23rd Parliament · 3rd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– I direct a question to the Minister for Health concerning moneys made available from loan funds to the States for mental hospitals. There was a report that capital expenditure for the States was allocated in varying amounts to each of the States on a basis of £2 for £1, and that four of the States had made use of that allocation over a period but that two of the States - New South Wales and Queensland - had not made use of it. It was reported that no further allocations could be made to the four Staff! that had taken an interest in mental hospitals until the two rather backward States of New South Wales and Queensland-
– Order! The honorable member should direct his question to the Minister.
– Is it true that no more money can be made available for Victorian mental hospitals until New South Wales and Queensland have used up their allocations?
– The position is not quite what the honorable gentleman has represented it to be. Money was made available to all the States and, in fact, two States - Tasmania and Victoria - did use up all their allocations. The other four States did not. But the question of whether more money can be made available is not a simple one depending on the rate at which the money is used when it has been made available under the States Grants (Mental Institutions) Act, which is the act under which these grants ar» made. It is true that no more advances can be made under that act; but at the last two Premiers’ Conferences, this matter was brought up by the Premiers and they have been asked to submit their wishes for money for mental health and mental institutions for the future. A great deal of information has been collected now bv the States. It is being examined bv the Commonwealth Department of Health and out of all this, no doubt, there will be some proposals for the future; but they are not yet in a form in which they can be dealt with.
– My question to the Minister for Health refers to an answer he gave to a question from, I believe, the honorable member for Farrer concerning the fluoridation of water supplies. Has the Department of Health or the Commonwealth Scientific and Industrial Research Organization carried out any investigations into the desirability of adding fluoride to the water supply in Canberra? Is it proposed to add fluoride to the Canberra water supply? Will an expression of opinion of the people of Canberra be sought before this step is taken?
– I cannot be precise as to the investigations that have been made without refreshing my memory by reference to my department; but it is unlikely that any programme of fluoridation would be put into effect in the Australian Capital Territory without obtaining an expression of opinion from the inhabitants of the Territory beforehand.
– I desire to ask the Treasurer a question. Has any firm agreement been made with the governments of the United Kingdom and New Zealand that when decimal currency is introduced, it will be introduced simultaneously by those countries and Australia and on similar terms?
– There is no such agreement. Perhaps I should give the House the background of this matter. The United Kingdom Chancellor of the Exchequer wrote to me earlier in the year expressing interest in what was being done in Australia in relation to decimal currency. He sought a copy of the report produced by the committee we appointed for the purpose and suggested that, while this matter had not been taken by him to his Cabinet, it was one in which he was interested. He also suggested that the New Zealand Minister for Finance, he and I might confer on the question at the forthcoming meeting of finance ministers in Accra. We did so, the New Zealand Government having previously stated that it supported in principle the adoption of a decimal currency system.
We had a useful talk and agreed that we would keep in touch with one another on the subject. I said that I had publicly announced on behalf of the Australian Government that, if a final decision to introduce the system were made, it was not likely we would do so before 1965, and that it was thought that if more than one of the three governments were to adopt the system, there might be advantage in doing so at about the same time and perhaps with some uniformity in the nomenclature of the coins to be used. At this stage, it was simply a consultation without any firm decision by any of the three countries.
– I desire to direct a question to the Treasurer. Does the right honorable gentleman intend to make a statement at an early date on his negotiations with the United Kingdom Government in relation to that Government’s proposed entry into the European Common Market?
– I will consider the suggestion of the honorable gentleman. I know that the House has a very full programme ahead of it, but for my part I would be entirely willing to give some account of my activities over the last few weeks, including the conference of finance ministers at Accra, the annual meetings of the International Bank for Reconstruction and Development and the International Monetary Fund in Vienna, and such other matters as may be of interest.
– Is the Minister for Trade aware of certain criticism of his recent statement that Australia’s products are almost totally excluded from the United States of America? Can the Minister elaborate this statement by saying whether there is any opportunity for Australia to increase its exports to the United States of any commodity without action being taken by the United States to limit our exports by quotas, excessive tariffs or legislation?
Is it a fact that the Hawaiian legislature has recently passed a law prohibiting the introduction of Australian beef? Has this legislation been ratified or vetoed by Washington?
– I do not readily recall a recent statement along the lines suggested by the honorable member for Farrer. It is common knowledge, of course, that many of our major items of trade cannot be sold to the United States because that country also produces them. I have in mind such items as wheat. It is also equally well known that, with a number of items such as wool and base metals, including lead and zinc, we have encountered severe obstacles in our efforts to trade with the United States. Of course, we have an opportunity to trade in a multitude of items which are not major, and in respect of them we have no special obstacles to overcome in the United States. Our goods need only be competitive and available. 1 shall let the honorable member have a list of the particular items normal to the Australian export trade in respect of which we encounter some obstacle in sale to the United States of America. I am not in a position to answer a question without notice in relation to what has happened recently iD the Hawaiian legislature, but I shall procure the information on that with precision and let the honorable member have it.
– 1 address my question to the Minister for Labour and National Service. Is it true that he has made comparisons between the unemployment position in Australia and the unemployment position in the United States of America? Is it true that the basis used for the compilation of the figures in Australia is very different from that used in Canada and the United States, and that if the same basis were used the position in Australia would not appear to be any better than that existing in America?
– It is true that there are some differences - not very substantial ones - between the methods of compiling figures relating to registrations for employment in Australia and the methods used in both Canada and the United States of America. This is a highly technical matter and the differences are highly technical ones. As to the last part of the honorable gentleman’s question, I am certain that irrespective of the allowances one may make - they would be fringe allowances, anyhow - the performances in Australia would be considerably better than they are in either Canada or the United States.
– I preface my question to the Attorney-General by stating that 1 have been approached by an industrialist in my electorate to ascertain whether the Minister has decided to introduce a permanent scheme for the publication of complete specifications of patents, which he previously said he would do. In considering the precise details of the permanent scheme, has the Attorney-General given thought to the implications of the proposals within the European Common Market countries to set up a European patents office, and to issue patents without examination and on the mere compliance with the formalities? Would not the proposal of the European Common Market countries act adversely on the Australian inventor?
– I can well understand the interest, not only of my colleague, but also of his constituents, and their desire to know as soon as possible whether I have been able to settle on a permanent scheme with respect to the publication of complete specifications of patents. This matter has taken some time because of the interest shown in it by the manufacturers as well as by the inventors, and because it has been necessary to find a middle course which will provide them each with a proper law.
The House will remember that I made a statement about this matter some time ago, and that I proposed certain interim measures. The question at issue then was whether, when a complete specification for a patent has been lodged, it should be published within six months or whether it should not be published until the Patents Office had examined the patent and decided whether letters patent should be issued. In Australia we follow the plan of examining patents before the letters patent are issued. The European Common Market proposal to which the honorable member has referred is different. It springs from a French system in which the patents office does not examine the specifications in detail at the outset but grants letters patent upon a cursory and formal examination, and later makes a more detailed examination. I considered that system when deciding upon a final scheme in respect of Australian patent law.
I can tell the honorable gentleman, and the House, that I have now completed the consideration of what should be the permanent scheme, and I have authority to bring a bill before the House during this sessional period to provide that permanent scheme which I think, when the details are known, will be found to be a proper compromise between the interests of the manufacturers, who want an early publication, and the interests of the inventors who, in most cases, wish the publication to be deferred.
– I address a question to the Minister for Labour and National Service. On 14th September, during the debate on the motion for the adjournment of the House, I read a communication from the Daylesford textile mill, stating that it was about to close down. I also read a letter from the Wangaratta flour mills, stating that they were about to close down, as well as a letter from the Dorrigo Chamber of Commerce asking that, in order to preserve the solvency of the timber industry in that district, a moratorium be established on payments on equipment used in the industry. Has the Minister taken any action in connexion with these three requests from decentralized Australian industry?
– I think it regrettable that the honorable member, if he is genuinely interested in these matters, did not specifically direct my attention to them before mentioning them in the House. I think that specific cases like this might have been discussed with me beforehand. My department is looking into these problems, and as soon as I can give the honorable member a reply I will do so.
– My question is directed to the Minister for Trade. As
Egypt’s cotton contracts in eastern Europe and elsewhere are being jeopardized by disease in its cotton crops, has the Minister any information which would indicate that cotton buyers on these markets will consider a change-over to woollen fibres?
