops the argument that it is in the interests not only of Australia but of all other countries that depend substantially on the export of bulk products, that there should be stable world prices for those products. We argue powerfully on the part of the under-developed countries of South-East Asia, Africa and South America that policies designed to secure stable and profitable prices for bulk products would represent one of the greatest contributions that could be made to world political stability. That is the policy of this Government, and we lose no opportunity to press it.

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– My question to the Treasurer is supplementary to that asked by the honorable member for Lilley. I ask the right honorable gentleman: Why is the Commonwealth Government lending only two-thirds of the sum needed to re-build the Mount Isa railway line and requiring the whole of the loan to be repaid in twenty years, whereas the Commonwealth Government has granted the full amount needed - about £17,000,000- to build a new line from Albury to Melbourne and to broaden the South Australian lines, and requires the States concerned to repay only three-tenths of the loans over a period of 50 years?


– I would have thought that the honorable gentleman was rather better informed about the nature of the negotiations which have gone on over the years between the Commonwealth and the State governments on the subject of railway standardization. Rail standardization, which is a railway programme linking up the Commonwealth as a whole, and what is being done in respect of a particular railway link in one State for a particular commercial undertaking, are very different matters. But the substance of the reply to the honorable gentleman is this: As he knows, the Government of Queensland, with Commonwealth assistance, sought to raise from the World Bank an amount approximating - I believe equal to - that mentioned as coming from the Commonwealth. The Commonwealth Government gave such aid as it could to the Government of Queensland in the application. Because, in the view of the company concerned primarily, the conditions prescribed by the World Bank were not acceptable to it, those negotiations broke down. The Commonwealth Government, recognizing very clearly the importance of this project to Queensland, and indeed to the Australian economy as a whole, took the action which has resulted in its expressed willingness to advance up to £20,000,000 for the purposes of this railway reconstruction. In effect, it put itself in the place that the World Bank would have occupied in this matter but, if anything, on somewhat more favorable terms for the Government of Queensland.

Mr Calwell:

– Could you not have done better than that?


– We have done a great deal better - I very nearly said “ a damn sight better “ - than the honorable gentleman and his colleagues were ever able to do for Queensland, and we intend to give continuing practical evidence of our interest in the development of the north of Australia in the years ahead.

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– I direct a question to the Postmaster-General relating to the use of television for debates upon matters of public importance, particularly the referendum in New South Wales on the question of the abolition of the Legislative Council. Is it desirable that there should be debates between the leaders of the two sides so that their arguments on the merits of their cases may be put before the electors? Is it a fact that on at least one commercial television station the advocates of the case for “ No “ came forward for debate and the advocates of the case for “ Yes “ refused to meet them?

Mr Bryant:

– I rise to order. The PostmasterGeneral is not answerable in respect of the referendum in New South Wales. Therefore, I submit that the honorable member’s question is out of order.


– The honorable member for Mackellar is in order. The only way in which he is out of order, if at all, is in taking too long to ask his question.


– Thank you, Mr. Speaker. Can the Postmaster-General tell the House whether any effort has been made by the national stations in Sydney to arrange a debate between the leaders of the “ Yes “ and “ No “ campaigns? If so, what has been the result?

Postmaster-General · DAWSON, QUEENSLAND · CP

– At the beginning of of his question, the honorable member asked whether I would consider it desirable that debates on such an important matter as the referendum in New South Wales should be assisted by the broadcasting and television services. I say quite emphatically, “ Yes, I think it is very desirable”. I will not comment on what the commercial stations might have done in this matter, but it so happens that I do know that, because of the desirability of debating this matter, the Australian Broadcasting Commission in Sydney did offer to the leaders of the Government and the Opposition these opportunities for a debate on the subject. I know that, following upon that offer, the Leader of the Opposition, Mr. Askin, was prepared to take part in the debate, but the leader of the Government, Mr. Heffron, was not so prepared. Therefore, the debate did not tak” place.

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– Is the Prime Minister to make a national television appearance on Sunday next? Is he being interviewed by a panel of three journalists? Did he call for the names of the members of the panel and eliminate the name of Mr. Denis Warner? Did his veto succeed, and was another journalist placed on the panel?

Why did the Prime Minister demand the right to select his own interviewers for this nation-wide television hook-up? In his cricketing terms, did he want a good, tough test, or did he want under-arms to pat down the wicket?


– Thank you. I acknowledge the brilliance of the question. It is quite true that I was asked to go on a joint television hook-up which it was suggested could be arranged between one commercial station in Sydney and the national station. I was told who the interviewers were to be. I did not make an inquiry; I was told who they were to be. I said that they were quite acceptable to me and I was willing to go before this panel.

Mr Ward:

– What about the questions? Were they acceptable?


– 1 have not seen them.

Mr Ward:

– I heard that you selected them.


– When the day comes that I am not able to deal with impromptu questions either in this place or on a television panel, I will resign. That is a childish idea. When the agreement had been arrived at, I was told that the representative of the Melbourne “Herald” station was not to be the one who had been nominated. Now, Sir, I have my own views about the people who appear to put questions, so it is said, to people on the Melbourne “ Herald “ station, because I have been there two or three times.

Mr Calwell:

– 1 have been there even more often.


– I know you have. Quite frankly, I see no occasion for a man occupying the office that I occupy to appear before a panel, the principal object of at least two members of which is to be grossly offensive and insulting.

Mr Haylen:

– You cannot take it.


– I do not mind being insulted in this place, because I realize that this is the characteristic method of certain honorable members, and I cannot put them out; but when I go before a television panel, I go before it as a volunteer and I am going to make my own judgments.

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– Is the Treasurer in a position to say what effect if any, the Government’s recent financial policy, has had on our overseas balances? If the position is a favourable one, does this mean that the Government’s credit policy is proving to be the correct measure and not detrimental, as claimed by some gloomy people?


– Undoubtedly, the action taken by the Commonwealth Government has had a direct effect in steadying a decline in our overseas reserves and, over recent months, in contributing to an improvement in the total reserves at the end of the March quarter in comparison with the figure at the end of the December quarter. The figures over more recent weeks have shown a continuation of that trend. Such evidence as is available to me suggests that the level of imports should be appreciably lower in the months immediately ahead. At the end of question time I shall, if the House gives me leave to do so, make a full statement regarding further action that the Government has taken to fortify the position of these reserves, principally as a precautionary measure and to enable the Government to go steadily forward with its current policies.

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– I direct to the Prime Minister a question bearing upon the statement made this morning by the Treasurer concerning the standardization of railway gauges, and a statement made by the Prime Minister before he left to attend the Commonwealth Prime Ministers’ Conference. Can the Prime Minister say whether any final determination has yet been reached, on the Commonwealth Government level, on the question of financing the standardization to 4 ft. 8i ins. of the railway gauge between Kalgoorlie and Kwinana? Is the Prime Minister aware of the tremendous national saving that will accrue in the proposed train loading which will exceed 3.000 tons on the new railway system? Is he aware of the urgent necessity for the early construction of this line for the purpose of tapping effectively the export wealth of Western Australia? In view of what has been said this morning, can the Prime Minister say whether the construction of the Western Australian railway will be financed on the same basis as that on which the standardization of the Sydney to Melbourne line is being financed or whether Western Australia will be treated similarly to the manner in which Queensland is being treated with respect to its railway project?


– Each of these matters is under discussion. I am not in a position to announce any decision.

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– Yesterday, the honorable member for Eden-Monaro asked the Acting Attorney-General whether the Australian Broadcasting Commission and the Australian National University could be designated Commonwealth authorities coming within the scope of the Crimes Act. Is the Minister now in a position to give a complete answer to the House regarding the Australian National University?

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

– Yesterday, I gave an answer to the House relating to the Australian Broadcasting Commission. The position so far as the Australian National University is concerned is this: The Australian National University has been a public authority for the purposes of the Crimes Act ever since 1946, when the Australian National University was first incorporated. There has been no change in this part of the law as it affects the university. The second part of the question that was asked by the honorable member for Eden-Monaro yesterday was whether the Attorney-General’s Department had conveyed its opinion on the Crimes Act to the university itself, particularly with regard to any restrictions on the right of discussion. No, Sir, it has not. According to the information made available to me the Australian National University has not asked for any such information. In the third part of his question, the honorable member for Eden-Monaro asked whether there had been any change in section 70 of the Crimes Act as to the right of discussion within the university. Again I answer, “ No, Sir “. The legislation amending the Crimes Act did not in any way alter the right of members of the National University to engage in free discussion. The only limitation on their power of discussion or the dissemination of information is with respect to official information which comes into their hands or into their minds, in respect of which they are under an obligation to maintain secrecy or not to disclose.

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– I ask the Treasurer: On how many occasions has Mr. Korman, of the Stanhill group of companies, interviewed him in the last six months? Was it the purpose of Mr. Korman’s visits to place the details of the financial difficulties being encountered by the Stanhill group of companies before the Treasurer and to ask him for direct governmental assistance or, alternatively, to seek his intercession to obtain aid from one of the banks in the Commonwealth group? If so, what assistance or advice did the Treasurer give to Mr. Korman? Has any other representative or person acting on behalf of the Stanhill group of companies, interviewed or approached the Treasurer or treasury officials on the same matter? If so, what are the details?


– The answer to the first part of the honorable gentleman’s question is, “ None “. The remaining parts of the question, therefore, fall to the ground.

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– I ask the Minister for Trade whether it is a fact that the leader of the goodwill and trade mission from Japan which recently visited Australia is giving consideration to the development of iron ore deposits in Western Australia. Would such a venture be financed by Australian and Japanese capital or by American and Japanese capital? Has this mission found any other developmental possibilities in Australia?


– I understand that Mr. Nagano, the leader of the recent Japanese trade and goodwill mission, was acting on behalf of certain Japanese steel companies interested in the possible importation of iron ore from Australia. I have no information as to the details of what may be contemplated in that regard. It would be a matter to be decided, so far as Commonwealth policy is concerned, by my colleague the Minister for National Development and, so far as State mining laws are concerned, by the Government of Western Australia.

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– Is the Postmaster-General aware of the poor condition of telephone junction cable lines in the metropolitan area of Sydney? Also, is he aware that, due to the condition of these lines, frequent crossed-line connexions occur and disrupt services? Can the Minister inform me whether, when a subscriber dials into a crossed-line, the call is metered against him? If this is so, hundreds of thousands of calls would be wrongly debited.


– In reply to the latter portion of the honorable member’s question I say immediately that certainly it is not a fact that hundreds of thousands of calls are wrongly debited. Very occasionally a request is made for investigation of an account. That is done, and very occasionally it is found that a mistake has occurred. That is natural in view of the number of calls handled by the service. To use a rare occasion like that on which to base a statement that hundreds of thousands of calls are wrongly debited is an extravagance I cannot allow to pass uncontradicted. The honorable member referred also to certain mechanical faults that develop in junctions. I think he knows very well that we have a very competent body of engineers and technicians who are constantly testing lines to ensure good service. Therefore, while some faults do occur, particularly in times of bad weather, those faults are quickly remedied, and that work is continuing all the time.

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– My question is directed to the Minister for Primary Industry. Is essential beef research being held up because of lack of agreement in the industry as to who should pay the levy, and because of a subsequent court case? Is it not possible to amend the act to meet the wishes of all concerned in the beef industry, and so get this urgent research into operation?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– A hold-up has occurred in the application of the act. As the honorable member knows, a High Court writ was issued, and the matter is being discussed. Cattle producers will be holding a conference next week to deal with certain features of it. The Government is watching the position.

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– I desire to ask the Minister for Labour and National Service a question. In view of numerous protests from the Victorian Chamber of Manufactures and the textile industry of Victoria about the effects of the credit squeeze and about rising unemployment in the textile industry, can the Minister advise the Parliament of any protests that have been received from New South Wales manufacturers on the same subjects?


– I personally have received no protests from New South Wales Chamber of Manufactures on those subjects.

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– My question is directed to the Prime Minister. In view of the increasing annual demand for fresh water for all purposes in Australia, and in view of the interest of honorable members, and of the public generally, in the practical decentralization of industry, will the Prime Minister arrange, in co-operation with the States, to have a series of maps prepared showing Australia’s resources of surface water, the potential for economic - and I stress the word “economic “ - storage, and the probable future requirements of Australia of fresh water for industrial, agricultural and other uses?


– The honorable member probably knows that the Department of National Development publishes atlases of natural resources which, I think, have so far covered rainfall, drainage, underground water supplies and the conservation of surface water. This type of publication may lend itself to the further purposes suggested by the honorable member. I will be very glad to take up the matter with my colleague, the Minister for National Development, to ascertain whether it is possible to continue the series along those lines.

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– I direct my question to the Treasurer. Is he aware that the report submitted more than eight months ago by the committee appointed to consider the matter of decimal currency recommended a change-over to decimal currency by February, 1963? Did the committee report that the longer the change-over was delayed the greater would be the cost? In view of the findings of the committee, will the Treasurer say whether the Government intends to introduce decimal currency, or is the report to be treated as the report of the Constitutional Review Committee was treated?


– I make no comment on the last part of the honorable gentleman’s question. My colleague, the Attorney-General, offered some views on that matter when the House discussed it a week or so ago. I can assure the honorable gentleman that the question of decimal currency and the consequences that would flow if a policy decision to adopt this system in the foreseeable future were taken by the Government, have been very much in my mind and in the minds of officers of the Treasury, and already have received Cabinet consideration. The honorable member referred to the report of the committee which the Government constituted to examine certain aspects of the matter. I have already informed the House that the committee was not required to report upon other quite important aspects, which have a bearing upon the timetable should a decision to introduce decimal currency be taken. One of these aspects is the provision of a new mint to cope with the new coins that would have to be minted. Experience in South Africa would suggest that after a mint has been constructed and the equipment installed, a considerable build-up of stocks of coins is desirable before the change-over is made, if there is not to be some confusion and commercial dislocation. So these problems, which involve questions of construction, of f actory production and of the coinage, have also to be brought into the picture.

Work has been done on these problems since the first Cabinet consideration, and I have a further draft submission for Cabinet before me at the present time. We have not been idle in other directions, either. As I told the House some time ago, we have sent observers to South Africa to watch the transition there from the former currency to decimal currency, and we have the benefit of that information available to us. There will be no delay beyond what the Government regards as unavoidable, but we have many important matters before us - matters which, in the judgment of the Government, are of higher priority at present than that to which the honorable member has referred.

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– I ask the Minister for Trade whether he has made or intends to make, now that the new United States Administration has settled into office, a further assault on the obstacle created to the consumption of wool in the United States by that country’s wool tariff.


– I do not know whether “ assault “ is the right word to use, but, as I have indicated previously, the current financial year is one of the occasions when there is an opportunity for further tariff negotiations under the terms of the General Agreement on Tariffs and Trade. This occasion gives each country that is a party to the agreement an opportunity to initiate negotiations with other countries that are parties to the agreement. We have taken advantage of that opportunity, and it mav be said that within the terms of the agreement we are at present engaging in negotiations on this matter with the United States Administration.



– by leave- I wish to make a statement concerning the accuracy of the “ Hansard “ report of the answer to a question that I asked in the House yesterday. This is a very important matter. Yesterday, I asked the Minister for Primary Industry (Mr. Adermann) a question about a report prepared by Personnel Administration Proprietary Limited for the Australian Wool Bureau. The Minister replied that as the report was in the nature of a confidential document, and as knowledge of its contents might be of advantage to competitors of wool, it was not likely that the report would be made available. I notice that in “ Hansard “ the Minister’s reply is not reported fully. I have not interviewed the “ Hansard “ department about this matter yet. I did not think it desirable or fair that 1 should do so. The Minister’s statement that it might not be desirable for the contents of the report prepared by Personnel Administration Proprietary Limited to come to the knowledge of competitors of wool is an important part of the answer, for if the report is not made available because it may be disadvantageous to the wool industry I shall have no opportunity to assess whether the report is in fact dangerous to the wool industry. I suggest that you, Sir, should inquire whether the Minister was justified in deleting the latter part of his answer, as it appears he did, although I am not certain.


– Are there any ministerial statements?

Mr Pollard:

– What will be done about this matter? It is an important matter and I ask you, Mr. Speaker, to inquire into it.


– Very well.

Mr J R Fraser:

– I rise to order. May I ask what is the position when doubt is cast on the accuracy of a report as finally appearing in “ Hansard “? Does the House, through you, Sir, have the power to call for the proof of the speech as originally presented to the member making it?


– Order! The usual procedure is that any doubt or query in relation to the “ Hansard “ report is discussed with the “ Hansard “ department and if necessary with the presiding officers. It is unusual for a subject of this kind to be brought before the House for a decision. The matter raised by the honorable member for Lalor will receive attention.

page 1193


Treasurer · Higgins · LP

– by leave - The Government has arranged a drawing from the International Monetary Fund of foreign currencies to the value of 175.000,000 United States dollars £A78, 125,000- and a stand-by credit of a further 100,000,000 dollars£A45,000,000which will remain in operation for one year. The actual drawing of £A78,125,000 worth of foreign currencies will result in the immediate addition of that sum to our international reserves. The stand-by credit can be drawn upon progressively and, if necessary, the full amount can be drawn over the next six months.

In effect these transactions represent a precautionary transfer from our secondline overseas reserves to our front-line reserves of international currency. They have been arranged not because of any real anxiety on the part of the Government that our reserves will prove to be insufficient. On the contrary, they have recently shown some tendency to increase and the Government is confident that its policies will continue to restore a state of balance in our international dealings. Honorable members opposite are interjecting and I can well understand their discomfort. They found-


– This is a statement by leave.


– If honorable members opposite propose to heckle me while I am making a statement by leave I assure them that they will get as good as they give.


– Order! I ask the House to come to order. The Treasurer has leave to make a statement. At any time interjections are out of order but more particularly so under circumstances such as these.


– I repeat that these drawings have not been made because of any current anxiety on the part of the Government. Indeed, as I have already shown, our overseas reserves are standing at a higher figure now than they were at the end of the December quarter and the information available to the Government suggests that the level of imports will fall during the months ahead. We are confident that our policies will continue to restore a state of balance in our international dealings. However, the normal seasonal trend of onoverseas business will produce extra calls on our reserves during the slacker ps”-t ~r the export season and we think it only prudent to put quite beyond doubt the strength and liquidity of our overseas resources in the period ahead.

At the end of March last our total holdin as of fold and foreign exchange stood at £A388,000,000. These will now be aug mented by the drawing of £A78,125,000 and can at will be further augmented over the next six months by drawing on the stand-by credit of £A45,000,000. Beyond that again we have untouched drawing rights with the International Monetary Fund under which we could apply for further credits to the extent of approximately £A88,000000.

I add by way of information for honorable gentlemen that in order that the Parliament and the public could have a clearer picture of the movements of our total reserves periodically, the Treasury some time ago raised with the Reserve Bank of Australia the question of publishing monthly the total of those reserves - the weekly figures are the reserves of the Reserve Bank itself. The Reserve Bank Board has decided that in future it will publish monthly figures of our total reserves. That information will add usefully to our understanding of trends as they are occurring in the reserves position.

Mr Crean:

– T move -

That the statement be printed.

I ask for leave to continue my remarks later.


– Order! The honorable member is not in order in moving that the statement be printed.

Mr Harold Holt:

– I understood that the honorable member moved for the printing of the statement and sought leave to continue his remarks later.


– Order! The honorable member was not in order in seeking to do that. A motion of that kind may come only from the Treasurer in these circumstances.

Mr Harold Holt:

– That has not been the practice in the past. There is ample precedent for a motion that a paper be printed being proposed by a member of the Opposition.


– Order! The position is quite clear. If a statement is made to the House the only person entitled to move that the paper be printed is the person who has made the statement. If somebody else wishes to propose that motion, it is necessary for him to obtain leave to do so.

Mr E James Harrison:

– I ask for leave to propose a motion.

Mr Calwell:

– No, make the Treasurer propose it.


– Order!

page 1195



– In a statement that I made a few minutes ago, I passed some remarks that could mean either some negligence on the part of “ Hansard “ or, alternatively, some monkeying by the Minister for Primary Industry (Mr. Adermann) with the “Hansard” proofs. I find, on referring to “ Hansard “, that on both counts any inference of that sort would be quite wrong and I apologize if I conveyed such an impression unwittingly. What did happen was that the honorable member for Wannon (Mr. Malcolm Fraser) asked a question supplementary to the one I had asked and the answer that the Minister for Primary Industry gave to him did include all those matters which I thought might well have been included in the answer that he gave to me.

page 1195



– (Lowe - Minister for Labour and National Service). - On behalf of the Minister for External Affairs and on my own behalf, I lay on the table of the House the following paper: -

International Labour Conference - Forty-fourth session, Geneva, June, 1960 - Reports of the Australian Government, Employers’ and Workers’ Delegates.

In the interests of economy I do not propose to move that the paper be printed, but copies will be available to honorable members from the parliamentary officers. In accordance with the established practice, the House will be informed at a later date of the action taken or proposed to be taken in respect of the convention and the recommendations adopted ‘by this conference.

Mr Whitlam:

– I ask for leave to move that the paper be printed.


– Is leave granted? There being no objection, leave is granted.

Mr McMahon:

– Plenty of copies of the report have been made available. If the honorable member for Werriwa looks at the size of the report I think that, on reflection, he will agree that it is not desirable to have the document printed, particularly as I will make as many copies as he wants available to him.


– Order! The Deputy Leader of the Opposition has been granted leave to move that the paper be printed.


.- by leave - I move -

That the paper be printed.

I do so in order that the House will have an opportunity to debate this paper. I appreciate the point made by the Minister for Labour and National Service (Mr. McMahon) that it will be unnecessary to go to the expense of printing the paper when, in fact, it is printed and is readily available to honorable members. To save the expense involved I shall, when opportunity has been given to debate the matter, agree to the motion being defeated. In other words, I propose this motion formally to permit a debate on this conference. I do not wish to put the country to any expense by reduplicating this report. I ask for leave to continue my remarks at a later date.

Leave granted; debate adjourned.

page 1195


Suspension of Standing Orders

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

That so much of the Standing Orders be suspended as would prevent consideration of Notice of Motion No. 1, General Business, being continued until 12.45 p.m.

page 1195



New England

.- I move-

That this House notes with grave concern -

  1. The dangerous concentration of 55 per cent. of our population in the five mainland State capitals, namely, Sydney, Melbourne, Brisbane, Adelaide and Perth,
  2. The overwhelming concentration of key and other defence industries in Sydney, Melbourne, Newcastle and Port Kembla, and
  3. That more than one-third of the total population of Australia is centred in Sydney and Melbourne; and recommends to the Government as a matter of extreme urgency in the interests of balanced development and defence that -

    1. an expert committee be appointed to inquire into and report on the best means of securing effective decentralization of population, industry, communications and administration;
    2. the. committee consist of representatives of-
    1. Commonwealth and State govern ments,
    2. local governments, and semiautonomous bodies engaged in water conservation, irrigation, hydro and thermal electric power,
    3. transport authorities, including State railways, also road transport, sea and air,
    4. authorities controlling ports and rivers and public works, including main roads boards and housing commissions, and also financial and industrial experts;
    5. the expert committee make recommendations in regard to -
    6. those industries which should be decentralized;
    7. the concessions in taxing, rating, haulage, communications, housing, road and rail to nearest ports of access, financial assistance, provision of water, sewerage, power and light;
    8. the conditions under which assistance would be granted, including finance, the selection of areas remote from existing target areas; and
    9. the provision of education and medical facilities in new cities to be developed and, any matters appertaining to the above, or which in the opinion of the Committee will assist in giving effect to the programme, including decentralization of government and administration.

Mr. Speaker, having formally proposed the motion, I wish to proceed to indicate why, in my opinion, it is more than fully justified. The House will note that the motion refers to a dangerous concentration of 55 per cent of our population in the five capital cities on the mainland. It refers, also, to the overwhelming and dangerous concentration of key and other defence industries in Sydney, Melbourne, Newcastle and Port Kembla, and to the fact that more than onethird of the total population of Australia is at present concentrated in Sydney and Melbourne. In this uncertain, potentiallydestructive nuclear age I assert that these are facts of very grave concern to the nation and to its Government. Two questions - I fully appreciate - arise when I put forward these assertions. The first is: Is there an excessive concentration of our people in the five State capitals, and, if so. why is this concentration dangerous? According to the official records at 30th June. 1960. the total population of Australia was then 10,280,000, so that in the five State capitals 55 per cent, of the total population of an area of 3,000,000 square miles was actually concentrated in less than 3,000 square miles. The greatest concentration of population, which is’ in Sydney, is in an area of approximately 300 square miles. This concentration is dangerous.

I proceed now to another aspect of the matter. I refer to the forecast of the Commonwealth Immigration Planning Council made on 21st January, 1961’. In a very thoughtful paper prepared for the Australian Citizenship Convention, analysing population and immigration trends, the council suggested that in 1965 the population of mainland Australia would be more than 11,000,000 and, if present trends continued, no fewer than 6,212,000 of those people would be in the five capital cities. Any one with an atom of responsibility cannot but be aware of the grave significance of those figures and the danger, particularly in the present age, of pursuing policies which have brought about this terrific concentration relative to our total population. If those policies are continued, they will simply add to the evil in a very grave manner indeed. I have asserted, Sir, that this concentration is exceedingly dangerous to the nation. Apart from the increase of social evils it may be said from the defence stand-point that to continue along this line of concentration in an age of nuclear and atomic warfare is a form of racial suicide. National survival demands dispersion of population, government and industry as far as possible.

I wish to refer to a statement which was made by a man who is held in very high public esteem in Australia. At the Citizenship Convention to which I have referred, which was held in Canberra in January of this year, in a paper entitled “ Quo Vadis “ Major-General Sir Kingsley Norris stated -

Among the lessons from the last war were that, in order to meet any great challenge, it is necessary -

to develop our resources to the maximum, and

to preserve them by dispersion.

To the query, “ Is the present concentration of the population of Australia in the five capitals dangerous? “, that is also my reply in a nutshell. Thelast war was fought at the end with bombers, block-buster bombs. V-bombs and one atomic bombing. We will have failed to learn the lessons of that war if we do not think now in terms of nuclear bombs, the intercontinental ballistic missile, and probably worst of all the atomic or nuclear bomb fired by an atomic-powered submarine deep under cover from 50 or perhaps only 10 miles away. When one considers that our principal cities in which our industries and population are concentrated are virtually right on the shore, I suggest that that is a possibility which this nation, if it has any sense of responsibility, must take into immediate consideration.

I suggest to the House, Mr. Deputy Speaker, that there is an overwhelming case to support my contention that the present concentration of our population is dangerous. I recall to the minds of honorable members that during the last war a Japanese submarine surfaced a few miles off Sydney and plugged several small shells into Sydney. Fortunately, only one or two of them exploded and none did much damage. That was the pattern of things to come. If one considers the difference between the nuclear and atomic-powered submarines of to-day and the submarines of the last war, one need not use much imagination to realize the danger to our people, our industries and our very national existence presented by the present policy that we are pursuing as though these things could not happen in this world. Let me emphasize, Sir, that Hitler learned the idea of blitzkrieg entirely from the sweeping charge of our people across the desert when in a cavalry charge we overwhelmed the Turkish forces. He applied that principle to tanks and he practically swept the world before the democracies could recover. That was the pattern of things to come. If we think in terms of the last war and pursue this policy of laisser-faire, we will have only ourselves to blame.

I pass on to my next point which is our industrial concentration. In my resolution I have claimed that there is an overwhelming concentration of key and defence industries in the two major cities of Sydney and Melbourne, and Sydney’s allied or satellite cities of Newcastle and Wollongong are not far distant from it. Let me give the facts on this aspect of the matter. It is very difficult to arrive at a complete picture of the concentration of industries and em ployment because statistics which would give the complete picture of aeroplane construction and many other aspects of defence industries are notably absent. However, I believe that what I have been able to obtain from official records is sufficiently near the point I want to make to enable the House to assess whether my claim is extravagant and to enable the nation to assess whether there is danger in the present setup.

I considered two important groups of industry associated with defence and key industries, namely chemicals, explosives, &c, and industrial metals, machines, conveyances, &c. For brevity I will group New South Wales and Victoria together and compare them with the rest of the Australian mainland. When I took out these statistics a short time ago, there were 1,124 chemical factories, of which 897 were in Victoria and New South Wales and the balance of 227 in the rest of Australia. In the second group - industrial metal, machines, conveyances, &c. - there were 17,840 factories, of which 12,750 were iti New South Wales and Victoria and the balance of 5,090 in the rest of Australia. The number of employees gives a more complete picture. Australia had 41,324 employees in chemical factories. New South Wales and Victoria had 33,850 of those. In the industrial metals, machines, conveyances, &c. group, Australia had 422,124 employees, of whom 312,781 were in New South Wales and Victoria and the balance of 109,343 in the rest of Australia. The value of chemicals produced annually in Australia at that time was £98,100,000. The value of those produced in New South Wales and Victoria was £83,000,000, leaving a balance of £15,100,000 worth for the rest of Australia. The total value of industrial metals produced was £533,000,000, of which £403,000,000 worth was produced in New South Wales and Victoria, leaving £130,000,000 worth for the rest of Australia. I suggest that those figures speak for themselves. It would not be correct to say that all that production is located in the capital cities I have mentioned, but it is correct to say that it is overwhelmingly located in those centres. Is that the result of a policy of dispersion? Is that the policy which is to safeguard our national existence? If so, I ask this house and the Government to tell me where our second line of industrial defence is.

Let us consider the position in New South Wales. In that State, we have coal of high quality at Ashford, Gunnedah and Werris Creek. Coal and iron ore form the basis of all industry. Recently, iron ore of very high quality has been discovered very close to Grafton. Limestone, an allied requirement, is found, with bauxite, in very large quantities in northern New South Wales. Moreover, we have water in abundance available for conservation; at present, it is conserved only to a small degree. Other States have similar assets, yet we continue to permit a concentration of industry in our capital cities and apparently do nothing about it. I direct the attention of honorable members to this brief statement that was made by the National Security Board of the United States of America in 1954 -

The serious impact of vulnerability is brought out when we consider that 71 per cent, of our industrial workers are contained in 50 of our major metropolitan cities.

That, of course, refers to the United States. But, Sir, here in Australia nearly 60 per cent, of such workers are concentrated in five capital cities. If that is not a dangerous concentration of population and industry, I want to know what is. I submit, Mr. Deputy Speaker, that the trend in Australia is such that it warrants serious consideration by this House and urgent action by the Government.

I ask the House: Is the present situation a result of laisser-faire or is it the result of a deliberate policy? I believe it is mainly the result of a deliberate policy in every State on the part of those who control finance, commerce, industry and the press. If my conclusion is correct - I express it with no sense of bitterness but as a plain statement of fact; there is much evidence to support it - that suicidal policy can be reversed by the forces to which I have just referred working in co-operation with the Commonwealth Government. A reversal of policy would speed the decentralization of communications, government and administration by the creation of new centres of administration which, for convenient. T shall call new States. T do not want ?nv o”»e to rise and foolishly say. “ You cannot unroot your cities and move your industries holus-bolus to the country “. Of course we cannot. To do that would be beyond our capacity. But they may be uprooted for us willy-nilly. If, following an atomic attack, there were any of us left to carry on, we would have to do something about moving our activities inland.

I should now like to deal with the matter on a different basis. One of the leading experts and leading steel makers of America has pointed out that 3 per cent, of America’s plant and machinery becomes obsolescent every year. He has suggested that that obsolescent plant could be replaced by plant established on new sites and in new buildings and surroundings. Incidentally, such a transfer would give the workers a much healthier and safer situation in which to carry on their life work. One of the most horrifying features of what could happen under the impact of a nuclear attack on this country is that if five nuclear bombs, delivered from the air, the sea or anywhere else, landed on our major cities, all our centres of communication and administration would be completely wrecked. I believe that, quite apart from the fact that this country would be more healthy and better developed if there were more States, we would have additional centres of civil administration and police control. If a crisis occurred, even though it was not as great as that which I think is possible, in the absence of such centres of administration, communication and control we would have to depend upon martial law and martial government. I refer at this stage to a document that was issued by the civil defence authorities in New South Wales and which contains this statement from a very authoritative source in the United States -

The point is that one cannot, by pronouncing the words “martial law”, create a capability that does not exist, or that is at best very small. Army units might in some areas, where civil governments were either prostrate or destroyed, be able to govern, using the devices of martial law, or “martial rule”, as it is sometimes called. But to expect the Army to govern the country, or even to extend substantial aid in emergency operations, is totally unrealistic.

Having, I believe, established that there is a dangerous concentration of industry and population under the system that has developed since federation, and having indicated that it is essential to break through from that system, which has failed so miserably, and to establish as soon as possible new centres of government and administration, I pass on to what I suggest is the first step that should be taken. That step, as indicated in my motion, would be a gathering together of Commonwealth and State authorities and all whose knowledge is essential to bring about a dispersion of population and industry. It may be said that I have been too lavish in my suggestion. I am not concerned about that, Sir. I am not concerned about the establishment of a committee which would sit endlessly and go through the humbug of presenting facts and figures and then forget all about them. What I am concerned about is doing something that will achieve results. I believe that we cannot bring about an effective dispersion of population and industry unless we bring together the best brains in finance, government, development, transport, education, health and every other activity that would be associated with such a dispersion, either by establishing new cities or adding to existing cities. As the Commonwealth controls finance through the system of uniform taxation, it is for the Commonwealth to give a lead and for the local government authorities to assist by rating. The job of bringing forward practical means of promoting decentralization by providing adequate transport facilities is one for the States, and the harbour and river authorities must provide the best means of water transport. The education authorities must see how they can accommodate the transplanted or growing populations in new areas under a programme of decentralization.

For these reasons I am not wedded to the establishment of the committee in any particular form, with respect to either its composition or the manner in which it operates, whether through an executive assisted by sub-committees in all the States or by some other means. Those who comprise the committee must be people who realize the dangers in centralization and the need for decentralization. They must be people who are anxious to try to repair the damage that the mistakes of the past have done and to prevent similar mistakes from being made in the future.

I think that I look at my country in much the same way as every other Australian looks at it. I am sure that we all stand appalled when we project our minds into the future and see the possibilities that lie ahead if we allow Australia to remain only partially developed. We must realize that centralization is building super-targets in small areas at certain parts of the coast. In saying these things I do not discount the contribution that Tasmania can make in the cause of decentralization. That contribution can be very valuable, and I have said nothing about it only because it does not affect my case. I have not mentioned the really fine work that the Commonwealth Government is doing on the Snowy Mountains scheme and various other projects. One would be foolish to scout those things, but they do not go to the heart of the problem,.

The real problem is this concentration of population and industry in a few places. Why has it occurred? I say that it is the result of a deliberate policy implemented by people who are powerful enough in every way to impress their views on Australia. I plead with those people to reverse the direction in which their power is applied and to recognize the danger to themselves, to the people generally and to Australia as a whole if the present process of centralisation continues. I urge them to bring their great influence behind a move for the real decentralization of the forces and resources which can do for Australia the job that is needed.

Let me indicate in just a very few words some of the dangers of the present position by reference to the concentration of defence industry in the industrial area of Maribyrnong, which, I believe, is only four or five miles from the heart of Melbourne. What a lovely bang there would be, if one may express the idea in such terms, should a modern missile be directed at Melbourne! What devastating effects there would be on the population of that city! Recently representatives of 600 or 700 manufacturers in country areas of Victoria approached the Premier of that State and said: “This ever-growing concentration of people is the result of deliberate policy. We ask that that policy be reversed in order to give industries and towns in country areas a chance to expand “. I say the same sort of thing for New South Wales, my own State. I plead with this Government and the House not to allow to pass this opportunity to act. My motion is not proposed for party or personal ends, lt is proposed because 1 am seised, as I am seised of nothing else, of the belief that unless we in Australia move - and move quickly - there will come a day of reckoning from which we cannot escape.


.- Mr. Deputy Speaker, I second the motion and have much pleasure in supporting the remarks made by my colleague, the honorable member for New England (Mr. Drummond). Decentralization is something which we in Australia must consider very seriously at this time. The problem is one which concerns not only the future of the country but also, I believe, the place that this country will take and the part that it will play in world affairs in the years to come.

On a number of occasions I have said in this House that Australia has a problem that is particular and peculiar to this country because we have a very large area and a very small population. There is no other country in the world that is confronted with this problem in the same way as is Australia. This problem has become, even more complex because of the concentration of our population in limited and restricted areas. This concentration has become so marked that we in New South Wales frequently mv that the letters “N.S.W.” in the common abbreviated form of the name of that State stand for Newcastle, Sydney and Wollongong. I think that, in view of the potential of the other parts of the State, this is one of the tragedies of New South Wales. Centralization of population and, industry in Sydney, the capital city, is having a detrimental effect on the State as a whole.

The density of population in Sydney and the difficulty of establishing new enterprises there have forced certain industries to po to Queensland, Victoria and South Australia, and from the standpoint of the- country generally this is perhaps of advantage tn Australia as a whole if it happens only for a period. But I believe that this situation will continue unless something is done about the present centralization ii New South Wales, and that- State will thereforesuffer.

The honorable member for New England said that the centralization that we see has resulted from a deliberate policy brought about by certain interests and certain pressures. This is one of the unfortunate features of the situation, Sir. Naturally, if there is a large number of people in one area governments take certain action with respect to that area solely because of the large numbers there, and the relatively few people elsewhere are not given the same attention simply because they are fewer in number. We need to move large numbers of our people from the areas where they are concentrated and disperse them elsewhere if we are to overcome this tendency.

I speak particularly about my own electorate, because, naturally, I know it closely. But I believe that the things that I have to say about my own constituency may be said with equal force about other parts of Australia. For the moment we perhaps face difficulties in the timber industry, and these difficulties are accentuated because timber has to be hauled long distances over our railways and our roads with the result that the cost of production and therefore the cost to the user of the timber is increased.

I refer also to the development of Port Stephens - a matter that I have mentioned previously in this House. My colleague, the honorable member for New England, said that certain interests have been able to apply pressure in order to have attention given to the areas that are important to them, and that sort of thing- has had its effect on Port Stephens. We have there a harbour second to none, in the world but, tragically for Australia, it has cot been used. When the construction of the oil refinery which- has been, built, at Kurnell was first talked about I suggested - this is a matter that has nothing to do with the Commonwealth Government - that, the refinery be established at. Port Stephens. Had’ it been built there New South Wales would have gained one of the greatest advantages that could have accrued to that State. Evenif the State Government had incurred an expenditure of £2,000,000 over the establishment of the refinery at Port Stephens the location of this establishment there would have been of value to the entire State im particular, and to Australia as a whole, because the Port Stephens area would have been provided with roads, railways, electricity supplies, telephone services and all the other facilities needed in an area where an oil refinery is constructed. This development would then have tended to attract other industries, and overseas firms interested in establishing themselves in Australia might have looked favorably on the Port Stephens district as a suitable district in which to commence operations with small financial outlay. At the present time the cost of establishment of industries in the area is prohibitive.

Development of the Port Stephens area would have been of value to the country, not only from the point of view of the establishment of particular industries in the district, but also because it would have assisted in opening up a good deal of undeveloped country around the Hastings, Manning and Macleay rivers, besides further developing areas already in production. The primary products of that part of the country would be extremely valuable, not only from the point of view of the local market, but also because they could help to increase our export earnings. They could be brought to Port Stephens and shipped from there, instead of having to he transported to Sydney or Newcastle. Costs of production would then be reduced because of decreased transport costs.

In many of the larger towns in my electorate strenuous efforts have been made to establish secondary industries. I give credit to the local authorities that have been endeavouring to do something along these lines. But one of the greatest problems confronting them is that of transportation costs. If you establish an industry in one of these country areas, you are faced with the problem of meeting high charges for the. transport of raw material for use in the industry, and the subsequent difficulty of transporting the finished product to the capital cities. If Australians population were spread more evenly throughout the country, local consumption in country areas would increase, and the transportation costs that now militate against decentralization of industry would be reduced.

Let me tell honorable members about a town in my electorate called Smithtown. Many years apo this town enjoyed port facilities and a. regular shipping service. As a. result of the retardation of development in the district, there is now practically no shipping service whatsoever. This is an example of what has been happening generally in similar country areas, and I contend that the problem is one that should concern not only this Government but also all other governments and all the people of Australia.

The honorable member for New England spoke of the. discovery of iron ore in the Grafton area. I believe that the potential of such country districts is unlimited. We frequently speak about the financial problems confronting the country and the need to build up our export trade. If we are to solve our economic problems and increase our export earnings I believe we must first concentrate on decentralization and the development of country areas. After all, these areas are responsible for the products that bring 80 per cent, of our export earnings, and they are, therefore, vital to the financial and economic stability of Australia. This is a matter that we have tended to lose sight of, and to which I have directed attention in this House on many occasions. By following a policy of decentralization I believe we can make a valuable contribution to the development of country districts. This will be of great benefit not only in our domestic economy but also in overcoming our balance of payments problem.

I pay a tribute to the officers, of the Commonwealth Scientific and Industrial Research Organization for the research work they have done and the help they have given to primary producers. But again we find that their work has had limited effectiveness because our population has been concentrated largely in metropolitan areas. If there were more people in country areas greater advantage could be taken of the assistance offered by this organization and rural progress and development would then be greatly enhanced.

In the metropolitan area, of Sydney one sees every day the problems raised by trafficcongestion and the way in which this is. adding to our production costs. These costs, are increased, because of the constant delays; in transporting goods, from one part of the metropolitan area, to another, and also because of the additional fuel, consumed by the vehicles that transport these goods. Decentralization would provide a means of reducing these casts to a considerable degree.

Even in our political scene I believe there is a need for decentralization. New States should be established, so that greater effort could be concentrated on the development of country areas. In this Commonwealth Parliament I suggest there should be a greater proportion of members representing country electorates. At the present time the boundaries of an electorate are defined having regard only to the number of electors within those boundaries. In many cases it is obvious that this approach to the matter is ridiculous. One striking example of this is to be found in the very electorate that you represent, Mr. Deputy Speaker - the electorate of Darling. The member representing an electorate of that kind experiences great difficulty in covering long distances to see the various electors. In this way his difficulties are greater than those of other honorable members, who have many more electors but in a concentrated area. For this reason I believe that the percentage allowed on either side of the quota should be increased, in order to achieve a better balanced representation of country areas.

T second the motion of the honorable member for New England. I hope that the people will heed the honorable member’s very wise remarks, and that action will he taken along the lines that he has suggested, so that we may achieve something about which a good deal has been spoken for many years past, but about which, unfortunately, very little has been done.


.- Tt is with pleasure that I rise on behalf of the Opposition, and on behalf of country communities generally, to support, in principle, the motion proposed by the honorable member for New England (Mr. Drummond). The Labour Party has long been aware of the great need for a policy of decentralization of industry and population. Certainly one of the most disturbing features of this country’s growth in the post-war years has been the abnormal concentration of industrial development and, consequently, population in the capital cities. The members of the Opposition are anxious, as is the honorable member for New England, to have the problem tackled with all speed. Accordingly, we endorse the proposal to set up a committee to examine the situation and to make recommendations for the implementation of a decentralization programme.

We believe, however, that the constitution of such a committee, as suggested in the honorable member’s motion, would be far too cumbersome. With the inclusion of representatives of the bodies and authorities mentioned in parts (ii), (iii) and (iv) of paragraph 3 (b), the committee would consist of no fewer than 40 or 50 members, at a conservative estimate, and would be, in my view and that of my colleagues, unwieldy and unworkable. At this stage I should mention that the Labour Party has its own decentralization committee, of which my colleague, the honorable member for Wilmot (Mr. Duthie), is chairman. Consequently, we have a full understanding of the great diversity of the material that comes before a committee of this kind.

While we support the motion in principle, we propose an amendment which would provide that representatives of the bodies and authorities to which I have referred, those concerned with local government, transport, water conservation, irrigation, power, roads and housing, and also financial and industrial experts as well as representatives of trade unions, may be called to give evidence, but not be represented on committee. In the final analysis, Mr. Deputy Speaker, the responsibility for decentralization and balanced development is the responsibility of government. Therefore, we believe that a committee consisting of representatives of the Commonwealth Parliament, together with parliamentary representatives from each of the six States, would be more effective in its deliberations.

Other bodies, particularly local government bodies, would have ample opportunity to present their views. After years of heart-breaking efforts to entice industry into their country communities, I have no doubt that they would readily avail themselves of the opportunity to do so. Accordingly, Mr. Speaker, I move -

That sub-paragraphs (a) and (b) of paragraph (3) be omitted with a view to inserting the following sub-paragraphs in place thereof: - “ (a) a committee be appointed to inquire into and report on the best means of securing effective decentralization of population, industry, communications and administration;

the committee consist of members of Commonwealth and State Parliaments; (ba) the committee be authorized to call evidence from -

local governments and semi-autonomous bodies engaged in water conservation, irrigation, hydro and thermal electric power,

transport authorities, including State rail ways, also road transport, sea and air,

authorities controlling ports and rivers and public works, including Main and Country Roads Boards and Housing Commissions, and

financial and industrial experts and trade unions; “.

The struggle in country communities for a measure of decentralization of industry and population is a sorry story. It is a story of an Australia-wide endeavour by localgovernment authorities and other interested bodies and committees to entice industry into country communities so that they can develop and prosper and so provide young citizens with opportunities for employment and advancement in the localities in which they choose to live. These committees bear different titles. In Bendigo, we have the Industrial Expansion Committee; in Castlemaine, there is the Industries for Castlemaine Committee; and in Seymour, there is the Committee for Industrial Enterprises. Whatever their names and wherever they are, they have been born with one desire - to expand country communities. But their role has changed, Mr. Speaker. Now, they fight desperately to hold what industry they have, for the scales are heavily weighted against country industries. The strain of competition against the cities is forcing the closure of factories that are vital to the very existence of many country towns.

The accumulated evidence that is available to any investigation committee must surely present a powerful case for urgent action to be taken to develop country areas. It is estimated that in the past ten years, the natural increase of population in Victorian country areas was about 250,000. The actual increase of population was under 75,000 during that period. Melbourne enjoyed a natural increase of approximately 250,000, while its real increase was nearer the half million mark in those same ten years. Those figures indicate a great trek. Countless thousands of Australians, young and old, have joined in the journey to the city, a journey not of desire but of sheer economic necessity. Because of it, the breaking up of homes and the disruption of family life is painfully evident in country areas. Each year, thousands of youngsters leave school and gain employment in the capital cities. Why? Because the country communities from which they come are industrially stagnant and because employment opportunities cannot keep pace with the growing legion of youth.

It is an accepted fact that 55 per cent, of the nation’s population is to be found in the five major capital cities. It is true, too, that only 8 per cent, of the population of New South Wales is west of the Great Dividing Range, while Melbourne harbours about 70 per cent, of the population of the State of Victoria. Since the 1954 census, Melbourne’s population has risen by 20.2 per cent., while the City of Bendigo has had to be content with a rise of only 10.8 per cent, in the same period. City dwellers might well ask, “ What is wrong with the continued emphasis on the development of the big capital cities? “ Time is too short, Mr. Speaker, for me to delve deeply into the pros and cons of the question, but, broadly speaking, three main factors - economic, social and defence - must be considered. All three factors point to the need for the correction of the bloated and lopsided growth which is so evident to-day.

Generally, it is thought that because the concentration of industry in the capital cities has occurred, it necessarily is the best distribution of industry on purely economic grounds. Taken on an individual industry basis, that is almost indisputable. The close proximity of major markets, the fact that the capital cities are focal points for road, rail, air and sea transport, and that there are available in the capital cities large labour forces equipped with a variety of skills, all add strongly to that argument. But reckoned in terms of costs to the community, a stage could be reached at which the sprawl of capital cities was uneconomic. Country people believe that that stage has already been reached in Australia. The great backlog of public works, such as the provision of sewerage, water, power, roads and footpaths, the over-burdened transport systems, the bloated land values, and the colossal time-wastage in travelling to and from places of employment, all add tremendously to the costs that the community has to bear. Those factors should be taken into account by governments.

Passing from economic to social factors, we find that there are three great needs.

They are: The need to improve amenities and facilities in country centres; the need to provide an adequate range of employment opportunities for all members of the family; and the great need for specialized educational facilities in country centres. There seems to be no need, Mr. Speaker, for an expert military assessment to make us realize that to-day the great cities of the world are extremely vulnerable. A nuclear attack could cripple this country within hours. The need for the dispersion of population, power supplies, industry and the defence services seems to be imperative. To me, all of this constitutes an overpowering case for action, not words.

There is a strong feeling current among country communities that they should have received a greater share of our industrial development, and that governments have not played their part in providing a more equitable distribution of population and industry. The Menzies Government is particularly guilty in this respect, because it has completely disregarded the plight of country communities. Indeed, its lack of concern is very much apparent at the present moment. I was dismayed to see that the speech of the honorable member for New England was boycotted by the Liberal Party. For much of the time that he was speaking, only one member of the Liberal Party was present in the House. It can be said that the Liberal Party is completely decentralized even at this moment, because there are only three or four of its supporters in the chamber.

A conference of Commonwealth and State representatives that was held in 1945, in the Chifley era, agreed on a basis of co-operation between the Commonwealth and the States for the purpose of achieving decentralization. Year Book No. 46 of 1960 contains an outline of the decisions of that conference which held the seeds of hope for country communities. As a direct result, countless industries blossomed forth in country areas, only to wither away and die under an uninterested Liberal government. The lack of interest of the Government and the standard of its co-operation with the States in regard to this matter can be measured by its reaction to the recent inquiry on the all-party Distribution of Population and Industry Committee in Victoria. Three times the Victorian Premier asked that two Commonwealth officials be allowed to give evidence before the committee, but each request was in vain. Why, Mr. Speaker, the very motion that we are now discussing has been on the noticepaper for eight or nine months, which indicates the Government’s lack of interest in the need for a more balanced distribution of industry and population.

Although the architect of the immigration programme - the Chifley Labour Government - planned differently, more than 75 per cent, of the newcomers to our land in the last decade have settled in the capital cities. Their coming provided a wonderful opportunity for a planned infusion of life into country communities, but the opportunity was ignored. In the light of happenings in recent months, the inactivity of the Menzies Government over the last twelve years has almost paled into insignificance. One of the great tragedies of the Government’s economic policies, parties larly in relation to the relaxation of import controls, and the credit squeeze, has been the effect on country communities.

To make an- assessment of the true employment situation in country towns and provincial cities I consider that a realization of the picture in normal times is essential. Ministers have said on several occasions that Australia’s economy is balanced on a razor’s edge. Because of their failure to gain a fair share of Australia’s industrial expansion, the economy of country towns is always balanced on a razor’s edge. In normal times, employment in country towns is never plentiful. In normal times, youngsters in the country are forced by economic necessity to join in the drift to the cities. Any recession, mild or otherwise, is fell immediately in country centres where opportunities for alternative employment are extremely limited. Consequently, the situation after fourteen months of relaxed import controls and five months of credit restrictions is critical. The result of the Government’s policies has been an acceleration in the movement of country people to the capital cities in their search for employment.

When these economic policies were introduced several Ministers stated that some redeployment of labour would take place. The words “ and unemployment “ should have been added, for the blight of unemployment is abroad in every country community, as it is in the cities. With alternative employment non-existent, the redeployment of the unemployed, if it is achieved, will take place in the main in the cities.

Let us look at the situation in a few of the country centres in Victoria. In Bendigo at least 300 persons have lost their employment in recent months, and a great number of others work for only three or four days a week. This week and next the summer seasonal employment will cease for another 200 or 300 people and they, too. will join the jobless. In Castlemaine more than 100 people have lost their employment since Christmas. Like other textile factories, the Castlemaine woollen mills have been delivered a shattering blow by the Government’s economic policies. A similar situation exists at Wangaratta, Shepparton, Seymour and Ballarat and in most country towns. Another indication of the Government’s unsympathetic attitude to country industry is found at Kyneton where Kyneton Meat Products Proprietary Limited is engaged in the killing and export of meat. The company had commenced extensions and had planned to employ an additional 25 to 35 people, the ultimate objective being a complete unit engaged in the export of meat. Because the company been refused credit, it has been forced to suspend its building operations, which are half-completed. The Government has said that it will offer incentives to export industries, but the application of that policy seems to be conspicuous by its absence, at least in relation to the Kyneton company. I have referred this matter to the Treasurer (Mr. Harold Holt) for sympathetic action.

An investigation into the financial factors influencing the possible establishment and maintenance of industry in country areas would reveal some remarkable facts. For instance, the transport of raw materials and finished products to the major markets - the capital cities - is a suitable cost factor. The inter-capital city freight rates between Sydney, Melbourne and Adelaide are only 2+d. to 3W. per ton mile, but the average rate between, for example, Melbourne and Bendigo is more than double those rates. Charges for power and water, which are so vital for country industries, are also higher than they are in the city. Clearly these factors, with others, do not encourage but rather discriminate against countryindustries.

Mr Jones:

– We could do with a Labour government in Victoria.


– Yes, we could. The Commonwealth Government could well shrug off the problem as being one for the States, but the country people believe that this is a national problem which warrants the attention of the National Parliament. Commonwealth and State governments could employ a number of incentives to achieve what is loosely termed decentralization. There could be, first, decentralization of government activity, secondly, special regional taxation concessions; thirdly, offers of crown lands for the establishment of industries; fourthly, concessions in power, transport and water charges; and fifthly, special financial assistance to industries through a decentralization authority or fund. All these matters could be considered by the committee, if it is constituted.

It is my sincere hope that this debate will reveal a realization of the problems that confront country communities, and that effective action to arrest the drift to the cities will result. I commend the honorable member for New England for his longstanding interest in balanced national development, and I hope that his fervour will be matched by that of the Government. It has been suggested that this motion will take its place in the future as another proposal that has been postponed indefinitely. If this happens the Government will earn the enmity of country people generally who want, not words, but action.


– Is the amendment seconded?


.- 1 second the amendment which has been moved by the honorable member for Bendigo (Mr. Beaton). It is designed purely to effectuate the motion of which the honorable member for New England (Mr. Drummond) gave notice many months ago and which to-day he has had the opportunity to present to the House in> a very eloquent and constructive fashion.

The amendment merely provides for what we believe would be a more workable committee to inquire into this matter, and gives the proposed committee the power to call evidence from the very large number of bodies and experts whom the honorable member for New England mentioned. The honorable member brought before the National Parliament a subject which is of concern to every person in this nation and is primarily now a matter in which the National Parliament should take the initiative. The war was scarcely over when in August, 1945, a conference of Commonwealth and State Ministers was held to discuss the question of decentralization. I have not the time to give the text of the resolution which was passed by that body, but honorable members can find it in the 1960 Commonwealth “Year Book”. The Labour Party takes pride in the fact that the Curtin Government in the last years of the war, and the Chifley Government took many steps towards developing the nation as a whole. Towards the end of the war the Curtin Government passed the Aluminium Industry Act and leased munitions annexes, which were no longer required, in provincial towns. The Chifley Government continued with the work of decentralizing industries and leased additional munitions annexes on favorable terms. Furthermore, it passed several acts which speak for themselves, namely, the Western Australia Grant (Water Supply) Act, 1948; the Snowy Mountains Hydroelectric Power Act 1949; the Railway Standardization (South Australia) Agreement Act 1949, and the States Grants (Encouragement of Meat Production) Act 1949. The last act made provision for roads to assist the beef industry in Western Australia and Queensland. In addition, the Chifley Government by administrative action set up the Katherine and Kimberley research stations to investigate the agricultural and pastoral potential of the tropical part of Australia which represents 40 per cent, of our area and 4 per cent, of our population.

It is along the lines of that active Commonwealth initiative that the Federal Parliamentary Labour Party is working through its decentralization committee, under the chairmanship of our Whip, the honorable member for Wilmot (Mr. Duthie) and the secretaryship of the honorable member for Bendigo. The Commonwealth Government can already carry out by administrative action many of these matters.

Migration has not been the great settling influence in Australia that was at one time expected, and it is unreasonable for us to send immigrants or expect them to go to parts of Australia where amenities are not adequate for people who were born in Australia. But we must confess that we have relied on unmarried migrants to set up what measure of decentralization there has been in Australian industry since the Second World War. That is to say, the cities of Wollongong, Mount Isa and Port Pirie could not have doubled in size since the war if it had not been for the fact that migrants were brought in pursuant to the vision and administrative energy of Australia’s first Minister for Immigration, the present Leader of the Opposition (Mr. Calwell). The sugar industry, our principal tropical industry, could not have been maintained if it were not for migrant labour.

The regrettable thing is that the migrant labour cannot be kept in the sugar industry or in the three industrial cities I have mentioned because amenities are not being provided nor is there the necessary variety of industrial investment and employment. Sydney and Melbourne have grown greatly. By the standards of our consumer economy, they have prospered greatly since the war; but the rest of Australia has not. One cannot visit any provincial city in Australia or any regional centre without being depressed by the inability of those towns and centres to retain the young people born, raised and educated there. There is not a variety of industrial employment and investment in those places.

One thing the Commonwealth Government could do forthwith is open to it through its own providoring and purchasing services. The Department of Supply last year spent over £51,000,000 in buying supplies for other Commonwealth departments. The expenditure in each State was as follows: -

The position is completely incomprehensible. Queensland, which has 14 per cent, of Australia’s population and a quarter of

Australia’s area, receives about 1.5 per cent, of orders from the Commonwealth Government. That is no contribution to decentralization. The Commonwealth Government’s own ordering policy centralizes Australians around Melbourne and Adelaide, maybe for political reasons, but we are all suffering economically because of it. There is another matter that the Commonwealth Government can control. It has no general power over capital issues, but it has a general power over the investment policy of foreign investors. I sympathize with the point that was made by the honorable member for Lyne (Mr. Lucock) concerning an oil refinery at Port Stephens. The same position has arisen more recently regarding an oil refinery at Port Alma. The unfortunate fact is that State governments are unable to require foreign investors to set up an industry in any particular part of a State, because rather than do so the foreign investors will go to a more compliant State or a State whose bargaining power is weaker.

The Department of Trade produces booklets every year giving the pattern of overseas investment in Australia. From the 1 960 publication, “ British Manufacturers in Australia “, it appears there are 568 Australian firms in which British firms have invested, and of that number, 505 companies are domiciled in New South Wales and Victoria. There are 27 in South Australia, twelve each in Queensland, Western Australia and Tasmania. Again, the Department of Trade in its 1960 publication, “ United States Investment in Australian Manufacturing Industry “, states that there are 230 Australian firms in which United States firms have financial interests, and 916 Australian firms with which United States firms have manufacturing agreements. Of the 230 firms in which American companies have invested, 220 are domiciled in New South Wales and Victoria, five are in Queensland, four in South Australia and one in Western Australia. There are none in Tasmania. Of the 916 firms with which the United States firms have made manufacturing agreements, 838 are domiciled in New South Wales and Victoria, 47 in South Australia, eighteen in Queensland, nine in Western Australia and four in Tasmania.

Mr Jones:

– Does the Commonwealth Government force them to decentralize their investments?


– The Commonwealth Government undoubtedly has power to tell foreign investors where they will set up industries in Australia.

Mr Forbes:

– If you exercised the power, you would not get the industries.


– In that case we could do what any other country in our industrial position does - buy up experts from other countries, borrow the money from international organizations and set up the industries ourselves. It is not necessary to develop Australia by selling slabs of industries in Sydney and Melbourne. We will not develop Australia that way. The Liberal Party policy has consistently failed to ensure the development of Australia as a whole. There are three primary powers which the Commonwealth Government can exercise to promote decentralization or national development. One is under section 51, placitum (i.) of the Constitution under which the Commonwealth can legislate with regard to trade and commerce among the States. Railway freights are a flagrant example of the centralization that every State Government carries on through its railway system. The Commonwealth cannot build railways in a State without the consent of the State, but it can, in fact, make grants to the States which will promote interstate or decentralized transport by roads, ports and airlines.

The next power it has is under section 122 of the Constitution under which the Commonwealth can administer territories surrendered by any State. We all realize that the only real way to develop the northern part of Australia is for the Commonwealth Government to accept from Western Australia and Queensland the northern half of Western Australia and the north-western part of Queensland in the same way as the Commonwealth did 50 years ago in respect of the Northern Territory. The other power which the Commonwealth has is to make grants to States under section 96 of the Constitution. The States have now only sufficient money to maintain the place and the pace of their present activities. Western Australia and Queensland are the States which are most extensive in area and most extended in finance. The. two States where development is most required are those which can afford it least.

Let us look at specific industries. There would not yet be an aluminium industry in Australia if the Labour governments of Australia and Tasmania had not set up the aluminium industry at Bell Bay. Now we find that we have the largest bauxite deposits in the world within our own country in northern Queensland. Near Gladstone, there are the coal resources and the water power to process the bauxite for our own internal demands for aluminium and for the export of the processed product which would be to the economic benefit, internal and external, of our country. The governments of Queensland and the Commonwealth could have set up such an industry with Commonwealth initiative, and it would have paid off.

Again, Western Australia which has all the resources of iron ore required and which has at its doorstep the best markets available to any of the Australian States around the Indian Ocean, must wait for its steel industry until the Commonwealth builds a railway and the Broken Hill Proprietary Company Limited which has a steel monopoly, sets up the industry. There is nothing to prevent the Commonwealth Government making a grant to Western Australia to use the man-power and mineral resources of that State to produce the steel which Australia needs itself and which Australia could supply more cheaply and promptly than Japan or any of the European, purveyors, to all the independent countries emerging around the shores of the Indian Ocean.


– Order! The time allotted for precedence of general business has expired. The honorable member for Werriwa will have leave to continue his speech when the debate is resumed. The resumption of the debate will be made an Order of the Day under “ General Business “ for the next sitting.

Sitting suspended from 12.45 to 2.15 p.m.

page 1208



Mr. ADERMANN (Fisher - Minister for

Primary Industry) [2.15]. - I move -

That Standing Order No. 104 - 11 o’clock rulebe suspended, until the end of next month.

Our sole desire is to have some flexibility in our proceedings. It is not intended to have a series of late nights, but, as we are getting towards the end of this sessional period, the Government deems it desirable to suspend this rule.


.- This motion is not agreed to by the Opposition. The Minister gave no reasons for the House having to sit, for the remaining two weeks which are projected in this sessional period, after 11 o’clock at night. From my recollection of the speech delivered by His Excellency the Administrator when opening the Parliament, there is only one piece of legislation which has not yet been introduced. That is the Patents Bill. Admittedly, the Attorney-General (Sir Garfield Barwick) promised last session to bring in the Patents Bill this session. Earlier this session, he made hrs third statement on the subject, but he is now overseas and will not be back in time to launch the measure. What other legislation which is not already on the noticepaper has to be introduced?

It is sometimes said that towards the end of a session it may be necessary for the Parliament to sit after 11 o’clock at night in order to receive messages from the Senate, to process legislation originating there, or to consider amendments made by or requests emanating from that chamber. But the Senate is not sitting this week, so that excuse cannot yet apply. As I recollect what he had to say, the Minister did not. forecast any new legislation coming before us.

It is a matter of constant wonder to the public and of chagrin to members of the Parliament itself, that the Parliament cannot get through its business even if it sits till 11 o’clock on Tuesday, Wednesday and Thursday nights. That is not a satisfactory hour at which to debate anything. Members on the opposite side from a speaker as well as those on his own side object to speeches m the small hours of the morning. There is no free debate at all after 11 o’clock at night. Why do we have to sit after 11 p.m. for the rest of the sessional period? The motion seeks to enable new business to be introduced after 1 1 o’clock. In other words, it seeks to permit of the starting of thedebate on any subject after 11 o’clock. What justification can there be for that? I notice that the Treasurer (Mr. Harold Holt) had- the grace not to move the suspension of” this rule on this occasion.

Mr Harold Holt:

– The Minister for Primary Industry is the Minister in charge of the House for this week.


– You have always submitted the motion in the past. As a matter of fact, ever since you became Leader of the House, you have always moved this motion towards the end of sessions. On those occasions, you have made a bit more of a demonstration in favour of suspending the rule. If there is anything urgently arising, then it is always possible for the House to suspend the relevant standing order. But the unfortunate thing from the Government’s point of view is that the Government, in doing that, has to have present an absolute majority of the House. It has to have 62 of its members in the House after 1 1 o’clock if it wants to suspend the standing order. As the division lists will show, there are never 62 members of the Government parties in the House after 11 o’clock. Therefore, without any real excuse, without having any justification for introducing new legislation unexpectedly at this stage of the session, we are asked to agree to this blanket suspension of the 11 o’clock rule. As always on these occasions, the Opposition will vote against the motion.

I have stated that the Parliament is expected to sit for another two weeks. There is no reason why it cannot sit for three weeks, or four weeks more if there is business for it. But there is no great press of business on the notice-paper, there has been no promise of unexpected legislation coming before us, and the Senate is not sitting. No case has been made out for suspending the 11 o’clock rule at this stage.

Treasurer · Higgins · LP

– I hope the Deputy Leader of the Opposition (Mr. Whitlam) and his colleagues will not try to whip themselves into a passion and make some childish demonstration on this business. My colleague, the Minister for Primary Industry (Mr. Adermann), who is Minister in charge of the House for this week, has already explained that this is a precautionary step which it is customary to take towards the end of a sessional period so that the House will be in a position to deal quite flexibly with the business coming before it. I welcome the comment by the honorable gentleman on behalf of his party that, on what he sees of the programme ahead, there should be no reason for us to be sitting late hours and protracting the sittings of the House because, for our part, 1 can assure him that the Government will give him every co-operation in ensuring that the programme of business is completed expeditiously while at the same time providing reasonable opportunities for representative viewpoints to be stated.

This session has been rather notable for the amount of time which, so far, we have made available for private members’ business. I have gone to pains to ensure that there should be no restriction of opportunities for private members on any of the days devoted to either general business or grievance. We have had a rather longer time for private members’ discussions on the motion for the adjournment of the House at night. Honorable members opposite who, apparently, are troubled by any prospect of sitting beyond 11 o’clock as a result of this motion, do not experience the same inhibition when it comes to keeping the House until after midnight on those occasions.

The Deputy Leader of the Opposition says that we should not be bringing in new business after 11 o’clock at night. I hope that will not be necessary. For our part, we shall be trying to avoid that contingency. But the working rules which apply inside the honorable gentleman’s own party sometimes make it desirable in its interests, no less than those of the Government - if honorable members opposite want the opportunity, for example, for a caucus examination next day of some bill which the Government finds it necessary to bring in at a later stage of the session - for a second-reading speech to be made on behalf of the Government after 11 p.m. I certainly hope that the House can complete its business within the next fortnight, which was the general understanding between the Government and Opposition parties earlier in the session. For my part, if honorable members opposite feel that the period should be extended, they will not find me resistant to that proposal; I shall be about the business of the Government in Canberra, in any event. I shall do what I can to bring the business expeditiously before the House. I can assure honorable members opposite that we and the Draftsman have worked quite arduously to ensure that result. Having said1 that, I hope that we may get on with the business of the House and that honorable gentlemen opposite will not turn this debate into a political song and dance which really impresses nobody and does not increase the stature of the institution of which we are all members.

Leader of the Opposition · Melbourne

– I want to say just a few words on this proposition. This has been a barren session. The Government has had no real business. It has no business now. Only two important bills await discussion, the Income Tax and Social Services Contribution Assessment Bill 1961 and the Commonwealth Electoral Bill 1961.

Mr Harold Holt:

– You may have reason to revise that judgment.


– We have no indication from the Government yet that there will be any other important legislation except the Supply Bill, and that will provide an opportunity for debate. If members addressed themselves to those three pieces of legislation only, the House could get up next week. Therefore, there is no need to suspend the 11 o’clock rule.

Mr Harold Holt:

– We have the Foot and Mouth Disease Bill.


– I know, but that was brought in for the honorable gentleman’s benefit and for the benefit of his back benchers who, when they cannot get into the debates in the day-time, keep the House sitting late at night, on all sorts of peculiar issues in which their own people are not in the least interested. The right honorable gentleman has spoken quite a deal to the motion, but he has not convinced anybody that there is any justification for the suspension of the 11 o’clock rule. If he has some important business to bring in between now and 11th May he ought at least to tell honorable members so that they might prepare themselves by some study of the subject that is to be debated. To bring in important legislation at 11 o’clock at night and expect it to be passed the very next day is only to make a farce of parliamentary government. I do not think that the Government has any real business at all. I think it has simply introduced this motion because it is customary to bring down a motion of this sort at this stage of a session. On other occasions other governments have had some reason for wanting that extra opportunity to bring legislation forward at a late hour, but this Government just cannot hurry into recess quickly enough. It cannot get the Parliament shut up quickly enough. This Government knows that it is under fire and under criticism from its supporters outside the Parliament and that the longer the Parliament is in session the worse are the Government’s electoral chances. Its friends and supporters in the Parliament only want to help it to rush us into recess, but we see no reason for supporting this motion at this time.


.- I think that the Leader of the Opposition (Mr. Calwell) spoilt his speech by the last few words, because there is no doubt that he was quite wrong. The Government is not trying to rush the Parliament into recess for the reasons he attributed to it, because, in all the debates on urgency motions and other matters that have taken place during this sessional period, the Government has had winning points all the time. To use the words that the boys would use, Labour has not taken a trick at all. It has had a terrible bashing all the time. So the last few words of the Leader of the Opposition were quite wrong. The rest of his speech was fairly good. I am no lover of suspension of the 11 o’clock rule, because I do not like late sittings any more than any one else does. I remember that when Labour was in office, on certain mornings we got back to the Hotel Kurrajong just at the time when the bell was ringing for breakfast. Of course, that was when Labour was in government, and only a few Labour members here remember those days. All the new Labour members think that under Labour the House rose every evening at about half-past eleven or earlier. The honorable member for Fremantle (Mr. Beazley) has a quite vivid recollection of arriving back at the Hotel Kurrajong and hearing the bell ring for breakfast when getting near the building, after having sat here all night. As a matter of fact, in those days, I got my best opportunities to speak in this House at half-past four and six o’clock in the morning, when most members were resting. They were chiefly not the members who are here now.

I do not like suspension of the 11 o’clock rule. I think that we can do our business best when we are wide awake and at the right time, but the Treasurer (Mr. Harold Holt) has said very clearly that this measure is only for an emergency. It is said that the House will rise in two more weeks; I think that is right. But in the meantime anything may arise. The Opposition - we do not know what it is going to do - may propose a lot of urgency motions, and the time of the House will be taken up in that way. This measure is only a safeguard so that the House will rise on the date decided. 1 do not think for one moment that it is the intention of the Government or of the Leader of the House to keep the House sitting late at night for the next two weeks. I think that it is a wise Treasurer and a wise management of this House that make provision for power to act, if it is absolutely necessary, in the way proposed.


.- I oppose the motion for various reasons. One is that I am concerned about the health of the Treasurer (Mr. Harold Holt). It is quite obvious that he is suffering from severe strain because of the withering attacks that have been rightly made upon him for his incapacity as Treasurer and his inability to govern. I have noticed him to-day. He is worn, tired-looking and cranky. He has had Dorothy Dix questions put to him to take up time, and it is quite obvious that he is suffering from great mental stress because of the problems confronting him and the complete failure of the Government to face up to them. Feeling as he does, he can well appreciate that we on this side of the Parliament, charged with the responsibility of bringing to the people’s notice the policies that this Government is following, require reasonable hours in which to present our case to the people. We are not all so fortunate as the Treasurer. We cannot all dash away to north Queensland at week-ends to sleep off the late hours. We have to be in our places in the Parliament, or in our electorates.

It is all very well for the Treasurer to say that this measure is necessary. For the reasons that I have given, amongst others, I think it should be opposed. The honorable member for Mallee (Mr. Turnbull) says that the Labour Government did this kind of thing. It may have done, but was not its legislation worth staying up for? Was it not worth while to stay up all night for the introduction of the Snowy Mountains scheme in which this present Government takes such pride? Was it not worth while to stay here late in order to enact great developmental schemes the benefits of which the people of this nation are reaping to-day? I refer to the Commonwealth Scientific and Industrial Research Organization and other undertakings. What is the position to-day? We have, to sit here until the middle of the night to hear the honorable member for Mallee make a speech which he is able to make only because he has slept for half the day in order to be. prepared. In addition to that, the Government is constantly wasting time. Last night I was approached to speak in order to keep a debate going because the Government had virtually nothing on the books. Now, because the Government knows that the chambers of manufactures, its own supporters, and people all over the country are condemning its policies, it wants to rush this Parliament into recess and, in the meantime, by having debates late in the night, to deny the people the opportunity of learning what is really wrong with the country, and stop criticism from being levelled at a time of the day when the people can hear what it is all about.

As I have said before, the honorable member for Mallee, when in government, is like a worn-out old tomcat, but when in opposition he is a roaring lion. To-day members of the Government introduce into this Parliament everything that they condemned when they were in opposition. It would not be so bad to sit late if the Government had something worthwhile to put forward. Where is the Treasurer now while the motion is being debated? Just as when the Budget was being debated, he is not in the House. The only difference this time is that he is in the country, which I suppose is accidental.

I join with other members on this side of the Parliament in criticizing the Government, which keeps the Parliament sitting for the minimum of time, does the greatest amount of damage to the country and then, in order to cover up its mistakes from just criticism levelled from this side of the Parliament, has its policies debated in the dead of night. I suppose the honorable member for Mallee wants to debate woolgrowing problems in the middle of the night when the people in the country cannot hear what the discussion is all about. I suppose also that the Government would like us to debate in the dead of night the South African question and the attitude of the Prime Minister (Mr. Menzies) to it. Well it might, because it has a lot to be ashamed of. It is a wonder that the Government does not introduce the subject of West New Guinea and matters like that in the middle of the night, because it does not want the people of this country to know the policies that it espouses in those regards, the reasons it is rushing into recess, and the falsity of its policies generally.

I am sick and tired of the Treasurer’s saying that the Opposition wants to make some political capital out of these matters. He wants the right to get away with anything in the Parliament, but there are more than 120 members of this House and they are all entitled to talk. Why should their rights be restricted in any way because the Treasurer is worn out and is suffering under a strain because he is so inexperienced in the handling of his portfolio? I suppose that if I had the Chamber of Manufactures in Victoria on my wheel, I would want the House to rise, but I thought that the Treasurer did not take notice of pressure politics and was not concerned with people who disagreed with his policies.

It appears to me that the Government is afraid to face up to the consequences of its legislation and does not like the criticism of the Opposition. The Leader of the Opposition (Mr. Calwell) has said that the Government has next to no new legislation. If the Opposition had not moved a few amendments to the Electoral Bill, I suppose that the House could have risen to-night, because there is almost nothing else on the books, as it were. If it were not for Labour initiating urgency debates to show the Government’s incompetence in dealing with unemployment and other matters, the Parliament would not have had enough business to keep it going for a couple of hours a day, yet it is proposed now that we should sit into the night. The Government has brought forward nothing of benefit to the people. It is running away from criticism and is being attacked on all sides by industry and by the people. It wants to shorten this sessional period by introducing new legislation after 11 p.m. That ‘is scandalous in the extreme and deserves to be condemned.

If the honorable member for Mallee (Mr. Turnbull) were sincere, he would do what he implied he would do a short time ago, when he said, “ I am opposed to late sittings “. But he is a strange kind of man. He has the right to say what he likes in this Parliament, so long as he votes for the Government. We find a member of the Australian Country Party saying that he disagrees with this motion. Of course, the members of the Liberal Party are silent. They are not prepared to face again in the caucus room the barrage that was directed at them by the Ministers when they criticized the dictatorial policies of the Government.

I can understand their not wanting to sit after 11 o’clock to hear the Labour Opposition talk. Quite a few members of the Government parties never speak in the Parliament. In that way, they are like many of the Liberal members in the Upper House of the New South Wales Parliament. It is so long since they have spoken that we hardly know that they are there. If the Parliament sits after 11 o’clock at night, those honorable members will be able to go back to their electors who were not listening to the parliamentary broadcasts and say, “ I did speak, but it was at 3 o’clock in the morning”, or something to that effect. These things deserve to be brought to the light of day. The Government does not want to face up to its responsibilities and it does not want to face Labour criticism. The Treasurer wants to escape his responsibilities by making the Parliament sit late into the night, when there is no excuse for that whatever. With other members on this side of the Parliament, 1 join in the condemnation of this motion.

A few days ago, the honorable member for New England (Mr. Drummond) wanted to raise a matter of vital importance, but the honorable member for Mallee, and others on that side of the House, made sure that he was gagged. They wanted to stop him from speaking on constitutional matters. Country Party members say, by way of interjection, that that is not right. I wonder what the honorable member for New England thinks. Unless I am a very bad judge or unless my eyesight is failing, he was extremely annoyed, to use a parliamentary term. It is no good denying that he does not want to talk on the review of the Constitution at 11 o’clock or 12 o’clock at night. He wants to talk about it in the middle of the day.

The Government does not care what honorable members talk about in the middle of the day so long as they are not critical of its attitude to certain matters. I suppose that we will have the amazing situation later on that the debate on constitutional review will be resumed at 3 o’clock in the morning, in order to give the honorable member for New England an opportunity to tell the one or two people who are awake in Australia at that time what he thinks of these great proposals. This Government is vulnerable in many ways, but it is vulnerable mainly because it dislikes being opposed. It does not like to be criticized. It wants to gag debates.It introduces little in the way of constructive policy. When anything of vital importance is presented to the Parliament, the debate is often gagged by this Government, which says that it stands for freedom of speech and for the right of individuals to criticize.

What do the unemployed people think of a government that wants to extend the sittings of this House beyond 11 o’clock at night, but offers no solution of the unemployment problem? Many people are going out of business because of unemployment caused by credit restrictions. 1 wonder what they think of this Government’s policy and of the refusal to allow that subject to be debated in the light of day. The Government wants those matters to be discussed late at night. The Government knows that the criticism that I am levelling is true. It knows that it is running away from its responsibilities. The Minister for Repatriation (Mr. Osborne) who will soon be making positively his last appearance in this House for the next few months, knows that I have given the reasons why he does not want to debate these matters at this hour of the day, but wants to do it in the middle of the night.

I should like honorable members opposite to say in the light of day what they have to say on credit restrictions, unemployment and the great economic problems facing the people because of the policies of the Government. The members of the Country Party, of course, want debates to be held in the early hours of the morning, because most of the people who support them go to bed at 9 o’clock at night. They think that anything that they say in the early hours of the morning will not be heard by their constituents. They hope to hide their incompetence by speaking when people are not awake to hear them.

Mr Turnbull:

– Those are the remarks of a city slicker.


– I do not want to remind the honorable member of where I come from. He should know that by now. He called me a city slicker, and I think I should tell him again that I come from Currabubula. I take exception to the term “ city slicker “ being applied to a fellow who was born and bred in the country and who, unlike many members of the Country Party, has had a lot to do with the land.

Mr. Speaker, I lodge my objection to this motion. I regret that my health and that of other honorable members on this side of the House will have to be undermined by our sitting up into, the middle of the night in order to debate things that ought to be debated at other times. If the Treasurer cannot formulate a policy which does not cause him strain, inconvenience, worry and shame, he should resign his portfolio. In any event, he should allow us to debate his policies in the middle of the day. These matters are important to me and to other members of the Opposition. We. emphatically protest against this infringement of the rights of honorable members to express their opinions at a time when they can be heard by those whom they represent in this Parliament.

Mr Adermann:

Mr. Speaker, in order that legislation may be discussed in the light of day, and so that there will be no further waste of time, I move -

That the question be now put. (Mr. Speaker - Hon. John McLeay.)

Question put. The House divided.

AYES: 56

NOES: 36

Majority . . 20



Question so resolved in the affirmative.

Question put -

That the motion (vide page 1208) be agreed to.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 58

NOES: 39

Majority . . . . 19



Question so resolved m the affirmative.

page 1214


Customs Tariff (Dumping and Subsidies) Amendment (No. 1)

In Committee of Ways and Means:

Minister for Repatriation · Evans · LP

– I move - [Customs Tariff (Dumping and Subsidies) Amendment (No. 1).]

  1. That duties of customs be imposed in accordance with the following provisions: -

Dumping Duty.