– I have no information that European countries which draw upon Egypt as a source of raw cotton would be likely to change over to wool or other fibres because of the failure of the Egyptian cotton crop. In fact, I understand that different spinning and weaving equipment would be required for textiles other than cotton. As there is a surplus of raw cotton in the world 1 would expect that the countries that were unable to procure their requirements from Egypt could get them from other countries, particularly the United States of America. But I can inform the honorable member, who I know is very interested in this matter, that Australian sales of wool to eastern European countries have gone up very substantially over the last three or four years.
– I address my question to the Minister for Trade. Is he aware of an announcement that the Japanese Government has increased the amount of deposit required of woolbuyers from 1 per cent, to 5 per cent? Is this move, and the publicity given to it, a stunt to enable the Japanese to depress the wool market? Does it follow the lines of a similar announcement last year when similar tactics were adopted? If so, will the Minister take action to ensure that the wool-buyers of the world are informed that Australian wool is not for sale at gift prices?
– I am not completely familiar with what, if anything, has been done by the Japanese authorities in this regard. But I do remind the honorable member that since the signing of the Japanese Trade Agreement the Japanese have become the most important buyers of Australian wool. Indeed, I have no doubt that the Australian woolgrowers have received scores of millions of pounds more for their whole clip over the last several years than they would have obtained had not the Japanese been such vigorous buyers at our auctions. Hav ing an acute concern for the well-being of the Australian wool-growers in my mind, I would be the last to pick a quarrel with the Japanese.
– That is not the point. You would let them have our wool at any old price.
– Not by any means. I believe that the honorable member will know from his commercial experience that every time the United Kingdom raises the bank rate, as happens not infrequently, it is reflected in the commodity market.
– I address a question to the Postmaster-General relating to rural automatic exchanges. I ask whether it is a fact that his department is now experimenting on the test benches with a new system to replace the present rural automatic exchange equipment. Can he inform the House of the progress being made, and can he say whether, if these tests prove satisfactory, they will lead to a reduction of the present time lag in installing rural automatic exchanges?
– It is a fact that experiments are being carried out in connexion with the introduction of the crossbar system in rural automatic exchanges. As I have informed the House previously, the cross-bar principle has been introduced into a few of the major automatic installations in Australia. The main one of these is in Toowoomba, and it has been operating successfully. It is now being tested out to see just how the application of that principle to the rural automatic exchange system could benefit the service generally. I have not had any recent information as to just how far these experiments have gone, but I shall obtain what information I can for the honorable member. I have little doubt that the expectations of the department that the application of this principle will enable the rural automatic exchange system and the country automatic system to be tied in more successfully with the overall automatic system throughout Australia will be realized.
– I ask the Prime Minister whether he has stated on a number of occasions that the credit squeeze policy of the Government was necessary to correct boom conditions. Has he now predicted another boom in 1962? If so, and in view of the frequent starts, stops, retreats, turns and twists which have been a feature of Government policy, and which are confusing to all sections of the community, will he make an early statement, in precise terms, of the Government’s future economic policy - that is presuming the unlikely survival of the Government - indicating when the next credit squeeze to end the predicted 1962 boom will be applied?
– The first observation made by the honorable member for East Sydney was, oddly enough, quite correct. His second statement that I had prophesied a boom in 1962 was quite wrong. What I said was that we must be careful not to have one. I notice that hilarity is breaking out on the Opposition benches. Yes, it is frightfully funny. What I got up to say was that I detected in what fell from the honorable member for East Sydney a sort of belief that we would still be here - no doubt making a mess of it from his point of view - after the next election, This represents the first time in my knowledge when the honorable member for East Sydney and I have entirely agreed.
– I address a question to the Minister for Health, supplementary to that asked earlier by the honorable member for Fawkner. Can the Minister tell the House the amount of the Commonwealth grant allocated to Queensland to assist in the provision of buildings and facilities at mental hospitals? Can he also supply information about projects that have been undertaken or completed, and about those that are being planned in Queensland for which Commonwealth funds will be used?
– I cannot give the details from memory, but I can recall at least three major projects that the Queensland Government has undertaken - one at the Brisbane Mental Hospital, one at Charters Towers and one at Ipswich. These projects have involved the expenditure of many hundreds of thousands of pounds. The procedure that is followed requires that the State governments shall submit each year to the Commonwealth Department of Health their individual programmes for approval under the terms of the States Grants (Mental Institutions) Act. These programmes may cover very large numbers of projects, both large and small, some of the latter involving only reequipment. The programmes are approved and payments made to the States as the projects are carried out during the year. 1 think the Queensland Government still has about £900,000 available to it under this act, but what projects it intends to spend the money on I cannot say offhand.
– Has the Treasurer’s attention been directed to a statement by Mr. G. R. Bain, director of the New South Wales Chamber of Manufactures, expressing a belief that the rate of recovery of Australia’s economy from the depressed conditions obtaining earlier this year has been too slow? Is it a fact that this opinion has been confirmed by the August report of the Retail Traders Association, which shows that retail sales for that month were down 7 per cent, compared with the figures for August, 1960, covering all major sections of the retail trade? In the unlikely event of its being returned at this year’s election, will the Government consider Mr. Bain’s suggestion that a supplementary budget should be introduced early in 1962 - as promised, incidentally, by the Labour Party if it is chosen to form a government - providing for a more realistic deficit to stimulate demand and employment?
– I have not had the statement made by Mr. Bain brought to my attention as yet. I tried to keep in touch with events within Australia while 1 was overseas, by reading reports from my department and all the latest press articles bearing on Australia’s economic position. The Government’s estimate of the manner in which the economy is progressing has been confirmed, not only by a quite remarkable response to the first loan floated by the Government in this financial year, but also by the fact that there was a record attendance at the Melbourne show. I gather, too, that the festive occasion of the Sydney racing season has not proceeded without substantial attendances.
– Is the Treasurer aware that the taxation benefits resulting from family partnerships entered into by members of families on the land have had considerable influence in causing many primary producers to see that their sons received a good education and were given experience in management and control at an early age? Also, is he aware that this has resulted in the introduction of more advanced production methods, with resulting benefits to primary industry in improved efficiency? Will the Minister, when considering the recommendations of the Commonwealth Committee on Taxation, take account of the very substantial benefits, in terms of increased efficiency, which family partnerships have bestowed on primary industries and, therefore, on Australia?
– I have no doubt that when Cabinet makes a detailed examination of the proposals contained in the report of the Committee on Taxation, and decides what detailed policies shall be adopted, it will not overlook the considerations mentioned by the honorable member.
– I wish to ask the Prime Minister a question. Is he aware that a well-known jockey was disqualified for life last Saturday for allegedly pulling another jockey’s leg? Seeing that the right honorable gentleman has been pulling other people’s legs for years, why has he not been disqualified?
– I have been under the impression for twelve years now that as a result of these activities, good, bad or indifferent, I have practically been given a life sentence by the people of Australia.
– I ask the AttorneyGeneral whether it is a fact that for a considerable time he has been engaged in activities in conjunction with the State authorities designed to bring about uniform company legislation throughout Australia. If this is a fact, can the honorable gentleman tell the House whether there is any constitutional power to ensure that the measures so enacted shall remain uniform, or does uniformity rest on a gentlemen’s agreement? Even if the members of the present governments, who are gentlemen, agree, what happens when other governments which are not composed of gentlemen come into office and decide to amend the measures for which they are responsible?
– It is quite true that for some months I have joined with the Attorneys-General of the States in an endeavour to get a model companies bill which can be passed by the State parliaments and, in respect of the Territories, either by this Parliament or by the legislative bodies in the Territories. There is no constitutional means by which we can prevent any one of the legislatures concerned from making changes in the law that is adopted, but the Attorneys-General of the States and I have formed a standing committee and have undertaken that we shall submit to one another changes in the company law proposed from time to time. It is quite true that that arrangement rests on the basis of Ministers being responsible and gentlemen. After all, a great deal of the British constitution itself is on no more secure foundation. Yet it seems to work, notwithstanding many changes in the political colour of the party for the time being occupying the government benches.
– I wish to ask the Treasurer a question. During the right honorable gentleman’s visit overseas, the Prime Minister announced that the recent Commonwealth loan was very successful and that savings banks and insurance companies had contributed one-half of the proceeds. The Prime Minister said, also, that a substantial portion of the loan had been contributed by the trading banks. I ask my distinguished friend, the Treasurer: What percentage of the loan was contributed by the trading banks?
– I shall examine the details of the matter and see how far it is practicable to comply with the honorable gentleman’s request. I am not sure that it has been the practice in the past to make known all these details, but, to the extent that it is competent for me to do so, I shall satisfy his curiosity.