  1. – (1.) If the Minister is satisfied, after inquiry and report by the Tariff Board -

    1. that goods that are produced or manufactured outside Australia and have been or are being exported to Australia have been, are being or may be sold to a person in Australia at an export price that is less than the normal value of the goods at the date of exportation; and
    2. that the importation of those goods is causing or threatening injury to an Australian industry producing or manufacturing like or directly competitive goods or may hinder the establishment of an Australian industry in connexion with the production or manufacture of like or directly competitive goods, the Minister may cause a notice to be published in the Gazette specifying the goods as to which he is so satisfied. (2.) Upon the publication of a notice under this clause, there shall be charged, collected and paid to the use of the Queen for the purposes of the Commonwealth, on goods specified in the notice imported into Australia, a special duty (in this clause referred to as “the dumping duty “). (3.) The amount of the dumping duty in respect of any goods is a sum equal to the amount by which the export price of the goods is less than the normal value of the goods at the date of exportation. (4.) The Minister may, by instrument in writing, exempt goods from the dumping duty if he is satisfied -
    3. that like or directly competitive goods are not offered for sale in Australia to all purchasers on equal terms under like conditions having regard to the custom and usage of trade;
    4. that the difference between the export price of the goods and the normal value of the goods at the date of exportation does not exceed ten per centum of the normal value and that the exemption would not cause injury to an Australian industry producing or manufacturing like or directly competive goods; or
    5. that the goods, being articles of merchandise, are for use as samples for the sale of similar goods. (5.) Where the Minister exempts goods from the dumping duty under the last preceding subclause by reason of his being satisfied as to a matter specified in paragraph (a) or (b) of that sub-clause, the instrument of exemption shall be published in the Gazette.

Dumping Duty - Third Country. 2.- (1.) If the Minister is satisfied -

  1. that goods that are produced or manufactured in a particular country and have been or are being exported to Australia have been, are being or may be sold to a person in Australia at an export price that is less than the normal value of the goods at the date of exportation; and
  2. that the importation of those goods is causingorthreateninginjurytothe trade in the Australian market of producers or manufacturers in a third country of like or directly competitive goods, the Minister may cause a notice to be published in the Gazette specifying the goods as to which he is so satisfied. (2.) Upon the publication of a notice under this clause, there shall be charged, collected and paid to the use of the Queen for the purposes of the Commonwealth, on goods specified in the notice imported into Australia, a special duty (in this clause referred to as “ the third country dumping duty “). (3.) The amount of the third country dumping duty in respect of any goods is a sum equal to the amount by which the export price of the goods is less than the normal value of the goods at the date of exportation. (4.) The Minister may, by instrument in writing, exempt goods from the third country dumping duty if he is satisfied -
  3. that like or directly competitive goods are not offered for sale in Australia to all purchasers on equal terms under like conditions having regard to the custom and usage of trade;
  4. that the difference between the export price of the goods and the normal valueof the goods at the date of exportation does not exceed ten per centum of the normal value and that the exemption would not cause injury to the trade in the Australian market of producers or manufacturers in the third country of like or directly competitive goods; or
  5. that the goods, being articles of merchandise, are for use as samples for the sale of similar goods. (5.) Where the Minister exempts goods from the third country dumping duty under the last preceding sub-clause by reason of his being satisfied as to a matter specified in paragraph (a) or (b) of that sub-clause, the instrument of exemption shall be published in the Gazette.

Countervailing Duty

  1. – (1.) If the Minister is satisfied, after inquiry and report by the Tariff Board, in respect of goods that are produced or manufactured in a particular country and have been or are being exported to Australia -

    1. that a subsidy, bounty, reduction or remission of freight or other financial assistance has been or is being paid or granted directly or indirectly upon the production, manufacture, carriage or export of those goods; and
    2. that the importation of those goods is causing or threatening injury to an Australian industry producing or manufacturing like or directly competitive goods or may hinder the establishment of an Australian industry in connexion with the production or manufacture of like or directly competitive goods, the Minister may cause a notice to be published in the Gazette specifying the goods as to which he is so satisfied. (2.) Upon the publication of a notice under this clause, there shall be charged, collected and paid to the use of the Queen for the purposes of the Commonwealth, on goods specified in the notice imported into Australia, a special duty (in this clause referred to as “the countervailing duty “. (3.) The amount of the countervailing duty in respect of any goods is a sum equal to the amount of the subsidy, bounty, reduction or remission of freight or other financial assistance referred to in sub-clause (1.) of this clause. (4.) If the Minister is of opinion that adequate information as to the amount of subsidy, bounty, reduction or remission of freight or other financial assistance cannot be obtained, the amount of subsidy, bounty, reduction or remission of freight or other financial assistance shall, for the purpose of this clause, be such as is determined by the Minister. (5.) In this clause, “ financial assistance “ includes the benefit accruing to an exporter from the use of dual or multiple rates of exchange in relation to the proceeds of export sales.

Countervailing Duty - Third Country

  1. – (1.) If the Minister is satisfied, in respect of goods that are produced or manufactured in a particular country and have been or are being exported to Australia -

    1. that a subsidy, bounty, reduction or remission of freight or other financial assistance has been or is being paid or granted directly or indirectly upon the production, manufacture, carriage or export of those goods; and
    2. that the importation of those goods is causing or threatening injury to the trade in the Australian market of producers or manufacturers in a third country of like or directly competitive goods, the Minister may cause a notice to be published in the Gazette specifying the goods as to which he is so satisfied. (2.) Upon the publication of a notice under this clause, there shall be charged, collected and paid to the use of the Queen for the purposes of the Commonwealth, on goods specified in the notice imported into Australia, a special duty (in this clause referred to as “ the third country countervailing duty “). (3.) The amount of the third country countervailing duty in respect of any goods is a sum equal to the amount of the subsidy, bounty, reduction or remission of freight or other financial assistance referred to in sub-clause (1.) of this clause. (4.) If the Minister is of opinion that adequate information as to the amount of subsidy, bounty, reduction or remission of freight or other financial assistance cannot be obtained, the amount of subsidy, bounty, reduction or remission of freight or other financial assistance shall, for the purpose of this clause, be such as is determined by the Minister. (5.) In this clause, “financial assistance” includes the benefit accruing to an exporter from the use of dual or multiple rates of exchange in relation to the proceeds of export sales.

Injury not to Include Insubstantial Injury.

  1. A reference in any of the last four preceding clauses to an injury does not include a reference to an insubstantial injury and a reference in clause one or three of this paragraph to the hindering of the establishment of an Australian industry does not include a reference to an insubstantial hindrance to the establishment of such an industry.


  1. – (1.) If the Minister is satisfied that any goods that are produced or manufactured in a particular country have been or are being imported into Australia under such conditions as to cause or threaten serious injury -

    1. to producers or manufacturers In Aus tralia of like or directly competitive goods; or
    2. to producers or manufacturers in a third country of like or directly competitive goods that are dutiable at a rate applicable under the British Preferential Tariff or at a rate lower than the rate that would be applicable under that tariff, he may cause a notice to be published in the Gazette specifying the goods as to which he is so satisfied. (2.) Upon the publication of a notice under this clause, there shall be charged, collected and paid to the use of the Queen for the purposes of the Commonwealth, on goods specified in the notice imported into Australia, a special duty (in this clause referred to as “ the emergency duty “). (3.) The amount of the emergency duty in respect of any goods is a sum equal to the amount, if any, by which the landed duty-paid cost of the goods is less than a reasonably competitive landed duty-paid cost ascertained as determined by the Minister. (4.) In making a determination under the last preceding sub-clause in relation to goods produced or manufactured in a particular country, the Minister shall, iflike or directly competitive goods produced or manufactured in another country are being imported into Australia, have regard to the landed duty-paid cost of the last-mentioned goods (5.) In this clause, “ the landed duty-paid cost “ means -
    3. in relation to goods that have been purchased by the importer - the amount, expressed in Australian currency, that is equal to the cost to the importer (including the amount of any duty of customs other than the emergency duty) of the goods landed in Australia; or
    4. in relation to any other goods (including goods consigned by the producer or manufacturer of the goods for sale in Australia) - the amount, expressed in Australian currency, that would have been the landed duty-paid cost, in accordance with the last preceding paragraph, if the person who owned the goods at the time of their importation into Australia had, before the goods were imported, sold them to a person in Australia and that lastmentioned person had imported them into Australia. (6.) Where, in relation to any goods, the Minister is of opinion that -
    5. it is difficult to ascertain the landed dutypaid cost; o;
    6. the purchase price or any other item of cost to be included in the landed dutypaid cost was not fixed in good faith on a commercial basis, the Minister may determine the landed duty-paid cost, having regard to costs of production and manufacture in the country in which the goods were produced or manufactured and other relevant matters.

Notices not to be Published if Inconsistent with International Obligations.

  1. The Minister shall not cause a notice to be published under sub-clause (1.) of clause two, four or six of this paragraph unless he is satisfied that the publication of the notice is not inconsistent with the obligations of the Commonwealth under any international agreement relating to tariffs or trade.

Duties to be Charged Separately.

  1. The several duties specified in the preceding clauses of this paragraph shall be separately charged, notwithstanding that more than one duty applies to any particular goods.

Ascertainment of Equivalent Amount in Australian Currency for Purpose of Calculating Duty.

  1. – (1.) For the purpose of calculating the amount of any duty payable under this Proposal in respect of any goods, the equivalent amount in Australian currency of an amount calculated in a currency other than Australian currency shall be ascertained in accordance with a fair rate of exchange at the date of exportation of the goods. (2.) For the purpose of. this clause, the Minister may, where he considers it desirable so to do for the avoidance of doubt, specify, by notice published in the Gazette, a rate that is to be deemed to be, or to have been, a fair rate of exchange in relation to a currency -

    1. on a date, or during a period, preceding the date of publication of the notice; or
    2. from and including the date of publication of the notice, or an earlier date specified in the notice, until the revocation of the notice. (3.) The rate of exchange specified in relation to a currency in pursuance of the last preceding sub-clause shall, for the purpose of calculating the amount of duty payable on any goods exported on the date or during the period to which the rate so specified applies, be the rate of exchange that shall be applied for the purpose of sub-clause (1.) of this clause in respect of the currency specified in the notice.

Power to Specify Goods

  1. The powers given by this Proposal to the Minister to cause notices to be published specifying goods extend to the publication of notices specifying -

    1. goods of a particular class or kind;
    2. goods exported from a particular country;
    3. goods contained in a particular shipment;
    4. goods exported by a particular exporter;
    5. goods specified in such other manner as the Minister thinks fit; and
    6. goods entered for home consumption before the date of publication of the notice as well as goods entered for home consumption on or after that date.

Revocation of Notices

  1. – (1.) The Minister may, by notice published in the Gazette, revoke a notice specifying goods published in pursuance of this Proposal. (2.) Upon the revocation of a notice, the special duty on goods specified in the notice ceases to be payable, and shall not be charged or collected, on goods entered for home consumption on or after the date of revocation.

Special Duties to be Additional to Ordinary Duties.

  1. The special duties payable under this Proposal are in addition to such other duties of customs (if any) as are payable under any Act other than the Act passed to give effect to this Proposal.

Repeal and Saving

  1. That the following Acts be repealed: -

Customs Tariff (Industries Preservation) Act 1921;

Customs Tariff (Industries Preservation) Act 1922;

Customs Tariff (Industries Preservation) Act 1933;

Customs Tariff (Industries Preservation) Act 1936;

Customs Tariff (Industries Preservation) Act 1956;

Customs Tariff (Industries Preservation) Act 1957

  1. That, subject to the next succeeding paragraph, where, immediately before the date on which the Act passed to give effect to this Proposal comes into operation, a special duty is payable on any goods under the Customs Tariff (Industries Preservation) Act 1921-1957 in consequence of the publication by the Minister of a notice in the Gazette specifying those goods, the special duty continue to be payable on those goods, and may be charged and collected, in accordance with that Act on and after that date notwithstanding the repeal of the Acts specified in the last preceding paragraph.
  2. That the Minister be empowered, by notice published in the Gazette, to revoke a notice referred to in the last preceding paragraph, and, upon the revocation of the notice, the special duty on goods specified in the notice cease to be payable, and be not charged or collected, on goods entered for home consumption on or after the date of revocation.


  1. That the Customs Act 1901-1960 be incorporated and read as one with the Act passed to give effect to this Proposal.


  1. That, in this Proposal, unless the contrary intention appears - “ export price “, in relation to goods that have been or are being exported to Australia, mean -

    1. an amount, expressed in Australian currency, that is equal to the price paid or payable to the exporter, or an agent in Australia of the exporter, for the goods (including free on board charges in the country of export); or
    2. if the Minister is of opinion that adequate information as to the price so paid or payable cannot be obtained - an amount, expressed in Australian currency, that is equal to the price estimated by the Minister to be the price so paid or payable; “the Gazette” mean the Commonwealth of Australia Gazette; “ the Minister “ mean the Minister of State for the time being administering the Act passed to give effect to this Proposal; “ the normal value “, in relation to goods that have been or are being exported to Australia, mean whichever of the following amounts, as ascertained by the Minister, expressed in Australian currency, is determined by the Minister to be the normal value of those goods -
    3. an amount equal to the fair market value of like goods sold in the country of export for home consumption in the ordinary course of trade plus free on board charges paid or payable in that country in respect of the goods, but not including any duties or other taxes paid or payable in that country in respect of the goods, being duties or taxes that are remitted or refunded on export;
    4. an amount equal to the highest comparable price paid for like goods sold in the country of export for export to a third country in the ordinary course of trade plus free on board charges paid or payable in the country of export in respect of the goods, but not including any duties or other taxes paid or payable in the country of export in respect of the goods, being duties or taxes that are remitted or refunded on export;
    5. an amount equal to the fair market value of like goods produced or manufactured, and sold, in a third country selected by the Minister, being a country in which, in the opinion of the Minister, the costs of production or manufacture are similar to those in the country of export, in the ordinary course of trade for home consumption in that third country plus such amount as is estimated by the Minister to be the cost of placing the goods free on board in the country of export, but not including any duties or other taxes paid or payable in the third country in respect of the goods, being duties or taxes that are remitted or refunded on export; or
    6. an amount equal to the sum of -
    1. the cost of production or manufacture of the goods or, if the Minister is of opinion that adequate information as to the cost of production or manufacture of the goods cannot be obtained, such amount as is estimated by the Minister to be the cost of production or manufacture of the goods;
    2. free on board charges paid or payable in the country of export in respect of the goods; and
    3. such additional amount in respect of selling costs and profit as is determined by the Minister; “the Tariff Board” mean the Tariff Board established under the Tariff Board Act 1921-1960. G. That, in this Proposal -

    4. a reference to an inquiry by the Tariff Board be read as including a reference to such an inquiry held or commenced to be held before the coming into operation of the Act passed to give effect to this Proposal; and
    5. a reference to a report by the Tariff Board be read as including a reference to a report made upon such an inquiry.

The purpose of the measure which I have just moved is to impose certain special duties of customs to provide protection for Australian industry against various forms of unfair trading. It also covers emergency action which may be taken against imports which cause or threaten serious injury to domestic producers or to producers in certain third countries. As this is a financial measure, it must be introduced into the House as proposals, in accordance with the Standing Orders. The measure will come into force on the date on which the act passed to give effect to the proposals receives the royal assent.

It is proposed that the Customs Tariff (Industries Preservation) Act be repealed. The proposals incorporate those parts of the Customs Tariff (Industries Preservation) Act which are in current use and in addition make provision for some additional measures of protection against unfair trading. Their provisions incorporate the means of dealing with dumping and subsidies which have been internationally agreed in the General Agreement on Tariffs and Trade. They also take account of comments which have been made by the Tariff Board on problems arising from the Customs Tariff (Industries Preservation) Act.

The proposals provide for a dumping duty on goods that are exported to Australia at an export price which is less than the normal value of the goods, where this causes or threatens injury to an Australian industry or may hinder the establishment of an Australian industry. The imposition of dumping duties will continue to be subject to inquiry and report by the Tariff Board.

A reference to injury to an Australian industry is not to be read as including a reference to an insubstantial injury and a reference to the hindering of the establishment of an Australian industry does not include a reference to an insubstantial hindrance to the establishment of such an industry.

The intention of the proposals is to introduce dumping legislation which is consistent with Article VI. of the General Agreement on Tariffs and Trade, which lays down internationally accepted criteria for the imposition of dumping duties. The General Agreement on Tariffs and Trade states that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry or materially retards the establishment of a domestic industry. The Government would have preferred to introduce these criteria in the words in which they are expressed in the General Agreement on Tariffs and Trade, but our legal advisers have pointed out that this could have given rise to problems of legal interpretation. The measure is therefore framed in such a way as to provide for the application of the criteria laid down in

Article VI. of the General Agreement on Tariffs and Trade, but avoids possible difficulties of legal interpretation which might have been met by using the exact wording of the article.

The provision relating to dumping duty covers the types of cases which are now dealt with under sections 4, 5 and 6 of the Customs Tariff (Industries Preservation) Act - that is, goods sold to Australia at less than their fair market value, goods sold to Australia at less than cost of production plus a reasonable mark-up and goods consigned for sale in Australia which may be sold at less than a reasonable price. It is, however, broader in scope than these three sections of the Customs Tariff (Industries Preservation) Act in that it empowers the imposition of dumping duties not only where injury to an Australian industry is caused or threatened hut also where the establishment of an Australian industry may be hindered. It is also broader in that “ normal value “ of goods exported to Australia is defined more comprehensively than is done in the two definitions in section 4 and 5 of the existing act which deal with fair market value and cost of production only. In establishing a fair price, the Minister may take account not only of these factors, but of the price of like goods sold in the country of export for export to a third country and also of the fair market value of like goods produced in a third country where costs of production are similar to those in the country of export.

These are the tests which are recognized in the General Agreement on Tariffs and Trade as representing proper means of establishing the normal value of goods entering into international trade; in addition, they provide a means of establishing the normal value of goods in cases where the fair market value or cost of production cannot be readily ascertained.

The proposals make provision, as does the present act, for imposing dumping duties to protect the trade of third countries against unfair trade practices. The provisions of section 11b< of the Customs Tariff (Industries Preservation) Act relating to the imposition of countervailing duties on imported subsidized goods are reproduced in this proposal. The countervailing duty provision covers not only subsidies on imported goods but also subsidized freight rates. The sections of the present act which relate specifically to subsidized freights are therefore being omitted.

The proposals also reproduce the provisions of section 11a of the Customs Tariff (Industries Preservation) Act which permits the imposition of emergency duties, in accordance with Australia’s international obligations, to prevent serious injury to an industry.

The sections of the Customs Tariff (Industries Preservation) Act which relate to depreciation of currencies have not been brought forward in these proposals. Protection against exchange depreciation is available through other channels. Most countries have accepted obligations under the International Monetary Fund which prevent the occurrence of situations of the type which sections 8 to 1 1 of the Customs Tariff (Industries Preservation) Act were designed to counter. Moreover there is provision in the Customs Act for the Minister for Customs and Excise to fix a fair rate of exchange in respect of imported goods and there is also provision both in the Customs Act and in these proposals to deal with manipulation of exchange rates through the use of multiple currency practices. I might mention that sections 8 to H of the Customs Tariff (Industries Preservation) Act have not been invoked since the nineteen twenties.

I commend the proposals to honorable members.

Progress reported.

page 1220


Second Reading

Debate resumed from 26th April (vide page 1155), on motion by Mr. Harold Holt-

That the bill be now read a second tune.

Melbourne Ports

.- The Opposition does not oppose the measure. However, we on this side regard this is a very clumsy way of doing what the Government intends to do. The Government intends to channel some 30 per cent, of the total future investments of insurance companies and superannuation funds into government securities, two-thirds of it into

Commonwealth securities and the remaining one-third into the securities of local government authorities and others, which are still described as public securities. We regard this as an essential move to secure .a better overall disposition of the investment pattern in the Australian community, and apparently, belatedly again, the Government also recognizes this. I .should like to refresh the recollection of honorable members on a debate on life insurance that took place in this House nearly three years ago. On that occasion, speaking for the Opposition, I said -

  1. . I feel that .the time may have arrived for a comprehensive re-examination of the role which insurance plays in the community to see, among other things, whether there should be some better guidance or directions with regard to the investment ;of these vast amounts.

Later, speaking in the same debate, the honorable member for Petrie (Mr. Hulme), now a member of the Ministry, quoted1 those words of mine and went on to say -

I say quite definitely that, when these companies

The honorable member was referring to insurance companies - move their investments away, perhaps, from Commonwealth securities and into mortgages, they are seeking a higher rate of interest. That, of course, has a reflection in the bonuses which are received by the policy holders. I believe that when the companies do this they are acting in the best interests of the policy holders.

If the direction were that the companies must invest their funds - even to the extent of more than 50 per cent. - in Commonwealth loans or in local authority loans, then the companies would not be acting in the best interests of the policy holders.

I have quoted the honorable member tor Petrie only to show that at least there has been some change of views by the Government with respect to this important subject of investments of life insurance companies.

Mr Haworth:

– When were those speeches made?


– My speech was made on 20th March, 1958, and that of the honorable member for Petrie on 25th March, 1958.

Mr Bandidt:

– That was a speech by ti back-bencher.


– He is now a member of the Ministry.He at least has been persuaded that what he said in 1958 was wrong. I do not concede that I thought he wasright in the first place - I did not - but we now have a change of heart on the part of the Government. This Government claims not to believe in controls. It claims to support something that it calls free enterprise. Its action now serves to highlight the fact that it is impossible always to hold such pure theories. Sometimes one must choose between the private interest and the public good. In my opinion the Government’s move now is a move in the direction of the public good; but rather than face the problem systematically the Government proposes’ to deal with it in a back-handed way that involves reconstructing the income tax legislation so far as the assessment of life insurance companies and the treatment of private superannuation funds are concerned.

In an article in the 1st April, 1961, issue of the “Taxpayers’ Bulletin” the present method of assessing life insurance companies is described succinctly. The article reads -

Briefly, life insurance companies are assessed under a special code found in Division 8 of the Assessment Act. In brief, premiums do not comprise assessable income and assurance companies are taxed on their net investment income and, in addition, under Section 115–

That is one of the sections that is to be altered by this bill - a special deduction is allowed of 3 per cent. of that part of the “ calculated liabilities “–

I do not at this stage propose to go into the intricacies, even if I understood them completely, of the way in which the Commissioner of Taxation arrives at what is called calculated liabilities. The article continues - at the end of the year of income as bears to such calculated liabilities the same proportion as the value of the assets.

Provident, benefit and superannuation funds established for the benefit of employees are free of income tax in terms of Section 23 (j) of the Assessment Act.

That section also will be amended by this bill-

Subject to certain conditions, the income of a provident, superannuation or retirement fund established for self-employed persons is exempt in terms of paragraph (j.a. of the same section.

That, briefly, describes how life insurance companies are assessed at present. The changes proposed by the Treasurer (Mr. Harold Holt) are for a number of reasons. On reason is the present method by which life insurance companies are assessed. As the Treasurer pointed out in a statement to the House about a fortnight ago, although life insurance companies theoretically pay tax on their assessable income at the rate of 5s. in the£1, the practical effect is that they pay tax at an average rate of only ls. 6d. in the £1 on their assessable income. As the Treasurer has pointed out the present tax structure tends to have an inbuilt disadvantage to the holding of government bonds by insurance companies as against shares. Like any other company, they are exempt from paying tax on dividends received1 from other companies. It pays them, from a taxation point of view, to have a higher proportion of dividends, which bear no tax, than government bonds, which are calculated as assessable income for taxation purposes. This is one factor that has influenced insurance companies in the disposition of their investments. The choice has not been altogether a free one for the insurance companies. It is a free choice only after taking into account and carefully calculating the effects of taxation.

We are told that insurance is a good thing for the community because it is one of the principal sources of private savings. Insurance premiums amount to about £150,000,000 a year, but allowing for the payment of maturing policies, the net flow into the savings pool in the hands of life insurance companies is about £100,000,000 a year. People are encouraged to take out insurance policies because to a certain extent premiums are an allowable taxation deduction. An individual taxpayer may claim a deduction of up to £400 in respect of insurance premiums paid. Those deductions mean a loss of revenue to the Government of about £35,000,000 a year. In addition, undertakings that provide superannuation benefits for their employees are allowed to deduct the cost of those benefits when computing their assessable income. The loss to revenue in this way amounts to a further £9,000,000 a year. The total effect of inducing this £100,000,000 of net investment each year into the insurance companies is to reduce the revenue of the Commonwealth of Australia by £44,000,000. I say to the honorable member for Hume (Mr. Anderson), who is interjecting, that I want to develop this argument in my own way because this is a fairly complicated matter. Offsetting the net advantage that I have mentioned is the fact that it costs approximately £25,000,000 per annum to administer the life insurance companies of Australia. When these figures are taken into account, it is seen that this is not a very systematic way of channelling £100,000,000 worth of savings from the community at large. About £44,000,000 of revenue is lost and something like £20,000,000 or £25,000,000 is expended in running the life insurance companies themselves. When these factors are taken into account, it is seen that there is not the degree of injustice in the Government’s action as at first sight appears to be the case. That is one aspect of the nexus that is responsible for the changes that are being brought about by this measure.

Another factor, of course, as the honorable member for Petrie (Mr. Hulme) pointed out in this House some years ago, is that the insurance companies have an obligation to make to their policy-holders the best possible payments upon the maturity of their policies, having regard to the existing channels of investment and the effects of inflation which has existed in the Australian community over the last ten years in particular. What the insurance companies have to do in this regard is set out very clearly in an address entitled, “ The role of Insurance Funds and their Investment in the Australian Economy “ that was delivered to the Victorian Branch of the Economic Society on 26th September, 1958, by Dr. Bell who is, I think, an economic expert retained by the Australian Mutual Provident Society. He pointed to three essential things so far as life insurance investment is concerned, and stated -

The liabilities assumed are of a long-term and continuing nature.

As these liabilities are of a long-term and continuing nature, the life insurance companies have had considerable difficulty over the last ten years in trying to estimate the likely effects of inflation on them. In periods of stability, the life insurance companies have been prepared to favour gilt-edged securities. But of recent years they have seen the capital value of gilt-edged securities fall, and they have attempted, on a longterm basis, to shift their investments into channels that either provide a higher rate of interest than government securities, such as fixed interest securities, or, alternatively, into equities in which there is a greater degree of correspondence between the rise in the value of the equities and the fall in the value of money. Dr. Bell went on to say -

The element of interest has a major role to play in the solvency of the whole operation of life insurance. . . . Life offices are, of necessity, large fund accumulators.

That seems to me to sum up fairly briefly the concept of life insurance companies in the traditional sense. Formerly, as the figures that were cited by the Treasurer show, the life insurance companies had a much higher proportion of their total investment in government securities than they have at the present time. The other main channel of investment was in the form of mortgages. They had very little resort to investment in fixed interest securities or the actual ownership of shares. Because of the inroads of inflation the insurance companies have been forced to change their investment pattern. We on this side of the House believe that the sensible and equitable thing to do in the public interest is not to let interest rates all rise one after another, but to endeavour to grapple with the problem which makes interest rates rise, that is, to grapple systematically with the problem of inflation. If there is to be a margin between the interest rate on gilt-edged securities and that on equities, we think it is more equitable to lower the gilt-edged rate progressively - and the other rates with it - rather than to allow all rates of interest to rise. But the tendency of this Government has been to take the other course, to let what it calls “ money factors “ rule. That theory sounds very good, but we have to examine the position. Under this scheme there may be some beneficiaries, but there are a lot of losers. To a great extent, life insurance and the later development, the growth of superannuation funds, which I will talk about in a moment, tend to be middle class and upper class devices rather than means to enable the poorer sections of the community to accumulate money.

Mr Killen:

– Have not the insurance companies a responsibility to protect their policy-holders?


– 1 agree that they have an obligation to protect their policy-holders, but the Government has an obligation to protect the public. At times, there may be a conflict of interest between the policy-holders - a limited section - and the community as a whole. I suggest that that is the situation that has developed. I am trying to make the point that if we consider the amounts of insurance policies rather than their number, we find that to a great degree the principal policy-holders in life insurance companies are in the sections of the community that are able to save. They are aided by the fact that saving by means of life insurance is made more attractive by concessions offered under the taxation structure. These concessions are granted at a cost to revenue of £44,000,000, taking into account deductions allowed to employers in respect of their contributions to superannuation funds.

The insurance companies may squeal about the Government’s proposals, but 1 think they should look at the very substantial benefits they derive at the moment from taxation concessions. If we evaluate on balance the adverse effect of this measure on the insurance companies we find that it only slightly offsets their present taxation concessions. The Government should have examined this particular aspect of the matter more closely than it has done. Turning to the other aspect of the problem, I think that the Government has leaped in the dark. I refer to the setting up of private superannuation funds, some of which are administered by life insurance companies and others by the funds themselves. The investments are determined either by a fund itself or by an adviser to the fund.

The problem involved here was highlighted very well in a paper that was delivered at a fairly select conference held some time ago. At the 64th session of the Actuarial Society of Australia and New Zealand an address was given by Mr. J. R. Harris, F.F.A. Those letters stand for Fellow of the Faculty of Actuaries. His remarks were made from the point of view of a gentleman who is concerned mainly with this new device, the private superannuation fund. A few things should be said about these private superannuation funds. The first is that, apart from occasional surveys that are made by the Commonwealth Statistician, very little concise in formation about the extent of the funds is available. The second is that sometimes they invest through life insurance companies and sometimes they simply set up funds which are almost entirely controlled by the managements. The kind of difficulty that arises was referred to a few years ago by some of the Government’s advisers. On page 7 of the 11th Annual Report - that for the year ended 31st December, 1956 - the Insurance Commissioner, referring to these private superannuation funds, said -

It is probable that in most instances surrender occurs as a result of withdrawal from a superannuation scheme following a change of employment. Lt is understood that very few superannuation schemes provide for transfer of policies from one scheme to another as an employee changes his employment.

Yesterday the Minister for Labour and National Service (Mr. McMahon) told the House that it is a good thing for the economy when people change their employment, but the existence of these superannuation schemes makes it difficult for people to change their employment.

I suggest that the situation at which we have arrived was summed up very well in an article in “ Nation “, of 3rd December, 1960. I commend this article to the consideration of the Government and its advisers. It is headed1, “ Stick for the Staff “, with the sub-heading. “ Market consequences of Mr. Holt’s blow to the pension funds”. It cites the example of a firm named Ralph Symonds Limited which, the article says, was offering to take over an ailing Sydney piano manufacturer, Beale and Company. It was found that Beale and Company had one of these private superannuation funds in existence. At first, on a theoretical level, part of the argument in the take-over bid was whether the fund should be wound up or the new firm should take it over. According to the writer of this article, on an examination of the legalities of the position it was found that - “… the money in the staff fund did not belong to the company, neither was it money which the employees at any particular moment had the right to acquire; it was a retirement fund, something that keeps rolling along.”

I suggest that as in many instances employees are paying a minimum of 10s. a week, and much larger sums, into funds which presumably belong to no one, and which can become a plaything in take-over bids, it is time something was done- to regulate this kind of activity, just as something has been done in other fields of insurance. In many of these funds, if an employee has a row with the boss he has no right to get back even his own contributions, let alone the contributions to the- fund which the employer has claimed as a deduction under the provisions of section 66 of the Income Tax and Social Services Contribution Assessment Act. These funds are an entirely unregulated part of the economy. We are told that at the moment they aggregate about £300,000,000, and another £300,000,000 is in government superannuation funds, where I hope the protection is greater than in the private funds. Those figures were given in the speech delivered by the Treasurer (Mr. Harold Holt) recently.

The writer of the article in “ Nation “ refers to another point which, in my opinion, is significant, and that is that the investments of a Targe number of the superannuation funds are purely in the business itself. The writer asks: What happens if at the same time as some people are seeking retirement benefits from the fund other employees are being laid off because the firm says that it cannot continue to employ them? If. the superannuation fund, is part of the entity as a going concern,, the fund becomes a going concern, not. a running up concern. I believe that, this sort of thing calls for some regulation..

It is easy enough to say that these are just private rights. In my opinion, once more than a dozen people are employed in a firm and have rights of this kind built up out of their own savings, the matter ceases to have the intimacy of privacy and tends towards the point where there should be some public intervention to regulate it equitably in the interests of people who are often unable to defend themselves against the depredations of employers. That has been done in other parts of the world, particularly in that great citadel of free enterprise, the United States of America. If it can be done there without offending anybody, surely in all justice it can be done in Australia.

The problem that concerns a great number of American people is the concentration nf economic power. The article in “ Nation “ from which I have quoted points out that in Australia at the moment the staff fund of one of our biggest companies, the Colonial- Sugar Refining Company Limited, is its largest single shareholder. Where do we get to when the principal shareholders of companies are, as it were, passive blocks of shareholders, when legally it is impossible to tell who owns, the shares, and when, in the final analysis, the only significant question is, who in theory are the trustees? In most cases the answer is that the managements are the trustees. It is just another device for making, the managers more- secure than previously in their authority over the shareholders. Again I suggest that in the interests of the apostles of free enterprise this aspect calls for closer scrutiny.

In the United States the majority of the shares in Sears Roebuck, which is one of the biggest discount and merchandising houses in that country, are held by the staff pension fund. I am not suggesting that that situation has been reached in Australia, but it could be reached. If we are getting anywhere near it, then rather than wait until one of our large firms cannot pay superannuation benefits to its employees^, and before it is too late. some sort of organiza-tion should be set up to which the funds have to report annually so that their total significance can. be evaluated. This matter is of interest to the community as a. whole. The members of this Government never face up to a situation until the roof of the house has fallen down about their heads. But occasionally there are innocent victims when the roof falls down. It is the. duty of a government to interfere for the public good rather than to let the private interest run along blithely in its own way.

I said earlier that I would cite examples that had been quoted by Mr. Harris. He takes as a possibility the case of a young bank clerk who as far back as 1921 started at the lowest rung of the ladder. He explains what would have happened if there had not been any inflation from 1921 to 1960 and if a fund had been created, the contribution to which had been 10 per cent, of the bank clerk’s salary. I am not concerned at this stage with whether the young man paid all of the 10 per cent, or whether it was shared between the employer and the employee. That bank clerk would have expected that upon retirement he would be entitled to a lump sum benefit of £3,644, or 8.1 times his salary in the year in which he retired. However, the actuary points out that, because of the effects of inflation, instead of getting £3,644, the purchasing power of which would have been 8.1 times his salary in the final year of employment, the clerk would now receive £4,719, or only 2.9 times his final salary. That illustrates the kind of dilemma in which these private superannuation schemes are placed. They have to seek some channel of investment which will give to a man at the end of his contributing life a return the purchasing power of which approximates what he expected when he joined the scheme. That is why you have this recourse on the part of private superannuation funds to equity investment rather than to government bonds.

Mr. Harris set out the position very well at page 1 12 of the report of the proceedings of the actuaries’ conference. He said -

I would expect to find in most Australian funds at present-

He was speaking as an actuary who was advising members of private superannuation funds -

  1. that the fund was obtaining a higher yield on new fixed interest investments than on its present portfolio.

In other words, he was postulating that interest would continue to rise rather than 10 fall and that the tendency would be to go into the fixed interest field. Of course, alterations have been made by this Government in recent times that have had some effect on the ability of people to continue to look to funds in this way. Mr. Harris also said that he would expect to find -

  1. that the fund’s income would exceed its expenditure for some years even if it was immediately closed to new entrants. . . . Consequently new investments will have to be made for some years.
  2. that the term of the fund’s fixed-interest investments was much shorter than the term of its liabilities.

In other words, they have to continue to cross-change these fixed investment securities, hoping they will be on a rising market.

But what happens if they are on a falling market? I suggest that some of these funds started off very optimistically a year or two ago. The Treasurer suggests that new investment in the funds is of the order of £90,000,000 a year and that the tendency is for a higher proportion of that money to be placed in fixed interest or equity investments. Those who administer these funds may suffer a few headaches within the next twelve months as a result not only of this legislation but also of previous legislation, but would it not be in the interests of those people to do something immediately to ensure that there was more regulation of their investment policy? At least, they might then know where they were going rather than have misgivings after certain changes had occurred. That is why, Mr. Deputy Speaker, I suggest that the Government is now only tinkering with the problem. It is certainly using the existing tax provisions to bring about something that it regards as being very good overall, but the problem is not being dealt with systematically.

The proposed legislation avoids the emerging and major part of this problem - the private superannuation funds. It does nothing at all to grapple with the problem of the scrutiny of the socalled rights of some people who have invested in these funds. We have what seems to me to be almost a ludicrous contrast. Yesterday the Minister for Labour and National Service (Mr. McMahon) told us that labour turnover was a good thing, hut he does nothing to stop that which makes labour more immobile than he wants it to be. It is not to be assumed that I agree with his argument, but I point out that only two or three years ago industrialists were pointing to labour turnover as being an adverse factor, not a favorable factor. The Government’s action shows that it does not follow the winds of change but is only dragged along and that it ends up in the middle of the cyclone and perpetrates a lot of misery.

The Opposition does not object to this measure, because we regard a certain amount of social control in the public interest as having priority over the unmitigated advantage of individuals who pursue an economic path of their own choosing. I do not even criticize the work that the insurance companies have done over the years. I merely point out in conclusion that the position they have reached has not been arrived at entirely by their pulling themselves up by their own boot straps. They have been aided and abetted by taxation concessions. The new form of development - the private superannuation fund - is simply an attempt by some to rise on the escalator of inflation at the expense of the majority, who are down at the bottom. We believe in controlling inflation for the majority at the bottom rather than providing top-hatted schemes for those who are at the top.


.- The honorable member for Melbourne Ports (Mr. Crean) in his helpful, well-considered and well-presented speech made it quite clear to the House, I suggest, that the Opposition does not oppose the bill. But he has criticized it as being a clumsy method by which to achieve the desired objective. 1 trust that in my contribution to the debate I shall furnish an adequate answer to that criticism. The honorable member said, amongst other things, that the Government was seeking investment for the public good; but he went on, unsuccessfully in my opinion, to criticize the Government on the ground that it was forgetting its aim of free enterprise. Again I hope that my contribution will provide an answer to the point which the honorable member endeavoured to make.

I was concerned when the honorable member for Melbourne Ports referred to this measure as being a re-construction of the Income Tax and Social Services Contribution Assessment Act. I must say in reply that the bill proposes only amendments confined almost entirely to the several sections in the legislation which relate to life insurance. Before I leave my reference to the speech of the honorable member, I point out that he inferred that the administrative cost of some £25,000,000 of the life insurance companies in Australia applied specifically to the annual accrual of assets of from £90,000,000 to £100,000,000. Let me indicate how foolish that statement is. Naturally, these administrative costs relate to the amount, now in excess of £1,000,000,000, which represents the combined or total assets of those companies.

Mr Uren:

– An increase of more than 100 per cent, in ten years.


– We shall deal with that increase.

Mr. Deputy Speaker, students of taxation law have invariably found that the sections in the Income Tax and Social Services Contribution Assessment Act which apply to life insurance companies are most complex. The use of special formulas for the calculation of rebates and liabilities has been defensible for a number of years, and I suppose that to hope that our legislative experts could come up with a simple method of achieving the objective of this bill would really be to expect too much. In my opinion, the amendments to the act enunciated in this bill will .certainly complicate the taxation law as it applies to life offices and will, as a corollary, enhance the responsibilities of all officers, lawyers and taxation consultants concerned with the interpretation of the law.

Having accepted this inevitability of complex law, I want, if I may, to make it quite clear that I support the Government’s decision to use the Income Tax and Social Services Contribution Assessment Aci as a vehicle to meet its requirements in this field. It seems to me to be quite logical to turn to the existing law, which extends attractive concessions to superannuation funds and life offices, and by modification or qualification to bring about the pattern of the investment of funds which the Government firmly believes is warranted in the country’s interests. I suggest that this action centralizes in the one act provisions which are distinctly related.

When we turn to the history of the taxing of life offices, we find that for many years mutual life offices were exempt from Commonwealth income tax, just as pension funds are to-day. The present basis of Commonwealth taxation of the income of life offices had its origin in the Financial Relief Act 1933. This act established the principle of a deduction for the estimated amount of interest required to be earned by a life company in order to meet its policy obligations and provided for a deduction based on 4 per cent, of its calculated liabilities under policies in force at that time. As honorable members doubtless know, these provisions have become the existing section 115 of the Income Tax and Social Services Contribution Assessment Act. At the time when they were instituted, life offices were taxed also by the States on varying bases. On the introduction of uniform taxation in 1942, the 4 per cent, basis provided for in section 115 of the act was reduced to a basis of 3 per cent, in order that there should be no overall reduction of tax revenue received from the life offices. It is interesting to note that, apart from this amendment in 1942, the sections of the principal act relating to the taxing of life companies have remained virtually unchanged, although the rate of tax has changed from time to time and the comparison between the rate levied on life companies and that levied on other companies is now less favorable to the life offices than it used to be.

Although the investment income of a private superannuation scheme is exempt from tax, similar income received by a life company in respect of insured superannuation business entrusted to it is taxed in the hands of the life company. The Treasurer (Mr. Harold Holt), in his statement to this House a few weeks ago, reminded us that governments have given great encouragement and practical assistance to life companies and superannuation funds. The current provisions of the law have been left virtually unamended for 28 years, and favorable tax treatment has meant that life companies, on the average, have been paying less than ls. 6d. m the £1 of their total assessable income. Substantial tax concessions in respect of life insurance premiums and contributions to superannuation and provident funds have helped considerably. I think that this was mentioned by my friend, the honorable member for Melbourne Ports.

May I emphasize that this Government, which, of course, I am indeed happy to support in this proposed amendment of the taxation law, recognizing the value to Australia of an increasing amount of personal insurance, which is an important form of individual saving, has been responsible for lifting the deduction for premiums and superannuation contributions from £150 in 1949 to £400 to-day. It cannot be denied, Mr. Deputy Speaker, that this one concession to taxpayers, which, as the honorable member for Melbourne Ports mentioned, costs Commonwealth revenue about £35,000,000 a year, has in recent years been a major factor in stimulating the amazing increase in the business of the life offices. I suggest that it provided a readymade sales story. It brought in business so often with the expenditure of little effort. It has played, I feel, a big part in the building up of the total Australian assets of the life companies to a figure which now exceeds £1,000,000,000. Why, the annual increase in these assets is estimated to-day at 10 per cent! These funds, which were less than £300,000,000 in 1944, grew by £90,000,000 last year alone.

We have noted that the life companies pay very little tax indeed. But even more favorable treatment is extended to the privately managed superannuation and provident funds, for the majority of these are tax-free. This help, again, is reflected in their progress. Their assets show an annual increase of about 15 per cent. - not 10 per cent., but 15 ner cent! In the last ten years alone, the assets of these funds have risen from under £200,000,000 in value to almost £600,000,000 to-day. I believe that those responsible for the administration of these funds and of the life companies will always be grateful to this Government for the economic climate and the helpful legislation which have made possible this fantastic progress. May I express the hope, too, that these current measures will be accepted by those same people and by all concerned with this subject in the right concept.

Let me remind the House of the change in the investment practice of life offices, which, of course, was mentioned in the Treasurer’s second-reading speech. Although the increase in total assets during the past eleven years was £562,000,000, these companies increased their holdings in public authority securities by only £81,000,000, and of this amount only £4,000,000 found its way into Commonwealth securities. There lies the Government’s concern. Here is the basis for the thoughtful approach which has led to the introduction of this bill. A real change seems to have swept across the old tradition of investment by such organizations only in gilt-edged securities. In 1949, 68 per cent, of the assets of these companies was invested in public authority securities, and the indications are that the proportion for 1960 is less than 33 per cent. The practice of the superannuation funds is much the same, the decline being from 50 per cent, in 1949 to 39 per cent, in 1959.

Mr Uren:

– The Treasurer said that the figure was 27 per cent.


– If the honorable member thinks that his figures are more accurate, mine are here readily available for him to check.

The Government believes that a reasonable proportion of these large amounts, of community savings which are placed in the custody of life offices and superannuation funds should be so invested as to help to finance the essential community services of the nation, Mr. Deputy Speaker. According to my assessment of the action now proposed, the element of compulsion has been adequately removed. Honorable members are aware of the existing provision for a rebate of 10 per cent, of income derived from Commonwealth bonds. I am most interested in this, for my thesis is that in this aspect of the existing, legislation we find a good basis for the acceptance of what is now proposed. I am submitting that this provision for a. 10 per cent, deduction of income derived from Commonwealth bonds establishes a principle - invest in Commonwealth bonds and obtain a benefit or concession. The new investment pattern proposed is, therefore, not the introduction of a new principle but rather the extension of rebates or allowances already provided for, the benefits of which can be taken up by the life offices and funds, or, if they so desire, left or disregarded. This is why 1 support the use of the income tax act for the purpose. I believe that taxation rebates and incentives lend themselves appropriately to the achievement of the required investment pattern, the 30/20 per cent, ratio, which means,, of course, 30 per cent, of investment in public authority securities, including 20 per cent, in Commonwealth securities.

Let me turn for a few moments to the privately managed superannuation and provident funds. How will they be affected? In the first place, let me point out that these funds have been exempt from tax. They will still be exempt from tax, provided they maintain the 30/20 per cent, ratio in their investment portfolios. They will pay tax at mutual life insurance company rates only if they choose not to invest accruing assets beyond the 1960-61 level according to the 30/20 per cent, ratio, or if they reduce their holdings of public authority securities from the 1st March, 1961, level.. This means that these funds will, in any case, continue to enjoy exemption from: taxation on an amount- equal to the 1960-61 level of investment income; In other words, the funds will not be called on to pay tax retrospectively. I am suggesting that this is fair treatment indeed.

What- are the provisions in the act for life companies, which are: in a somewhat different category? The first point 1 want to make about the effect on life companies is that under the existing legislation they are required to pay tax on their superannuation incomes. Now, by creating a separate statutory fund for their superannuation business, and by choosing to accept the investment ratio, suggested, by the Government, they can arrange for this section of their business to become exempt and to receive treatment similar to that given to the private funds.. I direct attention to the fact that this is a provision that life offices have, been seeking from governments for quite a number of years.

The second provision in the interests of the life offices concerns section 115 of the existing act. This has provided for a deduction in relation to the calculated liabilities of a company. This, Mr. Deputy Speaker, was originally designed to help Australian companies at a stage when they needed help. It recognizes that some part of the investment income of a life company will be absorbed in meeting the. liabilities on policies, and is not,, as a consequence, an appropriate subject for taxation. This special- deduction has freed from taxation an amount of from 2i to 3 per cent, of a company’s- Australian policy reserves. To obtain this section 115 deduction, the companies apply their actuarial estimates to the formula specified in the act.

There is a further major concession extended to life offices-. I refer to section 46 rebates. This section, provides for a rebate in respect of dividends, included in a company’s taxable income. Although dividends received by other companies become taxable, income when they are distributed to their shareholders in due course, dividends received by life companies can be distributed to policy holders tax free, because; reversionary bonuses on life policies are; not subject to tax. I think I should emphasize the value of this rebate by citing a passage from the statement made by the Treasurer several weeks ago: -

With the increased holdings of company shares by the life companies, this has become an increasingly valuable privilege. Indeed, it produces a sort of inbuilt discrimination against government securities, the income from which is taxable, and it thereby tends to increase the attraction of company equity investment. This is a consequence certainly never intended when the provision was introduced and, in. fact, is a consequence which runs counter to the wish of past governments, as well as that of the present one, that a large proportion of insurance investment should be in government securities.

To my mind, the bill now before us undeniably indicates an even more generous attitude to the life companies. Let me explain the reason for making this contention. The two ‘benefits with which I have dealt are being continued subject to the adoption of the 30/20 investment plan. But there is now offered to these companies an added incentive. The section 115 deduction will be increased for their ordinary life business by 1 per cent, for every percentage point in excess of 30 per cent, in the proportion of their Australian ordinary life assets held in public authority securities. It will also be increased by one-half of 1 per cent, according to the extent to which the proportion of those assets held in Commonwealth securities exceeds 20 per cent. However, the bonus for holding Common: wealth securities in excess of 20 per cent, will apply only if the holdings of public authority securities other than Commonwealth securities, are at least maintained during the year concerned, at the amount so held at 1st March, 1961. This bonus for hol’ding- Commonwealth- securities will also be- offset- by a reduction of one-half of 1 per- cent, for every percentage point below 10 per cent, in the proportion of the Australian- ordinary life assets held in public authority securities other than Commonwealth securities.

It- is clear that this bonus- plan can substantially increase the- deductions for calculated’ liabilities. I. go> so far, Mr. Deputy Speaker, as to suggest - and’ I anr. being perfectly frank, in my assessment of the effects of the legislation - that life companies, by co-operation, with the Government in respect of the readjustment of their investment portfolios; can achieve freedom- from taxation entirely:

Let me also direct attention to the Government’s moderate approach to the changes which may prove necessary in a company’s investments. I note with interest that the Commissioner of Taxation has been given authority to take into account bona fide efforts of the trustees of a fund, and to grant exemptions from taxation according to special difficulties and circumstances that may arise. In like manner, the Me companies desiring to obtain the benefit of these taxation concessions that I have tried to outline in simple terms, but finding themselves with insufficient time to make the necessary adjustments, may enter into an undertaking to conform to the investment pattern by the year 1971. fir other words, this Government, displaying a- very moderate attitude, says, “We realize thatin certain rare circumstances time may be required, and the Commissioner of Taxation will be given authority to grant extensions of time until 1971 “. Further, should more than 40l per cent, of the annual increase or accrual of assets be required’ to be invested in public authority securities, or if more than? 25 per cent, be required for investment in Commonwealth securities, the legislation provides that these proportions may be considered the ceiling limits annually for these types of. investment.

Naturally, Sir, the life: insurance offices have been given an opportunity to submit their views on these’ new proposals. It is known that the Treasurer (Mr- Harold Holt) has made readily available the statement that he made to this House a few weeks ago. There has been liaison with the object of ascertaining the protests or the problems that the companies’ might present. It is pleasing to me and, I am sure, to all concerned’, that the Government has incorporated in this bill’ certain recommendations that have been put forward by the companies. The proposed new section 115a represents’ one such modification.

To summarize what I have endeavoured to present to the House in discussing this, most important measure,. Mr. Deputy Speaker, let me say, first, that the need for such a scheme to stimulate investment in small public authority securities cannot be challenged. The honorable member for Melbourne Ports has referred to belated, action on the part of the Government. We know that the trend’ of events in the later months of 1960 indicated that something like this should be done. That trend was not necessarily apparent to the same degree in earlier years. Secondly, life companies and superannuation funds, which are concerned with such a great volume of individual savings, and being traditional investors in public authority securities, are quite fairly, in my opinion, being asked to help in the developmental programme of the nation. Thirdly, as I have endeavoured to explain, no new taxation principle is being adopted. Instead, an extension of rebates to insurance companies and superannuation funds is being offered. Fourthly, compulsion has not been incorporated in this legislation. Life companies and superannuation funds will be free to choose their own methods of investment. Finally, very great advantages are offered to the life companies and funds in the event of their conforming to the 30/20 per cent, ratio for their investments. I commend the bill to the House, Mr. Deputy Speaker, and express the hope that it will prove to be yet another monumental piece of legislation introduced by the Menzies Government.


– In all the time that I have been in this House, Mr. Deputy Speaker, I do not suppose I have ever heard such a carefully prepared speech as that delivered by the honorable member for Swan (Mr. Cleaver).

Mr Chresby:

– And a jolly good one, too.


– Such speeches usually are, if they are prepared by Treasury officials or people close to the Treasury, because such people are best fitted to prepare statements on this subject. The aspect of the honorable member’s speech which most caught my attention was that care was taken not to make any reference at all to what the Treasurer (Mr. Harold Holt) had said in November last. Great care also was taken to avoid reference to the weaknesses that have existed in the control of private superannuation funds. No reference was made to matters that were mentioned by the Treasurer in November last, such as the action that would have to be taken in regard to companies that were not playing their part in furthering the national interest. So much care was taken by the honorable member to avoid reference to those matters that his speech will be remembered as one prepared for him by somebody else, prepared in a way calculated to give voice to matters that the Treasurer wants the public to be told about to-day instead of the matters that he referred to in November last.

The only reference by the honorable member for Swan to the November statement of the Treasurer was to the effect that by 1960 the trend of events indicated that something like this would have to be done. That is not in accordance with the facts, Mr. Deputy Speaker. In November last, the Treasurer stated that certain measures would have to be implemented quickly to try to correct the unstable condition of the economy. We must not forget the nature of those measures. First, there was the proposal to increase sales tax on motor vehicles and, secondly, insurance companies and private superannuation funds were to be compelled to contribute to Government loans. Those measures were indicated by the trends of 1960, and those were the measures that had to be watered down in 1961. The honorable member for Swan knows very well that during the last fortnight, the Premier of Western Australia, the State from which the honorable member comes, has stated that certain things are essential for the development of that State. However, the provision of funds to enable those things to be done has been denied Western Australia by this Government. The honorable member should be saying that the Treasurer’s approach of November last was the correct approach, rather than delivering the kind of prepared speech that we heard from him to-day.

As was stated by the honorable member for Melbourne Ports (Mr. Crean), who led the debate from this side, of the House, the Opposition does not intend to oppose this legislation because of the urgent need for it and because the Government has indicated that the legislation represents the limit to which it is prepared to go at this time, in calling upon life insurance companies and private superannuation funds to contribute to government loans. As the honorable member for Swan rightly said, those organizations have enjoyed great taxation advantages over the years. Of course, there may not be a ready response on their part. Goodness knows, this Government has met with many failures over the years. I remember that at one time - so many years ago now that it is a matter of history - the Prime Minister (Mr. Menzies) called a conference of all interested parties with a view to seeing whether something could be done to stabilize the Australian economy. Despite that, the economic situation has continued to go from bad to worse and, as I have said, in November last the Treasurer was obliged to direct attention to the, great difficulty that the Government was experiencing in finding the money that was necessary for the continued development of the nation. If I remember correctly, he stated that great sums of taxation revenue had to be used to finance Commonwealth and State works.

That is the background of this legislation. The Government found, towards the end of last year, that the time had arrived to consider requiring life insurance companies and private superannuation funds to contribute to Commonwealth loans. As the honorable member for Swan has said, between 1949 and 1959 only £81,000,000 was contributed to loans by insurance companies which now hold £1,000,000,000 worth of assets in this country. The honorable member also said that only £4,000,000 of that sum had come under Commonwealth control. The situation had developed in such a way that the companies and funds surely must have known that they were inviting legislation that would compel them to return to the state of affairs that they were prepared to accept during the war years.

We must remember that between 1949 and 1959 the companies increased their assets by a total of £562,000,000. I do not blame them for doing so. Nevertheless, during the time that they were increasing their assets by that vast sum, they were prepared to contribute, only £4,000,000 to Commonwealth loans for the advancement of this country. They did that at a time when call after call had been made, not only by members of the Government but also by the Opposition, the trade unions and representatives of industry, for a clear recognition of the developmental needs of the country. As honorable members will remember, earlier to-day in this chamber we heard that money was short for a national project in Queensland. An approach was made to the International Bank but funds could not be obtained to finance the project. Then we had to rely on our own resources to raise a mere £20,000,000 while companies that have accumulated immense wealth to the tune of £562,000,000 contribute a mere £4,000,000 towards the development of this country. I suppose it can be said that rather than blame the companies we should blame the lack of control of interest rates and profiteering that has gone on over the last ten years. That is the basic cause of the trouble. If we go to Circular Quay we can see a great 25-story building shooting up. The insurance company which owns the building regards it as much more important, from its own point of view, to erect such a huge building than to contribute something towards Commonwealth funds to be used on the water conservation scheme that Western Australia needs so badly. It is high time that there were new thoughts on the problem of what is best in the interests of the development of this country.

This morning, we heard quite a lengthy but interesting speech from a member of the Country Party who was a former Cabinet Minister in the New South Wales Parliament. He complained of the increasing rate of expenditure in the cities. Make no mistake about this - the insurance companies have been the principal offenders in pouring money into great buildings in capital cities. One has only to go to Melbourne, Sydney or Adelaide to see evidence of the immense amount of money that is being poured into capital investment. For what reason are the insurance companies and others doing this? They are doing it because that kind of investment provides a much better return than does investment in government bonds.

The position during the war years was much different from what it is now. At that time, 68 per cent, of the companies’ funds were invested in government bonds but only, in the main, because interest rates were pegged at 3i per cent. When this Government came to office and an advantage could be obtained by investing in other ways at higher interest rates, investment in government bonds fell away. I have some doubts about the proposal contained in this measure. There is only one way in which it will work. I know that the honorable member for Swan said that under this new arrangement life insurance companies will be able to avoid taxation completely. But what will they avoid? All that they will avoid will be taxation at the rate of ls. 6d. in the £1, a concession that they have enjoyed for 28 years. The concession is so small in relation to the return that they can obtain from investment in other directions that I shall want to see the predicted increase in investment iq government bonds before I shall be convinced that the Treasurer was wrong in November, 1960, and is right in April, 1961.

I support the remarks of the honorable member for Melbourne Ports in relation to private superannuation funds. These organizations are mushrooming in this country. Because of its change of policy since last November, the Government is placing those funds that already exist and have assets to the tune of £300,000,000 in an advantageous position compared with those that will be established in the future. Any new fund that wants to supplement its investments to the extent that the old funds already have supplemented theirs must conform to the Government’s wishes, or be taxed. The Government’s new policy means that the funds which already have assets of £300,000,000 always will he in a privileged position. I support the statement of the honorable member for Melbourne Ports that it is time the position was examined more closely. These private superannuation funds have grown to the stage where if there were a downward trend in the commercial side of our economic life - no one wants to see it - some of them would be found to be based on nothing more than book entries, because there is no control over them. They are different from any fund that is controlled by the trade union movement. In New South Wales - I think this applies generally - the superannuation and provident funds of the .trade union movement are subject to the same control as are the friendly societies. Surely that is little enough to expect with all these private funds that .are in existence and are coming .into existence.

In my view, it is completely wrong to allow a fund to operate, to which the workers contribute something and to which the employers contribute something or nothing, as the case may be, that is not subject to control at some level. Not even a balance sheet of these funds is required, and one can assume that 80 per cent, of the workers who contribute to them have never seen a book of rules or a constitution. They are merely told by the employer the value of the fund. I know of one fund the contributors to which are handed a slip of paper which indicates that if they live to a specified agc the amount to which they will be entitled will be so much more than was expected when the last report on the fund was made. When I knew that this debate was coming on, 1 asked a number of workers for a copy of the rules of the superannuation funds to which they were contributing, but there are no rules. The funds are simply set up by the employers. If a close examination were made of the operations of these private superannuation funds it may be found that they have been established as a means of circumventing taxation. I join with the honorable member for Melbourne Ports in calling for a closer examination of these private superannuation funds because I feel sure that if there is a downward trend the position that was revealed in the Beale organization will be found to obtain elsewhere. That brings me to what the Treasurer said towards the conclusion of his contribution last night. He stated -

Some of the life companies and the privately managed funds may still prefer not to take advantage of the new arrangements. That will be their business. But I feel confident that the majority of the funds and companies will recognize the value of the taxation advantages which will in the future be available from increased investment in public authority securities. We may expect to receive much greater subscriptions to Commonwealth and semi-governmental loans from them in the years to come.

I hope that those years are not too far distant because it is tragic in this year of 1961 that any real Australian development should be retarded because of lack of funds in the Commonwealth Treasury. It is wrong, too, that 66 per cent, of the money that is necessary to meet .our commitments under the Commonwealth-States works programme should come from taxation revenue. After all, when we talk about whether compulsion in this form should -be used, we should remind ourselves that taxation in this country to-day on the civilian level is compulsory. What we are doing at present is to reduce by taxation the normal living standard of those on the basic wage who have families of two or three children to maintain. Then some of the taxation that has been taken from the lower wage groups is diverted to that proportion of Commonwealth revenue - amounting to about 66 per cent, of it - that is needed for national development on a Commonwealth and State level.

I think it is wrong to use compulsion to collect from direct taxation about 66 per cent, of the money that is required for capital works when the income of the life companies and superannuation funds amounting to about £100,000,000 a year could be tapped. An honorable member said earlier by way .of interjection, “ What about the guarantee that has been given to the policy holders? “ J do not know of any better guarantee for a policy holder than government securities. So when it is a matter of raising 66 .per cent., or thereabouts, of the funds needed for Commonwealth and State capital works from compulsory taxes or from compulsory investments .by the .life .companies and the superannuation funds, I personally come down on the side of the proposal that was outlined by ,the Treasurer in November. His proposal then was that those companies, and superannuation .and provident funds, be compelled to lend a fixed proportion of their funds by investing in -Government securities.

I do not say that in the belief that compulsion in any form is a necessary ingredient of progress in a community. But Australia is developing so quickly that only two things should -prevent our progress. One is unavailability of manpower and the other is unavailability of material. I am thinking in terms of some of the works that require to be done in Australia. I am thinking, as I have said earlier, of the money needed for a railway project in Queensland. I am thinking of the statements made to me by the Premier of Western Australia who spoke of the dire need ‘for an extension of the water conservation scheme in that State if Western Australia is to contribute to the national wealth all that it could give through exports of meat and other produce. I am thinking also .of the report I saw that 1,299 persons were drawing the .dole in Rockhampton as at 1st April. While we have such a position developing iia Queensland we see the Fitzroy

River, a waterway equal to the Snowy River, without one weir along its course. When I think of these things, and of our need for progress, I can only wonder at the Government’s cockeyed way of thinking.

All honorable members will agree that the Commonwealth Government carries tremendous responsibilities in finding money for capital works since it has accepted the responsibility for the collection of uniform income taxation and of other revenue from fields that should contribute funds for national development. When I consider these things, I find myself consistently reverting to support of the policy that was advocated by the Treasurer last November. Time will prove - and before long - whether the change in the Treasurer’s thinking is correct, or whether the doubts that he expressed almost in his last words on this matter last night will materialize. Perhaps this change of thought was imposed on the right honorable gentleman by somebody else. In any case, I disagree with the proposition that we should leave this matter where, as the Treasurer said -

Some of the life companies and the privatelymanaged funds may still prefer not to take advantage of the new arrangements.

If that happens, I hope that the Treasurer and the Government will revert to the policy advanced last November when the Government announced that it would get the funds it required compulsorily. There is no good reason why we should not follow in the next decade the pattern of contributions to Commonwealth funds that was adopted in the period between 1939 and 1949. That would give us the contribution we need towards the nation’s development. The period from now until 1970 will be the testing time which will decide whether we or somebody else will hold Australia. We should decide now whether there should not be some forms of compulsion to provide the funds we need for capital works. These could include action to force back interest rates to a point where money will become the servant of the .people instead of a medium of investment in the hands of companies and certain individuals. But if, instead, the Government prefers to let interest rates run on so that private investments will continue to be more attractive than the investment of money in the development of Australia, I say again that I support the proposal that was made by the Treasurer last November for some form of compulsory contribution to national funds. What was good enough from 1939 to 1949 should be good enough in the vital period of Australia’s progress that extends from now until 1970.

Those who have a realistic approach to these matters will be able to hear later to-day a speech by the Prime Minister (Mr. Menzies) on certain developments to the north of Australia. I believe that we have only a limited time in which to develop Australia and take advantage of the great potentialities that are exemplified in the Fitzroy River basin and the development of Western Australia. If we - as a national Parliament - throw away these opportunities and waste the time available to us by denying the financial assistance for which many instrumentalities are crying out, it is we who finally must accept the responsibility for our failure to develop Australia. I make no apology for that statement. I have moved across the face of Australia in the past three weeks and have seen many projects that are crying out for Commonwealth assistance. I attended a conference of the Commonwealth Parliamentary Association, and those who made the strongest plea for new thinking by those in authority who control the purse strings in Canberra were a representative of the Australian Country Party from Queensland and the delegates fom Western Australia, including the Premier of that State. I support them in their contention that the money should come from Commonwealth sources, and I support the proposal that was submitted by the Treasurer last November in preference to the proposition contained in the legislation that is now before the House. We support the legislation-

Mr Uren:

– Only in respect of the 30 per cent, provision.


– I am dealing with the question of compulsion in comparison with the proposed voluntary contribution that is implicit in this bill. The important question is: Was the Treasurer right in the method of contributions he advocated last November, or is he right now? It is my hope that what he suggested almost in the last words of his speech will not materialize. I hope that no companies will fail to contribute towards the money that is required. They will be induced to come into this scheme only if a cold calculation of the figures shows that the rebates will be of more financial value to them than will the return from investing their money in some other way. That has been their approach to this question right through the piece. If that had not been the approach, this type of legislation would never have been necessary.

The honorable member for Swan (Mr. Cleaver) says that this is good legislation. It will be good only insofar as it provides the funds which the Treasurer says this Government so urgently needs to meet the works programmes of the States and the Commonwealth. After hearing the Treasurer say that money is urgently required, and knowing what is happening in the areas to which I have referred, I must say frankly that I am hopeful, as is the honorable member for Melbourne Ports (Mr. Crean), that the Government will give much deeper thought to this question of private superannuation funds. If this legislation does not succeed in furnishing the Government with its requirements, I hope that the Treasurer will not hesitate to return to his former approach and put the development of Australia above the interests of financial organizations in this country.


– Although the honorable member for Blaxland (Mr. E. James Harrison) has supported the bill, I feel that he might have been a little more generous towards the Treasurer (Mr. Harold Holt) and the position that he has taken up. I feel also that the honorable member perhaps does not fully appreciate the work that has been done by the great insurance companies or insurance associations in Australia, the part they have played in the development of Australia and the necessity for mobilizing and increasing savings in order to make available the funds necessary to do the kind of things he has been describing to the House.

In my opinion, this bill steers a skilful course between the twin dangers of compulsion and ineffectuality. In point of fact, the effect of the bill is to take savings and investment resources and to direct some of them into the public sector. We all know that it is necessary to do this, because we know that private investment cannot flourish without the framework of roads, power stations, transport and the other services into which public investment is channelled. We know also that our people cannot be developed without education, health services and other things to which the revenues of this country are applied. The very fact that we are taking something like £300,000,000 or more from the proceeds of taxation each year and putting that money into capital works is evidence of the necessity to find more money, somehow or other, for the public sector.

But I think honorable members should remember that while this bill is doing something which is desirable now and something which, as the Treasurer has said, is necessary, it does not touch the other side of the picture - the need to increase the total of savings and the total of investment funds. We all know that if the total of investment funds is not increased - this bill does not deal with that question - and if more of those funds go to the public sector, as indeed they must, the amount left for the already starved private sector of investment - on which, in the main, the productivity of this country depends - will be diminished. If you have a fixed total and you take more out of it for one thing, it is only elementary that less is left for other things. Since we do need more for the public sector, we should be thinking along the lines of increasing the available total because, if we could increase the available total, we could take what is needed for the public sector without diminishing what is left for the private sector.

Insofar as this bill is effective - and I think it will be effective to a great extent - in diverting money to the public sector, that will mean that the amount left for the private sector will be diminished. Particularly do I fear that the funds available for housing will be lessened as a consequence of the very success of the measure which is now before the House. When considering this matter, we should be endeavouring to close, as it were, this loophole in the economic approach which underlies the bill. We should be thinking, not only of diverting money to the public sector, leaving the private sector with less, but also in terms of increasing the total amount available so that we can do the things necessary in the public sector without leaving the private sector even more starved than it is to-day.

I do not propose to repeat the things that have been said by many honorable members on this side of the House, and also at times by myself, about the savings deficiency which is the great gap in the Australian economic system. Instead, I hope to do something constructive and to put forward, as a specific amendment to the bill now before us, a proposal which seems to me to be a reasonable addendum to and a necessary extension of the Government’s present policy as expressed in this bill, which, as the Treasurer has said, is a necessary measure.

Many ways have been suggested for increasing savings. I intend to suggest an amendment to the income tax legislation which will have exactly that effect. Let me describe in outline what I propose. I do not describe it for the first time in this House, but for the first time I put it forward as a specific proposal for inclusion in legislation. My proposal is that any individual taxpayer - I do not mean a company; I mean an individual - should be able to deposit voluntarily in any one year up to £500 with the Treasury, that this sum should be allowed as a deduction from his taxable income, and that he should be enabled to withdraw that money, after a certain minimum time of deposit, at his own will, but that when he withdraws it, it should be treated as an accretion to his taxable income. That would be very much akin to the kind of averaging which primary producers enjoy under the income tax acts. There would be a further provision - which I believe to be an essential part of the scheme - whereby, on marriage, a depositor could withdraw up to £1,500, free of accretion to his income, and, on the birth of each child, a further sum of, say, £1,000, also free of accretion to his income, provided he had first built up a credit with the Treasury to cover the withdrawals. I believe that the family man is the man whom we should be endeavouring to assist. In those circumstances, a man who is starting out on married life would have a great advantage.

I have explained the proposal in outline. The Clerk has the detailed amendment which is, I hope, being copied and will be available for distribution to honorable members later this evening. I do not thinkthat the details concern us; very- much. They are machinery to effect the proposal that I have put before the House in outline., There has to be some machinery for the depositing of this money. This is only an. ancillary matter to the income tax provision. I suggest that the best machinery is to have special tax concession bonds. Unless there is some kind of instrument which is in a tight packet there may be great difficulty in accounting, whereas if there are specific bonds of, shall we say, £20 face value - the figure is arbitrary - this taxation reformcould be effected without a great amount of Treasury machinery.

One other matter to which I hope to direct the attention- of honorable’ members is that the proposals’ are meant to, come into operation not immediately but on a date to be proclaimed. I think that whatever we do should be tied’ in with the normal Loan Council programme and matters of that character, and I would not expect, to be: able to make a change effective as from this week, or this month. One would have to set up machinery and to allow time-. For this reason I have suggested that the amendment should not come into operation until a date which-, the Government would decide and proclaim.

The effect of this amendment will be to benefit two classes of people, particularly. It will benefit, first, the young - the teenager who is earning, the person who is preparing for marriage, and the young family that is starting to build up and to face the responsibilities that follow marriage. The amendment will provide machinery whereby a single person can conveniently save, with the help of a deduction from income tax, in preparation for marriage. I do not apologize for the fact that for the young people- the effective return to be derived from, bonds of this character is pretty good, because they will be allowed an income tax deduction without having an accretion when, they withdraw their funds. I do not think that the House will begrudge young families just that. This proposal, is designed to assist young families starting out on- life. It is designed also to assist people who are nearing the retiring age and can see that their incomes will’ drop when- they pass the retiring age and’ leave business. For those people also there will1 be a particular attraction in’ being allowed a deduction at a- time1 when their incomes, are high, so that they can spread the withdrawal over their old age when their incomes are lower and will not attract the same rates of tax. This is: quite an important aspect of the whole affair. I do not for one moment suggest that the benefit of these tax concession bonds, which I think should bear interest; should be confined to two classes, the young and the old. I simply say that the maximum* benefit will, go’ to those two classes, although other people also may be interested in them.

Mr Cleaver:

– Has- the honorable’ member taken a. good, look at the cost?


– The honorable member for Swan directs my mind to the cost of the proposal. The cost is’ likely tobe very low in comparison with the cash receipts to the Treasury. Let us” consider this matter. When bonds are bought, l’OO’ per cent, of the price comes into the Treasury in cash. It will be said that there is, as against this, a liability in the future. That is true. Is this not one of the things that we are trying to do - to get people to invest in the public sector? There will be an income tax deduction. The cost of this, depends on the rate of tax applicable to the people concerned. The proposal that I make is specifically a little man’s proposal. The top limit is £500. This is not meant for the big man. It is meant for the littleman who may have up to £500 in a year to put aside.

Mr Uren:

– How many could afford to put aside £500 a year?


– There are many single- men in the earning group who wouldbe glad of an opportunity to put £500- a year aside as a deduction from their taxable incomes. I know that the married man is scratching and that he is in- financial’ difficulties, but the single man may have quite a lot of cash to spare. Of this- money, the Treasury is unlikely to forgo more than a few shillings- in the £1 in tax. It will be getting the money in but it will be losing tax to the extent, perhaps, of one-fifth - certainly not more on- the average - of its cash collections. Although it may have to pay out this money at some time in the future’, the money win form a revolving fund. lt will be a net addition to the amount of our mobilizable resources. Although there may be a future liability, a fresh stream of investment will be coming in all the time. With the net amount in the fund rising, as it must, from zero, it will be a net addition to the savings and capital resources of the country.

This may seem to be a far-reaching proposal. I do not think, that it is, of itself. It could possibly be a part of a larger scheme of taxation reform. I believe that a larger scheme of taxation reform, designed to help the family, is desirable. 1 believe we should be bringing down what one would call a family budget with greater concessions for dependants, a more liberal definition of the word “ dependant “, and perhaps some adjustment of taxation rates so that the single man would pay a little more if he did not save, but no- more if he did save, and the married man- would pay less in tax and get more. This is, I think, a desirable thing to do. But it is not a necessary consequence of what I am now proposing.

The proposal I now make can stand, I think, on its own feet. It has sufficient merit of itself as a single proposal and in isolation. It has, I think, the added potential merit that it could be part of a larger scheme. Indeed, I hope that in the preparation of the coming Budget the Government will look to these other matters and introduce what I might describe as a family budget. But I feel it not appropriate to go into these matters at the present, stage. At the present stage, I am proposing this limited scheme which has merit in itself and which’ has the additional potential merit that it may, at some future time, form part of a larger scheme.

I hope that the House will accept as constructive, not necessarily as final, the proposal’ that I am putting before it in this amendment: It is. drawn without benefit, unfortunately, of legal advice because r have been informed that the legal officers are not available to help members in drawing the technical details of their proposed amendments. Unfortunately, therefore, the wording is my own and comes forward’ without the- full benefit of legal’ advice which I have sought- and which I had hoped to have. However, I think, that the wording does at least explain quite explicitly the kind of proposal that I am endeavouring to put forward. If any honorable member has a constructive suggestion in regard to it I shall be most happy to discuss it with him and to do anything 1 can to improve the proposals that are before the House.

Mr Cleaver:

– Would it have any impact on social services?


– Not a great deal. In its present form, it has only a technical reference to the social services legislation. The interest credit is not deemed to be income from property under that legislation. That is because interest credit would not be drawn and you do not want all the complications of income from property coming into assessments under the act. It has no major application to social services legislation. That is a different matter and one which I thought not proper to bring forward at the present time. In that connexion, I am grateful for the advice of certain honorable members.

May I finally say this: I believe that the Government has not yet had proper regard to the major principles of finance. We have been looking, from time to time, to the expediency of the situation. We have been driven as the Treasurer said, by necessity. Do not let us always be driven by necessity. Let us take the initiative and do something constructive. Let us examine our economic difficulties and see what has to be done. The real trouble with the Australian economy is this endemic deficiency in savings. It is high time that we did something about it, and I hope that the proposal I put before the House will do just that.

Mi. UREN (Reid) [4.59].- The honorable member for Mackellar (Mr. Wentworth) is a remarkable character in many respects. He has forecast an amendment which, in some ways, shows that a great, deal’ of thought has been given to it and, therefore, we cannot ridicule it. His proposal relates to the problem of teenagers on which I have heard him speaking on television. I suppose that a certain element among- teenagers has a great deal of spending money which possibly has been diverted, into- the wrong directions. The honorablemember also mentioned the problem of people retiring on account of age. He said that people can save up to £500 a year. Let us come down to earth. I want to direct to the honorable member’s attention the fact that approximately 70 per cent, of the 4,000,000 taxpayers in this country have actual earnings of less than £1,000 a year. He has proposed a tax rebate on amounts up to £500 a year.

Mr Anderson:

– That is for single men.


– He spoke about all classes. He did not confine his remarks to any one section of the community. The Government has increased the amount of insurance premiums deductible from gross income to £400 a year. This costs the taxpayers - you and me - £44,000,000 a year in tax rebates. That amount is made up of £35,000,000 which is allowed as a deduction from the income of private taxpayers and £9,000,000 deductible from the income of companies. Those figures have been provided by the Treasurer (Mr. Harold Holt).

The proposal of the honorable member for Mackellar would allow certain individuals to claim up to £500 a year as deductible from gross income. Already, certain individuals may deduct £400. This new savings proposal would enable them to add £500 to that amount, making a total of £900 a year deductible from taxable income. The great mass of the workers - the 70 per cent, who receive up to £1,000 a year - pay tax at the rate, of about 3s. in the £1, so that under the honorable member’s proposal their tax liability would be reduced by 900 by 3s. But a man in the top income bracket pays tax at the rate of 13s. 4d. in the £1. If he is committed to insurance premiums of £400 a year, the. taxpayers pay £266 of that amount for him. As the Treasurer has said, it is costing the taxpayers of Australia up to £44,000,000 a year to subsidize insurance companies.

The honorable member for Mackellar may have good intentions but it would only be a very small section of teenagers, possibly some of the children of the silvertails in his electorate, who might be able to save £500 a year. I doubt whether, among the working class element of the electorate of Reid which I represent, one child could save £500 a year. So I will not have a bar of the amendment forecast by the honorable member for Mackellar. He has not got his feet on the ground. He represents a section of the community which we know the Menzies Government represents. On this side of the House, we are concerned about the welfare of the great mass of the people. We are not concerned about the sectional interests that Government supporters represent.

At long last, the Government has decided to bring down this legislation. It first announced the proposal in a great scramble on 15th November, 1960. At that time the Treasurer said that the Government would direct 30 per cent, of the investments of insurance companies and private provident funds into government loans. Since that time the Government has mellowed a little because of the great pressure that has been put on it and has decided to make certain taxation concessions to insurance companies and provident funds which invest at least 30 per cent, of their money in government loans.

Mr Cleaver:

– Do you agree that there is no compulsion about the scheme?


– I think that this is a very good precedent for a future socialist government. I have no objection to this principle of tax education. Our present Constitution is out-moded and suffers from limitations, but the Taxation Branch has fairly wide powers. A socialist government would certainly use proposals such as this to divert money from the private sector to the public sector in the best interests of the people of Australia.

The private insurance companies of this country are not concerned about the development of the nation. Their capital flows always to those investments from which they can make most profit. They are not interested in the development of the country but only in the profits they can make. Under the Menzies-Holt Administration the insurance companies have, little by little, diverted money from government securities not into essential private development but into non-essential private development. It is because of this trend that the Government has brought down this legislation. At first the Government intended giving a definite direction, but now it is content with giving merely a nudge.

During the present Government’s term of office insurance companies have increased their assets by £562,000,000. At December, 1959, their assets stood at £1,120,000,000, an increase of over 100 per cent. During the same time they increased their investments in government undertakings by only £81,000,000; and a mere £4,000,000 of that £81,000,000 has been invested in Commonwealth undertakings. The figures I am quoting are those of the Federal Treasurer (Mr. Harold Holt). At the present time private insurance companies and private superannuation funds are investing £281,000,000 of £1,120,000,000 in government and semi-government undertakings. When the Chifley Government was in power in 1949 the assets of these organizations amounted to £560,000,000 and their investment in government and semi-governmental undertakings amounted to £200,000,000. Although these organizations have increased their assets by 100 per cent., by £562,000,000 to £1,120,000,000, they have increased their investments in government and semi-government undertakings by- only £81,006,000. The reason for this is lack of guidance by the Government. During the Chifley Administration correct guidance was given.

This Government allowed the position to reach such a stage that in November last a scramble occurred and it was forced to take panic action. The Government has altered its policy since then. It has been a case of on, off again and on again. First of all the Government increased sales tax on motor vehicles from 30 per cent, to 40 per cent, and then reduced it again to 30 per cent. The Government is not sure what it should do about debentures and registered notes. Its policy on that matter is still a big question mark, although the Government is supposed to have control over the development of the nation.

I desire to quote some figures supplied by the Reserve Bank of Australia. In 1948, whereas the amount of money invested by life assurance offices in government and semi-government securities was £211,000,000, the total holdings of Commonwealth Government securities amounted to £2,351,000,000. Between 1948 and 1959, the amount invested by life assurance offices in government and semi-government securities increased from £211,000,000 to only £218,000,000, but the total holdings of Commonwealth Government securities in the same type of security increased to £3,590,000,000. That is an increase of about £1,200,000,000 of the total holdings of Commonwealth Government securities and an increase of only £7,000,000 in the case of life assurance offices. That demonstrates the lack of encouragement given to life assurance offices by this Government. In 1947 when the Chifley Government was in office, according to Dr. Harold Bell, an economist of the Australian Mutual Provident Society, insurance companies’ assets were worth £357,000,000. Investments in government and semigovernment securities amounted to £256,000,000 or 71.9 per cent, of their assets. That was the position under the Chifley administration when correct guidance was given.- The present Government has allowed private insurance companies to become giants in the financial field. They hold a large proportion of the wealth of this country. The Government has allowed them to divert this wealth not only into nonessential industries hut .also into ..what have become known as fringe institutions.