– My question is addressed to the Treasurer. I ask: Did the right honorable gentleman say, in a report on his activities overseas in negotiations on the probability of the United Kingdom becoming a member of the European Common Market, that the Australian dried vine fruit industry would probably face grave difficulties in marketing if the United Kingdom became a member of that organization? If so, can he give an assurance that the United Kingdom representatives are fully acquainted with the difficulties that may beset this industry, the production of which is almost 100 per cent, in the hands of ex-servicemen, and that Australia’s representatives are doing everything possible to avert these marketing difficulties?
– What J attempted to do in the course of discussions overseas was to make the point that an overall settlement which might appear to the United Kingdom or countries which are members of the European Common Market to be not disadvantageous to Australian in the broad could, nevertheless, have a very serious effect on particular industries unless the circumstances of those industries were taken into account in negotiations. In other words, some arrangement which might produce a percentage result that they could hold to be not seriously crippling to the Australian economy could, if insufficient attention were given to a particular industry - and I mentioned the dried fruits industry as a case in point - have serious effects, not only on that industry, but also on the community life of this country, seeing that we have important settlements which are concerned almost solely with this type of production. 1 also instanced the kind of damage which could be done in the Shepparton valley, for example, if the canned fruits industry were not given adequate protection or safeguards or assurance of entry into the markets of Europe or the United Kingdom. I believe, Mr. Speaker, that the point was well recognized, and that in the discussions which are now taking place in London, where we have a very able body of officers from the Department of Trade in almost daily consultation with United Kingdom officials, the detailed consideration that we would hope to see given to particular cases is in fact being given.
– Is the Treasurer aware that at a place called Bingil Bay, in north Queensland, £20,000 has been spent in constructing a motel, and that the State Government is to build a large luxury hotel in this locality? Having regard to the government-imposed credit squeeze, does the Treasurer not consider that such money as is available should be flowing into the construction of homes, hospitals, schools, &c, rather than into undertakings of the kind I have mentioned? Has the Treasurer any personal knowledge of this area, and does he know of any special reason why it should have been so favoured? Will he consider approaching the Queensland Government with a view to ensuring that in this and other areas available financial resources are directed to more essential and more important works? Finally, is it a fact that there is evidence of some wealthy people from the south-
-Order! The honorable member is now going too far. He should ask his question.
– Would the Treasurer consider trying to eliminate this kind of unhealthy expenditure in this particular area?
– Which area?
– Bingil Bay.
– I do have some personal knowledge of that very delightful area. I have no personal knowledge of any commercial activities that are proceeding there. It has not been the function of this Government, within the limit of credit policy as pronounced, to attempt to interfere with the activities of private entrepreneurs, and I do not see anything emerging from the question put by the honorable gentleman which should cause us to alter our attitude.
– Can the Treasurer say whether, during his trip overseas, he formed any conclusions as to the effect, if any, of Britain’s entry into the Common Market on capital inflow to Australia?
– I do not know that I appreciate having that rather uncomfortable jet-propelled progress described as a “ trip “. Still, subject to that, I did have some discussions as to-
– Did you do any spear-fishing this time?
– Well, the honorable member would make a very desirable target if I could ever get him in position, provided that his hide were not too tough for whatever weapon I might employ. I did have discussions with the Chancellor of the Exchequer, the Governor of the Bank of England and other appropriate people about the prospects of capital formation for Australia, whether by way of loans or by way of capital investment, should the United Kingdom effect entry into the European Common Market. I do not think any one can offer a very definite opinion on that matter at this stage. At present, we have a preferred position on the London market for our loan raisings, and have been more successful than other Commonwealth countries in the post-war years in the volume of our loan raisings and the terms on which loans could be secured. We have also enjoyed a very big proportion of the United Kingdom capital investment here amounting, I believe, to approximately 60 per cent, of the total capital investment in Australia from 1947 onwards.
In the terms of the Treaty of Rome, the United Kingdom would find it necessary to open iis market to other member countries of the European Common Market, and at first sight that might appear to prejudice Australia’s position. On the other hand, our association has been a traditional one. We feel that that fact will not be ignored when the negotiations are in progress. And there is some reason to believe that this closer economic association which could develop would strengthen the position of London as one of the world’s major financial centres, if not the leading centre. With a greater degree of activity financially in London, with more investment perhaps from the Commonwealth of Nations and from Europe, and the use of London as a money centre to a greater extent by the countries of Europe, it could happen that there would be even larger funds available for investment in Commonwealth securities or, indeed, by way of capital investment out here. I do not think we need to be unduly pessimistic about our outlook in that regard. Certainly, those to whom I spoke in London were confident that Australia would continue to have a strong position on the London market.
– Will the Minister for Primary Industry suggest to the States through the Australian Agricultural Council that the Bureau of Agricultural Economics undertake a survey of the unimproved but readily and cheaply available improvable land in the temperate area of Australia, with a view to finding out why the owners of this land have not used modern techniques to increase production? In view of the large area of unimproved pasture, even in such States as Tasmania and Victoria, would the Minister agree that the answer revealed by such a survey might suggest policies or incentives that could be applied, and that would do much to increase export production?
– I know the honorable member’s interest in improved pastures and everything associated with that type of work; but I think the biggest obstacle to the investigation he has envisaged is the limited staff available to the Bureau of Agricultural Economics. It has a full task ahead of it for the next year or two. However, if it is possible, we will see what can be done about the project the honorable member has suggested.
– by leave - Recently there has been some press controversy, particularly in Queensland, involving the administration of the Director of Posts and Telegraphs, Queensland, and the use of departmental vehicles. Investigations into these matters by the department has been proceeding for some weeks. In the past few days, certain sections of the press have been seeking statements from officers of the Postmaster-General’s Department and the Public Service Board and from myself. Quite properly, at that stage, those approached refused to comment on the matter that was already being handled departmentally. However, in view of the latest developments, it is proper that I should now, in this place, state the facts.
Following investigation, the DirectorGeneral of Posts and Telegraphs, on 27th September, 1961, that is last Wednesday, charged Mr. E. C. A. Brown, Director of Posts and Telegraphs, Queensland, with three offences of improper conduct and suspended him from duty as from close of business on that date. The charges, which were made under the provisions of section 56 of the Public Service Act, were that Mr. Brown was guilty of improper conduct in that between 28th and 31st July, 1961, he used for other than official purposes a motor vehicle belonging to the Postmaster-General’s Department; between 6th and 8th August, 1961, he sought the assistance of a subordinate officer in fabricating reasons to justify the use of the motor car; and that between 6th August, 1961, and 15th September, 1961, he made false and misleading statements when asked to explain the use of the motor car.
In accordance with the provisions of the Public Service Act and Regulations, Mr. Brown was required to reply to the charges in writing within seven days stating whether he admitted or denied the truth of the charges. Mr. Brown has now, in writing, admitted the truth of the charges. In accordance with section 56 of the Public Service Act, the Public Service Board is required to make to the Governor-General such recommendation as to punishment or otherwise as to the board seems fit.
.- In accordance with the provisions of the Public Works Committee Act 1913-1960, I present the report relating to the following work: -
Proposed construction of a Science Block at the Royal Australian Air Force Academy, Point Cook, Victoria. and move -
That the paper be printed.
.- I wish to raise a point which I think is important to the Parliament. The honorable member for Paterson (Mr. Fairhall) has presented a report which is the result of mature consideration by the Public Works Committee. I am anxious to know from the Government just what purpose is served by bringing these reports to the Parliament. Despite all the money spent by the committee in its investigations and in preparing reports, there is no certainty that the Government will implement its recommendations.
I had an unhappy experience in a matter such as this. Ten years ago, the same committee presented a detailed report to the Parliament on a proposed new telephone exchange building at Bathurst, New South Wales. The Parliament accepted the report and the Minister received it, but no action has been taken in those ten years to implement the findings of the committee. The previous Postmaster-General wrote letters and gave assurances, and since the present encumbent has occupied the position, he has written a number of letters to me. But, as far as I can ascertain, he has paid no heed to the decision of the Public Works Committee. If its findings are not to be respected, I think the logical action is for the committee to be disbanded and the position of the Parliament in these matters made clear. It is futile and fruitless to hold an inquiry unless a responsible Minister will act on the reports presented to the Parliament.
I raise this as a matter of principle, because it is deplorable that ‘a Minister of the Crown can adopt a party, partisan, petty political attitude on a matter of this kind. It is deplorable that a Minister can throw overboard entirely a report of a committee of the Parliament and disregard previous assurances that action will be taken. Matters determined by the Public Works Committee should not be allowed to go into the discard. I hope that future reports of this kind will be respected by Ministers and that action will be taken.