The Commonwealth Bureau of Census and Statistics gives details of new capital raisings by public companies in Australia. Whereas in 1960, companies listed on stock exchanges raised £193,000,000 in debentures, registered notes and deposits but only £48,000,000 in share capital, in 1955 companies listed on the stock exchanges raised £59,000,000 in share capital but only £27,000,000 in debentures, registered notes and deposits. The reason for the increase in debenture stock is that by raising money in that way companies can evade taxation. They can evade 8s. in the £1 in company tax. This again was the reason for the panic legislation of 15th November last; and the Government is not yet sure what it is going to do about the matter.

The Opposition supports the Government in its proposal to direct investment. Although the Government has taken too long to take this action what it has done is a step in the right direction. The problem that exists in Australia is common to other countries. I direct the attention of honorable members to an article in “ New Statesman “, of 24th March, 1961. It is headed “A Four-Year Plan for Britain” and is written by the Right Honorable Harold Wilson, M.P. He, of course, will be the future Chancellor of the Exchequer in Great Britain on the Labour Party’s return to power in that country. Britain is facing the same problem as Australia. Under the capitalist system money is flowing into nonessential industries where it can earn the greatest profit; it is not being invested in the interests of the community. In the article 1 have mentioned Mr. Harold Wilson referred to investment in new industrial buildings, plant and machinery in 1959 and revealed that Britain was diverting 15.5 per cent, of the gross national product into these industries. In West Germany, it was 23 per cent., in the United States of America 17 to 20 per cent, and in the Soviet Union 30 per cent. According to my own figures, in Australia it was 17 to 18 per cent. We can see, therefore, what is done under the socialist system of the Soviet Union. My friends on the opposite side of the House may smile, but this is something that we should consider. The Soviet Union is diverting 30 per cent, of its gross national product into essential industries, and this must be compared with 18 per cent, in Australia and 15.5 per cent, in Great Britain. Only a fool would refuse to take notice of these facts. We know already of the scientific advances in the Soviet Union.

In citing Mr. Wilson, I should point out that he obtained his information from a speech made to members of the American Chamber of Manufactures by Mr. Allan Dulles, the Director of the Central Intelligence Agency of the United States of America. His intelligence on Cuba was not very good, but I will accept him as an authority on the matter 1 am discussing. Mr. Wilson also gave some figures on education, and honorable members opposite should take some notice of them. The Soviet Union is spending 10 per cent, of its national income on education; Great Britain 4 per cent, and Australia only 2 per cent. Each year, there are 130,000 science and engineering graduates in the Soviet Union, but only 13,000 in Great Britain and 1,500 in Australia. On a population basis the Soviet Union has 1h science and engineering graduates to every graduate in those faculties in the United Kingdom. Similarly, in Australia there is only one graduate for every 4i graduates in the Soviet Union.

This position cannot be ignored. Clearly, we must divert some of our money into essential industries and into education. These matters must receive the highest priority, and this is where the capitalist system fails. As a socialist party, the Labour Party is the only party that is willing to undertake the development that is needed in Australia. Although this matter has been raised time and time again, the Government ignores the challenge. We know that the Government allows luxury home units to be built although sufficient homes are not available for the people.

Mr SPEAKER (Hon John McLeay:

– Order! 1 ask the honorable member not to get too far away from the bill.


– This bill contains provisions which are part of the economic proposals of the Government and I am trying to point out that the Government should divert money from non-essentials to essentials. I am trying to bring out the point that a Labour government would not only use the principle in this field but would also use it to ensure that homes were built for the people instead of luxury units for the wealthy. This Government is permitting the construction of luxury hotels and commercial buildings, but we would build hospitals and schools for the people.

The Government allowed the production of motor vehicles to increase rapidly, lt introduced measures to control this increase and then reduced the rate of sales tax from 40 per cent, to 30 per cent, because it had solved the problem, or so it said. But immediately it did this, sales of motor vehicles increased once again. This industry will again eat the heart out of the Australian steel industry and will again be a drag on petrol .and rubber imports. Theseare some of the problems that face the Government, and it could do much by diverting capital into education. We agree that this bill provides a good precedent, although it is a bit late. For eleven years the Government has done nothing.

To give some idea of the great wealth that has been diverted to those who are already wealthy, I shall give some figures relating to the taxation allowance for th< depreciation of plant. In 1948-49 £96,000,000 was allowed for the deprecia-tion of .plant and by 1959-60, the figure- had grown to £512,000,000. This is an increase of more than 500 per cent, in a period of eleven years. We say that the renewal of plant should be encouraged in certain essential industries so as to make them efficient If they are efficient, Australia can develop as a competitive nation. But we say that a tax rebate should not be allowed for the depreciation of plant in non-essential industries. This tax rebate should be withdrawn from certain sections that have built up great wealth. The money should be retained in the national purse and spent on works that would lead to the development of the country.

Earlier, the honorable member for Blaxland (Mr. E. James Harrison) spoke about the development of Australia and referred to the eastern rivers of” Queensland. I have just returned from’ Rockhampton. I have seen the eastern rivers of Queensland and can understand the need to develop them. Australia is one of the driest continents of the world. We should be damming these rivers and turning their waters inland1. This was one of the great visions that Bradfield’ had. many years ago, but only a Labour government will ever bring the vision to- reality, lt was a Labour government under Mr. Chifley that started the Snowy Mountains project and only a Labour government will undertake such projects as the Bradfield scheme for Queensland and the Ord River scheme in. Western Australia. These States are crying- out for development and only a socialist government will make available the money needed for their development. lt is interesting to look at another position and see how the wealthy are becoming wealthier. Undistributed profits in the hands of Australian companies rose from £81,000,000 in 1948-49 to £205,000,000 in 1959-60. This is wealth that we can control. Dr. Coombs in his Perth lecture in 1959 said that undistributed profits were an indirect tax levied by companies on consumers to pay for future development. That is exactly what is happening under this Government. Undistributed profits increased by more than 100 per cent, in the period from the last year of the Chifley administration until 1959-60. Labour could tax. undistributed profits and divert a good deal of that wealth into the development of Australia in the best interests of the people, lt- might be said’ that some companies are acting in the best interests of Australia’s development, and essential industries could be allowed to retain certain undistributed profits without tax. The hammer of taxation can be used in respect of non-essential goods, which are at present flooding the market. The. Opposition supports the Government’s proposals. This Parliament has great taxing, powers. Mr.. Chifley used those powers, and I am sure that they will be used by Labour to a great extent- in the future.

In a recent speech in the House the honorable member for Yarra (Mr. Cairns) put forward certain proposals in relation to the practice of granting as an allowable deduction for taxation purposes expenses incurred in advertising non-essential products. We should, clamp down on this practice. Organizations that spend large sums of money advertising non-essential items should not be able to claim the cost of such advertising- as an allowable taxation deduction. A great amount of money is being spent by various firms in this way.

I wish -to say. a_ few words- now about _ undistributed profits of overseas companies operating in Australia. We know from information supplied by the Government that since 1947-48 overseas monopolies have invested in Australia £349,000,000 worth of undistributed profits. These wealthy overseas companies have been able to accumulate vast sums of money and increase their assets in this country, while in effect levying a tax on the Australian consumers. The problems to which I have referred are problems that a. Labour government will deal. with, properly when it is returned to. power.

For two years the Constitutional Review Committee heard evidence and deliberated. A further two years have elapsed since that committee submitted its report to the Parliament, and still nothing has been done. We know that the Government will never act on the committee’s recommendations, so the only powers that the Parliament will have to control the distribution of wealth in the community will remain its taxing powers. The Taxation Branch belongs to the people, and we should ensure that it works in the best interests of the people and in the best interests of the development of Australia. A future Labour

Treasurer will see that the Taxation Branch does work in that way.


.- One sentence in the speech delivered by the honorable member for Reid (Mr. Uren) deserves to be remembered. He said that this bill is a good precedent for a future socialist government, and he pursued that theme. That will also be my theme. I propose to devote myself entirely to this bill and to the main principle in it. In particular, I propose to refer to the consequences that will flow from that principle should it be pursued, as no doubt one day it will be, by a socialist government.

The prelude to this measure, as put forward by the Treasurer (Mr. Harold Holt) on behalf of the Government, is the wickedness of life offices and1 superannuation funds in not doing what was alleged to be their public duty. The Treasurer pointed out that, in 1939, 50 per cent, of the assets of those institutions were invested in government and semi-government securities. He said that in 1949 the proportion was 68 per cent., but by 1959 it had fallen to 37 per cent. In 1939 the long-term interest rate was 3i per cent. In 1949 it was 3i per cent., and in 1959 it was 51 per cent. The Treasurer asks us to draw the inference that these institutions have not been doing their duty. Let us look at the figures I have just given and see what they really mean.

Mr Bryant:

– Are you attacking the Treasurer?


– No, not the Treasurer; I am attacking the Government. The Treasurer is merely the spokesman for the Government. In 1939 there had been a period between the two great wars that included a world-wide depression, when a number of companies went bankrupt and a number failed to pay dividends. It was a time when insurance companies might well have looked to government securities as a safe investment for their funds. One must remember that the rate of interest then represented real money. In 1939 inflation was not running at the rate of over 3 per cent, per annum as it is to-day, and people received a real return of 3J per cent, on their money. But to-day, if they get a return of 3i per cent., in terms of real money that would be precisely nothing, because inflation is running at approximately that rate. In 1939 approximately 50 per cent, of the assets of these institutions was invested in government securities. That is understandable. In 1949 the proportion had risen to 68 per cent. Of course it had. There had been a war, and naturally the savings of the people had to be channelled into the war effort. That is quite understandable, and in ordinary circumstances such a high percentage would have been utterly abnormal.

Mr Wheeler:

– We must remember that the market was pegged also.


– That is so. By 1959 the figure had dropped to 37 per cent. In the light of what has happened in the United Kingdom and the United States, that is still a very good figure indeed. It is true that the rate of interest is now 5% per cent. If you deduct 3± per cent, or 4 per cent, because of inflation, the true return may be about 2 per cent. That is a poor return compared with the real rate being received in 1939 or 1949. So the figures that have been trotted out by the Treasurer on behalf of the Government seem to be completely hollow.

Let us see what has happened in the United Kingdom and the United States. I propose to quote a description of the situation taken from a British insurance supplement published in the “ Economist “ of 19th September, 1959. The article reads -

Decisions to change direction in investment policy have to be implemented over a period of years.

Insurance funds, as every one knows, arc going out of gilt-edged and into equities. To an important extent the movement is still part of adjustment to the violent distortion of insurance portfolios that took place during the war. Between 1937 and 1947 holdings of gilt-edged jumped from 29 per cent, to 43 per cent.-

That is, less than it was during the war in Australia- of the insurance companies’ invested assets. That was clearly an excessive proportion; it would have been excessive if there had been no inflation and no new preference for stakes in real assets rather than securities with a fixed money return.

But the insurance companies could not simply unload their excess gilt-edged. In practice, they had made few substantial sales. The balance of their portfolios has been adjusted over the years by deployment of new money, the bulk of it going into equities.

In the same document a table is published showing that in 1958, the latest period for which figures were available, the holdings of British life offices in British Government securities and guaranteed stocks represented 20.6 per cent, of their total assets, and holdings in British municipal and overseas government and municipal securities represented 8.6 per cent. - substantially less than the holdings of life companies in Australia at this time.

In the United States the position is even stranger, no doubt, to the eyes of the Treasurer. I propose to quote from the 1960 “ Life Insurance Fact Book “. Under a heading “ Government Securities “ the following statement appears -

The aggregate held in Government securities at year-end 19S9 was less than half the amount held in 1949, and about one-third of the peak of such holdings in 1946.

The percentage of life companies’ assets invested in U.S. Government securities at the end of 1959 was 6 per cent, compared with 6.7 per cent, the year before. For the decade of the 1950’s, the U.S. Government securities averaged 11.1 per cent, of life company assets. In the 1940’s, marked By the years Of war emergency, Governments represented an average of 32.5 per cent, of all life insurance company assets.

Since 1945, when investments in U.S. Government securities represented 45.9 per cent, of the life companies’ assets, there has been a yearbyyear decline in the proportion that these securities have represented of total assets. Following World War II. there was an unprecedented demand upon all thrift institutions for capital funds for the domestic economy. The life companies, which had played a major role as investors in United States Government securities at a time of national crisis, gradually shifted their investment emphasis to provide capital for business and industrial growth, home-building and community development. In the decade of the 1950’s, while the aggregate mortgage loan and corporate security holdings increased 147 per cent.,- United States Government securities decreased by 55 per cent.

So this movement has occurred, for entirely understandable reasons, in the United Kingdom and in the United States of America, but on an even bigger scale than here. So much for the Treasurer’s prelude to this bill. I know, of course, that we have a special problem of development, and I do not overlook it, but for the time being I am interested in pointing to the complete hollowness of the prelude to the bill given by the Treasurer (Mr. Harold Holt). The honorable member for Reid (Mr. Uren) joined in the orchestral accompaniment. This trend is not confined to Australia. In fact, the Government here has fared rather better than the Government of the United Kingdom and the Government of the United States, and there is not the slightest suggestion in either of those countries - or anywhere else - of resorting to forced loans to remedy the position.

I want to say a word now about the people who are affected by legislation of this kind. The honorable member for Reid echoed what is in the hearts of members opposite, but he was perhaps indiscreet enough to put it in plain terms. He referred to the life offices and the superannuation funds in the sort of terms with which we are familiar, coming from the soap boxes that are mounted by honorable gentlemen opposite from time to time. He referred to these institutions as though they were wealthy companies and blood-sucking capitalists, and entirely institutions for the benefit of the idle rich. Indeed, the Treasurer himself has given the impression that these institutions are giants, doing the wrong thing and quite divorced from the people who, in fact, have their money invested in them. .. _ _ _ . _ _

I want to make it quite clear that I stand here, not for wealthy institutions, but for thousands and thousands of little people. They are the people for whom I am speaking here - little people, middle-class people, city clerks, farmers and an increasing number of workers with family responsibilities. They are the people concerned in this bill. They are people who are making provision against death or for retirement, for widows and children. If anything is done to the detriment of these institutions, it is done to the detriment of little people, of women and children, not of great financial institutions.

What does the bill do? It is so complex that one may fail to understand it. The explanatory note issued by the Treasurer as lately as yesterday afternoon ran into 33 closely typed pages of highly complex material. I do not profess to understand, nor do I believe that any member of this House understands, the full implications of this bill. So we have to look at it in the broad. Only after a painstaking examination by experts of the various institutions will it be possible for them to arrive at some idea of what the bill means in terms of pounds, shillings and pence to the funds of those institution*

However, some things are quite clear. The bill consists of a mixture of rewards and punishments. The rewards are tax concessions on .a silding scale, .under certain conditions. The penalties are the withdrawal of ‘concessions .unless -a proportion of >the funds flowing into the ‘institutions concerned is invested in government securities. This is a .penalty in the sense that the “interest payable on government securities is less than .the return obtainable from some other types lot investment -that would otherwise be available. To balance the plus and minus is a matter of precise calculation in each case, but, as I have said, certain things are quite clear.

First, the statement by the Government in November was perfectly clear. The Government intended, willy nilly, to force these institutions to put a fairly high proportion of their funds into government securities which would bring them in a lower return than they could get elsewhere. The Government made it quite clear in November that that was its intention, and we may be sure that this bill is intended to do precisely that. These institutions either must lose their tax concessions or they must give up a higher return on their investments. They must do one or the other. Whichever course they pursue, they will lose. Let us be quite clear about that, and forget about the complexities of the bill.

The superannuation funds were not taxed before, but they are to be taxed now. ‘This, also, is quite clear. But why were they free of tax? It was not because of any generosity on the part of the Government. They were free of tax because if employers had chosen, instead of establishing their own funds, to pay their employees some retirement benefit, then in each year when they paid it the employers would have been entitled to a tax concession for it, as part of the expenses of the businesses. So when, instead of doing that, they set up these funds, it was clear that they should remain free from taxation. This was not any act of generosity on the part of the Government at all. It was a recognition of the fact that the employers, if they had not set up the superannuation funds, would have been entitled to a tax concession.

There is another broad consideration which is not entirely negligible. This bill may be fairly mild, but its importance lies in the fact that it is a first step on the downward path. From the Governments statement in November and from what it is doing now, these institutions will be justified in drawing the inference that, if this measure is too mild, a more drastic -one will be introduced. They realize that they had better go along quietly. All that has been said from the other side of the House will enforce this view in their minds. So, by a process of blackmail as well as by what is deliberately being done in this bill, you are going to force funds into this channel at sub-economic returns. That is the essence of the matter.

The Opposition has made its position very clear. One Opposition speaker after another - and this will doubtless go on as the debate continues - has said, in effect, “ My father chastised you with whips, but I will chastise you with scorpions “, if I may quote a gentleman in the Old Testament. So I proceed to discuss this bill on the basis “that a new principle has been introduced into our affairs - -namely, guided investment of the people’s savings. We had a very clear exposition of this from the honorable member for Reid, who can think of all kinds of ways of investing the people’s savings, giving them in the end, I have no doubt, no return at all.

What is repugnant to me about this measure is that citizens will be compelled to invest .their savings, not in what brings in a good -return or .even a fair .return, but at sub-economic and unfair rates in what the planners consider to be socially desirable projects. This is entirely repugnant to me. What is the ;end of the road upon which the Government has made its first mild, hesitating step? Consider, first, the steady decline in the value of money, which, as I have said, is at the rate of 3 to 4 per cent, per annum. This is likely to continue into the future, as far as we can see, because the political forces that operated to bring it about in the past are still operating and, as far as we can see, will continue to operate. This will go on.

The second thing we have to .consider is that the expressed policy of the Labour Party is cheap money. If the value of money declines at the rate .of, say, 4 per cent, per annum and if the Labour Party, in pursuit of its expressed policy of cheap money, considers that 4 .per .cent, is a good enough return to give the people on government securities, and uses every weapon in the armoury of the Constitution to force people to put their money into .government securities, you will see that the real return that the thrifty will get will be .precisely nothing. Indeed, it could (he a negative quantity. What does this mean in regard to the propensity to save and .to :be thrifty? Such .a trend must in the long run make saving very difficult and ultimately impossible. The citizen will be prevented from making his own provision for the vicissitudes of life, for his .retirement or for his widow and children in the event .of his death.

In the past ten years the ‘Government has taken from the people of Australia in taxation for public works £2,000,000,000 which they might otherwise have invested and so, perhaps, added to their personal savings. This year 65 per cent, of public works are to be carried out with money that has been taken from our citizens by taxation. This means that the Government has clipped the wings of the-private -citizens -and prevented - them from saving by taking all that money from them in taxation. Not content with that, the Government -intends to have guided democracy in respect of their savings. -Pursuit of this course upon which the Government has set its feet, in this ‘bill, may mean that our citizens will receive -no return at all on -their money or even that the capital will erode. This measure is a crippling and mortal blow to thrift, saving and the capacity of the citizen to provide for the vicissitudes of life for himself.

This prospect is so utterly repugnant to me and so contrary to what I conceive to be the Liberal society and the good life in any human society that T cannot in conscience support even this first short step towards perdition. On this matter I have been consistent throughout. I opposed this measure from the moment the proposal left the Treasurer’s lips in November last year. I have opposed it on several occasions outside this House. I have made my position perfectly clear outside the House and it is perfectly clear now. To me, this is a matter of conscience and it goes ‘back not only to discussions about this bill outside this chamber but also to what I said in the House during the Budget debates last year and the year before. To my mind, this goes to the very root of the kind of society that we .hope to preserve. In itself, this is a littLe step, but the question is: Where will this step lead us in the end?

In the time ‘that remains to me, 1 wish to examine some of the more detailed arguments that have been advanced by the Treasurer on behalf of the Government. “First, he has sought to pillory the leaders of these institutions as persons failing in a moral duty to the community. I have already dealt with that in a large measure. These men “have a paramount duty to their policy holders, for whom they are trustees. They have tried to .safeguard .those people against the inroads of inflation. “Secondly, the Treasurer has equated the policy holders with the whole community. This is not a true equation. It is true that they are a large group, but why should they ‘be singled out, in effect, to pay a special tax for the benefit of all? In plain and simple terms, that is what this proposal amounts to. They are thrifty people and they are small people. Why should they bear a disproportionate share” of .the burden of ensuring that public policy is carried out just “because they are thrifty and because they are small people? Of course, the real reason is quite plain. Most of them will not understand; they will not .know what is happening to them. That is the real reason why they have been singled out. I could use here a very harsh .analogy that I used in another place, but J will not do so.

In equating policy holders with the whole community, the Treasurer has pointed out how as citizens earning a living they gain from public works designed to sustain industry and to provide amenities. He has pointed out how, as taxpayers, they gain by making loans rather than paying taxes to enable public works to be carried out. He has pointed out how as policy holders they gain by a stable currency that sustains the real value of their ultimate insurance benefits. But this, of course, is plain casuistry. As I have just pointed out, policy holders are not the only people who benefit from public policies. They are a large section, but they are not the whole community. They should not be singled out to .bear a disproportionate share of the burden .of sustaining such policies to the advantage of the whole community.

Does any one really suppose that the tax burden will be reduced because more money is raised by raiding these institutions and forcing loans from them? The Treasurer referred to the need for a more “ balanced investment “ as between the public and private sectors - they are his own words - thereby implying, of course, that more is required for public purposes than was required in the past, despite the fact that government spending as a percentage of the gross national product rose from 21.6 per cent, in 1938-39 to 24.6 per cent, in 1949-50, and to 26.6 per cent, in 1959-60. Those are not the figures that were given by the honorable member for Reid; they are the true figures.

The Treasurer here condemns himself out of his own mouth. There will be no reduction in taxation because this raid is made upon these funds. This revenue will be additional to the money that the public has already provided by way of taxation and will amount to a still further impost upon one section of the community. Does any one really suppose that this manoeuvre will stabilize the value of the currency? It is surely because the Government anticipates a continuance of the decline in the value of money, making low fixed-interest securities such as government securities less and less attractive, that it is introducing this measure at all. So, the reasons that have been given by the Treasurer on behalf of the Government are completely fallacious and1 are simply casuistry. They are unworthy of serious discussion.

The third argument that the Treasurer has advanced - this is a relatively minor one - is that nobody complained when a large part of the assets of the savings banks was required to be invested in government securities. I should like to make two comments on that argument. In order to induce the Government to separate the central bank from the other activities of the Commonwealth Bank of that time, this was part of the price that had to be paid and1 was accepted by those of us who sought to bring about that separation. It was a bargain and that is all. Secondly, people who put money into savings banks usually put in a few hundred pounds as a ready reserve. They do not really look upon it as a substantial investment at all. In fact, I suspect that a number of such people are surprised that they receive any interest pay ment at all. So, it is unworthy to produce that as an argument.

I have not much time left in which to pursue this matter further. I should like to end by saying that Australia has to be developed; of course it has. For that purpose it needs a great deal of capital. That capital has to be secured by way of savings unless the method of securing it is to be highly inflationary. But because this bill strikes at thrift and savings, I am utterly opposed to it. In the long run it must kill thrift altogether and kill the independence of the citizen. This country may be developed by imposing heavier and heavier taxation. In effect, that is all this bill does. The Government is now entering a new field by conscripting the savings of the people at low rates of interest. Australia may be developed that way, but thrift will be killed as we go along, and in the end, instead of the citizen having a precise claim against the next generation for the capital that he has put in for that generation, he will be dependent upon what the Government wishes to hand out to him to provide for the vicissitudes of life, because it has made it impossible for him to provide for them himself.

The other way to develop Australia and provide for the expenditure of the country is to ensure that the people put individual savings into this great national development and personally become entitled to a precise return on the capital that they have put into the development of Australia. This is the independent way of developing the country. This is the way in which to breed independent citizens. It is the way that the Government should be adopting.

I have not the time to pursue the observations of the honorable member for Mackellar (Mr. Wentworth). I have been more concerned with attacking the measure, because I believe it is pernicious and that it will set a precedent which will be utterly disastrous in the end. There has not been sufficient time to enable me to be destructive in my criticism of it and also to speak about the constructive aspect of the matter - inducing thrift rather than laying a heavier tax burden, either explicit or covert, upon the people.

Debate (on motion by Mr. Duthie) adjourned.

Sitting suspended from 5.56 to 8 p.m.

page 1247



Prime Minister and Minister for External Affairs · Kooyong · LP

– by leave - Mr. Speaker, I propose now to make a statement on West New Guinea, Laos and Sierra Leone I speak first about West New Guinea. We have had a brief, but most interesting, visit from General Nasution, the Indonesian Minister for National Security and Chief of the General Staff. He met Ministers for discussion, while subsequently I had two long talks, at each of which the Minister for Defence (Mr. Townley) was present. In the result, though no new policies were expressed, both General Nasution and I thought that there was a considerable clarification of points of view, and further elucidation of the facts.

The discussions throughout were conducted, as one would expect, in an atmosphere of the utmost goodwill and of mutual respect. Our two countries are neighbours and friends, with very great interests in common - our interest in peace, in security, in resisting communism. The one matter of difference of opinion relates to West New Guinea. And .even there, as I have been able to point out to the General, Australia’s interest in New Guinea as an island derives from our desire to see the economic and social progress of its inhabitants, and from our natural interest in the character of its political future. It is an interest which has been emphasized by the significance of New Guinea to us in two wars, and more particularly in the second. It does not derive from hostility to Indonesia, for there is no such hostility in Australia.

Sir, having made these general remarks, I think it due to this House and to our distinguished visitor that I should state in summary form, and, I hope, with complete fairness, the Indonesian point of view as explained to us, and the Australian point of view as explained by us. I put it in this way, though at all stages it was made clear that, in the dispute or difference between the Netherlands and Indonesia, Australia is neither a party principal nor a selfappointed arbitrator, but is a naturally interested neighbour.

As General Nasution explained it, the Indonesion position is that its claim to West New Guinea is not legal, but political and historical, West New Guinea having been part of the Netherlands East Indies. He claimed that West New Guinea was part of Indonesia before the establishment of the Netherlands East Indies, lt is because of this, he said, that Indonesia will not take the matter to the International Court of Justice - a procedure which Australia has constantly advocated, and which the Netherlands is willing to adopt. We dwelt on this matter for some time. I once more made it clear that Australia attached great importance to sovereignty, in a world in which new sovereignties are being created and independent rights maintained. I said that we recognized Dutch sovereignty in West New Guinea, with all that such recognition involved, and that we could not reasonably or successfully be asked to reverse this recognition. If the matter went to the International Court, I said, and the judgment went for Indonesia, we would of course respect that judgment.

General Nasution said that he understood our argument on that point, but added that one consequence of it should be that, in any discussions between the Netherlands and Indonesia about West New Guinea, Australia should be strictly neutral, and should - not -support -and encourage- the” Dutch-either ~ ~ generally or in the United Nations. This indeed, as he made clear, was the great thing that he wanted to establish with us. I therefore reiterated that, as we had said at the time of Dr. Subandrio’s visit - which honorable members will recall - we desired three things -

  1. . That there should be no recourse to armed force, whether by major or minor operations - for example, by armed infiltrations - to give effect to Indonesia’s territorial claim.
  2. That any negotiations between Indo nesia and the Netherlands should be voluntary and free of any threat or duress.
  3. That any agreement made as a result of negotiations so conducted would be fully respected by Australia.

I went on to explain what we were doing in our section of New Guinea in pursuit of our long-held goal of improvement of living standards, education and health to a point where the population would freely determine its own future. I will refer to this again a littlelater, Sir. I said that the Dutch were pursuing: broadly similar policies, with the same objective.

The. general inquired as to whether Australia did not have some military arrangement with the Netherlands in respect of West New Guinea. I said that we had no such arrangement, either directly or indirectly, and that whatever might be rumoured or suggested to the contrary had no foundation. The only agreement related to administrative consultation on common problems and on the forwarding of selfdetermination in New Guinea. That agreement was published, and he was conscious of it - he knew about it - when it was made on 6th November, 1957. I think that perhaps I. should recall to honorable members the principles set out in that agreement between ourselves and the Netherlands. They are as follows: -

  1. The Netherlands and Australian Governments base their policies with regard to the territories of New Guinea, for which they are responsible, on the interests and inalienable rights of their inhabitants in conformity with the provisions and the spirit of the United Nations Charter.
  2. The territories of Netherlands New

Guinea, the Australian Trust Territory of New Guinea, and Papua, are geographically and ethnologically related and future development of their respective populations must benefit from cooperation in policy and administration.

  1. The Australian and Netherlands Governments are therefore pursuing, and will continue to pursue, policies directed towards the political, economic, social and educational advancement of the peoples in their territories in a manner which recognizes this ethnological and geographical affinity.
  2. At the same time, the two Governments will continue, and strengthen, the co-operation at present existing between their respective administrations in the territories.
  3. In so doing the two Governments are determined to promote an un interrupted development of this process until such time as the inhabitants of the territories concerned will bc in a position to determine their own future.

At the same time, I said, not only Australia but other nations could not but be disturbed by any use of force, since even limited hostilities, whether in New Guinea or Laos or elsewhere, could have unforeseen and deplorable consequences. We were therefore glad to have the General’s renewed assurances that force would not be used. I will refer to this again a little later.

I took the opportunity of asking about the infiltrations which were reported to have occurred along the West New Guinea coast. The General replied that there had been some infiltrations, some of those concerned in them being armed;: that such cases were not due to any policy of the Central Government, but arose from some unavoidable lack of control- in particular areas; and that there had been some infiltration in reverse from West. New Guinea to the eastern islands of Indonesia, inspired, he said, by the Dutch, for the purpose of fomenting disaffection in those islands.In answer to a question’, he agreed that there was no suggestion that the Dutch were contemplating any form of conquest, but maintained’ that their actions were a form of subversion. I have stated without comment these remarks by the General; so that the House may have a balanced picture of our discussions.

To conclude this phase of my report, I should refer to two other aspects of the matter. As has been frequently pointed out in this House, the native inhabitants of New Guinea have no ethnological association with Indonesia. General Nasution retorts to this.- that there are several distinct ethnic groups in Indonesia, and yet they are within one political structure, and that Malayan is widely spoken in West New Guinea-. When I say “ Malayan “ I mean the Bahasa Malay language. In answer to this we have pointed out that the indigenous inhabitants of the island of New Guinea have more in common, both ethnologically and otherwise, than any of them have with the various races of Indonesia, and that this is a factor which should not be ignored.

But General Nasution adds to this another point. In answer to our emphasis upon ultimate self-determination for both sections of New Guinea he contends - and I say this because he advances the proposition with great force and obvious sincerity - that West New Guinea should be (and, as he would say, is) part of Indonesia, and that there is no more reason for conceding selfdetermination to West New Guinea than to any other racial group or geographical area in Indonesia. This meant that Indonesia rejected the idea of self-determination for the people of West New Guinea. It was further made clear that the only form of trusteeship acceptable to Indonesia would not be one under the Charter of the United Nations, of the kind with which we are familiar, but would be one for the purpose of transferring West New Guinea to Indonesia after a brief intervening period. Having regard to this view, 1 carefully developed our views on self-determination, and now record them very briefly for the House -

  1. In our own New Guinea territories, our policy is, by steady degrees and up to the limits of our financial and administrative capacity,, to promote. the_ advancement of the people so that ultimately they will choose for themselves their own constitution and their future relationship with us. We will respect their choice whatever it may be. This, for us, is not a new policy. We have pursued it for years. It arises from our sense of responsibility, a responsibility which cannot be suddenly or prematurely abandoned if our trusteeship is to be honorably performed.
  2. Having regard to these undoubted facts, Indonesia cannot reasonably expect Australia to take, nor will Australia take, an initiative in a procedure designed to lead to a handing over of sovereignty and the abandonment of the right of selfdetermination in the territory concerned. I put all this to our distinguished visitor. That was, and is, the reason why Australia is most definitely not prepared to put pressure on the Netherlands to negotiate for the transfer of sovereignty and the abandonment of self-determination.

In other words, we recognize Dutch sovereignty, we deal with the Netherlands as a sovereign power, and we approve of the policy of ultimate selfdetermination which has been adopted by the Netherlands in relation to West New Guinea. If this is regarded by Indonesia as partisanship, we point out that it favours the recognition of sovereignty and the objective of self-determination, to both of which Australia is inevitably attached.

  1. But on such matters the Netherlands, as the sovereign power, will make, quite freely, its own decisions. Those decisions will be recognized and respected by us.
  2. We are on most friendly terms with the Dutch, as, remembering the last war, we ought to be. We are also close to” and friendly with Indonesia. What Australia has done in the United Nations when the West New Guinea item has come up there, is to support sovereignty and domestic jurisdiction. Sovereignty is basic for Australia no less than for others, including Indonesia. None of this is hostile to Indonesia, and it ought not to be thought so.

Before I conclude, I return to the matter of military involvement. I repeat, in the most categorical terms, that Australia has no military commitment with the Netherlands in relation to West New Guinea, direct or indirect. But armed conflict in that country, whether arising from mass invasion or limited guerrilla episodes created by armed infiltration, would present Australia, in common wilh other countries, with a grave problem. Any such conflict could certainly not be ignored by the United Nations. It would engage the attention, helpful or otherwise, of the great powers. It would threaten world peace, and could well bring disaster to South-East Asia by its encouragement of Communist activity and intervention.

It is therefore necessary to make our position quite clear. We stand for peaceful negotiation at all times, provided that such negotiation is conducted without the threat of force of any shape or kind.

I have stated our recognition of Dutch sovereignty, and our approval of the Dutch policy of self-determination. We have entered into no military commitment beyond those involved in the Charter of the United Nations, to which all members subscribe. But if military conflicts, great or small, arose out of these differences, new and grave problems would arise for many nations, including our own. It is for this reason that the renewed assurances of peaceful pursuit of Indonesia’s claims, made by General Nasution, are of such profound importance and international value.

Before I conclude this section of my statement, I would like to say that we were all impressed by General Nasution’s frankness and personality. 1 am sure that he and his wife enjoyed their visit to Australia. Every opportunity was given to the General by the press, broadcasting and television stations, to express his views. I know that he appreciated this, as we do. He has left Australia after faithfully and ably representing his own country, with, I am certain, a confidence in his own mind that, while his visit may not have changed our policies, it has certainly made a powerful contribution to our common understanding and good will.

I shall turn from that subject now and bring the Parliament up to date, as far as I can, with the position in Laos. Since I last spoke to the House on Tuesday, 11th April, new and important developments in the continuing crisis in Laos have occurred. In Moscow, negotiations have at last resulted in a measure of agreement between the Soviet and the United Kingdom Governments as co-chairmen of the Geneva Conference of 1954 which settled the Indochina conflict.

The United Kingdom Government has acted throughout these negotiations in close consultation with its friends. We hope and believe that the Soviet Government did likewise, for the value of the new agreement will depend largely on its being respected by other members of the Communist bloc.

The arrangements agreed upon are, in brief, that -

  1. The co-chairmen should callfor a cease-fire in Laos which should be arranged by the Laotian combatants themselves. This call was issued on 24th April;
  2. The Indian Government, as chairman of the International Control Commission for Laos, was invited to reconvene that Commission in New Delhi. The commission is to report to the co-chairmen and to receive instructions from them on the commission’s functions in controlling the cease-fire. I may add, Sir, that the Indian High Commissioner in Australia, Mr, Sen, has been chosen by his Government to represent it as chairman on this commission.

We welcome this, for Mr. Sen has a close knowledge of Laos, and a wide understanding of the problems involved.

  1. An international conference on Laos should be convened in Geneva on 12th May.

Invitations have already been issuedfor the proposed international conference which will be attended by fourteen nations. These will comprise -

The nine nations who met in Geneva in 1954, that is to say, the Union of Soviet Socialist Republics, Communist China, the United Kingdom, the United States, France, Laos, Cambodia and North and South Viet Nam.

Honorable members will recall that Communist China was one of the parties to that discussion, though not diplomatically recognized by some of the other members.

The three-nation members of the International Control Commission - India, Canada and Poland.

The other two nations who border on Laos - Thailand and Burma.

Pending the establishment of a government of Laos which is accepted by both sides, it will be for the conference to determine how Laos should be represented at the conference.

I make the following observations: First, no explicit condition has been recorded by the co-chairmen that the cease-fire must take place prior to the convening of the international conference. Arrangements for the negotiation of a cease-fire are placed, in effect, in the hands of the various Laotian elements. I believe that the representatives of the Laotian Government, headed by Prince Boun Oum - which 1 should add is regarded as the constitutional government of Laos by the Australian Government as well as by the Governments of the United Kingdom, the United States and other countries - will co-operate actively in making the necessary practical arrangements for an immediate cease-fire. We can only hope that other Laotian elements will adopt a similar attitude.

Both the United States and the United Kingdom Governments have made it clear that they will not be prepared to attend the proposed international conference until they are satisfied that a cease-fire has in fact occurred in Laos. The point has great importance, lt is out of the question to -confer- on ways and means of .ensuring the future independence and neutrality of Laos - a policy of non-interference by Western powers and Communist powers alike - if fighting is continuing in Laos and new military threats are added to the recent series of offensive operations by the Pathet Lao. Those operations have won important and increasingly dangerous gains for the insurgents. They have been supported by the Soviet air lift of arms into Laos and by overland transport of supplies from Communist North Viet Nam as well as by some military personnel from North Viet Nam. Both Luang Prabang and Vientiane, the two capitals, are now threatened by these offensive operations. The most important of them occurred simultaneously with the final stages of the recent negotiations in Moscow.

Secondly, the Australian Government has long been determined to support genuine negotiations for a peaceful solution of the Laotian problem. At the same time we have made it clear, by our recent association with the Seato communique of 29th March, that we are united with our allies also in our determination to prevent armed Communist domination of Laos. This being clear, there is now a better prospect of coming to an agreement, by negotiation, on a solution which will satisfy all legitimate interests and avoid war. The common ground is the desire of the Laotian people, the Western and neutral powers and, as we hope, the Communist powers, that Laos should be a genuinely neutral State under a national government representing all responsible opinion.

Thirdly, the problem of Laos has not been solved. It is an economically weak State, lacking social and political cohesion. It will always be exposed to pressures, open and clandestine, from its Communist neighbours. It will be the task of the conference to try to devise ways of relieving it from this pressure. The security of South-East Asia depends on Laos being neutral and free from Communist or any other domination. The next three or four weeks will reveal how much co-operation we can expect from the Communist powers in these efforts to establish by peaceful negotiation the framework for Laotian security, independence and neutrality.

I draw the attention of the House to the -fact that- Sierra Leone,- one .of -the .oldest British Territories in West Africa, will attain its formal independence to-day, 27th April. Sierra Leone last year declared its intention of applying for membership of the Commonwealth and at the Prime Ministers’ Conference last month, we welcomed its entry, subject to the usual constitutional processes. These processes are now complete and I have received a message from Sir Milton Margai, Prime Minister of Sierra Leone, expressing appreciation for the acceptance of S’erra Leone as a full member of the Commonwealth.

Australia is represented at the independence celebrations in Freetown this week, at which His Royal Highness the Duke of Kent is representing Her Majesty. Lord Casey, who, as Minister for External Affairs, had so much to do with developing our relations with newly independent countries in Asia and Africa, kindly agreed to attend on our behalf. He is accompanied by Mr. D. O. Hay, our High Commissioner designate to Canada, who is on his way to his new posting.

Sierra Leone is not a large country, but by no means an unimportant one. The course of its constitutional development towards independence has been smooth and peaceful, in full agreement and cooperation with the United Kingdom. It will be a valuable addition to the Commonwealth group in West Africa. In the past, Australia has had little contact with Sierra Leone, but we look forward to the development of close and friendly relations within the brotherhood of the Commonwealth, and will be glad to offer the new nation any assistance within our capacity. I feel sure that all honorable members will join me in extending a warm welcome to our newest Commonwealth member and in expressing our sincere good wishes for the future welfare and prosperity of Sierra Leone and its people.

I lay on the table the following paper: -

West New Guinea, Laos and Sierra Leone - Ministerial Statement - and move -

That the paper be printed.

Suspension of Standing Orders

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

That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition (Mr. Calwell) speaking for a period not exceeding 30 minutes.

Leader of the Opposition · Melbourne

.- The Opposition welcomes the opportunity to take part in the debate initiated by the Prime Minister (Mr. Menzies) following the Government’s discussions with General Nasution during his recent visit to this country. The Prime Minister could not have reported to the Parliament very much earlier, because he returned to Canberra only yesterday after seine General Nasution off to Manila. We are glad that the people of Australia have been able to listen to the Prime Minister’s statement and to know the Government’s views on the future of Dutch New Guinea. We have our views, too, and in many respects they are identical with those of the Government.

Let me first tell briefly the history of the island of New Guinea, because the history of events in that area, so close to us, has some relationship to the Indonesian claim. In 1828 the Dutch occupied the western part of New Guinea. In 1895 the eastern boundary of the Territory of Dutch New Guinea was fixed by treaty. In 1884, Germany formally took possession of New

Ireland, New Britain, a portion of the Solomon Islands and that portion of the island of New Guinea lying north of Papua. On 6th November, 1884, a British protectorate was proclaimed over the southern coast of New Guinea and the islands adjacent thereto. It was called British New Guinea until the protectorate was ended on 4th September, 1888, and the area was annexed as a British possession. In 1905 Australia passed the Papua Act under which the British possession became the Territory of Papua. The act was proclaimed on 1st September, 1906. Under the Papua and New Guinea Act 1949-57 the Territory of Papua, which is a possession of the Crown, and the Territory of New Guinea, which is a trusteeship of the United Nations, are administered as one unit.

One of Indonesia’s claims to New Guinea is, as the Prime Minister has related it, based in part on some historical circumstance under which in other days some of the old sultans of Indonesia raided the northern portion of New Guinea and took slaves to their home territories. The other claim is based on the assertion that when the Dutch gave freedom to the Republic of Indonesia, as we know it to-day, but which before World War II. was known as the Dutch East Indies, they also surrendered to Indonesia the remnant of their Dutch East Indies empire that was always known as Dutch New Guinea. The Indonesian Government claims further that the Dutch, by an agreement reached in 1948, acknowledged Indonesia’s claim to this territory.

As to the first contention, we say, as does the Government that the people of Dutch New Guinea belong to a different race, or to a variety of races which are ethically very closely related, they are a people different from the Indonesians, and therefore are entitled to determine their own future when they have reached a sufficiently high level of education to be able to make a free and’ unfettered choice.

With regard to the claim that the Netherlands Government agreed to hand over Dutch New Guinea to the Indonesian Government, we say that even if there were such an agreement it would have no moral validity because the Netherlands Government has no moral right - whatever its sovereign rights might be - to hand over the people of New Guinea to any other colonial power. In our view - and this is where we disagree with the Government - the Prime Minister has not made the position of his Government sufficiently clear on that point. On several occasions in the past he has asserted - as he again asserted to-night - that if the Netherlands and Indonesia ever reached agreement on the future of Dutch New Guinea, which could involve the possession of Dutch New Guinea by Indonesia, Australia would stand aside. We did not agree with that proposition when it was first announced by Lord Casey, as he is now, and others some years ago, and we do not agree with it now. It could be claimed quite properly that the Government, having asserted the principle of selfdetermination with such strength and firmness as the Prime Minister has done tonight, has by inference abandoned it. We think the Government should be quite explicit on the point. The day ‘has long since passed when dependent people can be bartered, or seem to be bartered, between an old European colonial power like the Netherlands and a neo-colonial power like Indonesia. _ - - - _ _ _ -

Whatever might be said in criticism of the Dutch and their rule in Dutch New Guinea, whatever might be thought about colonialism, and whatever time limit might be put upon the existence of colonialism anywhere, these things should be remembered: First, the Dutch have said that they hope to get out of Dutch New Guinea in ten years. They are spending millions of pounds annually - indeed something like £12,000,000 this year - on educating the indigenous people to the point where they will be able to govern themselves. The second fact is that if Indonesia ever moves into Dutch New Guinea, it will never want to move out and it will never give the native people of the country the right to govern themselves, because it claims that Dutch New Guinea always was a part of Indonesia. General Nasution has said, in effect, that to give the right of selfdetermination to the indigenous people of Dutch New Guinea would be just as illogical as giving it to the people of some other territory that is recognized by every one as constituting a part of Indonesia. We believe, too, that the Indonesian people will never want to spend any money on Dutch New Guinea or in any way assist its development. One reason why they will not give financial assistance is because they cannot. They have more than enough to do in developing and strengthening their own country and in attending to the wellbeing of the 90,000,000 people who occupy the territory of the Republic of Indonesia.

We are not unfamiliar with Indonesia’s point of view.. In recent years there have been several missions from Indonesia to Australia. Dr.. Subandrio, the Indonesian Foreign Minister, was in Australia when J3r. Evatt was the Leader of the Opposition, and I understand that on that occasion what the Prime Minister has said to-night was told to Dr: Subandrio. I was present when discussions were held with Di. Subandrio and Dr. Helmi, the Indonesian Ambassador to this country, and what I am saying tonight was then said by Dr. Evatt. The position was well understood by Dr. Subandrio, although he did not agree with it any more than General Nasution agreed with what the Prime Minister told him during his recent visit. By courtesy of the Government I was present at the Cabinet luncheon .for General Nasution the other -day-, and on that occason I tried-to put the - - - Opposition’s point of view to General Nasution in a few moments as I am putting it to-night. I said that all the peoples of New Guinea should be regarded as one people. They are not one people at present. In the short history that I gave of the carving up of their island, it was European colonial powers which made the division. It was not Indonesia, and it was not the people of Dutch New Guinea. In fact, I think it was the British Foreign Office, which had to satisfy Germany and Holland, which both wanted more colonial territory. The proposition that was advanced by a Queensland statesman of a century or more ago to the effect that the island of New Guinea should be retained as one entity was rejected, and the Dutch were told that they could occupy one portion and the Germans were told that they could occupy another portion.

We face the situation that this artificial division of the country exists. Every one who believes that World War I. was fought on the principle of self-determination, and every one who believes that people have the right to determine their own future, must agree that the 2,500,000 indigenous inhabitants of the island - the 700,000 human beings who live in Dutch territory and the 1,800,000 human beings who live in our Territories - must be helped so that ultimately they will be able to make their own choice freely.

At present they have no sense of nationhood. They live in tribes and they think only in tribes. Even the wealthiest tribe in the Territory, the Tolais, who live in New Britain, have no real sense of nationhood. A considerable time may elapse before they are all fit to govern themselves, but when they are fit to do so they will, as the Prime Minister has said, make their own choice and we shall respect it. As a party, we have been on record in relation to this issue for a long time. We have said that when the people of the whole island make their choice - whether they decide to become an independent republic, whether they decide to become part of a Melanesian federation, whether they decide to become a part of the British Commonwealth of Nations, as we would like, or whether they decide to become a part of Indonesia, we shall accept and respect the decision, which will have been made by them and by them alone. That ought to suit Dr. Soekarno and General Nasution and everybody else interested in the question. If any person in Indonesia will not accept that proposition, then it can only be that he is using the Dutch New Guinea situation for local political purposes, and is not primarily concerned with the well-being of the people of West New Guinea. The biennial conference of the Australian Labour Party sitting in Canberra recently defined the attitude of the Labour Party on this question as follows: -

The Labor Pary asserts that the only people who have the right to determine the future of their island of New Guinea are its indigenous people.

The United Nations holds that the inhabitants of the Trust Territories of New Guinea are not yet fit to govern themselves. The Labor Party believes this to be true of the inhabitants of the rest of the island.

The Labor Party will support and co-operate in the efforts of the United Nations to resolve the present dispute over West New Guinea so as to avoid armed conflict.

The conference went on to say in reference to our own particular area -

The Labor Party declares that the sole right of Australia in Papua and New Guinea is to develop the territories to independence at the earliest possible time and that it must then withdraw.

The economic, social and political development of New Guinea involves resources beyond the capacity of the Commonwealth of Australia; consequently it will be necessary to call in the resources of the United Nations.

I pause at that point to observe that there are people in the United Nations - and they are not all members of the Afro-Asian group - who keep telling us what we ought to be doing to help the people of Papua and New Guinea in matters of health, education and everything else. The resources of this country are not limitless. Australia is spending generously and successfully very large sums of money annually on Papua and New Guinea, and the only reward or return we get for that expenditure as a people is the satisfaction of knowing the amount of good that is done. We cherish the hope that, as a consequence of the progress we see being made, and when the native people can make their decision, they will not part with us with any feeling of hate or hostility or consider that we have in any way at any time exploited them or done them any harm. The Labour Party Conference of 1957 was very concerned about the New Guinea situation and so it resolved -

A mutual regional pact for security and welfare should be negotiated between Australia, Holland and Indonesia. The pact should aim at promoting the security of the entire areas of Indonesia and New Guinea. It should also aim at improving the standard of life for all the people throughout this area - so vital to Australia.

The idea behind all that was that Indonesia and the Netherlands and the Australian Government would guarantee, under the auspices of the United Nations, to protect the safety and the well-being of all the peoples of those territories, and that with such an agreement in operation, great progress would be made in lifting the living standards of the people of Indonesia as well as the peoples of Papua and New Guinea. That idea was not acceptable to the Indonesian people any more than was the proposal that the matter should be resolved by the International Court at the Hague, and we see dangers in that proposition as we do in the attitude adopted by the Government that if Indonesia and Holland ever agree, Australia will stand aside. But at least that was a suggestion which was honestly made and that might have led somewhere.

The Indonesians have been adamant on this whole question. They say they want no United Nations control over West New Guinea unless it be based on a firm understanding that after a certain very limited time - indeed, they have stipulated only two years - the whole territory will be handed over to Indonesia. Of course, that would not be acceptable to any Australian.

Going back earlier still to the days of the Chifley Government when my colleague the honorable member for East Sydney (Mr. Ward) was Minister for Territories, we had under discussion various ideas by which we thought we could help to bring peace to that troubled part of the earth’s surface. It was close enough to us to merit our attention. The issues were of such importance that the honorable member for East Sydney, as Minister for Territories, gave a good deal of attention to the matter. He will speak in this debate later. He knows from his own experiences as a Minister and from his own studies of the Territory, what the attitude of the Indonesians was at that time.

Of course, twelve years have passed by and Indonesia has become firmly established as a nation. We wish it well. We have no feelings of ill will towards the Indonesian people. We treated General Nasution, as we did Dr. Subandrio, with the respect and honours they deserved. We were happy to find them parting from us as good friends even if each did say when he left us that he was not satisfied with our attitude.

My interest in this question, like that of all Australians, is to see a certain number of years elapse before the people of Papua and New Guinea are asked to decide their future. If the United Nations or anybody else were to ask the people of Papua and New Guinea now what they should do, they would certainly vote for continued association with Australia. They would not vote to break their links with Australia. But we do not want to take advantage of their present strong feeling of dependency upon us. Ultimately, when they feel they are free to make a decision, when they have their own trained doctors and administrators, when they are providing their own revenues and when their industries have been developed, we will want to see them make their own choice. I worry at times when I see how other people throughout the world, knowing very little about this matter and caring possibly no more than very little, are inclined to take up an attitude which is not helpful. There was a time when the ambassador of a great nation had a scheme for handing over Dutch New Guinea to the Indonesians after a lapse of six or seven years. I was very glad to read in the press that the United States of America was not prepared to accept Dr. Soekarno’s proposition, and I hope the press reports on the matter are true. I hope that the United Kingdom Government will be influenced by our thinking on this matter.

Of course, every government that is situated in Europe has a European outlook. I do not blame them for that; but we and the United Kingdom are part of the Commonwealth of Nations, and if the Commonwealth is to be maintained, we expect the United Kingdom to have some concern for our point of view. I have no reason to believe that it Would not be anxious to be identified with our point of view. The basic proposition that has been put forward ~~ to-night By” the “Prime- Minister- -on-behalf _ - of the Government and advanced by myself on behalf of the Opposition, namely, that the only people who have the right to determine the future of New Guinea are the indigenous people of New Guinea, must be accepted by all mankind as the best and right one for the people of Dutch New Guinea.


.- To-night we have heard a most informative statement, by the Prime Minister (Mr. Menzies) which, particularly in respect of Dutch New Guinea, I believe will receive the warm approbation of the people. It does not reflect any great change of attitude on the part of the Government. On the contrary, it represents a continuation and reiteration of the policy that we have stood by now over a period of years. I was particularly pleased to hear the sentiments expressed to-night by the leader of the Opposition (Mr. Calwell), who said that the views stated by the Prime Minister (Mr. Menzies) were almost identical with those of the Opposition. As his speech progressed, I found that to be so. He said that there was one point of disagreement. That was where he suggested that if the Dutch and the Indonesian people came to an agreement and we recognized it, we would be more or less selling out the right to self-determination of the indigenous people of Dutch New Guinea. I want to remind the honorable gentleman that we have said that we would recognize the agreement if it took place between the Netherlands and the Indonesian governments. We did say that we would recognize an agreement between the Netherlands and Indonesia as the parties principal, arrived at by peaceful processes and in accordance with internationally accepted principles. That is indeed an important fact and one which 1 hope the Leader of the Opposition inadvertently overlooked especially when we appreciate that if the words, “ internationally accepted principles “ mean anything at all - and they are set out to some extent in the United Nations charter - they mean that ultimately these people should have the right of self-determination. If the Leader of the Opposition accepts that, and if that is his only disagreement with the Prime Minister’s statement to-night, I feel that he should be in complete agreement with the statement which has been made with respect to West New Guinea, lt has been obvious that, during the talks between the Prime Minister and General Nasution, there has been no doubt in each man’s mind concerning the attitude of the other’s government. It is quite clear that the general has again plainly set out the desire of the Indonesian Government to annex West New Guinea. It is equally clear that we have said that we will recognize Dutch sovereignty over New Guinea.

Here it is interesting to look at the claims of Indonesia to Dutch New Guinea on political and historical grounds, as mentioned by the Prime Minister. We know that a claim based on geographical grounds cannot be supported. We also know that a claim based on ethnological grounds cannot b<i supported because anyone who has been to Dutch New Guinea and seen the people there, even those living in that part closest to Indonesian territory - Ceram - as well as those further down on the island of Japer will have noticed the distinct difference between the people ethnologically. I do not think anybody in this House would endeavour to establish a claim based on ethnological grounds.

But we might have a look at the historical claim. Whatever claim Indonesia might have historically must go back some 400 or 500 years and perhaps even further to the time when, as the Leader of the Opposition said to-night, the Sultans used to come across, get slaves and take them back to work. If the claim has a more recent origin it must go back to the time when the original orientation of Dutch New Guinea took place - the time when the Dutch took over that territory in the first instance - and that was many years ago. Surely, if the Indonesians base their claim on that, then they are basing it on a claim of colonialism which the Indonesian Government itself is the first to decry. In any case, over this period, the world has become a little more accustomed to disputes between countries. We have set up the United Nations, and we have endeavoured at all times to reach some peaceful solution of disputes. We know that colonialism to-day is not the selfish thought of a few individuals, and that it is gradually dying out. So if we examine Indonesia’s claims on historical grounds, I do not think that it can be substantiated in the present circumstances.

The other question which I wish to raise is that of sovereignty, and here we stand firm. We recognize Dutch sovereignty over this area, and it is interesting to see why we do. We recognize it because, as far back as 2nd November, 1949, a conference known as the Round-Table Conference was held between the Dutch and Indonesian Governments at the Hague. At that conference, the Indonesian and Dutch leaders got together. It was their task to produce a charter for the transfer of sovereignty. Article I. of that charter reads -

The Kingdom of the Netherlands unconditionally and irrevocably transfers complete sovereignty over Indonesia to the Republic of the United States of Indonesia and thereby recognizes the said Republic of the United States of Indonesia as an independent sovereign State.

So far so good1. Article II. of the same charter reads in part -

With regard to the residency of Dutch New Guinea it is decided -

in view of the fact that it has not yet been possible to reconcile the view of the parties on New Guinea, which remain therefore in dispute. . . .

There is no need for me to remind honorable members of the events which followed as a consequence of that, but I think they should be placed on record during this debate because this is an historic occasion on which we have once again confirmed our policy in relation to this matter. Paragraph (f) of Article II. (a) of the charter to which I have referred reads -

The status quo of the residency of New Guinea shall be maintained with the stipulation that within a year from the date of transfer of sovereignty to the Republic of the United States of Indonesia, the question of political status of New Guinea will be determined through negotiations between the Republic of the United States of Indonesia and the Kingdom of the Netherlands.

Those two paragraphs are quite explicit. An exchange of letters then took place between the Indonesian and Netherlands delegations. On 2nd November, 1949, the chairman of the Netherlands delegation at the conference, Mr. J. H. van Marsder, forwarded a letter to the chairman of the delegation of the Government of the Republic of Indonesia, which read - 1 have the honour to inform you that the Netherlands delegation to the round-table conference states that the following has been agreed upon by the delegates to the conference. The clause -in Article 11 of. the -draft, charter Qf -transfer of sovereignty, reading “ the status quo of the residency of New Guinea shall be maintained “ means -

And this is the important part - through continuing under the Government of the


On the same day, the Netherlands received an acknowledgment couched in similar terms and pointing out that Indonesia recognized that sovereignty remained in the hands of the Netherlands. This was an agreement duly signed by the Dutch and Indonesian Governments under which the Indonesian Government recognized Dutch sovereignty over West New Guinea. So, if we accept the fact that a claim cannot be established ethnologically, historically or politically and we come back to endeavouring to establish it on the grounds of sovereignty, then, surely, any attempt to do so would be tantamount to abrogation of an agreement which was made between the two governments because the Dutch have always shown and still show a willingness to continue to negotiate within the ambit of the agreement and the charter.

But the Indonesian Government has said straight out that it will not continue or re-commence discussion on this subject.

Unless the Indonesian Government is willing at least to meet the Dutch on the question of sovereignty, I fail to see how any agreement can be made. Since the intergovernmental talks, Indonesian spokesmen have continually said, “ We shall decide this matter for ourselves “. They have gone on record from time to time to point out that if difficulties confronted them they would even use force of arms. It is partly re-assuring to have from General Nasution a statement that force of arms will not be resorted to and that all efforts to obtain West New Guinea will be by peaceful means. If the Indonesians are genuine in their statements, I suggest that there is no higher or more impartial authority than the International Court of Justice to which to resort. However, Indonesia has consistently refused to place its claim before this body, which is the supreme adjudicating authority of the United Nations for resolving disputes between nations. If the court were to decide for Indonesia, we would respect that decision. If it were to decide for the Dutch, likewise we would respect the decision. I believe that Indonesia’s unwillingness to submit its. case to a judicial body which is above reproach weakens its case substantially.

Throughout the last four or five years Indonesian diplomats have made goodwill visits such as that which we have had from General Nasution. I believe that goodwill visits of this kind are excellent. They promote better understanding and frank exchanges of views that cannot be obtained other than by personal contact. They permit a greater understanding of the interests of one another. The benefit of the recent visit to us has been that we were able to assure the general that we have no military pact with the Dutch. This is important. Just as important and valuable was the assurance given to us by General Nasution. However, I do hope that such visits are solely goodwill visits and not attempts to persuade other nations to come to aid or to pursue Indonesia’s claim to this territory. I hope that they are not made in an effort to obtain international sympathy for the Indonesian cause. The Australian people have’ a great interest in New Guinea. In many of us this is an emotional interest. I feel sure that any attempt by Indonesia, after receiving encouragement and sympathy from any part of the world, to take any portion of

Dutch New Guinea other than by peaceful means would be greatly resented by the majority of the Australian people.

The Dutch have accepted the principle of self-determination as a cardinal point of the policy that they administer in Dutch New Guinea. This is a policy which I believe deserves the commendation of this House. 1 have been to that territory and I have seen the expansion of their influence into the hinterland. The establishment of air fields, hospitals, technical training, and other facilities for educating the native people is going on apace. By these means the Dutch hope to bring the native people to the stage of self-determination within a reasonable time. That is the big difference between the policies of Indonesia and the Netherlands. We ourselves believe in the policy of self-determination and we want to see our own Territory of Papua and New Guinea reach that stage. It is indeed very gratifying that just recently, both in our territory and in the Dutch territory, steps were taken to establish legislative bodies whereby the native people can gain experience in conducting their own affairs and can learn to be self-reliant.

It is not easy to educate these indigenous people quickly. The process is long, slow and tedious. If we were to hasten it, lt would not be in the best interests of the people. Just recently in other parts of the world we have seen the difficulties of people who perhaps were not ready to take over the responsibility and reins of selfgovernment. To have such things happen at the front door of Australia would be a calamity. The achievement of self-determination tor New Guinea, no matter how quickly we would like to see it come to pass, must of necesssity be slow. By contrast, Indonesia’s policy in relation to West Irian, as it is known to Indonesians, is one of annexation. I can find no statement that the Indonesians will give the people of Dutch New Guinea self-determination. We believe that self-determination is an important principle. We uphold it and we shall do our utmost to see it implemented.

In view of all these matters and having attempted to demolish the various claims one by one, I fail to see that Indonesia’s claims to Dutch New Guinea hold water. First, T again urge the Indonesians, if they are sincere in their claims, to place this matter before the International Court of Justice. Secondly, we require from them a public pronouncement to the effect that the people of West New Guinea will receive the opportunity of self-determination in accordance with the policy that the Dutch have already put into operation.

I should like to conclude where I began by saying that this matter should be above the making of political points against one party or another. I was particularly pleased at the attitude of the Leader of the Opposition, which to my mind increases his stature. The matter is so important that it should be put above party-political considerations. I hope that other honorable members will follow the lead given by the Prime Minister and the Leader of the Opposition and endeavour to keep the debate on a high plane. The matter is of such great interest to our country that we should not endeavour to score cheap political points over persons or parties.

I should like to join with the Prime Minister in congratulating Sierra Leone upon the achievement of its independence and to welcome it as an additional member of the British Commonwealth of Nations. In recent months we have seen the departure of one Commonwealth country.


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

East Sydney

.- Mr. Deputy Speaker, there will be no disagreement on the importance of the subjectmatter that we are discussing this evening. All honorable members- must be concerned with the gravity of the situation which is undoubtedly developing to the north of Australia. Having said that, I must express my regret that the Prime Minister (Mr. Menzies) once again has displayed his great capacity to deliver a speech on any subject whatever without saying very much and leaving a great number of the important questions unanswered.

The Government appears, as usual, to have no definite policy as to how it would act under certain circumstances. It is certainly keeping this Parliament and the people completely in the dark in respect of it. Why has not the Prime Minister faced up to the situation that exists? What the Australian citizen wants to know is what action will be taken by the Government and what will be its attitude if the Dutch decide to vacate West New Guinea and the Indonesians decide to move in, or if the Dutch are compelled by force either to defend that territory or to vacate it. What is the attitude of the Australian Government? Its indecision, in my opinion, creates a great danger to the security of this country.

Of course, the Australian community believes in the United Nations. We want to see international disputes settled, not by recourse to arms, but by negotiation and agreement. But surely nobody suggests that such a process is being adopted to-day. The honorable member for Phillip (Mr. Aston) seemed to be quite satisfied that because General Nasution, who was recently in this country, gave certain assurances, which have been repeated on a number of occasions, there will be no recourse to the use of arms. The Prime Minister said the same thing. He said that he insisted there must be no recourse to armed force, but if there were agreement between the Dutch and the Indonesians in. respect of the future political control of West New Guinea, then we would respect the agreement. Yet the Prime Minister said throughout his speech that Australia stands for the principle of self-determination.

The Labour Party does not believe an colonialism. We have done our best to end it. There is no body in this country from whom the Indonesians obtained more assistance in gaining their independence than the Australian Labour Party and the trade union movement. We were helping the Indonesians to gain independence in whatever way we could when those who constitute the present Government were taking all kinds of action to prevent them from achieving their objective. So it is rather interesting now to see the change of front on the part of some honorable gentlemen opposite.

Of course, the Indonesian leaders continue to say that they do not propose to have recourse to armed force to obtain possession of West New Guinea. But is it not a fact that they have also stated on a number of occasions that they regard West New Guinea as a part of Indonesia? Even General Nasution said that certain incidents may arise which might compel them to adopt a different attitude. While General Nasution was giving his assurances in this country, Dr. Subandrio, the Foreign Minister of Indonesia, visited the United States of America with President Soekarno. When asked the very same question - whether he would give a guarantee that there would be no recourse to arms - he gave a different answer to that given by General Nasution. He said, “ No one could say that “. Of course, nobody can say it. What is the exact situation? While the Government sits back and hopes that there will be a peaceful settlement of this trouble, other people are predicting rather the reverse. An Indonesian newspaper called “ Barita Indonesia “ quite recently stated -

West Irian would be in Indonesian hands before next August 17th . . . This would be achieved by diplomacy or by force.

Dr. Subandrio said on another occasion that he could not guarantee a peaceful settlement of Indonesia’s claim for control of West New Guinea. President Soekarno, only last year, said -

Before the cock crows next year, West Irian will return to Indonesian territory.

Dr.” Herbert Feith, one of the Government’s own authorities, who is an Asian affairs expert at the Australian National University, declared in a recent statement that fighting in New Guinea was likely before the end of the dry season. The dry season in New Guinea is the winter. So, according to these gentlemen, the danger is with us at the present moment.

What was the purpose of General Nasution’s visit to Australia and the visit of President Soekarno and Dr. Subandrio to the United States? I am entitled to express my opinion on this matter because as an Australian citizen I am concerned about the security and interests of Australia. These gentlemen, in my opinion, are sounding out world opinion in order to see what the reaction will be in the event of their adopting a different course of action to secure control of West New Guinea.

What will happen to the agreement which the Government had with the Dutch? I am not enamoured of the Dutch or of any other colonial power for their activities in the past. As I have said, the Labour Party assisted the Indonesians to obtain their independence. I believe that the Dutch are now determined to leave New

Guinea as soon as it is practicable for them, to leave it. What, we have to be afraid of is that the Dutch may vacate West New Guinea much earlier than this Government expects and much earlier than the Australian community hopes. When all is said and done, if an armed conflict arose between the Dutch and the Indonesians for possession of West New Guinea, the preponderance of armed strength would be on the side of the Indonesians. The Dutch know that. Although they have put. a considerable portion of their revenue into the development of West New Guinea, they have declared, without equivocation, that: they intend to vacate it within ten years. If the. Dutch felt that there was no support for their announced intention to give the indigenous population of West New Guinea, at the end of ten years, the right to self-determination by their own vote, do honorable members think that the Dutch would stand alone on that principle? If they are not to stand alone, who will stand with them? These are important questions which the Government has failed to answer.

Strangely enough, the arms which the Indonesians possess to-day were obtained from both, the Western powers and from the Soviet bloc. The Indonesians played the game very skilfully. They played one off against the other. Because the Western powers were trying to maintain their influence in that area, they provided Indonesia with arms. The United Kingdom also provided arms for Indonesia, and so did Soviet Russia. No doubt China has also given the Indonesians material aid. To-day the Indonesians, it is said, have a predominance of military power in this sphere.

We have to recognize that there were problems for the United States, the United Kingdom1 and other Western powers, because the Netherlands happens to be a member of the North Atlantic Treaty Organization-. When- these countries first began to supply arms to Indonesia, naturally the Netherlands, as a member nation of Nato, became very concerned.. But it was given certain- assurances- by the United States of America and by the other Western powers. In. )958i, America. guaranteed West New Guinea against, armed occupation. The late Mr. Foster. Dulles, thaSecretary of State of the United. States; said that if Indonesia attacked New Guinea she would have the United States to deal with. It was only because of those assurances given to the Netherlands at that, time that the North Atlantic Treaty Organization was able to retain the Netherlands as a member.

What a peculiar position Australia happens to be in at the moment? We are joined in this area with other nations of the South-East Asia Treaty Organization. Many of the member countries with whom we are associated in this organization have declared their support for Indonesia’s claim. We have the peculiar situation that Pakistan, Thailand, the Philippines and Malaya - the last not in such definite terms - are not unsympathetic to the claim of the Indonesians. As I have said already, I do not know whether the Government, notwithstanding this, has ever taken the trouble to have this problem discussed at any meeting’ of the Seato countries. It is a most serious thing for the people of Australia that we can never get any decisive- declaration of policy from the Government. Therefore, as a member of a party which at all times is opposed to colonialism - which has wanted to see the end of it - I shall tell honorable members, in case they have forgotten, what the Labour Party of the day decided to do after the termination of the war. Time will not permit me to quote any of the speeches that were made, but at that time supporters of the present Government condemned the Labour Government for not encouraging white settlement in the territories. But although they claimed that the Labour Government was not encouraging permanent white settlement, these honorable gentlemen were talking about New Guinea as if it were a permanent possession of Australia. Members of the Labour Party have never regarded’ it as such. We have regarded ourselves as trustees for the native people of the Territory.

It was a Labour government which merged the territory of New Guinea, with the territory of Papua./ over which Australian sovereignty had been recognized. The Labour Government not only decided that the territories should have a joint administration, but it also- declared that it was determined, to push, on with- the- development of those territories with- the idea of giving them- self-determination, when it felt they were capable of making- the decision for themselves. Present Government supporters condemned us for that. We said at the time also that we were prepared not merely to give to the United Nations Trusteeship Council an annual report of our trusteeship of New Guinea, but to give the United Nations a report on what we were doing in the joint territory of Papua and New Guinea. Right throughout Labour has been consistent in the attitude that it has adopted.

I take the same line as the Leader of the Opposition. I join issue with the Government and the Prime Minister on the declaration that, as long as there is agreement between the Indonesians and the Dutch, we have no further interest in the matter, and will recognize that agreement. What has happened to the great principle of selfdetermination? As the Leader of the Opposition said, we do not propose to end one form of colonialism and establish another. We think that the indigenous population of New Guinea, as the inhabitants of an island and as a united territory, ought to have the right to determine the future political control of their own country.

What is the position? What will happen to these unfortunate people if the Government, as a result of its vacillating attitude and its failure to define its policy on this matter, encourages the handing over not only of West New Guinea, but of its people, for the care of whom the Dutch have taken the responsibility, just as the Australians have accepted the responsibility to care for the people of eastern New Guinea? We have to ask ourselves, therefore, how much reliance we can place on the word of Government members who talk about their consideration for the people who reside in any portion of New Guinea. How much dependence can we place on their word and on their declaration that they believe in selfdetermination?

I read to-day a statement in which President Soekarno said that he wants to join with his West Irian countrymen and unite with them in liberty. Knowing the situation that exists in . Indonesia to-day that is a rather strange statement. There exists in Indonesia what the rulers of that country call “ guided democracy “. Everybody knows that “ guided democracy “ is only another name for dictatorship. I listened- in to some of the television sessions in Australia in which General Nasution was questioned. He was asked whether political parties were permitted to exist in Indonesia and he said that as long as political parties co-operated with the President they were allowed to exist. If they disagreed with the President, or his policy, they are wiped out of existence. Under this guided democracy in Indonesia newspapers that criticize the President or his policy are not allowed to continue to function.

As the Leader of the Opposition has said, Indonesia is a country that has not been able, up to date, to cope with the enormous problems with which it is confronted in its own territory. It has tremendous problems. It has the great problem of poverty facing it. What is to happen to the people of West New Guinea? Would they be any better off materially through a change from Dutch to Indonesian control? I do not think they would be. I think they would be much worse off.

My time has nearly expired, so let me say in conclusion that I think that this matter of- West -New- Guinea- should- he _ discussed on the United Nations level. The problem ought to be taken to the United Nations as soon as possible. What is the Government waiting for? Does it propose to sit down without a policy and wait until actual fighting commences before it decides what this country should do? Australia is a peace-loving country, and the United Nations was established to preserve peace. That is where this matter ought to be determined, and the Government should take this question there at the earliest possible moment.


.- I think it is unfortunate that the honorable member for East Sydney (Mr. Ward) has not followed the example of his leader (Mr. Calwell). I think most honorable members on this side of the House will agree that his remarks have been provocative and mischievous and, I believe, insulting to General Nasution in suggesting that we are unable to accept his word. The honorable member for East Sydney suggested that we should go to the United Nations, regardless of the negotiations that have taken place between General Nasution and the Prime Minister (Mr. Menzies). If we did that, we would immediately provoke Indonesia. I think the honorable member implied that we should adopt some further measures, such as threats, just in case the present assurances are not recognized.

I think every one who has listened to the debate to-night - I hope many thousands have done so - will be very grateful that these negotiations were handled by the Prime Minister and not by the honorable member for East Sydney. But one never knows; some day the Opposition may be the government. If the honorable member for East Sydney is ever Minister for External Affairs, it will be a most unfortunate day for Australia. We can congratulate ourselves that we had some one of the tremendous capacity of the Prime Minister to handle this most delicate situation. Our relations with this very large nation to our north have been very friendly and our trade and cultural relations in the area are very much bound up with the future of Indonesia.

In holding the view that we do about West New Guinea, I believe that we have right and world opinion on our side. As the honorable member for Phillip (Mr. Aston) has pointed out, under the Charter of the United Nations the people of West New Guinea must eventually decide their own destiny. The honorable member also pointed out that they are related in every respect to the people in the remainder of the island of New Guinea. These people in no degree belong to the people of Indonesia. They belong to the great Asian group of Melanesians, and some day a sort of federation of Melanesia may be formed. However, that is very far in the future and probably does not warrant speculation at this time.

Unfortunately, there is a degree of urgency about our efforts to bring selfgovernment to these people. We have speeded up our plans to prepare the people in our portion of New Guinea for self-government. But it is very difficult for these primitive people of the jungle suddenly to accept the responsibilities of self-government. This contention applies also to the people in the Dutch area. Apparently the Dutch have planned to move out of West New Guinea in ten years and to give self-government to the indigenous people within that time. Recent evidence shows that the people in

West New Guinea who are able to express a considered opinion have no desire to be associated in their government with Indonesia.

We must, however, respect the ideas and the claims of Indonesia. We have met General Nasution in Australia and I am sure we are all very relieved to hear of the undertaking that no armed conflict is likely to take place in this area. I believe that the statement embodying this undertaking is most important, both for the people of Australia and for the people of Indonesia. We should try to avoid armed conflict; after all, friendly negotiations will undoubtedly lead to a solution.

The main claim of Indonesia to West New Guinea rests on ancient historical factors. The. Leader of the Opposition suggested that the ancient rulers of Indonesia took slaves from West New Guinea. I would not condemn them for that, because in comparatively recent times our blackbirders did much the same sort of thing in the South Sea Islands. However, if we project the historical claim of Indonesia to other parts of the world, we would at this time have some most embarrassing conflicts. Great Britain, for instance, on an historical basis, could claim considerable portions of France. Although we must respect Indonesia’s claim, the historical basis seems to us to be rather flimsy.

Economically, there does not seem to be any really strong reason why any nation should want West New Guinea. Geologically it is a tangle of huge mountains and deep gorges, and considerable areas of it are swamps and jungles. There is no indication of mineral wealth, except that oil was found in the Vogelkop in the western end of New Guinea. Pre-war, this was a very promising field, but subsequently it proved to be only a very minor one and it has now been abandoned. West New Guinea probably has timber resources. But the area of land suitable for cultivation is very small and there would be great difficulty in supporting a very large population. On the other hand, if this was part of a combined nation of New Guinea, the position would be altogether different. The richer eastern end would help to support the people in the poorer western end.

Another important factor is the boundary between eastern and western New Guinea.

This follows a meridian of longitude that cuts right across the island. Many tribes or peoples belonging to the same cultural group and probably speaking very similar languages are separted by a line that is arbitrarily drawn on the map. That is another reason why I do not think it is right to separate the people of West New Guinea from the people on the rest of the island. Of course, other factors must be considered. Undoubtedly one of the chief factors influencing Indonesia’s claim to the western end of the island is the political factor. The transfer of sovereignty over the Dutch East Indies from the Netherlands to Indonesia involved considerable political difficulties, and we know that a number of armed conflicts took place shortly after the Dutch left that area. I think Indonesia’s claim to West New Guinea was initially a means of rallying the people of Indonesia to the new government there. To annexe West New Guinea became a firm policy of certain leaders in the new Indonesian Government and that policy assumed great emotional significance amongst the people of Indonesia.

I should like to express the very great pleasure that all of us must feel now that Sierra Leone has become a member of the British Commonwealth of Nations. Sierra Leone is one of the oldest British territories. Let us hope that it has based its new government on the best traditions of British government - the most successful form of democracy the world has ever seen. Let us hope that the actions of the new Sierra Leone Government will be in the best interests of the people.


– The matter being discussed to-night is the meeting between the Prime Minister of Australia (Mr. Menzies) and General Nasution of Indonesia. The subject of their talks was the trigger spot of West New Guinea, how to avoid conflict there, and how to bring about peace in that area. We could make a great deal of trouble amongst ourselves here as Australians by raking over the ugly history of colonialism and making allegations as to who supported colonialism. But it is too late for that kind of talk. The winds of change have blown all those old orders away. What we must think of now is the position of Indonesia, Holland and their dependent peoples. The basic problem that faces us to-day is not who is to make war but who is to make peace. This meeting of two men to discuss the relative values of their causes reminds me of the preamble to the constitution of the United Nations Educational, Scientific and Cultural Organization - words which rank with the Gettysburg Address or any other of the magnificent statements of policy and human achievement that have ever been uttered in the world. That preamble states - . . that since wars begin in the minds of men it is in the minds of men that the defences of peace must be constructed; the ignorance of each other’s ways and lives has been a common cause throughout the history of mankind of that suspicion and mistrust between the peoples of the world through which their differences have all too often broken into war; that the great and terrible war which has now ended-

This was shortly after the end of the last war - was a war made possible by the denial of the democratic principles of the dignity, equality and mutual respects of men . . . that the wide diffusion of culture and the education of humanity for justice and liberty and peace are indispensable to the dignity of man . ._ . that a peace based exclusively upon the political and economic arrangements of governments would not be a peace which could secure the unanimous, lasting and sincere support of the peoples of the world . . .

That is what we seek to-day - to preserve the peace by human understanding. To that end nothing could be better than that the minds of men should meet. It was a very good thing that General Nasution came to this country. It was a very good thing that the Prime Minister met him and that we extended Australian courtesy to him. It was a very good thing that we stated our position as bluntly and as rigidly as he did his.

The meeting between the Prime Minister and General Nasution was a meeting of the minds of men. I would have been happier if more honorable members could have met the general in, say, the King’s Hall where we could have tested his mettle and had an opportunity to understand his point of view. That opportunity was reserved to the top levels of government - perforce I know - but it would have been a good thing if more of us could have met him so that we could have gauged, through our own feelings and sensitivity, what he was thinking. I hope that this will be done when we next have such an important visitor.

The meeting of men together is the salvation of the world. If we believe in the United Nations we must agree that international problems cannot be solved by the clash of arms and the horror of bloody conflict, or by empty rhetoric as to who is right - Holland or Indonesia - in this present situation. Any honorable member who believes in such a solution will not have my support. We must shed some of our nationalism, some of our superficialities and some of our fears and look at this problem in the light of the circumstances existing in the world to-day. The meeting between the Prime Minister and General Nasution was a memorable one. It was a useful meeting and of considerable value to us as well as to the rest of the world. What did Australia gain from this meeting? Some clearcut statements were made by our distinguished visitor and we on our part also made some definite assertions. In his speech to-night the Prime Minister said that so far as General Nasution was concerned there was no retreat whatever by Indonesia from its claim to West Irian. The Prime Minister said that General Nasution felt that Indonesia had a claim to West New Guinea on historical and political grounds - that the area had1 been part of Indonesia before the Dutch colonizers came to the Spice Islands. General Nasution admitted - this is at least a point of information if not of understanding - that there had been infiltration of West New Guinea by Indonesian forces, but said that those forces were not under the direct control of Djakarta. General Nasution claimed that the Dutch had landed a foraying party in a remote part of Indonesia. He said that that party had landed on the outer eastern islands of Indonesia, where the central Government still does not have full control.

General Nasution said that Indonesia would not accept a United Nations trusteeship over West New Guinea unless it was a bridge to the eventual handing over of the area to the Indonesians. He also said that Indonesia would not have recourse to the International Court on this matter. He claimed that Australia should remain neutral in discussions with the Dutch over West New Guinea and he implied or charged that we were making military preparations in New Guinea. At least these matters were brought into the open and they are matters that the minds of men can answer immediately. We were able to deny emphatically that we were making military preparations in New Guinea and I believe that General Nasution accepted our denial without reservation. He was re-assured on that point. This is another step forward in the mutual understanding between men towards the preservation of peace.