Question resolved in the affirmative.
.- In accordance with the provisions of the Public Works Committee Act 1913-1960, I present the report relating to the following work: -
Proposed provision of Engineering Services to the Rapid Creek Subdivision, Stage 2B, Darwin, Northern Territory. and move -
That the report be printed.
I think I should draw the attention of the House to the fact that the committee, during its consideration of this project, gave some attention to allegations that bombing at the Air Force range had caused considerable structural damage to houses in the neighbourhood. There was no substantial evidence to support this, but it did appear from the evidence that the time had come when there should be much closer consultation between the Departments of Territories and Air in relation to the further development of Darwin. It is obvious that the extension of housing areas in Darwin is bringing settlement closer to the limits of the bombing range, To this stage, there has been no reasonable, if any, co-operation between these two departments, and the committee believes that this is necessary to safeguard future housing development.
.- To reply briefly to the last point raised by the honorable member, I must say that the committee must have been inadequately informed. Correspondence has passed between the Minister for Air and myself regarding the availability of land in the vicinity of the airport and the use to be made of thisland. That correspondence has taken place; I have signed the letters myself.
Question resolved in the affirmative.
In Committee of Supply: Consideration resumed from 28th September (vide page 1535).
Department of Customs and Excise
Proposed Vote, £5,227,000.
Department of Trade
Proposed Vote, £3,667,000.
Department of Primary Industry
Proposed Vote, £2,945,000.
Bounties and Subsidies
Proposed Vote, £13,510,000.
.- I desire this afternoon to discuss the estimates of the Department of Primary Industry and to make particular reference to the matter raised by my colleague, the honorable member for Wannon (Mr. Malcolm Fraser) at question time. This concerns the general efficiency of farming and what we can do in Australia to increase this efficiency and to ensure that greater use is made of existing land where enormous potential exists.
It is certainly correct to say that if all the present scientific knowledge were applied to these areas, we could undoubtedly double our production in the higher rainfall, more favoured, areas of south-eastern Australia. How is this to be done? The Government some years ago made a grant of, I think, about £250,000 to the States to enable them to provide greater extension services. The idea was that agronomists in the States should be given this extra money so that they could hold field days, show films on improved methods of farming, write articles, make broadcasts and, generally speaking, acquaint farmers with the results of research that had been undertaken by the Commonwealth Scientific and Industrial Research Organization and the State Departments of Agriculture.
I think all of us who are associated with the land would say that extension services are not as successful as we had hoped they would be. This is no reflection whatever on the people who run them or on the ability of the agronomists. However, as an example, I point out that at Wagga, in my electorate, the agronomist in charge has about 1,500 farms under his direct control. That is provided he does not also have to go into other areas, because very often, these posts cannot be filled and one agronomist must do the work of two. This man, responsible for some 1,500 farms, has 230 working days in the year. By the time he finishes his normal office duties filling in forms and the rest of it, he is lucky if he has 150 days for visiting properties and advising people in extension services. At this rate, the agronomist at Wagga would take ten years to spend one day on every farm under his control. Obviously, it is quite impossible for him to succeed and to carry out efficiently his duties relating to extension services.
Because of this, the system of rural advisory services has grown up in New South Wales and, I understand, in some other States. These services appear to me to be of great advantage and the Commonwealth Government, together with the State governments, should get right behind them. We should try to subsidize them and to help them in every way we can. I believe that the first of these services was set up at Bombala. The agronomist there has been posted elsewhere. The local people had such a respect for him that they banded together and agreed to make an annual contribution so that he could remain and advise them. Since then, the same form of rural advisory service has been started at Wagga with conspicuous success. Under the scheme, some 40 farmers band together and make a contribution, depending on their acreage. Out of this amount, the salary of a graduate in agriculture is paid. This man is then available to the 40 members. He visits their properties about six times a year and advises them on a great many subjects such as economic planning, fuller development of the farm and animal husbandry. He must be available to tell them how to make the best use of their pastures, how to increase their lambing and calving percentages, whether they should breed their replacements to increase their herds, what they should buy, methods of strategic drenching and other associated matters. He is available for advice on pest destruction and how to cope with diseases. Under the scheme which has been introduced at Wagga, the agronomist remains in his office for one-half day a week. Usually he selects the local sale day which gives the members of the service the opportunity to visit him and discuss their problems with him.
It has been found also that an advisory service can have great advantage in running experiments in the district. We know that the Commonwealth Scientific and Industrial
Research Organization has a limited number of farms. In my own area there is no C.S.I.R.O. farm between Deniliquin and Canberra, and there is a tremendous variation between these two districts. With the aid of the agronomist, the advisory service has been able to run experiments which are useful, both to the organization and to the local people. Experiments are carried out on new species of plants. A present experiment is to try to find out why lucerne cannot be grown in certain areas or on certain properties. This may be associated with some virus. The point I want to make is that as well as providing extension services for its members, this service is performing a very useful job which will be of benefit to all primary producers, to the Department of Agriculture and to the C.S.I.R.O. In addition, the agronomist is able to keep in touch with the latest reports from that body. Every farmer knows the amount of reading matter that is published. It is so colossal that if he tried to read the lot he would end up with reading indigestion. Sometimes it is possible to send the officers of the service to various C.S.I.R.O. meetings and to special field days when, if they notice anything which will be of use in their own areas they can put it into practice when they return home. One could speak at great length on this kind of rural advisory service, but the time has come when the Government should look very closely at this matter to see whether it can assist these services to function. I am certain that the use of these advisory services is the most efficient way to improve productivity and the quality of farming.
The Government could assist by paying a subsidy to organizations of this kind. It could assist also in another way. The kind of person required to run these services and to develop them is very difficult to find. For example, the graduate in agriculture who is turned out from the Sydney University has not immediately all the qualifications that are required of him. He should be not so much an agronomist, who can talk about how to produce pastures, as a person able to deal with animal husbandry and extension services generally. It has been found that probably the best course in New South Wales, and possibly in Australia, is the rural agricultural science course which is being carried on at the University of New England at Armidale.
Unfortunately, this university has been in existence for only seven years and, as the course is of five years’ duration, this means that very few graduates have completed training there and have had the opportunity to obtain any practical experience outside. So, it may be possible for the present to obtain graduates in agriculture from New Zealand who may fill the bill better than any one else can.
Some people may say that if the Government were to assist the services that I have mentioned it would be helping the good farmer who is prepared to help himself. Each farmer member of the Wagga advisory service pays an average of £80 to the organization. Some people may say that those farmers are fairly good farmers and that the Government should help the poorer ones. But if you help to improve the standard of farming, undoubtedly the poorer farmers will be watching the results of the experiments to see how those results can be applied to their own properties. I have stated specifically that when the agronomist is available any one can use his services provided the required payment is made to meet the cost of his services. So the Government would be helping not only the farmers who decided to set up the advisory service but also making the services of a skilled agronomist available to any one in the area who may need him.
I hope that the Minister for Primary Industry (Mr. Adermann) will look closely at this matter. At present, there is a lack of adequate extension services, and probably the system which I have advocated will get closer to the problem than any other system which has been adopted. There is nothing new in this proposal. It has been in existence in New Zealand and America for a considerable time. The Government could, and should, introduce the system here and encourage its development. There is a great interest in this matter at Wagga. The first organization proved so satisfactory that within a short time there was a long list of people waiting to fill vacancies caused by the retirement of members. There were so many people on the list that a second agricultural service was set up in Wagga. Harden recently formed its own service, and I think that a number of services will spring up throughout the State. But there would be many more if the Government were able to give some form of assistance by way of subsidy. I am glad to see the Minister at the table. I hope that he will look closely at this matter.
.- I speak to the estimates relating to the Department of Primary Industry and the Department of Trade. At the outset let me state that I believe that the Commonwealth Government has a responsibility to defend Australian industry because this is basic to trade. Without healthy industries, there is little hope of trade expansion and development. Internally it is important that people should have employment, that they should have substantial pay envelopes and that they should have the capacity to buy the goods that they produce. This Government’s outstanding failure in the matter of trade is its indecision. The Government has been incapable of making up its mind specifically on any matter and holding to that decision for any length of time. One has only to read the statements which have emanated from the Treasurer (Mr. Harold Holt), the Minister for Trade (Mr. McEwen) and, to a lesser extent, the Minister for Primary Industry (Mr. Adermann) to learn that throughout the years their views on all important matters have varied with the winds of our seasons.
Let us look at some of these examples of indecision. First, there was the report of the committee which inquired into the dairying industry. Honorable members who represent dairying electorates must be appalled at the failure of the Government to take action to protect this important primary industry and those engaged in it. A report on the dairy industry, prepared after careful thought and consideration, was submitted to the Government only to be pigeon-holed by the Minister for Primary Industry (Mr. Adermann) and forgotten.
The next matter to which I wish to refer, to indicate the Government’s lack of decision, is the question of wool pies - the buying and splitting of lots - and the attitude of those who, by acting in concert and holding a gun at the heads of the primary producers, are able to fix the price of wool to the detriment of the growers and of the people of Australia generally. Instead of taking action in this matter himself, the Minister appointed a committee of inquiry under the chairmanship of His Honour, Sir Roslyn Philp. Early in the piece the chairman said that the introduction of a reserve price system in wool selling would need finance and he did not know where it would come from. I promptly asked the Minister for Trade (Mr. McEwen) what was the Government’s intention if the committee of inquiry reported favorably on a reserve price system. Of course, the Minister sidestepped the question. Once again he failed to give leadership in this important industry. He said, “ I think this is a matter more in the province of the Minister for Primary Industry “, thus passing the buck to the honorable gentleman now seated at the table. He said -
Sir Roslyn Philp is completely right in saying that he does not know whether the Government would finance a plan - for who on earth could, with prudence, say that he would finance a scheme as yet unformed?
The Minister has not yet said either that the Government is prepared to finance a reserve price plan, or that it is not. If Sir Roslyn Philp is uncertain and cannot report favorably on a reserve price plan because he has had no indication of the Government’s policy in this regard, surely that is a matter which the Government ought to have cleared up without delay, indicating its stand on the matter to His Honour.
In the “ Sun “ of 7th September appeared an article headed “ Speculators Oppose Wool Scheme”. And who else would you expect to oppose it? I put it to you, Mr. Chairman, as a country man: Who else would oppose a reserve price except those who get dividends out of the pies which were so adversely reported on by Mr. Justice Cook? The article to which I have referred read-
Some wool-growers organization executives who are not dependent on wool-growing for a living are among the strongest opponents of a wool reserve price, a grazier told the Wool Marketing Committee of Inquiry to-day. The committee was hearing evidence from Mr. L. A. Simpsonson, grazier, of Oaklands, N.S.W.
The next matter to which I will refer in the course of these few brief minutes is the export of merino rams. Here is another matter that was pushed to one side because the Government was not ready to make up its mind whether to maintain the existing policy or bend before pressure from those who want to see merino rams exported from this country. If rams are sold on the world market the price will increase immediately, with the result that the wool-growers of Australia, particularly the mixed farmers and the small men, will have to pay a higher price for the merino rams that they require.
Because the Minister for Trade would be the one man most interested in this subject, I asked him a question about it. It is characteristic of the present Government that it is prepared to gouge from Australia anything at all which wi’.l increase its income in the present desperate economic circumstances, and the Sydney “ Mirror “ was largely responsible for leading the campaign to halt the Government’s action on the export of merino rams. I say that the Minister’s refusal to answer my question as to whether or not there would be a change of policy on the part of the Government seems to indicate that a sell-out is likely to take place after the nex election, should the* present Administration be returned to power.
If there is not to be a change of policy, why could the Minister for Trade not have said so and let the Parliament, the industry and the people generally know? The growers - both the small wool-growers and the mixed farmers - will have to fight back. I consider that the strongest possible campaign will have to be developed to protect those engaged in the wool industry. It is no use the Minister for Trade pretending that pressure is not being applied for the removal of the merino ram export embargo.
A case for the export of merino rams was submitted by Mr. George B. S. Falkiner, who, of course, has a vested interest in this matter. For him there would be a substantial amount of money to be derived from the export of merino rams. In addition, we find that the chief of the International Wool Secretariat wants the merino ban lifted. These gentlemen are a powerful force in the land and their influence is undoubtedly felt in Government circles, particularly in the Departments of Trade and of Primary Industry. “Muster” of 24th May, 1961, states -
Lifting of the ban on the export of Merino sheep was advocated on Monday by the chairman of the International Wool Secretariat, Sir William Gunn. Sir William was supported by the vice-chairman of the Secretariat, Dr. J. Van der Wath, South Africa.
The I.W.S. Conference continued this week in Sydney.
Those are the kinds of people who are putting pressure on the Commonwealth Government to agree to the export of merino rams from this country. When, quite civilly and in search of information, I asked the Minister for Trade what would be done about this matter and whether he could give an assurance that merino rams would not be exported, on that occasion he was uncommunicative. I say “ on that occasion “ because usually he is a forthright gentleman who speaks out and says what is in his mind. On this occasion there was a brusqueness, if not incivility, in his answer when he said -
I think the wool industry very well knows that the present Government has at all times acted in no other manner than in the best interests of the Australian wool industry.
That was no reply at all to my question, which was a question asked in the Parliament of Australia by a rural representative, seeking a fair and reasonable reply from the Minister in charge of the Department of Trade. Instead of receiving a proper reply I was fobbed off with a reply of that kind. This is not satisfactory. The Government has deferred a decision in regard to the dairy industry and will not make up its mind about a reserve price for wool or the export of merino rams.
I wish now to refer to the wheat industry. Recently I asked the Minister for Trade a question relating to wheat, which is important, because as recently as the weekand the Prime Minister (Mr. Menzies) himself said that Australia must find new markets for its wheat. In one newspaper, dated 30th September, there is the heading “ Find New Markets. Menzies Gives Wheat Warning.” I asked precisely that question of the Minister for Trade (Mr. McEwen), but, instead of giving a reply which would bring some comfort to those engaged in the industry, the Minister evaded the question by saying -
The sale of wheat is in the hands of the Australian Wheat Board. I have got complete confidence, as have the growers, in the board’s ability to continue to sell with great advantage to the growers.
That was not a proper reply to the question I asked, but it does indicate the Government’s indecision, and its inability to make up its mind on matters of this kind, and I mention it to indicate the Government’s refusal to state a policy or to give leadership in connexion with this matter. What is the position? Has the Government no opinion on this matter at all? I have already pointed out that the Government is prepared to make credit sales to Communist China. Does the Government intend to reserve that privilege for Communist China alone? Does it propose to exclude our friends and neighbours in the Commonwealth countries of Asia from credit buying? If it is good enough to make credit sales to Communist China then surely it should also be good enough to extend that privilege to other countries. I specifically asked the Minister for Trade whether he would be prepared to extend the privilege to Thailand, a country to which certain Australian exporters had sent samples, and with which they were prepared to do business. However, they had experienced difficulty because the United States of America proposed selling wheat on credit to Thailand to the detriment of the Australian wheat-grower and the Australian wheat-growing industry in general. Instead of making a forthright statement that if the Australian Wheat Board could make a deal for the sale of wheat on credit to our friends and neighbours in Asia, including Commonwealth countries, the Government would support it, the Minister once again failed to face up to his responsibility. And that characterizes the whole of this Government’s conduct throughout its long, tired, weary term as controller of the affairs of this nation.
It is about time that this Parliament was given a clear picture in connexion with this matter. Is Communist China to be the only country to receive wheat on credit? What about the other countries? Surely the Minister should make up his mind and tell us what the Government proposes to do. The question I asked was a reasonable one for it put the position fairly. The honorable member for East Sydney (Mr. Ward) wanted to know what the position was in connexion with the Wheat Prices Stabilization Fund, but again, instead of being given an answer, he was fobbed off by the Minister for Trade.
– Order! The honorable member’s time has expired.
.-] wish to make some reference to the proposed vote for the Department of Trade for which £3,667,000 is provided this year. That figure is approximately £500,000 greater than the amount expended last year. First, let me say that, from the way the honorable member for Macquarie (Mr. Luchetti) complained about various matters, it seemed to me that he was the one who was tired and weary. Probably that is because he has been so long in Opposition.
Let me point out to him and to the committee that this Government has taken some very definite action to promote our export trade. For one thing, there has been a great increase in our trade commissioner service. For instance, whereas in 1949, when the party to which the honorable member for Macquarie belongs was in office, there were only seventeen trade posts in twelve countries, it is expected that by 1961-62 no fewer than 37 posts in 28 countries will be either opened or approved - there are 30 at present. If that is not positive action, I do not know what is. A new post was opened at Beirut, in Lebanon, in July, 1961. In October, another will be opened in Lima, Peru. I also remind the committee that a post was opened in Sydney for the Pacific Islands trade in August of this year. New posts are proposed for Caracas in Venezeula, Teheran in Iran, and Athens in Greece. The posts at Cairo and San Francisco have been strengthened by the addition of assistant trade commissioners. Further, vacancies for trainee trade commissioners have been advertised.