The Australian viewpoints were put forward with emphasis. The Prime Minister said that in any attempt to resolve the problem there must be no use of armed force. He said also that there must be free negotiations between the parties. He said that there must be a respect for existing agreements - I hope without leaning over backwards to one side or the other. The Prime Minister said that there must be an adherence to the decisions of the United Nations and that a policy of development leading to self-determination must be pursued in the trusteeship territories. A policy of development in the trust territories, leading to self-determination, which is not covered by appropriate aid, would be merely a political term. Where do we stand in relation to these two opposing propositions? For us in the Labour Party this presents no problem. We have a policy on West New Guinea, newly formulated in Canberra in the first week in April, which is clear-cut and decisive and binding on us all. I beg leave to read sentences which my leader has already quoted in relation to New Guinea -

The Labour Party will support and co-operate in the efforts of the United Nations to resolve the present dispute over West New Guinea so as to avoid armed conflict.

Back and back we come to that phrase - “ so as to avoid armed conflict “, so that this half of the western hemisphere - the South-East Asian portion of the world - can be saved from bloodshed and so that the new and emergent forces can discuss their aspirations with each other, rather than have an armed camp looking at another armed camp over a fence of aggression, as it were.

Before I return to our task and obligations as Labour men on this clear-cut statement, I should like to refer to the two voices of Australia. What is the good of telling the Indonesians that we respect their aspirations? What is the good of saying to the Dutch that we will not do anything to worsen their position and telling them “ You have a sovereignty which must be respected “ - those are the words of the Prime Minister (Mr. Menzies) - when we speak in the United Nations in a different voice altogether. There has not been anything so cowardly. If we believe that we ought to fight for peace, it does not matter who comes to dislike us as the result of it and what friends we lose temporarily, because we believe that the only prize in the world to-day is peace perpetual - peace everlasting. Let us recognize that we cannot speak with two voices. I think it is a good voice in Canberra, where the Opposition can keep the Government in line - that is so in a democracy - but in the United Nations, to our eternal discredit, we abstained from voting.

I have heard the words “ selfdetermination “ bandied here like a new slogan, but what happens when we put it to the United Nations? Russia said, “ Let us give all these countries freedom immediately”. What did the Afro-Asians say? People denounce them, but I believe they are a moderating force in the United Nations. I understand from my very good friend and comrade, the honorable member for Banks (Mr. Costa) that he holds that opinion, too. He has brought some very fine information back to the Labour movement from his recent visit to the United Nations. As I said, 1 believe that the Afro-Asians are a moderating force. When some people talked glibly about handing the territory over, the Afro-Asians said: “ No. Selfdetermination! “ That was clear-cut enough, but what happened to us? Despite the phrases we heard mouthed in this House, we abstained from voting. I ask the Government: Do we believe in selfdetermination or is it just a pious platitude? Do we believe in it here and not believe in it in the United Nations? The eyes of the world are on the attitude of Australia. Australia makes a pretty powerful show of strength concerning these things and if the Government is to be respected for showing a democratic attitude, we must have a level line on this matter.

As I said before, the Afro-Asian bloc in the United Nations is not hostile to Australia. It is a moderating force and its strength has increased the deliberative and humanitarian forces of the Assembly. Sierra Leone and other new nations will become members. When the Commonwealth Prime Ministers visit the Queen each year, or whenever their conferences are held, and when matters are discussed in the United Nations, the coloured man is in increasing numbers and he shows a great disposition to be very human and understanding and not to be led by the nose by anybody. But when we arouse in him the fear of being the under-dog he reacts, and we have to be with him and understand him. How dare we talk about self-determination and colonialism when we look at our aborigines! How dare we talk about selfdetermination when it has a pious meaning - some social programme where we build a school but have no teachers or where we build a hospital and have nobody to man it! What the under-developed nations want is economic aid and hard cash as well as good brains and an honest heart to help them lift themselves. up by. the boots strings.. As I said before, the self-determination programme has to be real. It must have an economic basis and for that reason, when we say anything about this situation, we have to be prepared to stand up to our own history in this matter.

Now what I have to say in regard to New Guinea is complimentary in regard to the devoted work done there - and when I say “ New Guinea “ I mean the trust Territory. Anybody who has visited New Guinea not just recently but over a number of years will have seen that there is one marvellous corps at least in New Guinea. I refer to the men in the fields, the district magistrates, the patrol officers and the servants who in the bush and the uplands and highlands work with the natives and understand what their problem is. As a corps of workers in an under-privileged and under-developed and dependent Territory this body of men stands second to none in the world.

If we want to put a proposition to our friends the Indonesians; if we want to put a proposition to out friends the Dutch; or if we want to put a proposition in the chancellery of the world, the United Nations, we have to say what we have done with our trust territory. If West New Guinea is to become a trust territory, the decision of the Labour Party is that it must be as the result of the determination of the United Nations, and we can point the way with aid and help. It was not until recent years that the Dutch took any real interest in West New Guinea. They had Java, the spice island, whose perfume on the breeze, the poet said, could be smelt in the far Moluccas. It was the island of diamonds, oil, rubber and lush tropical growth. Not to be compared with it were the arid caverns and ravines and abysses of West New Guinea. The last-named was worthless until it became politically interesting. That statement may be true of the attitude of both sides in this matter, but if we are to resolve the proposition we must have a proper human understanding. We want to create, not war, but peace in the hearts of men. We have to understand two viewpoints.

What is the first proposition? I submit, in the same tenor as the speech was made by my leader, that we can give great help in developing the native population - the people who live off the soil and have been there for goodness knows how many centuries - and giving them the know-how. Let us not fall into the trap of making a liberal statement and then supporting ancient regimes. They are gone. Mr. Macmillan has said the winds of change are blowing throughout Africa. They are blowing not only throughout Africa but through the East and West Indies also. It is my belief - it has nothing to do with my political convictions or decisions - that the Dutch will go from West New Guinea in six or ten years, and the question of who fills the vacuum is going to be the trouble. Understanding on both sides may produce something peaceful and sensible out of what could be an armed conflict over possession of what is only a piece of territory which nobody really wants except for political reasons, or political pride, or Merdeka on the part of the Indonesians.

I have the utmost sympathy with the aspirations of the people who want to lift standards. It is unfair to the Indonesians to say that they are colonial-minded, inasmuch as they will go in and take over an area which is colonial. The Indonesians have lifted themselves out of the jungle of colonialism and when they progress, as we hope they do, they will also lift anybody who belongs to their country. Their proposition is not a question of colonialism but of getting a piece of country which, in their view, did belong to them and should be returned to them. That is all it is. But we have to get back to the matters that have been raised in relation to Indonesia and Holland and West New Guinea, and ask ourselves a few serious questions. How far do our prejudices go? Have we still got the old idea that New Guinea, being an island, is a barrier against the invasion of Australia. The defence value of New Guinea has gone since the Russians have put a man into space. The island has nothing to do with defence any more. What we have to consider is the people’s aspirations and what we should do about them.

There is no need to flog this matter into the ground, and I shall state, in conclusion, the core of this argument as we on this side of the House see it. We believe that any dependent people - I do not like the term indigenous, because it has been used too much and begins to lose meaning and becomes sloganized - who live in the territory in the poverty of primitive life are the first concern. We could help them because we have already worked miracles in New Guinea with a little money and a great deal of devotion to the natives. Look at the development of the Gazelle Peninsula and be proud that a country with only about 8,000,000 people in those days, and 10,000,000 to-day, worked that development out on its own without assistance. Look at the development of Mount Hagen in the highlands and look at the other towns and villages that are growing up. There is a pattern. The people who are clapping their hands and saying “In” or “Out” and “This is Dutch; this is Indonesian “ have missed the main point. The man of New Guinea is looking to us who have been his oppressors, sometimes his exploiters, and at least his colonial owners, and who have now got to hand back to him either West New Guinea or the Trust Territory, as the case may be, as reparation for the years of conquest and the years of exploitation.

So, when a highly placed and intelligent member of the Indonesian Government who knows his subject in detail is able to converse with the leaders of the Australian Government on this matter, it is well worth while and there is no need for criticism and no need for taking sides. The point is, as I rose to say, that wars begin in the minds of men; and only by men meeting together for discussion can those thoughts of war be dissipated. I hope these discussions will continue. I hope that the United Nations, which is charged to ensure that some progress is made on this terribly vexed, serious and dangerous problem of international friendship and peace, does so. I repeat that what worries me is that on the floor of this House we have a voice which is peaceful and well-intentioned, but under some duress in the United Nations we abstain from vital votes. Surely we do not send a man or a delegation to the United Nations to abstain. We have the right to vote and we have a point of view on most matters. On these most vital issues which affect us we. should vote. An abstention means that we have not made up our minds or that we have not the moral fortitude to make up our minds.

In regard to West New Guinea I repeat that we have had a very good result from these discussions. Although we may feel that people are carried away by their prejudices, when a man comes to a country and states his view and does not deviate from it, I do not agree that he is bartering around to see which proposition will be acceptable. He would not have learnt that from his own people. He has learnt it from the white man’s diplomacy. That would not be a natural instinct in a coloured man; he would have learnt it from his masters.


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


.- To-night the House has had the great advantage of listening to an important and most interesting statement by the Prime Minister (Mr. Menzies). First, he referred to his talks with General Nasution. The right honorable gentleman then brought the House up to date on the position in Laos. Finally, he expressed our good wishes to Sierra Leone on gaining its independence to-day. I am sure that all of us in this place support the Prime Minister in the good wishes which he offered. The greatest part of the Prime Minister’s statement was devoted to the discussions that he lad with General Nasution and the West New Guinea problem. In one sense, it seems to me that that report was sufficient unto itself and little more need be said about it. But as the debate has continued, I should like to take part in it and make some comments on the points raised by honorable gentlemen opposite.

I do so for several reasons. One of them is that I have visited Indonesia on two occasions. The first occasion was at the end of 1956 when the honorable member for New England (Mr. Drummond), the honorable member for Macquarie (Mr. Luchetti) and I formed the first Australian parliamentary delegation that went to Indonesia. Again in December, 1959, I had the honour of accompanying the Prime Minister on his first official visit to that country. Earlier this month, as a member of the Australian parliamentary delegation, I went to Netherlands New Guinea to attend the official opening of the newly constituted Nieuw Guinea Raad or legislative council. I believe that I should make a report to the House on the discussions that I was able to have during thos3 three visits.

On several occasions during my last visit to our neighbouring country, Indonesia, our hosts were good enough to discuss with me in an unofficial way their claim to Netherlands New Guinea, or as they refer to it, West Irian. The Indonesians, as I understood them, believed that the Dutch formally committed themselves to transfer the territory at a date to be determined, during negotiations preceding the actual transfer of sovereignty over the remainder of the Netherlands East Indies to Indonesia. Reference was also made to West Irian being included with parts of Indonesia ns territory dominated by former potentates. They believed that they could put into operation good and sound developmental and educational programmes. I was told quite clearly that the issue between Indonesia and the Netherlands was one to be resolved by peaceful means. They believed that armed force should not be used by countries as a means of settling territorial disputes. There were expressions of genuine desire to maintain strong, friendly ties with Australia, and it was acknowledged that close co-operation between our countries would be of benefit to both countries. That is a very short summary of the discussions I had with my friends in Indonesia.

As I have said, the Australian parliamentary delegation went to Netherlands New Guinea earlier this month to attend the official opening of the newly constituted legislative council in Hollandia. From my discussions with our Dutch hosts I understood that the Netherlands Government has a genuine desire to bring self-government to the people of West New Guinea and that the administration believes that its most important task is the education of the Papuans. In that belief I feel sure that there is a realization that although the intelligence of the Papuans is the same as ours they use their intelligence to create a life with the things they find in nature, and that with the introduction of western educational methods a radical process is under way which will develop primitive communities into a new Papuan society capable ot fulfilling the functions necessary for progress in this modern world. I also understood from the Dutch that their education programme includes public health, farming, housing and training for participation in government affairs. That is a very short summary of the discussions I had with our Dutch friends.

While in Netherlands New Guinea I had an opportunity to talk with some of the Papuan members of the Legislative Council. Some of the things they told me were that they, the Papuans, were eager to have self-government some time in the future, that when self-government was obtained they wanted a sound economy with a stable form of government, that they did not want to obtain self-government only to be dominated shortly afterwards by another country, that their desire for future independence was not incompatible with having good friendly relations with neighbouring countries and, indeed, with all members of the United Nations; and that their two pressing needs were the education of their people and the development of the country so that it could have its own financial stability without relying on outside help.

These reports of my discussions are necessarily short and they need no further interpretation. But I believe that I should provide some background comment. First, we should remember that because of the inaccessibility of many parts of the Territory many tribes have been kept imprisoned within small areas and isolated from the outside world, and in many cases from one another. Because of this isolation hundreds of different languages are spoken and there is very little, if any, form of communication between those tribes. It is estimated that there are 700,000 Papuans in the Netherlands portion of the large New Guinea island. Administrative officers have informed me that they have made reasonable contact with approximately 270,000 of those people and that they have registered a total of approximately 400,000. In addition, there are approximately 18,000 Europeans and 18,000 Asians. Those Asians are of mixed origin; some of them are of mixed European and Indonesian blood, and some are Chinese.

Most of the Papuans live in villages which are based mainly on what I describe as subsistence agriculture. They do very little trading. They grow coffee, coco-nuts, nutmeg and cocoa. They are being encouraged by the Administration to cultivate large areas and to indulge in trading with one another, and to produce for export. So in the future there will be some commercial activity amongst the Papuans themselves. In relation to the personal problem of the Dutch people, it is well known that the flow of oil on the north-western tip of their territory is declining. I was told when 1 was in the Territory that approximately 50,000 Papuan children go to primary school. There are about 1,100 such schools. In addition, there are thirteen secondary schools and seventeen vocational schools. Those figures indicate that the Netherlands Administration is making good progress.

I desire to express great appreciation of the work that is being done by the Minister for Territories (Mr. Hasluck), the Administration and the officers under their control, and of the great progress that is being made in our half of the island of New Guinea. If I may make a personal plea, I ask that neither the Dutch nor the Australian Administration be hindered in its work. Some people within the United Nations Organization and some outside it are asking us to set target dates for the giving of selfgovernment to the Papuans. The problems of New Guinea cannot be wiped out by the passing of resolutions. It is well known that the Communists want these developing countries to be left to themselves long before they are ready for self-government so that the Communists may come in and take over during the confusion that is certain to take place if self-government is granted before the people are ready for it. The people in these developing countries must be given as much time as possible to prepare for self-government. Democracy is not brought to people simply by presenting them with a ballot-box. Democracy cannot exist in New Guinea when more than half of the voters are regarded as chattels. I refer to the womenfolk in the greater part of the island, making an exception of those in certain coastal areas. So let us help the Papuans to achieve their goal as quickly as possible, but let us not rush them. I discovered that the Papuans themselves realize the danger of too much haste.

As an example of what is being done in New Guinea, I point out that in the current financial year- the Dutch are” “spending in Netherlands New Guinea the equivalent of approximately £12,000,000 in Australian currency. It is their intention to increase that sum by equal instalments until in three years’ time they will be spending the equivalent of approximately £18,000,000 in Australian currency. Speaking from memory, during this financial year Australia proposes to spend more than £19,000,000 in the Territory of Papua and New Guinea. The people themselves, especially those who are members of the respective legislative councils, realize that at present they have no form of trade to replace the subsidies that are being paid to stabilize their economies and that there is no sign of their being able to conduct sufficient trade in the near future to increase the sums that I have mentioned.

The problem before us is not one of judging whether the Netherlands or Indonesia is more suitable to assist the people in West New Guinea. The world has been told by the Dutch what their programme is. The Dutch have been quite frank about it and we realize what they are trying to do. I believe that if our Indonesian neighbours wish to proceed with their claim to West New Guinea they should tell the world what their programme will be. to help the people of West New Guinea to advance along the lines they desire.

I should like to take advantage of this opportunity to extend thanks to Dr. Platteel the Governor of Netherlands New Guinea, and his officers, for the way in which they received the Australian delegation and put themselves at our disposal to answer our many questions, and also to congratulate them on the manner in which they organized the establishment of their newly-constituted Nieuw Guinea Raad. I should also like to express appreciation to Indonesia and to General Nasution personally for his visit to Australia. I have vivid recollections of my visit to that country. I found there a genuine and widespread feeling of great friendship towards Australia and a genuine desire that this close contact with our country should continue.


.- Mr. Deputy Speaker, the Prime Minister (Mr. Menzies) correctly stated that General Nasution’s visit had certainly made a powerful contribution to our common understanding and goodwill. The statement made by the “Prime Minister to-night is “the” first that I can recollect from a member of the Government in this chamber or from an Australian representative in the United Nations which correctly and relevantly states the Indonesian claim to West New Guinea. It is the first statement that I can recall from any member of the Government in this chamber or any Australian representative overseas which has concentrated on the only plausible argument that is put forward in support of the Australian Government’s attitude towards that territory. If this attitude had been expressed with similar clarity and force during the 1950’s, Australia’s viewpoint would have secured very much more support internationally than it has secured. Australia has a very good case for the attitude it has taken internationally in relation to the territory of West New Guinea. But that case has not been put with! any strength or consistency, and it has been over-ridden time and time again with arguments which are quite untenable. I regret that some of those arguments obtruded themselves into the contributions to the debate that were made to-night by the honorable member for Phillip (Mr. Aston) and the honorable member for Mcpherson (Mr. Barnes). The Prime Minister avoided those untenable arguments to-night, and for the first time Australia’s case emerges clearly and forcefully.

We should never overlook the isolation in which Australia has placed itself on this issue, which has come up quite often internationally and on which Australia has received diminishing support, not only among the members of the United Nations generally but particularly among our Pacific neighbours. If war were to come over West New Guinea - and some honorable members have mentioned that possibility - Australia would not be able to resort to the security treaty of 1951 between Australia, New Zealand and the United States of America, which is commonly known as the Anzus pact, or to the South-East Asia Collective Defence Treaty, which is commonly described as the Seato pact. The Anzus pact covers an armed attack within “ the Pacific area “. The term is not precisely defined. The Seato pact refers to “ the general area of the Southwest Pacific “. The islands between Australia and Asia, which are included in this area, are not enumerated. We can be sure that neither of these pacts, which have been made the keystone of the Menzies Government’s international policy, applies to any situation which may arise in respect of West New Guinea.

The question of West New Guinea has arisen for debate in the United Nations on three occasions, and it went to a vote on two occasions. There was a debate but no vote in the General Assembly in 1955. There were debates and votes in the Political Committee of the Assembly, and in the plenary meetings, in 1954 and 1956-57 - the ninth and eleventh sessions of the General Assembly. On the first occasion, during the ninth session in 1954, the Political Committee expressed the hope that the governments of Indonesia and the Netherlands would pursue their endeavours to find a solution to the dispute. In plenary the resolution was supported by 34 nations and opposed by 23, with three abstentions. Among those nations which voted in favour were the Asian members of the Seato past - Pakistan, the Philippines and Thailand - and India, another of the Asian members of the Commonwealth of Nations. Among the 23 nations which voted against were Australia, Canada, the Netherlands, New Zealand, South Africa and the United

Kingdom. Significantly, among the three abstentions was the United States. The resolution was not carried by the General Assembly because it did not receive the requisite two-thirds of the votes.

The matter was debated once again in the Political Committee at the eleventh session. The resolution on that occasion called for the appointment of a good offices commission to assist in negotiations between Indonesia and the Netherlands. This resolution was supported in plenary by 40 votes to 25, and on that occasion there were thirteen abstentions. Once again, among the countries which voted in favour of the resolution were the three Asian members of the Seato pact, and Ceylon and India - the two other Asian members of the Commonwealth of Nations. Among those nations which voted against were Australia, Canada, the Netherlands, New Zealand, South Africa and the United Kingdom, as before. Among the thirteen which abstained were the United States again and, this time, Cambodia and Laos.

The significant thing is that although the United States Government; even under President Eisenhower, consistently followed the colonialist line when any of the powers of the North Atlantic Treaty Organization was concerned, even on the question of the Portuguese enclaves in India, that Government abstained on this issue. The United States has never supported the point of view of the Netherlands and Australia on West New Guinea. There is no question that the United States genuinely abstained, because the Latin American countries, which then were much more amenable to American wishes than ‘ they are now, were evenly divided between those which abstained, those which supported and those which opposed. Australia has no support from, the United States for the attitude which it has hitherto put forward in the United Nations - or anywhere else - and is it any wonder?

Trenchant arguments - and they were certainly trenchant when Sir Percy Spender put them to the United Nations in 1954 and 1955 - were advanced, on historical, legal, racial and linguistic grounds, to refute Indonesian claims. If those were the grounds on which Indonesia’s claims ought to be rejected, still more readily could the claims of the Netherlands be rejected, because, on all those grounds, the claims of the Netherlands were more tenuous and less substantial than are those of Indonesia. The fact that Australia propounded those tests for rule over the territory might have encouraged Indonesia to make claims, which in fact she has never made, to eastern New Guinea, to eastern Timor, to North Borneo and Sarawak, and to Palawan and the Sulu Archipelago.

It is true that Sir Percy Spender did make a very short reference to the justification for the continuation of Netherlands rule of West New Guinea under Articles 73 ar.d 74 in Chapter XI. of the United Nations Charter. In the Subandrio-Casey communique of two years ago, once again there was a passing reference to that subject. There was no precise reference to the charter, but there was a reference to the matter of self-determination. And it was no sooner mentioned than it was dismissed. These were the terms used -

There was a full explanation of the considerations which have led each country to a different view over western New Guinea (West Irian), with Australia recognizing the principle of self-determination. This difference remains, but the position was clarified” by” “an explanation “from’ Australian Ministers that it followed from their position of respect for agreements on the rights of sovereignty that if any agreement were reached between the Netherlands and Indonesia as parties principal, arrived at by peaceful processes and in accordance with internationally accepted principles, Australia would not oppose such an agreement.

The principle of self-determination was stated and then dismissed.

The bulk of the communique proceeded on the basis that the question of West New Guinea could be resolved by an agreement between two competing owners. If the Netherlands chose to hand over to Indonesia the land and the tenants which it owned in West New Guinea Australia would not object. Is not that the same argument which the Prime Minister has advanced - admittedly, in a subsidiary position - tonight? Does not that criticism apply also to the argument which he advanced - again in a subsidiary position - concerning the determination by the International Court of Justice? The claim that the Netherlands has - and, in our view, rightly has - to rule West New Guinea resides in the principle of self-determination for non-self-governing people. We weaken our case, we cast reflections on the genuineness of our argument, if we say, “ Oh, well, if they choose to come to an agreement, or if the International Court of Justice makes a decision, we will forget about self-determination “. In other words, self-determination will be ignored if the Netherlands and Indonesia come to a voluntary agreement or if the International Court of Justice determines the question of sovereignty in favour of one of those two countries.

The validity and the morality of Australia’s case has been based, all along, on self-determination alone. If a case along those lines had been put forward consistently during the 1950’s we would have had support from other countries, including the emerging countries of Asia and Africa, and, not least, those countries which belong to the Commonwealth of Nations. We have never had their support. Is that any wonder when we remember that we have not concentrated on the only argument which would have carried any weight with those countries?

Chapter XI. of the United Nations Charter, which comprises Articles 73 and 74, is headed “ Declaration Regarding Nonselfgoverning Territories “. It is a declaration, in the words of Article 73, by “ members of the United Nations which have or assume responsibilities for the administration of territories whose peoples have not yet attained a full measure of selfgovernment “. The United Nations has said ever since the war, as the League of Nations said during the years between the wars, that the people in the trust territory, the former mandate, of New Guinea are not yet fit to govern themselves. For that reason, Australia was given a mandate or a trusteeship over those territories.

If a resolution had been proposed in the United Nations, seeking the view of that organization on West New Guinea - and we voted against the resolution and helped to deny them the necessary two-thirds majority - if the United Nations had decided to express a view on this subject, it could, in logic and in morality, have come to no decision on West New Guinea other than that which it reached on eastern New Guinea. It is inconceivable that the United Nations would have said that the people of West New Guinea were fit to govern themselves while the people in the trust territory were not. Australia could have put this argument forward, and should have put it forward, in the United Nations and in the Commonwealth of Nations throughout the 1950’s, ever since this dispute arose between the new sovereign state of Indonesia and the former Dutch empire.

It is one of the tragedies - I hope that is an exaggerated term - or one of the misfortunes of this country that during the 1950’s the Prime Minister (Mr. Menzies), who has had an internal political security such as has been enjoyed by no other Prime Minister in the Commonwealth of Nations except the Prime Minister of India, was so slow to catch up with world opinion. We have seen again and again, when he has gone overseas, that he has trailed the field. It is true that after he recently received a rude awakening from the expressed attitude of the conservative Prime Minister of the United Kingdom he did show, at least in the United Nations, that he had finally caught up with world opinion on the South African .question, but he was the last of the Commonwealth team to do so. It is true that now, after his conversations with General Nasution, he has a fairly comprehensive realization of the relevance of the Indonesian claim and of the Dutch claim. The statement he has made to-night is the first clear statement that has been made, either by him .or by either of his two predecessors in the Ministry for External Affairs, on this subject.

Mr Anderson:

– That is not true.


– On previous occasions Lord Casey, as he now is, and Sir Percy Spender made glancing references to selfdetermination, but this is the first statement in which the matter of self-determination holds pride of place and is given proper priority.

In the few minutes left to me I want to deprecate two attitudes to this question that are constantly revealed, often by inadvertence. The first involves the idea that New Guinea represents some form of cordon sanitaire between us and Asia. Those who are influenced by that suggestion should recall that there are three archipelagoes - the Kai, the Tanimbar and the Aru Islands - between West New Guinea and Australia which have been occupied by Indonesia ever since that country secured self-government, as they were occupied during the war by the Japanese and used by the Japanese in preference to alternative bases in West New Guinea.

The other idea is that for some reason we seek to promote a union between various territories in New Guinea. If we give that impression, we are demonstrating bad faith, because Indonesia claims that it should be possessed of West New Guinea, as successor to the Netherlands empire. Our justification for ruling the eastern part of the island under trusteeship or under Chapter XI. of the Charter, and the Netherlands justification for ruling West New Guinea under Chapter XI. of the Charter, is that we are both training the people for self-government, so that they can later express their own views. They may express a wish to unite, to form unions with neighbouring countries or to form separate countries on their own account. They may wish to become separate republics within the Commonwealth of Nations, or they may wish to unite with Indonesia, or with the Hebrides and the Solomon Islands. These are matters for them to determine, and we should not give Indonesia the impression that we are promoting any particular union. If we give such an impression we may cause Indonesia, our enduring neighbour, one of the most populous countries in the world and potentially one of the richest, to believe that we are promoting secession of a territory which Indonesia believes it owns.

I conclude by supporting the clear and forceful statement by the Prime Minister, made for the first time in the history of this Government, that the Dutch claim to rule West New Guinea has the same basis as our claim to rule eastern New Guinea. We are accepting obligations under Chapter XI. of the Charter - and under a trusteeship agreement in our case - that Indonesia would not accept. We believe that the United Nations should hold that all of the indigenous inhabitants of the island are not yet fit to govern themselves, and that in the meantime the whole of the island should continue to be ruled by the two countries, Australia and the Netherlands, who are committed to thai international obligation.


.- J” find it rather strange, Mr. Deputy Speaker, that the Deputy Leader of the Opposition (Mr. Whitlam) should suggest that the- statement of the Prime Minister (Mr. Menzies) is the first statement made by a Government spokesman setting out clearly Government policy in this matter, particularly with regard to the issue of selfdetermination. If it is contended that the Government should have long ago done the things suggested by the honorable member, and if the Government is to be criticized for not having done them, then I contend that the Opposition has had an equally pressing duty to bring to the attention of the Government the necessity to do these things. This is the first time I have ever heard any member of the Opposition suggest any action other than that the matter should be put before the United Nations, and I am quite sure that “ Hansard “ will bear me out in this regard. It is interesting to note that honorable members on the other side of the House from time to time have been quite critical of the Government on the ground that it has not taken an independent line of thought. Yet, on this occasion the Deputy Leader of the Opposition has taken the Government to task for. being the only country in the world which, in his opinion, has an independent line of thought with regard to New Guinea.

I think it is reasonably fair to say that until very recent times Australia was one of the few countries which Had any thoughts at all about New Guinea or any knowledge of the conditions in that part of the world. Australia was not the only country in that position, but it was one of a very few. One of the tragic aspects of the discussions which take place on this subject in the United Nations from time to time is that the great majority of the delegates have not the faintest idea of what they are talking about when they discuss Western New Guinea or New Guinea generally. That comment applies to countries of the Western bloc as well as to those of the Afro-Asian and Communist blocs. They simply have no knowledge of the area. I think that many more representatives of those countries should go to New Guinea and see for themselves the conditions there.

I am sure that it gave the House very great pleasure to hear the Prime Minister’s statement to-night. It is also pleasing that the debate, on the whole, has been conducted in an atmosphere of unity of objective. So much ground has been covered,

Mr. Speaker, that there is no need for me to speak at length on some of the points that have been made. Because people tend, in the course of debates such as this, to forget the exact nature of statements that have been made earlier, I think it is important to remember that the Prime Minis,ter reiterated statements that were made at the time of Dr. Subandrio’s visit. At that time, the Australian Government said three things. First, it said that there should be no recourse to armed force, whether by major or minor operations - that is, by armed infiltration - to give effect to Indonesia’s territorial claim. Secondly, it said that any negotiations between Indonesia and the Netherlands should be voluntary and free of any threat of duress, and thirdly it said that any agreement made as a result of negotiations so conducted would be fully respected by Australia.

In the circumstances, Sir, I think it would be impossible for any Australian Government to say, “ We will not accept a decision which is made by a government whose sovereignty we have respected and whose sovereignty is respected_by the great majority of the other nations of the world at the present time “. It is no doubt true that such sovereignty is respected by the great majority of nations. It is a great pity that this matter was not taken to the United Nations at an earlier stage, and that the arguments that are being put forward at the present time were not put forward then. They are not new arguments. I have heard them over the last three or four years.

If Indonesia maintains the attitude that she has no intention eventually to give selfgovernment to West New Guinea, I think it should be clearly pointed out to the member countries of the United Nations, as it should have been pointed out quite a long time ago when this matter first came up, that what in fact Indonesia is trying to do is the complete opposite of what the AfroAsian bloc is trying to do. lt should be pointed out that in fact it is the opposite of what the Communist countries claim they are trying to do. As we know, those countries claim that they are trying to abolish colonialism in all its forms; but Indonesia, by its claim to West New Guinea, makes it quite obvious that what she wants to do is to colonize. There is not the slightest doubt about that.

If Indonesia says, in effect, “ There are three-quarters of a million people, but we are not prepared at any time to give them the right to determine their future “, then I think that that is nothing but an attempt at colonization. I know that some of our friends say that this is not a question of colonization but of autonomous government, or of government in autonomous regions, or some such clap-trap; but basically, it comes down to a matter of colonization.

On the one hand there is the argument that we should not permit any more of this wicked colonization, and on the other hand we have so many of the member nations of the United Nations, which know nothing whatever about the immediate problems, tending to support the extension of a form of colonialism. For that reason, Mr. Speaker, 1 think it should be clearly put to the United Nations that what Indonesia has in mind is, in effect, to cut off the life of an ancient people in an embryonic stage of development. Whether those people could ever be completely independent economically is, of course, a matter for great conjecture. I believe that the statement which the Prime Minister made to-night is an important one in that it quite clearly puts the views of the Australian Government and, as we have found during the debate, the views of a great many members of this Parliament. In fact, I am sure that they are undoubtedly the views of a majority of honorable members.

There are two matters which I think have to be borne in mind in a consideration of the questions that are before us. One is that there is in Australia a very considerable emotional feeling on this question of West New Guinea and the possibility of Indonesia taking over that area. I am not suggesting for one moment that that emotional feeling has a sound basis in logic. I, personally, do not believe that it has; but it would be foolish to deny that it exists. I think it would also be foolish for any government of Indonesia to fail to realize that there is a very great emotional feeling in Australia regarding West New Guinea.

The other point that I think we should bear in mind is one which gives me a little cause for concern. I sometimes wonder whether, while we respect Dutch sovereignty, we should not ask ourselves whether the Dutch are proceeding too quickly. We may say, “ Right. You have every reason to go ahead and do what you think should be done in West New Guinea, in view of your intention to give the people the right to self-determination.” T am relying only on newspaper reports when I say that it is likely that self-determination will be granted in about eight years’ time. I wonder whether the Dutch may not be going a little too quickly in specifying a term of eight years. In my opinion, if selfdetermination is achieved in eight or ten years, it will have been achieved too quickly, because with the greatest respect to the peoples of West New Guinea, I do not believe that in eight or ten years’ time they will be ready for complete selfgovernment. In that time, it is quite possible that they will be able to say with something like one voice, “We want selfdetermination “.

That is said at the present time, of course, but we have to bear in mind that only a small number of the people of West New Guinea and Papua actually say it. Although many of them may think that they should have the right to self-determination, it must be recognized that probably a vast number know nothing whatever of this particular problem. They do not know what decisions other people are seeking to make, either to their advantage or their disadvantage, because, as the honorable member for Robertson (Mr. Dean) has already said, a considerable proportion of the population is not in direct contact with the administration. So, Sir, I. am a little afraid that the Netherlands may be proceeding too quickly with the idea of self-determination.

If honorable members consider that the matter should be placed before the United Nations for determination, I wonder what they have in mind. I should hope that the United Nations would decide on the establishment of a trusteeship and that it would not attempt to carry out a referendum amongst the inhabitants, because I think it would find that some of them would be inclined to be a little warlike and to throw more than eggs.

Mr Cope:

– There will be an opportunity for that in New South Wales on Saturday.


– I am prepared to admit that some of the people who will vote “Yes” in New South Wales on Saturday will be as well informed as are some of the people of Papua.

Mention has been made of the fact that Australia, in appearing to stand alone in its attitude to West New Guinea, has not received the support of some fellow members of Seato. I do not think that is at all strange because, to my mind, the Seato agreement is designed basically to prevent a further spread of communism in South.East Asia. Indonesia’s claim to West New Guinea is not a matter which can be said, with any degree of accuracy, to be one that directly involves the spread of communism in South-East Asia and I do not think it strange, although it is very unfortunate, that some of our colleagues in Seato do not agree with us in relation to West New Guinea. A lot more information must be given to the United Nations before it will be able to come to a sensible decision on this question. I commend the Prime Minister for his statement on New Guinea. lt was very welcome but, I am inclined to think, a little overdue.

The portion of the statement which deals with Laos contains some important points which honorable members should bear in mind. One of the most important is in this section -

It is out of the question to confer on ways and means of ensuring the future independence and neutrality of Laos - a policy of noninterference by Western powers and Communist powers alike - if fighting is continuing in Laos and new military threats are added to the recent series of offensive operations by the Pathet Lao.

There is no doubt about that. The Prime Minister’s statement gives us reason to believe and to hope that there can be a peaceful solution to the problem in Laos, but we must bear in mind the very great dangers which exist. The Prime Minister stated -

The Australian Government has long been determined to support genuine negotiations of a peaceful solution of the Laotian problem. At the same time we have made it clear by out recent association with the Seato communique’ of 29th March, that we are united with our allies also in our determination to prevent armed Communist domination of Laos. This being clear, there is now a better prospect of coming to an agreement, by negotiation, on a solution which will satisfy all legitimate interests and avoid war.

We certainly hope that that will be the case. May I conclude by joining with those honor able members who have expressed their pleasure that Sierra Leone has come into the Commonwealth of Nations.

Debate (on motion by Mr. Duthie) adjourned.

page 1275


Timber - The Parliament - Department of Supply - Decentralization - Railways - Overseas Loans - Telephone Services

Motion (by Mr. Osborne) proposed -

That the House do now adjourn.


.- The Opposition was shocked to hear the Minister for Trade (Mr. McEwen) state in the House last week that the Government would not agree to ask the Tariff Board to investigate the possibility of emergency tariff regulations being used to assist the depressed timber industry in Australia. The industry proved an emergency case to the Department of Trade a few weeks ago. Mr. G. B. Leitch, chairman of the Tasmanian Timber Association, stated Tasmania’s reaction to this refusal in these terms - _

Mr. McEwen has said that the problems of the industry were due to a fall in demand, not to excessive imports which were arriving at a rate no greater than the average over the past few years. The Government has completely ignored the fact that imports last year flooded the country at a record level and huge stockpiles were held in Melbourne, Sydney and Adelaide. This stockpiling, along with the fall in the building rate, has caused importers to reduce their importing rate. If and when the building rate recovered, these stocks of imported timber would hit the market at prices well below those at which the Australian industry could produce its timber and would promptly be replaced by further mass imports.

Later in his statement Mr. Leitch said -

The Minister completely overlooked the 50 per cent, fall in demand on its main interstate market, which meant that any further importations were surplus to requirements and must react against the local industry.

The industry cannot survive in security against the twin hammer-blows of massive imports of timber from abroad and the indiscriminate credit squeeze. Sawmills in Tasmania and other States continue to close. Stockpiles of unsold timber in Tasmania are a grim throwback to the depression years. Scores of other sawmills are on a two to four-day working week. Many have stopped logging in the bush and contractors are looking for work. Towns that were dependent on sawmills are slowly dying an economic death as mills close or slow down production and as employees find no alternative employment in the district because the mills are often the only industry that keeps these towns alive. The latest report from New South Wales indicates that 55 mills in that State have closed down completely and over 700 men are out of work. This is a tragic picture that has been painted cold-bloodedly by this Liberal-Country Party Government which is determined to continue massive imports of timber into Australia and its vicious credit squeeze policy.

I ask the Government this question: ls it determined to close down the small timber mills in Australia and to put them completely out of existence by insisting that credit for home building, as the Treasurer (Mr. Harold Holt) stated to me last week, will not be released in sufficient volume to restore home building to the high level of last year? By insisting on this policy the Government is showing its determination to prevent many of these sawmills from ever commencing operations again.

It is criminal folly for a government deliberately to “ credit squeeze “ the massive home-building industry in Australia on which twenty satellite industries depend entirely for their existence. The human story of the effects of the Government’s panic legislation falls on the deaf ears, the hard hearts and the swollen heads of its Ministers. The main people damaged by this wretched credit squeeze policy which has been used indiscriminately in the Commonwealth are the little men, not the big men. The big men can survive and are surviving this credit squeeze, but the little men cannot and they are going to the wall. This applies particularly in this great timber industry which has been built up after years of hard work, in which thousands of pounds are invested and which is the back bone of the home-building programme.

The second matter that I want to mention relates to question time in this House. For a considerable period I have been concerned at the short period that is allotted for questions without notice. I made some investigations to-day and found that over the last twenty years the period devoted to questions without notice has varied from half an hour to as much as one hour. Over the past eight or nine years, 45 minutes have been allowed for questions without notice, but I have found that nowhere in the Standing Orders is the period specified. The period can be whatever the Government wishes. Therefore, the present allotment of 45 minutes is entirely the decision of the Government. At the end of 45 minutes, the Prime Minister (Mr. Menzies) asks that further questions be placed on the notice-paper.

This is about the fifth week of the current sessional period which began on 7th March, and I have been able to ask only three questions without notice. That is .about the average for honorable members. Mr. Speaker has a colossal task in trying to apportion questions evenly between Government and Opposition members. The Commonwealth has grown considerably since 45 minutes came to be accepted as an adequate period for questions. There are now more members of the Parliament, and this is one of the few occasions when they can freely put before the House problems affecting their electorates, the nation and the world. Invariably, if my memory serves me right, someone wants to ask a question when honorable members are asked to place further questions on the notice-paper.

I am firmly of the opinion that the Prime Minister should have another look at this matter and see whether it is possible to extend the period for questions by at least ten minutes or extend it to a full hour. If honorable members run out of questions the business for the day will be called on automatically. If the Government considers that an additional quarter of an hour is too much, ten minutes would do. In that time, honorable members could get in five or six more questions at least. I believe the business of the House is out of balance when, in five weeks, no honorable member is able to ask more than three questions without notice. If we get the call to ask one question a week individually we are very lucky. During the current sessional period the questions submitted have been of great importance This is election year and possibly honorable members have more questions to ask than they would ask ordinarily. For these reasons, I think that the period allowed for questions should be extended by a quarter of an hour. I am speaking on behalf of all members regardless of party.