The Government has also sent trade missions to Canada, the United States of America and the Pacific Islands. The trade ship “ Straat Banka “ visited South-East and South-West Asia in May and June of this year. Further, a survey mission went to South America in 1960, and another to North America in September of this year. It is proposed to send a trade mission to the Middle East and eastern Mediterranean in January of 1962, and to South America in March of next year. Further, it is proposed to send a trade mission ship to the Persian Gulf in April, 1962. Australia has participated in trade fairs in many countries throughout the world. There has also been a continuous programme of overseas commodity surveys covering major export commodities in the processed products field. These are all things which this Government has done, or will continue to do, to promote trade. Further, it will be establishing warehouses to ensure continuity of supplies in various countries. It has provided such incentives as pay-roll tax concessions and deductions for tax purposes of money spent in trade promotion campaigns overseas in an endeavour to encourage manufacturers to develop our export trade. Again, it established the Export Payments Insurance Corporation through which manufacturers and exporters were able to obtain the protection required before banks would finance them. So successful has this corporation been that by the end of June, 1961, it had underwritten £26,000,000 worth of business. The Export Development Council is operating most efficiently in this field.
But with all that the Government has done, and all that it will do, something more is needed. The manufacturers must play some part themselves. They must accept the challenge, and take some steps towards increasing our export trade. Over the week-end I spoke to one of my constituents who had just returned from an overseas trade promotion drive. He manufactures tubular steel furniture. He told me that he should have gone overseas long ago, for the amount of business he wrote up while he was away was remarkable. He said that he would not have gone when he did but for the taxation concessions granted by the Government. He also said: “ I can tell you that the quality of Australian products is equal to, if not better than, that of the products of most other manufacturers in other parts of the world. Our only trouble is our cost structure.” Unlike the honorable member for Macquarie, who spoke about increased pay envelopes to buy more goods on the internal market, I suggest that we must step up efficiency and reduce costs so that we may produce at prices at which we can compete on the world markets. The quality of our products is quite satisfactory. It is important that we open up alternative markets because, in the long term, if not in the short term, we shall have to offset any loss of preferential treatment in our trade with the United Kingdom should the United Kingdom ultimately join the European Economic Community.
Having mentioned the European Economic Community, let me now trace its establishment. The first step was the military alliance known as the North Atlantic
Treaty Organization: Then came the endeavours of various countries to strengthen their economic ties. In 1948, nineteen countries formed the Organization for European Economic Co-operation. Later, we saw the more positive alliance of six of those nineteen countries in the European Economic Community, under the Treaty of Rome in 1957. Seven more of the nineteen countries, including the United Kingdom, formed another group called the European Free Trade Association. Now, since the alliance of The Six has become so powerful because it was a positive one, the United Kingdom, which was one of The Seven that formed the looser organization, is now almost a supplicant seeking admission to the European Economic Community.
That has been the pattern in Europe. What will the pattern be like in South-East Asia In that area also there is a military alliance, in the form of the South-East Asia Treaty Organization. Malaya is now taking active steps to form an economic and marketing alliance with the Philippines and with Thailand. As honorable members are aware, there is also a move afoot for Singapore to federate with Malaya. We can readily perceive, therefore, a movement towards another alliance. Is history to repeat itself?
Let us consider the population of the various countries in South-East Asia, with which we trade. Leaving Japan, with its population of 92,000,000, out of account for the time being, we find that the other nations, India, Indonesia, Pakistan, the Philippines, Thailand, Burma, Ceylon, Malaya, Hong Kong and Singapore, have a total population of more than 665,000,000. At present they take about 10 per cent, of Australia’s exports, while Japan, with a population of 92,000,000, takes about 15 per cent, of our exports. All these countries, with the exception of the Philippines and Thailand, are members of the General Agreement on Tariffs and Trade organization. Singapore and Hong Kong, of course, would be covered by the United Kingdom application to join the European Common Market.
If we look at our trade balances with these countries, we find - if I may presume to set out the facts in the form of a betting sheet - that our trade balance with India is two to one against us, with Indonesia it is fifteen to one against us, with Pakistan five to four against, and with Ceylon two to one against. Again leaving out Japan, where the trade balance, incidentally, is three to one in our favour, we find that with the Philippines the balance is thirty to one in favour of Australia, with Thailand nine to one in favour, with Burma 100 to one, and with Malaya a little better than even money. Exports to Malaya, the Philippines, Singapore and Thailand are now worth more than £22,000,000 per annum, and undoubtedly, as living standards improve in those countries, the value of our exports to them will increase. As gifts of certain commodities, such as wheat and flour, by other countries are reduced, by agreement or by economic conditions, so will our trade increase.
If the pattern is unfolding in a similar way to that in Europe, we must be extremely vigilant to ensure that we are not left out of the picture, because the countries which are moving towards an economic alliance are those with which we have a very healthy trade balance. In this connexion I would like to read an extract from the report of an address given the other day by Mr. Colin Clark to the Australian Productivity Council in Melbourne. This gentleman is the director of the Institute for Research in Economics at Oxford in England, and he is in Australia on a survey tour. He said -
I know that three of the countries concerned - Malaya, Siam and the Philippines, all friendly to Australia - are near to concluding a marketing and economic union among themselves. They would like the sympathy and support of Australia. And we should invite Japan in, too.
If Japan comes in, the position, of course, could be further complicated. But I feel that if Australia does not want to be left in a position similar to that in which the United Kingdom finds itself to-day with respect to the European Economic Community, we must make as early a decision as we can whether to take the initiative in the formation of a marketing union or lose both our political standing and our trade in this area. I realize that until we know the results of the United Kingdom negotiations concerning trade within the Commonwealth countries our hands are tied, to some extent, but as soon as we have this information we must move according to the best interests of Australia and its development.
Let me refer briefly to some other steps the Government has taken to improve our export trade. The first is the development of what are known as beef roads, so that our cattle may be brought to markets more readily. The reduction of sales tax on certain transport vehicles has been another major step forward, and moves taken to facilitate the expansion of the steel industry have been of great value. All these aspects of Government policy will help Australia to become a much greater trading nation than it is at present.
In supporting the adoption of these estimates I would like to pay particular tribute to the men of outstanding calibre who are serving at our trade commissioner posts. They are truly dedicated. I know of one man, serving in a very hard area, both climatically and economically, who asked for an extension of his time there, so that he could continue for a further three years, because he felt that he had managed to get his finger on the pulse of events in that difficult area, and that he could benefit his department and Australia by remaining there, despite the adverse effect that continued service might have on his health and that of his wife. At every trade commissioner post that I have visited recently I have found that each and every man serving there had a full knowledge of what was going on and knew the detailed pattern of trade not only in his own area but also in surrounding areas. These are men of excellent judgment and wide knowledge, and through their associations with manufacturers and importers in the countries in which they serve they have been able to foster our trade in many overseas markets, and they will continue to do so. I have much pleasure in supporting the appropriation.
– The honorable member for Maribyrnong (Mr. Stokes) has endeavoured to state a case for the development of Australian industry for the purpose of capturing some of the markets that are available to us. I would like to consider some results of the Government’s action in completely removing import restrictions, with particular reference to its effect on a most important aspect of our development. I refer to the provision of certain items of transport equipment. There is little purpose in spending about £41,000,000 on a standard gauge railway between Kalgoorlie and Kwinana in Western Australia, and on the standardization of gauge of other lines to provide a link by standard gauge railway between all the mainland capital cities, if we do not adopt the correct policy with regard to the provision of equipment.
This Government, perhaps on the recommendation of the Commonwealth Railways Commissioner who was retired in circumstances that nobody knows very much about, started something that in my view should be halted right now. When it decided to give a Japanese company the contract to build railway equipment for the Commonwealth Railways, the Government by-passed fourteen important manufacturing units that had been built up over a period of years, expecting railways to be developed further, so that they could play an important part in Australia’s development, and expecting to receive contracts for the provision of railway equipment.
This Government has this year turned its attention to the extension of the rail systems in Australia - a matter which, for some considerable time, had been allowed to lie forgotten in limbo. I would have thought that the Government, in its planning, would have seen to it, first of all, that the main essential of effective railway operations - I use that phrase deliberately - was looked to and that action would have been taken to ensure that we manufactured in this country every item required for the effective operation of the Australian railways, for that is something that we are capable of doing. The Government, for reasons known only to itself, last year entered into a contract with a Japanese firm for the supply of equipment for the Commonwealth Railways. Australian manufacturers of this kind of equipment are being neglected in favour of companies not only in Japan but also in Great Britain. When the honorable member for Maribyrnong spoke of the United Kingdom’s entry into the European Common Market, I could not help thinking what is in the back of the mind of every member of this place: There is only one reason for that country’s entry into the Common Market. The United Kingdom wants to join that organization only for the purpose of extending the market for the products of British secondary industry.
– That is not so. There is much more to the proposal than that.
– Well, let us consider the matter from that standpoint, with particular reference to the manufacture in Australia of railway equipment and rolling-stock. The Government’s handling of the problem is completely wrong and directly against Australia’s national interests. I speak up for the Railway Rolling Stock Manufacturers Association of Australia because I believe that the companies which are members of that organization constitute an important cog in the industrial machine on which the progress and development of Australia depend. Almost at the same time that this Government entered into a contract with the Japanese company for the supply of railway rolling-stock, the New South Wales Government entered into contracts to the tune of about £1,173,000 for the supply of similar equipment by Australian manufacturers which are members of the Railway Rolling Stock Manufacturers Association, at contract prices which were only a shade higher than prices offered to New South Wales by the Japanese company with which the Commonwealth Government had entered into a contract.
I am not satisfied, Mr. Temporary Chairman, and the association is not satisfied, that the reply made by the Minister for Trade (Mr. McEwen) to representations by the association was genuine. The association claimed that the price under the contract with the Japanese company arranged by Mr. Hannaberry, who has since retired from the post of Commonwealth Railways Commissioner, was a dumping price. There is no way in which the truth of that claim can be established except by comparing prices. The price at which Hannaberry arranged to buy this equipment from Japan is so much lower than the price at which the New South Wales Government signed a contract for the supply of similar equipment as to leave no doubt in my mind that the Japanese fixed a dumping price. The Minister for Trade, in reply to representations from the manufacturers, said that inquiries made at his direction resulted in the obtaining of confidential information which indicated that the association’s arguments were based on an incorrect understanding.
When the price at which the Commonwealth Railways contracted to buy equipment from the Japanese company is compared with quotations for the supply of similar material to the New South Wales railways, there is no doubt that either Hannaberry entered into arrangements which are completely different from those made under the usual methods of contracting in an open market or the Japanese, as is claimed by the Railway Rolling Stock Manufacturers Association, dumped this equipment on the Australian market.
We find that this sort of thing is not limited now only to Japanese suppliers. I understand that tenders for the supply of further equipment for the Commonwealth Railways are out at the present time, and my information is that various overseas experts are already in Australia lobbying in an attempt to get the contracts instead of Australian suppliers. I tell the Government that for the efficient operation of railways in any country, and particularly in Australia, the equipment required must be manufactured locally. I say quite bluntly that the lifting of import restrictions was based on completely erroneous reasoning, especially in relation to the supply of rolling-stock for the railways, and, in this respect, has led to a dangerous situation for us nationally. The Minister for Trade told the Railway Rolling Stock Manufacturers Association that the Government’s policy is that Australian industry must rely for its protection against imports on duties imposed under the customs tariff. The Government reasons, further, that, so long as Australianmanufactured equipment equivalent to that available from overseas cannot be obtained, concessions under by-law will be approved in order to permit such equipment to be imported.
Let me outline what is happening at present. The motors for all the Goodwin diesel-electric locomotives built in Australia have been manufactured in this country by the English Electric Company of Australia Proprietary Limited. Everybody who understands these matters knows that the normal life of a diesel-electric locomotive ranges from five to seven years, depending on the kind of running involved. The company which I have just mentioned is an important company with a big establishment in my electorate. When the motors provided by it for Goodwin diesel-electric locomotives need overhaul, they are taken out of the locomotives and returned to the company’s assembly line. Some people say that the railways should themselves undertake all their own repair and maintenance work, but where ready access to the original manufacturing establishment is possible, it is far better and more economical to return equipment for repair on that establishment’s assembly line where all the necessary facilities are at hand.
The parent company in England of the English Electric Company of Australia Proprietary Limited has recently begun the manufacture of a more modern motor of the same horse-power as those manufactured here by the Australian company. Here, I shall show how the Government’s policy falls down on the job. When the New South Wales railways last entered into a contract with A. E. Goodwin Proprietary Limited for the supply of dieselelectric locomotives, it was naturally assumed that the English Electric Company of Australia would manufacture the motors. Instead, the parent company in England, having re-tooled for the manufacture of the more modern motors, has decided not to allow the Australian company to manufacture the new motors, but to supply them from England and to use the Australian company only for repair work on these components. This is where the stupidity of the Government’s policy becomes apparent. The Australian company will not re-tool for the construction of the new motors.
I warn the Government now that its present policies will favour companies in Great Britain and the United States of America by allowing them to export to Australia equipment manufactured in those countries. Obviously, parent companies overseas want to export all they can, and they will therefore use the Government’s policies against us. The English Electric Company, in the United Kingdom, has only to make technical alterations to the diesel-electric locomotive that it manufactures there. Then it can get them into Australia under by-law, because the particular type of machinery is being produced only by the parent company in Great Britain or America, and is not being produced by the subsidiary company in Australia. Australian industries will languish and die if something is not done about this policy.
Let me look now at what has happened to this association - and the Minister is fully aware of this. In 1955, the Railway Rolling Stock Manufacturers Association of Australia was employing the equivalent of 3.300 men, and had £17,000,000 worth of rollingstock orders. By 1960, as a result of the policy to which I have been referring, the value of orders had dropped from £17,000,000 to £7,000,000 and the number of workers engaged in filling orders for rolling-stock had dropped from 3,300 to 1,300. Yet all the time we are importing material the production of which in this country is essential in order to keep our assembly lines working and efficient. I ask the Government to have a second look at this matter. Both the Ministers concerned have had it on their tables for some time. I ask them to give careful consideration to it, because it is dangerous to follow a policy of importing such equipment from Great Britain and America, using the Australian industries only as distributing agencies. This is particularly so in relation to transport, because unless we can produce the equipment required for our own railways we shall find that in a time of national crisis, when we cannot get the equipment overseas, we shall have to train men to repair and reequip our railway systems. It is plain stupid to allow the present policy to continue. There is too much of a falling back in Australia’s production lines and in the manpower schedules associated with the production of railway equipment because we are following a dangerous policy that can wreck the Australian transport industry. So I ask the Government to look at this as a matter of urgency.
– Order! The honorable member’s time has expired.
.- I should like, first, to comment on the remarks of the honorable member for Macquarie (Mr. Luchetti), and on the suggestion that the ban on the export of merino rams should be maintained. I think that at one time the imposition of this ban was a very wise policy, but to-day it is completely out of date. We are subjecting a very important industry to very unfair conditions. For one thing, the tremendous advance in artificial insemination has made it possible to send excellent merino blood, in effect, outside Australia without the Government’s having any knowledge of the transaction. Indeed, I think that there is very good evidence to show that this is indeed happening. If it is happening, what is the use of retaining the ban on the export of merino rams? By so doing we are losing very valuable export income and serving no purpose.
I should like to deal particularly with our export trade. We all realize that Australia is in a very vulnerable position because 80 per cent, of our export income is earned by the sale of primary products. About 10 per cent, of the remainder comes from the sale of metals. While this situation exists we are vulnerable because our earnings are subject to overseas prices and to fluctuating seasonal conditions. The whole community must be very heartened by the encouraging progress made in building up our export trade in manufactured goods as a result of the efforts of the Minister for Trade (Mr. McEwen). I should like to put to the Government, for consideration, a suggestion which, if adopted, would stimulate the export of manufactured goods and at the same time provide industries for country areas. Australia is in a difficult position in that it has a large population around its coastline, but a thinly distributed population inland. Even so, within about 200 miles of our seaboard - for instance, in New South Wales and Queensland - we have areas which hold moderate populations supported by primary industry. A tremendous incentive leading to an increase of population in those areas could be given by a means which would at the same time develop our export trade. I point out that one of our difficulties in regard to decentralization is the difficulty experienced by industries established away from the coast in competing with similar industries in the capital cities because of the level of freight rates on the railways. We have to look at this matter from a national point of view - a point of view probably different from that which would have to be taken by any other country that might be considering a similar problem. This is so because of our climatic conditions and our geographical position.