Visitors to the Parliament find question time most enjoyable. It is the most popular part of the proceedings for them. This is the only opportunity honorable members have to ask impromptu questions, and more time is needed to do justice to the questions and to the Parliament itself. Each honorable member should be able to ask at least one question a week. If we manage to do so now, it is a miracle.

Mr Killen:

– How long do you suggest?


– I suggest an hour. After all, this is parliamentary business. It is not a matter of cutting into anybody else’s time.

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.

Minister for Supply · Petrie · LP

– Last year, the Deputy Leader of the Opposition (Mr. Whitlam) asked a question of me in these terms -

What expenditure did his department incur in the. lastfinancial year ineach State?

My answer to that question was published in “ Hansard “ of 8th September, 1960, in the following terms: -

Following is a statement of appropriations and trust account expenditure incurred by the Department of Supply in each State in 1959-60: -

Then followed a dissection of expenditure totalling £51,159,000. Earlier to-day, the Deputy Leader of the Opposition used these figures and applied them on the basis that they represented purchases by the Contract Board of the Department of Supply. I point out to the House that, in fact, this figure of £51,159,000 did not cover purchases made by the department, but included the administrative costs of the Department of Supply, the costs in relation to transport and stores, factory wages, expenses and overhead of some ten to twelve factories under the control of the department, expenditure in relation to the Weapons Research Establishments at Salisbury and Woomera, and also in relation to the various laboratories under the control of the department. They did not include the expenditure in relation to contracts entered into on behalf of the Services and some other of the Commonwealth departments.

The District Contract Board does not make purchases on behalf of all other Commonwealth departments. The Post Office, the Department of Works, the Department of Civil Aviation, the Department of Shipping and Transport and the Commonwealth Stores and Tender Board which is under the control of the Treasury, make their own separate arrangements in relation to contracts. The amounts which are spent or the contracts entered into by the Department of Supply on behalf of the Services departments are in fact made from the appropriations of those departments. The figures for theyear 1959-60 were -

By using the figure of £51,159,000, the Deputy Leader of the Opposition sought to draw two conclusions. They were first a lack of decentralization in relation to government purchases or government factories; and secondly, a disproportionate industrial activity in the State of Queensland. On the question of decentralization, there are under the control of the Department of Supply fifteen factories and aircraft maintenance workshops. Ten of these are in the metropolitan areas and five are outside them. Those five are the small arms factory at Lithgow, the filling factory at St. Mary’s, the ordnance factory at Bendigo, the Avalon airfield and aircraft factory in Geelong and the ordnance factory at Mulwala. Until recently, there was a sixth factory - a ball-bearing factory at Echuca.

It is interesting to note that those fifteen factories have been established since 1908. Seven of them were established by Labour governments and eight of them established by Nationalist and Liberal governments. Three were established outside metropolitan areas by the Labour Party and two were established outside metropolitan areas by Nationalist or Liberal governments. So, it is quite evident that in relation to the establishment of those factories, the general approach of governments of various parties has been similar. As I have said, many of them were established as far back as 1908 and up to 1924. To try to show in some way that to-day’s conditions then applied to those factories is to give a completely wrong impression.

To understand the situation, one has to have regard to the conditions in the relevant years as to labour, supplies of raw materials and the transport of employees. The factories in themselves are not complete, because industry provides many of the components which are used in factories under the control of the Government. For instance, in the making of a fuse, we may require sixteen parts. Six, seven or even half of the sixteen parts may come from industry as completed items to be used in the factory in conjunction with other small items made there to build up the fuse itself.

The Deputy Leader of the Opposition also tried to convey the impression that there was disproportionate industrial activity in Queensland. I have pointed out that the figures which he used were wrong. In looking at the contracts for tenders alone, it is impossible to made a deduction with relation to industrial activity within a State. Let me briefly give four illustrations to prove the point I am making. Take steel first. The head office of Broken Hill Proprietary Company Limited is in Melbourne. The actual processing activities of that company take place in New South Wales. The iron ore comes from many States within the Commonwealth, but because the head office of the Broken Hill Proprietary Company Limited submitted a tender which was accepted, payment is made to head office. In the allocation as between States that I have mentioned, the amount is shown against Victoria, although obviously very little of the actual work is done in Victoria.

Next take petrol. In petrol, of course, there is a very substantial overseas exchange content. Crude oil is brought in and refined, perhaps at Kurnell in New South Wales. But the head office of the oil organization is in Victoria. Here again, the head office submits the tender and consequently payment is made to head office in Victoria. But the petrol is used by the Royal Australian Air Force in every State of the Commonwealth. Therefore, it would be completely wrong to suggest that, because payment is made to head office in

Victoria, the industrial activity is in fact confined to Victoria.

Next, take copper. Copper is produced in Queensland, but the purchase of copper by the munitions factories of the Department of Supply is probably made through a processor in New South Wales or in Victoria. Therefore, in my statement I have allocated the amounts paid in connexion with copper to the State in which the payment was actually made.

The same applies to cotton. The greater part of the cotton produced in Australia ls grown in Queensland, but raw cotton is not purchased by the munitions factories. The raw material is sent to a processor, and the State in which the processor is established is given the credit in the dissection 1 have made.

If there is any industrial lag in Queensland, the Deputy Leader of the Opposition should be reminded that for 30 years, until approximately three-and-a-half or four years ago, Queensland had a Labour government. During the Labour Government’s regime, Queensland had the most oppressive systems of company and individual taxation of any State in Australia. Further, that period of 30 years of Labour rule was during Australia’s industrial era. One need only compare the industrial development in South Australia with that which took place in Queensland during that period to appreciate that very little encouragement was given to private enterprise by the Queensland Labour Government. During that period, the South Australian Government sought industrial enterprises whereas the Queensland Labour Government did not, with the result that South Australia developed while Queensland suffered.


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


– The Minister for Supply (Mr. Hulme) has hung quite a speech on one paragraph of the oration I made this morning on the motion moved by the honorable member for New England (Mr. Drummond) with relation to decentralization. This is the first time a Liberal member of this House has spoken on the question of decentralization in the eight years that I have been in this Parliament. This morning, the honorable member for New England received the support of only one of his colleagues on the Government side.

Mr Forbes:

– Because you spoke.


– Two Country Party members spoke and two Labour Party members spoke. I remind the House that the honorable member for New England put his motion on the notice-paper nine months ago, but it was not discussed last session. It was put on the notice-paper again this session. I welcome the fact that the Minister for Supply, who, I think, is the second senior Government representative from Queensland, has spoken on this subject. But I do not see that the point he made has exculpated the Government in its attitude towards Queensland. Let me quote from the answer he gave to me. The Minister said that of an expenditure of £51,159,000, only £768,000, or 1.5 per cent, was spent in Queensland. He said - and it is correct - that that amount of £768,000 represented the appropriation and trust- account expenditure that his department had incurred in that State. He has now given further figures showing the amounts spent by the District Contract Board in the various States. These figures show that, of an expenditure of £29,355,000 last year, only £1,500,000 was spent by the District Contract Board in Queensland. That State has only 14 per cent, of Australia’s population, and it comprises one quarter of the area of Australia, yet we have been told by a Queensland Minister, that only 5 per cent, of the District Contract Board’s expenditure went to that State and only 1.5 per cent, of expenditure from appropriation and trust accounts was incurred there.

It is true, as the Minister said, that copper or cotton in the processed form is bought by his department, but in fact the raw materials came from Queensland. How much was spent on those raw materials in Queensland by his department? How much of the £51,000,000 expended from appropriation and trust accounts, and how much of the £29,000,000 expended by the District Contract Board was represented by the raw material elements of copper and cotton?

Mr Hulme:

– I gave illustrations.


– You gave four illustrations; cotton and copper were the two that had relevance to Queensland. I made many references to Queensland in my speech this morning because, as I said, Queensland and Western Australia are the two States which are the most extensive in area and most extended in finances. If the development of those States is to be left in the hands of their governments and it has to depend upon the financial resources of those States, Queensland and Western Australia will not be developed as rapidly as the rest of Australia. Private investment has been adequate to develop, in terms of consumer economy, the cities of Sydney and Melbourne, which already have the customers, the employees and the civic amenities. That is not the case in Queensland or in Western Australia.

Reference was made to the fact that Queensland had a Labour government for many years. In some respects, the Queensland Labour Government was the best government in Australia. Its hospitals administration in Queensland was easily the best- in -Australia. - The Minister said that the most oppressive taxation scheme in Australia was in Queensland. From his point of view, with his ideology, so it was. But that was cured by the uniform taxation system. The Commonwealth Law Reports are full of High Court cases relating to Queensland graziers who lived in Toorak. Queensland grazing properties were conducted by Victorian companies so as to avoid taxation, but uniform taxation has been in operation now for nineteen years. The plain fact is that the tropical parts of Australia, and the most extensive States in Australia, will not be developed by private enterprise. We must have government enterprise to do it.

We had a very good example this morning of this Government’s attitude towards Queensland. The Commonwealth cannot build railways in a State without the consent of the State. It can build roads, aerodromes and ports, if they are in relation to overseas or interstate trade, but it cannot build a railway. There is a very great difference between the treatment that tho Commonwealth Government has meted out to Queensland in respect of the Mount IsaTownsvilleCollinsville railway and the treatment that it has meted out to South Australia in respect of the broadening of the gauge between Adelaide and Mount Gambier, and to Victoria and New South Wales concerning the new railway line of standard gauge between Albury and Melbourne.

Mr Hulme:

– It is no different from the position in regard to the railway from Kyogle to Brisbane.


– I was under the impression that the Kyogle to Brisbane railway was built on the same principle as the Albury to Melbourne and the Adelaide to Mount Gambier lines.

Mr Hulme:

– That is right.


– That is, that the Commonwealth lent the whole of the money. It required the States concerned to pay back only 30 per cent, of the loan, and it gave them 50 years in which to repay it. For the first time the Commonwealth has now made money available for the construction of a railway in less favorable circumstances. The Commonwealth is lending not the whole cost, but only two-thirds of it. It requires the repayment not of 30 per cent., but of 100 per cent, of the loan, and it requires the amount to be repaid not over 50 years, but over twenty years. It is an extraordinary thing that a Minister who comes from Queensland, an accountant of great experience in financial matters, has not referred to this aspect. The Minister for the Interior and Minister for Works (Mr. Freeth) interjects. I should have hoped that he would have been pressing for the standardization of the railway between Kalgoorlie and Fremantle. But I am concentrating on Queensland in this respect. If we confine public enterprise to utilities, the Minister for Supply could have explained why the Commonwealth is taking so long to make up its mind about the Channel country roads and so on. The Chifley Government showed in 1949 what can be done with Commonwealth incentive. The Commonwealth can make a grant under section 96 of the Constitution and ear-mark it for a certain purpose. Once again confining public enterprise to utilities, why has not the Minister said something about Queensland ports? This Government repealed the section of the Stevedoring Industry Act that permitted the Australian Stevedoring Industry Authority to make grants to port authorities to modernize ports. Here are three matters in relation to which it can be done. Without doing this, it is impossible to open up Queensland. As the consumer price index has shown, Queeusland has had the greatest increase of all Stales in inflation in the last six months md the greatest amount of unemployment.


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


.- I have risen because of the gross distortion of the facts of the situation by the Deputy Leader of the Opposition (Mr. Whitlam) in relation to the debate on decentralization this morning. To-night he made an assertion that I have heard before. He made it when he spoke this morning. He said that not one member of the Liberal Party in this House was prepared to advocate decentralization on the motion of the honorable member for New England (Mr. Drummond). The Deputy Leader of the Opposition knows, because he is the person on the Opposition side who was responsible for dealing with the Leader of the House (Mr. Harold Holt) in relation to arrangements for this debate, that that is a gross distortion of what actually happened. He knows the time limit that was placed on the debate. I believe, Sir, that he is perfectly well aware that both my friend the honorable member for Ballaarat (Mr. Erwin) and I were on the original list of speakers, and that I was squeezed out quite early because the honorable member for Lyne (Mr. Lucock) quite properly exercised his right to speak as seconder of the motion. The honorable member for Ballaarat was actually on the list to speak until such time as the Labour Party, for purely political purposes in an election year, and for the first time since I have been a member of this House, began to talk about decentralization and to pretend an interest in country areas.

The Opposition put up the honorable member for Bendigo (Mr. Beaton) to propose a completely spurious amendment to the motion of the honorable member for New England, which was magnificent, well thought out, well framed in every way, with constructive suggestions in every line of it. The amendment moved by the honorable member for Bendigo did not add a single thing to the points made in the motion framed by the honorable member for New England. The honorable member for Bendigo rose for two reasons, first, to back the Labour campaign in an election year, and to try to create a spurious impression that the Labour Party was interested in decentralization in this country whereas, as all members of this House and, I think, the majority of people in this country, know, the Labour Party thinks of decentralization only at election time. For the rest, it pursues a policy that is directed towards pleasing the people who put it in Parliament, that is, the people who reside in the metropolitan cities of this country. The other reason why this completely useless and spurious amendment was moved was to enable the Deputy Leader of the Opposition to exercise his right to speak as the seconder of the amendment, squeezing out of the debate, as he well knew, my honorable friend from Ballaarat who, in my view and in the view of well qualified judges, knows more than any one else here about decentralization in this country.

Mr Cope:

– I rise to order. Is the hon- _ _orable .gentleman in order, in-reflecting- upon. judges?


– There is no substance in the point of order.


– When I was so rudely interrupted I was saying that this was just a spurious political trick on the part of the Deputy Leader of the Opposition to prevent the one man in this House who really knows something about decentralization - the honorable member for Ballaarat - from stating his views and pointing out how much this Government has done during its ten years in office to further the objective of decentralization.

Mr Daly:

Mr. Speaker, I rise to order. Is the honorable member in order in discussing the question of speeches on a motion which is still on the notice-paper and on which, for all we know, he may still get an opportunity to speak?


– I think the honorable member is in order. He is replying to the Deputy Leader of the Opposition, who made reference to this matter.


– I shall continue, despite this obvious attempt to muzzle me and pre- vent me from making points which arc obviously getting under the Opposition’s skin. The Opposition, Sir, is aware of the impact which the honorable member for Ballaarat has made on his electorate because of his devotion to the cause of decentralization. I believe that the action of the Opposition in this case was a deliberate attempt to prevent the honorable member for Ballaarat from speaking on that subject this morning. The honorable member for Lyne, who co-operated in the framing of this admirable motion, which was thought up and moved by the honorable member for New England, a member of the Government parties, had except for the honorable member for New England himself, more right to speak fully on the motion than any one else. However, he deliberately limited himself to ten minutes so that the honorable member for Ballaarat and, perhaps, myself, could speak. The Opposition’s amendment was, I contend, moved purely for political purposes. The intention of the Opposition was to squeeze out the honorable member for Ballaarat, as it were. The honorable. member_for Lyne, who, as I_ have said, co-operated in the framing of the motion, confined himself to ten minutes, and the Deputy Leader of the Opposition could have done the same.

I conclude on this point: The Opposition, a few months before a general election is due, has started again to talk about decentralization. I have not heard from members of the Opposition a single reference to, decentralization in five years, except in the few months immediately prior to the general election of 1958. Now the subject has come up again. The honorable member for Bendigo, who holds a seat in an area where decentralization matters-

Mr Daly:

Mr. Speaker, I invite your attention to Standing Order No. 86 and I take the point that the honorable member for Barker is infringing it.


– Order! The point of order is not upheld.


– My honorable friend from Moreton (Mr. Killen) makes the point, that the Opposition is attempting to muzzle me. In conclusion, Mr. Speaker, despite the efforts by the Opposition before each general election-


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

Mr Whitlam:

– I wish to make a personal explanation.


– Does the honorable member claim to have been misrepresented?

Mr Whitlam:

– Yes. The honorable member for Barker (Mr. Forbes) said that I had squeezed the honorable member for Ballaarat (Mr. Erwin) out of the debate. He also used words such as “ spurious “ and “ trick “. I think I must explain that four persons spoke this morning to the motion to which the honorable member for Barker has referred. Two of them, the honorable member for New England (Mr. Drummond) and the honorable member for Lyne (Mr. Lucock), respectively moved and seconded the motion and spoke in sequence in favour of it. The honorable member for Bendigo (Mr. Beaton) and I followed in sequence, proposing and seconding an amendment. There were two speakers from each side, and the first two speakers took at least five minutes more than the others.


.- The Treasurer (Mr. Harold Holt) to-day made a statement that would startle every adult Australian if its implications were fully understood by them. He said that arrangements had been made to draw £78,000,000 from the International Monetary Fund and that other arrangements had been made for a stand-by credit of £45,000,000, to remain in operation for a year. He said that we could then, if necessary, apply for a further credit of £88,000,000. At no place in his statement did he mention that these are loans that will have to be repaid with interest. That, of course, is the startling thing in connexion with the amounts of £78,000,000, £45.000,000 and £88,000,000.

This year, the Government has borrowed £25,000,000 in London, £6,100,000 in Switzerland and £11,900,000 in Canada. Its total borrowings overseas during the last few months, inclusive of the last £78,000,000, are £121,000,000. Interest and repayments will amount to several million pounds annually. What are these loans for? I have asked the Treasurer whether they are for the purpose of purchasing specific goods with the object of developing Australia and, if so, what those goods are. I have asked also whether the loans are for the purpose of helping to restore our overseas funds. The Treasurer has said that the loans are for general purposes. Of course, they are intended to provide overseas funds in place of those which the economic policy of the Government has failed to safeguard.

The Government is putting back the day of reckoning, but that day of reckoning, owing to the means by which it is being delayed, will be much worse in its effect on Australia when it inevitably arrives. The Government has reached the position that all spendthrifts reach. It is borowing to pay its debts. That is exactly what is involved in borrowing to replace our overseas funds. On 12th April the Treasurer told me that our annual payments on loans amounted to about £48,000,000. He had already told me that our obligations in respect of investments from overseas amounted to £58,000,000 a year. Together with the additional amounts that will be payable overseas as a result of these further loans, we will have to send overseas over £100,000.000 annually. Unless our imports are rapidly and immensely reduced, further loans will be required.

The arrangements for what the Treasurer has called a “ stand-by credit “ of £45,000,000, made by one of our officers with the International Bank for Reconstruction and Development, is in reality an arrangement to borrow another £45,000,000. Why have we made that arrangement, and why have we arranged to have another £88,000,000 available to draw on? These amounts will be drawn because nothing has been done to remedy the position of our overseas funds, which are not mounting. They should be increasing, but they are not. They are being recouped by moneys coming into this country in the form of investment from overseas.

Mr Aston:

– I rise to order. Is the honorable member in order in anticipating discussion of a matter which is the subject of an item on the notice-paper?


– The .honorable member is in order.


– We are suffering from grave disabilities, but the Government, instead of taking action to get rid of them, is increasing them. A person who goes to a usurer in order to get money to meet his current commitments because his income is insufficient to meet them is putting himself into greater difficulties. That is the position, of course, with this Government. It is faced with the task of reducing imports into this country. It has to do that if it is to safeguard our overseas funds and get rid of the necessity for continued borrowing and for inducing at all costs overseas investment, not in industries that will develop this country, but in undertakings that will bring immense profits to overseas exploiters. Those are the things that face the Government at the present time.

The Government, of course, is always only too willing to give opportunities for lengthy discussion of conditions in Indonesia or of the bringing of liberty to the people of the Congo. It believes in freedom in places as far away as Paris, but in Australia itself when an opportunity is sought to discuss economic conditions that . have been created by this Government and will enslave our children’s children, not only is discussion stifled but the Government deliberately introduces propositions in such a way that the people of this country cannot thoroughly understand them. If this Government were acting in the interests of our country it would specify the purpose for which it proposed to raise loans. It would ensure that the moneys coming into this country were used, as the Japanese ensure that moneys coming into their country are used, for the development of the country and the improvement of the standards of living and conditions of the people, and not merely to provide huge profits from local industries to be expended in other countries.

So, Mr. Speaker, I suggest that the Government should set aside at least one day, before the end of the present sessional period, for a discussion of overseas loans, their purpose, and their effect upon our economy.

Minister for Territories · Curtin · LP

– I want to speak briefly in reply to a point made by the honorable member for Scullin (Mr. Peters). It seems to me that he revealed, if I might say so, the complete backwardness of his party in economic affairs. If he will cast his mind back he will realize that the International Monetary Fund and the International Bank were great international institutions in the establishment of which the previous government, which he supported, took an active part.

They were established in order to do precisely the sort of thing that is being done in this case. What he, and I am afraid a great many other members of his party overlook, is that Australia is growing up. It is growing into a great trading nation whose national income is expanding rapidly. We are no longer in that infant stage where borrowings of this order need cause dismay to anyone. I remind the honorable member that a transaction of this sort is not by any means an indication, as he suggests, of the insolvency of the country. It is the most triumphant proof that we can get from any quarter in the world of our sound financial reputation. It is the supreme proof of our solvency and of the fact that that solvency has passed the scrutiny of the sternest and most capable judges of these matters anywhere in the world to-day.

The fact that the fund and the bank are doing these things means nothing more than that having examined the whole economy of Australia they have formed the opinion- ~ that it is sound. They have come to the conclusion that the political stability of Australia is sound and beyond reproach, and that Australia is one of those countries to which advances can be made and the right to draw extended as a sound financial transaction. To instance Australia’s current dealings with international financial bodies as supporting some sort of an argument that our economy is in any way shaky, is just to talk sheer nonsense. This type of transaction, as I have tried to indicate to the honorable member, is the most triumphant proof that we can get from anywhere in the world that our economy and financial stability are considered to be sound and that people whose business it is to deal in finance believe that Australia is in an irreproachable position. I deplore the way in which the honorable member for Scullin spoke, apparently on behalf of a party that is still 20 years behind the times.


.- T did not intend to participate in the discussion on decentralization and I shall make a passing reference to that subject only because of the intrusion of the honorable member for Barker (Mr. Forbes) into the debate and his defence of the honorable member for Ballaarat (Mr. Erwin). I remind both honorable members that it was during the period of the Curtin and Chifley Administrations that there were established at Ballarat a plant for the extraction of nitrogenous products from air for the manufacture of explosives, an enormous gun cotton factory, a flax industry, and a great training base for the Royal Australian Air Force. I remind them also that engineering industries in Ballarat were encouraged and substantially helped. With the coming of an anti-Labour Administration however, the nitrogenous products factory, which had been subsequently converted by the Chifley Government into a plant for producing sulphate of ammonia for primary producers, was closed down and sold to private enterprise. The great gun cotton factory, in regard to which the Labour Government had negotiated a contract with a large British paper firm, is still being utilized by private industry, although the paper firm transferred its interests to other people. The flax mill has been closed down and the Air Force base has disappeared altogether.

Those few references indicate that as far as that district is concerned decentralization was not only preached by the Labour Government, but also practised. The Labour Administration also established at Portland, Victoria, large wool stores which, although never used for the purpose of storing wool, have proved to be invaluable to this Government for storing all sorts of material. They have now been made available, to wool-growers of the district as a selling centre. The Labour Administration also established wool stores at Geraldton, Albany. Moree and Dubbo. Although some of them were never used to store wool they all proved valuable for other purposes. 1 could go on ad infinitum giving illustrations of that kind.

An important matter on which I wish to sneak now is one which has concerned me greatly over the past few years. I am a tolerant person. I realize that during the post-war period, because of the vast expansion of Australia’s population, great difficulties have been experienced by governments of all political complexions in both the State and the Commonwealth spheres. Over the last few years, I have listened to supporters of the Government in various debates make slighting references to shortages during the immediate post-war period and during the time of the Chifley Administration. Some of them have been very mean references indeed.

Let me give an illustration of the situation now, sixteen years after the cessation of hostilities. The shortage of telephone ser-vices in the shire pf Whittlesea, the city of Broadmeadows, the municipality of Keilor and the shire of Altona is a disgrace to any political administration. I make no slighting reference to any of the departmental officers. They do their best in an impossible situation. The population of the area I have mentioned has increased by nearly 20,000 people since the last election, and that increase has followed the expansion, transfer and establishment of very great industrial enterprises. But, lo and behold, here is the Postmaster-General’s Department sixteen years after the cessation of hostilities unable to supply telephone services. Surely it should have been aware of the requirements of industry and been prepared to meet the demand.

I shall mention two cases brought to my notice only last week. A very large, oldestablished Australian industry, which produces goods of a utilitarian nature for household use, has been established in an inner metropolitan industrial area. I think it has effected a merger with an American enterprise and is now establishing a great industrial concern in Maffra-street, Broadmeadows. It proposes to manufacture good? for local use and for export. It made application to the PostmasterGeneral’s Department for the installation of a telephone.. on the spot to-day is a very prominent Melbourne contractor with his head-quarters in Richmond, Victoria, and a number of sub-contractors employing 200 men. Between now and October next, they will spend no less than £1,000,000. But they are informed by the PostmasterGeneral’s Department that they cannot get a telephone for twelve months. That is the first illustration.

In the shire of Whittlesea, a firm producing asphalt for road construction applied to the Postmaster-General’s Department for the installation of a telephone, but it will be unable to get the installation in less than eighteen months. In another instance, a firm in Thomastown has purchased 5 acres of land on which to establish itself.

It is moving its stores, administrative offices and so on to this site and already has applied for a telephone and been told that it cannot get one for twelve months.

These are illustrations of the effect of telephone shortages on industrial undertakings. But these shortages also affect the citizens. When a woman living alone - she may be an invalid - applies for a telephone, she is told that there is no cable and she cannot have a telephone for twelve months, eighteen months or perhaps ten years. A vast administrative staff in the PostmasterGeneral’s Department in Melbourne does nothing but receive letters from members of Parliament in these areas complaining about telephone shortages and seeking information as to when their electors will be supplied with telephones. A very courteous reply, couched in most fascinating language, is sent, but there is always a shortage of cables and no assurance can be given as to when a telephone will be installed.

These replies have become so hackneyed that a ridiculous situation exists. 1 have an illustration which concerns two people living side by side. They are not in my electorate but in an electorate in the eastern suburbs, where the same situation obtains. These people live in houses numbered 44 and 46 in the same street. They applied on the same day for a telephone and one was informed that because of a shortage of cables a telephone could not be installed under twelve months. But the neighbour was informed that a telephone could not bc installed in less than two years. The officers of the department have probably reached such a state that all they can do is to pull down a number - twelve months or two years - and hope for the best.

What is the position;? I have asked officers of the department: “ What is wrong? Are you short of material or of labour, or is your show badly mismanaged? “ They are evasive. They do not want to pool the Government. I personally saw the Postmaster-General (Mr. Davidson) last Tuesday about the industries I have mentioned to-night, but I have not yet received a reply. I gave him copies of the correspondence and no doubt he has referred the matter to the department. No doubt he has asked the same officers what they can do, and all I can expect is the same answer. I know what is wrong. 1 have asked the Postmaster-General what is wrong, but he will not commit himself. The plain fact is that there is no shortage of material or of labour and the management and technical skill of the officers of the Postmaster-General’s Department is top-notch. But this Government is so incompetent and so out of touch with the intimate needs of the people and of industry that it does not provide the PostmasterGeneral’s Department with sufficient funds to enable telephones to be installed promptly in essential industries, lt is a disgrace and a reflection on the Government.

I told the Postmaster-General to-night that I would be raising this matter. He is not present, and is it any wonder that he is not? If he were here he would have to say in this Parliament that there is no shortage of anything except money. Hang it all, Mr. Speaker, the telephone section of the Postmaster-General’s Department is a paying proposition. It pays handsomely. Yet members of Parliament receive dozens of letters every day concerning the shortage of telephones.


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


.- After listening to the statements of the honorable member for Lalor (Mr. Pollard), I am inclined to believe that he is a warmonger. He mentioned the gun cotton area which was established at Ballarat during wartime. The flax mill was also built there during the war. He boasted that this was a flourishing area during the war. He said that the Labour Government established some kind of paper mill there. I want to tell the House that the paper mill established by the Labour Government was almost defunct until the Liberal Government came into office.. I am very pleased to say that establishments in the gun cotton area and the pulp and paper mill are expanding.

It is true that we disposed of the sulphuric acid plant to Imperial Chemical Industries of Australia and New Zealand Limited, but this is a flourishing plant employing many men. In the same area we have Mintex Proprietary Limited, which manufactures brake linings for the whole of Australia. We have one of the first Cleveland group of manufacturing companies in Ballarat expanding and employing many men. All these industries have been established during the last five years. Also established in Ballarat in this time is the great American Timken tapered roller bearing company. Villiers Australia Proprietary Limited, manufacturers of internal combustion engines, have also been established there.

I remind the House that the British Nylon Spinners (Australia) Proprietary Limited, a £2,000,000 industry, was prepared to come to Ballarat. It selected a site there and was ready to establish the plant. The honorable member for Lalor knows very well that the Cain Government in Victoria refused to grant any transport concessions. All the poppycock used by the honorable member in his speech to-night was most insincere. This is a typical election stunt that we witness when we get near election time. Nothing was said about the fact that the Bolte Government appointed an all-party committee to consider the decentralization of population. That committee has only recently submitted its report. More decentralization has taken place in Victoria since the present Liberal Government assumed office in that State than ever took place under Labour governments. The development of the port of Portland was never thought of by Labour governments. As the honorable member for Barker (Mr. Forbes) pointed out, we face certain problems with respect to decentralization but none of those problems was mentioned by honorable members opposite this morning. We know that during a visit to Ballarat by the honorable member for Lalor things got too hot for him and he had to leave in a hurry, although I do not know why.

I cannot understand the twaddle that was uttered by honorable members opposite this morning. There was no meaning to their arguments. We have seen things of this kind happening on other occasions as elections have drawn near. Honorable members opposite seek to jump on the band-wagon of decentralization. They seem to think that if an industry is prepared to establish itself in Australia all that a government need do is hold a gun at that industry’s head and tell it where it should go. What nonsense. We know that Tom Playford would be only too happy to have any industry in South Australia. Honorable members opposite are very insincere. They have no idea what they are talking about. They have no idea how to achieve proper decentralization.

We on this side of the chamber have ideas and we are putting them into practice. We must realize that the responsibility for decentralization rests with the States. I would support any move to help the States in respect of decentralization but we must remember that the responsibility rests with the States. Honorable members opposite are attempting to lay the blame for lack of decentralization at the door of the Commonwealth. If we were to accede to the wishes of the Opposition we would need to grasp more control from the States. The Opposition had no argument to offer this morning. I appreciate what the honorable member for Barker said; he knows something about decentralization. The honorable member for Wannon (Mr. Malcolm Fraser) has done a great deal about decentralization in his area. Wherever we have Liberal governments we have progress and development, and people are ready to spend money. People will not spend money when a Labour government is in power. Wherever we see a Liberal administration we see money pouring into the country because the people have confidence in Liberal administrations. They know that a Liberal government will encourage and assist industries to expand. Under Liberal governments Australia has expanded and developed far more than it ever did under Labour administrations.

Friday, 28 April 1961

Minister for Primary Industry · Fisher · CP

Mr. Speaker, earlier to-day we heard a lot of opposition from honorable members opposite about talking after 11 p.m. It is now past midnight, so I move -

That the question be now put.

Mr Jones:

– Dingoes!


– Order! The honorable member will withdraw that remark.

Mr Jones:

– I apologize to the dingoes.


– Order! The honorable member will withdraw that remark.

Mr Jones:

– 1 withdraw the remark.

Question resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 12.5 a.m. (Friday).

page 1287


The following answers to questions were circulated: -

Food of Animal Origin From Overseas

Mr Swartz:

z asked the Minister for Health, upon notice -

  1. What steps are -taken by quarantine officers to inspect food items of animal origin which are brought into Australia by people from overseas countries or through overseas postal channels?
  2. Have any recent steps been taken to draw to public attention die potential threat to Australia’s live-stock industry which could be caused by the introduction of diseases in these foodstuffs?
Dr Donald Cameron:

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

  1. Before arrival at Australia, passengers are obliged to make a customs declaration stating, among other things, whether they have any meat or foods of animal origin with them or in their luggage. On arrival the luggage of persons entering Australia from overseas is carefully examined by customs officers for foods of animal origin. If any are found these together with similar declared items are detained and referred to officers of the Animal Quarantine Service for appropriate action. Similarly, customs officers stationed at post offices detain any item of food of animal origin and refer them to officers of the Animal Quarantine Service. There is a long tradition of co-operation between the customs and quarantine services in these functions, supported of course by legal authority.
  2. This matter has been given considerable publicity in the press from time to time and on 19th March, 1961, I issued a comprehensive statement explaining the risks inherent in persons having friends or relatives overseas send them parcels containing food items of animal origin. This statement was made available Vo metropolitan and provincial daily newspapers which gave it wide publicity. It was also publicized on the radio. In addition, the statement was tent to the editors of 30 foreign language and farm newspapers throughout Australia.


Mr L R Johnson:

son asked the Minister for External Affairs, upon notice -

  1. Have reports of a large-scale sea and air invasion of Cuba been confirmed?
  2. If so, is he able to say where and by whom the anti-Castro forces were trained and from where the attack was launched?
  3. ls he also able to say what was the country of origin of the ships, landing barges, gunboats, aircraft and weapons used by invaders?
Mr Menzies:

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

  1. The recent landings in Cuba were on a somewhat larger scale than the guerrilla warfare that has been going on for some time in parts of Cuba against Dr. Castro’s Government. It appears, however, that they were confined to a few hundred men, most of whom have been killed or captured by government forces.
  2. No. Various allegations were made in the General Assembly of the United Nations, but no conclusion was reached by that body.
  3. No: it is possible to buy armaments freely in several parts of the world.
Mr Haylen:

n asked the Minister for External Affairs, upon notice” -

  1. In view of the delicate and alarming situation in Cuba, will he, as soon as possible, make a statement’ to the House, based on the most recent and authoritative reports, on the background of the outbreak of hostilities in that country?
  2. Can he say if this outbreak is limited to the Cubans or if it is being fomented from outside?
  3. Will he deal in particular with the published allegations that the invasion of Cuba is a foreignbased attack with head-quarters in Florida and Guatemala?
  4. Is he able to say if the United States is involved in this matter or how far the outbreak is a genuine counter-revolutionary move against Dr. Castro?
  5. Is there any danger of the present situation in Cuba becoming another Laos?
Mr Menzies:

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

  1. I do not think that any useful purpose would be served by a statement from me at the present time. The General Assembly of the United Nations has had a full debate on the matter and the record is available to honorable members in the Parliamentary Library. 2 and 3. The conclusions reached by the Government on the allegations made by the representatives of Dr. Castro and by his Communist friends are set out in the statement by the Australian delegate, Mr. J. Plimsoll, in the General Assembly on 20th April, 1961.
  2. As Mr. Plimsoll pointed out, the statements by President Kennedy and by the United States representative in New York, Mr. Adlai Stevenson, made it clear that it was not the intention of the United States to wage an aggressive war against Cuba.
  3. There is no evidence to support this view. The situations in Cuba and Laos are distinguishable in various respects.

Exports and Imports

Mr Cope:

e asked the Minister for Trade, upon notice -

  1. What was the value of all Australian goods exported from 1st July, 1950, to 28th February, 1961?
  2. What was the value of all goods imported into Australia during the same period?
Mr McEwen:

– The following information, which has been obtained from publications released by the Commonwealth Statistician, is given in reply to the honorable member’s questions: -

  1. The value of Australia’s exports since 1st July, 19S0, is as follows:-
  1. The value of all imports into Australia during the period 1st July, 1950, to 28th February, 1961, was £8,649 million f.o.b.

Iron and Steel

Mr Daly:

y asked the Minister for Trade, upon notice) -

  1. What was the (a) quantity and (b) value of iron and steel imported in each year from and including 1950?
  2. From what countries were these imports received, and what was the (a) quantity and (b) value received from each?
  3. What was the (a) quantity and (b) value of iron and steel exported during these years?
  4. To what countries were these exports made, and what was the (a) quantity and (b) value taken by each?
Mr McEwen:

– The following details were supplied by the Commonwealth Statistician in answer to the honorable member’s questions: -

Because of the diverse nature of items included in the iron and steel group it is impracticable to show total exports in quantity terms. The following tables show the values of exports and imports of iron and steel in each year since 1950-51:-

Trade Delegations

Mr Daly:

y asked the Minister for Trade, upon notice -

  1. Have any members of the Commonwealth Parliament been included in trade delegations sent abroad since the last elections?
  2. If so, what are the names of the members and the countries visited?
  3. Will he give consideration to the inclusion of representatives of both Government and Opposition parties in future trade delegations?
Mr McEwen:

– The answers to the honorable member’s questions are - 1 and 2. Members of the Commonwealth Parliament have not been included in trade missions sent abroad since the last elections. °

  1. Trade missions which have been sponsored or assisted by the Government consist of representatives of commercial firms and banks whose object is to sell their products in the countries visited or to investigate market prospects on behalf of client companies. The Commonwealth’s activities are confined to the provision of organizational facilities and supporting publicity, which assists in creating a favorable climate in which mission members are better able successfully to pursue their primary purposes. As they are mostly selling missions the nomination of members of Parliament to these missions is not considered to be appropriate.


Mr Daly:

y asked the Minister for Trade, upon notice -

  1. What are the countries to which meat is exported?
  2. What was the (a) quantity and (b) value of meat exported to each country during the last three years?
Mr McEwen:

– The reply to the honorable member’s question, which is one of considerable detail, will be found in Table 12, pages 544-546, of the “ Oversea Trade “ Bulletin No. 57, 1959-60, published by the Commonwealth Statistician. I am making arrangements for copies of the relevant pages to be forwarded to the honorable member under separate cover.

Mr Daly:

y asked the Minister for Trade, upon notice -

  1. In the Government’s drive for export markets is a special effort being made to obtain new markets for Australian meat?
  2. If so, what are the - (a) countries concerned, and (b) details of the negotiations talcing place?
Mr McEwen:

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

  1. Yes. The importance which the Government attaches to increasing export markets for meat is shown as an example by the active consideration, which I have already announced, being given to the proposals for developmental roads in Northern Australia. With these roads it would be possible for store cattle to be sent to fattening areas at an earlier age than is now practicable and thus to increase the production of beef, primarily for export.
  2. Within the terms of trade agreements and understandings, increased access to certain markets is continually being sought. There is, of course, the Fifteen-year Meat Agreement which I negotiated some years ago with the United Kingdom. Agreements have recently been signed with Germany and Canada, which provided for improved access for meat. Direct responsibility for expanding our meat markets is primarily with the Australian Meat Board, which has been very active indeed in seeking new and improved markets for meat. In pursuance of this policy, members of the board have on a number of occasions visited the United States and Canada. The United States has, of course, become a very important market Government action has been designed to preserve that situation and a permanent representative of the Meat Board has been stationed there to study and report on the market with which he keeps in very close touch. A delegation of the board visited Japan in November, 1959, for the purpose of further developing this market which has reached sizeable proportions in recent years. In our inter-governmental discussions with Japan, careful attention is being given to securing increased access for our meat. The Meat Board also has a representative in the United Kingdom. A total of £35,000 a year is being spent in that country on publicity for canned meat This expenditure is out of Meat Board funds and is closely related to the costly promotion and publicity campaign being carried out in the United Kingdom under the general direction of the Commonwealth Government. A start has also been made on a campaign specifically designed to promote the sale of Australian frozen meat in the United Kingdom.

Australian Exports to Greece

Mr Daly:

y asked the Minister for Trade, upon notice -

  1. What are the details of the goods exported to Greece during the last three years?
  2. What was the value of these goods?
Mr McEwen:

– The following information was obtained from publications released by the Commonwealth Statistician and is given in reply to the honorable member’s question: -

Exports of Strategic Materials

Mr L R Johnson:

son asked the Minister for Trade, upon notice -

  1. What strategic materials and goods are the subject of the Government’s export embargo to Communist China?
  2. Is there an embargo on exports to any other countries; if so, what countries and exports are involved?
Mr McEwen:

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

The Australian Government embargoes the export to any Communist country of any of the products on the embargo list used by the United Kingdom. This list was published in the United Kingdom Board of Trade Journal of 5th February, 1960.

Cite as: Australia, House of Representatives, Debates, 27 April 1961, viewed 22 October 2017, <>.