My suggestion is that the Commonwealth Government should refund the rail freight on goods from country areas to the main ports provided the goods are exported By so doing it would help to increase the population of inland areas and this would, in turn, produce a greater volume of freight on the railways serving those areas. That, in turn, would result in greater efficiency and lower freight rates. If Australia had a large inland city, as America has in Chicago, our difficulties would be to a large extent solved, but so far there are no indications that we are likely to have such a city. We have to meet the challenge by some means that has not been used anywhere else in the world, because our continent is different from any other. We have country towns all over Australia where there is some form of industry. In Victoria, for instance, Bendigo and Ballarat have developed valuable industries, particularly textile industries which produce excellent woollen goods from Australian raw material. The textile industry is one industry which we should really develop considerably. In Victoria there is Portland, which could also be developed industrially if good shipping services were available. In Queensland, there are Toowoomba, Warwick and other places - large centres which are unable to develop because they lack secondary industries.
Primary industry will support a population up to a certain point only. We have to meet the challenge by refunding rail freight on goods manufactured in country areas and carried to our seaports for export - not goods taken down to the seaboard to compete with locally manufactured goods, but only goods for export. The people of Australia would gain tremendously by this means.
I should like to refer now to the motor industry which has been criticized for not reducing the prices of motor vehicles. I know that the Government has been criticized also by the motor industry itself, but I wish to refer to the question of a reduction of prices. The criticism on this point has been directed mainly at General MotorsHolden’s Limited, the largest motor manufacturing firm in Australia. It is noi as easy as all that to reduce the price of motor vehicles. General Motors-Holden’s Limited already has 52 per cent, of the Australian market and that percentage would be increased if the company reduced the prices of its vehicles. Eventually there would be a monopoly in the hands of General Motors-Holden’s Limited and that would not be a good thing for Australia. There is also another factor to be considered. There are already 350,000 owners of Holden cars in Australia. Their assets would be depreciated immediately if the prices of Holden vehicles were reduced. Retailers and the used car dealers in particular would be hit severely. The hirepurchase companies also would be affected because many agreements have been written at existing prices. Many complex factors must be considered in this connexion.
Instead of criticizing the motor industry for not reducing prices, we should criticize it for not taking a larger share of the export market as it is quite capable of doing. Members of the Opposition have suggested - and this is one occasion on which I might agree with them - that many manufacturers with parent companies overseas are loath to compete with the manufactures of the parent companies in marke.s outside Australia. That is a very dangerous situation. These companies must recognize that fact and try to alter the position because after all, ultimately they will not make much progress in Australia. We cannot be a self-contained area where secondary industries can develop like hothouse plants. Primary industries have supported secondary industries for a long time, but time has almost run out and this situation cannot continue much longer. Secondary industries must do better than they have done by exporting their products overseas.
I think it is ridiculous that the Lord Mayor of Sydney, Alderman H. F. Jensen, said when opening the Sydney motor show-
– He will be a member ot this Parliament soon.
– He should not be if people take notice of the remark I am about to quote. This is what Alderman Jensen said when opening the 1961 Sydney motor show -
The era of Australia’s complete dependence on primary industry has long since parsed although it will always be true that the products of the Australian countryside will always make a significant contribution toward the national economy.
That is an amazing viewpoint. I do not think it reflects great credit on Alderman Jensen’s assessment of the Australian economy. What is surprising is that the Chamber of Automotive Industries of New South Wales is supporting this gentleman in his candidature for the seat of Bennelong against the Minister for the Army (Mr. Cramer). When that chamber supports Mr. Jensen, it must realize that it is supporting also trie nationalization of industry which many honorable members on the Opposition side advocate. They also support the imposition of a capital gains tax. So it is strange to see an organization like the Chamber of Automotive Industries of New South Wales supporting a party which will eventually bring an end to free enterprise in industry. The motor industry will end up as a nationalized industry. There is no doubt about that if we take notice of members of the Opposition. I suppose that this Government has been in office so long and these people have enjoyed such great prosperity under this Government that they have forgotten the conditions under which the motor industry existed when the previous Government was in power. Apparently they think in terms of the boom times they have enjoyed during this Government’s term of office. I hope that these people will give a little more consideration to the rash judgment they have made in supporting the Lord Mayor of Sydney in his candidature in Bennelong.
.- All I have to say in answer to the honorable member for Mcpherson (Mr. Barnes) is that apparently his knowledge of the motor industry is very insignificant. He said that the people he was criticizing had forgotten the conditions under which the motor industry operated during the regime of the previous government. Let me tell him that it was the previous government that started the motor industry in Australia. The late Mr. J. B. Chifley, who was then Prime Minister, was very keen to have a motor industry established after the end of the Second World War. He called into conference the General Motors Corporation and told its representatives of his desire that a motor industry should be established in Australia. The rest is history as everybody knows. Mr. Chifley not only indicated his desire but also made available finance to General Motors-Holden’s Limited through the Commonwealth Bank so that it could start a motor industry. These facts are incontrovertible. If Mr. Chifley had not been Prime Minister after the Second World War, it is possible that the motor industry in Australia would have been much smaller than it is now. The historical fact is that the motor manufacturing industry in Australia owes its establishment to the Chifley Labour Government.
Having disposed very quickly of the honorable member for Mcpherson, I want to talk about something far removed from the motor industry. I refer to trade. The possibility of Great Britain’s entry into the European Common Market highlights the importance of increased trade promotion by Australia. There seems to be some diversity of opinion whether Great Britain will enter the Common Market. I am inclined to think it will, though that is something for the future to decide. But whether Great Britain enters the Common Market or not, trade activities generally must receive the special attention not only of this Parliament but also of the nation in general. We cannot dissociate increased overseas trade from our future development. I am very happy to be able to say that there is increasing public consciousness that the expansion of exports must be a necessary factor in Australia’s progress.
This is not a political question. Everybody agrees that that is so. We are also all agreed that we must exploit every avenue to expand our export trade. It is not much good saying we believe in an export trade if we do not do anything about it. Last year, a monster export convention was he’d in Canberra. It had as its objective icreased exports of £250,000.000 over five years. I understand a similar convention was held this year; but the convention held last year got away to a very good start because it was given a lot of publicity and made the people aware that those who were handling this problem had rather large aims.
The question of increased exports raises many difficulties. Our volume of trade with some of our most valued customers has changed. I cite Great Britain as an example. For the three years from 1936 to 1939, 53 per cent, of Australia’s exports went to Great Britain, but last year only 26 per cent, went to Great Britain. In the same period, 42 per cent, of Australia’s imports came from Great Britain, but last year only 36 per cent, came from this source. It can be readily seen that the volume of trade with Great Britain has diminished in recent years. Normally, this would be a catastrophe because in the past we have depended largely upon Great Britain, particularly, for our export trade. But Australia has certainly realized that this is not healthy. It has sought other markets and has made good in other areas the diminished trade with Great Britain, Europe, North America and Asia have received greater quantities of our goods.
It is becoming increasingly apparent that Asia, with its improving living standards, will be a prominent market for many of Australia’s basic commodities. I know that much can be said in opposition to this statement, because the general standard of living of the Asian people is low. However, I think it can be safely said that the standard is rising, though perhaps almost imperceptibly at present. I think we should solicit increased trade with Asia, because active participation at this early stage of Asian development may well help Australia to develop beneficial associations of an enduring quality. We must at all times cultivate friendly relations with Asia, and I know of no better way of doing this than by trade. As we know, some Asian countries which have gained self-government in the last decade or so are struggling economically for their very existence. Any assistance Australia can give by trade, exports and imports, on a friendly basis must be of incalculable benefit in the future.
Speaking generally, the Government seems to have adopted three methods to increase our exports. First, it has concentrated on finding new markets. That is sound common sense and no one could object to it. Secondly, it has attempted to expand promotional activities. This again, 1 think, is a sensible approach. Thirdly, it is trying to diversify the nature of Australian exports. This is a most important feature. As I pointed out when I spoke on the Colombo Plan last week, one of the most important reasons why some Asian economies have not been successful is that their export commodities are confined to too few baskets. Asian countries depend on the export of one or two staple commodities. Should there be a crop failure or some other failure through circumstances over which they have no control, their export earnings can drop acutely in one year. Australia could be in the same position if it depended on one or two commodities. A catastrophic drought could mean that our income from wheat and wool would drop. However, we have diversified the nature of our exports and we are not so much at the mercy of climatic conditions as we were. I commend the Government for what appears to be a most intelligent approach to the problem, particularly when we note what can happen to the economies of Asian countries which depend on one or two commodities.
Trade with Asia is certainly mounting. Over the past five years, we have had a favorable trade balance with Asia of £400,000,000. That in itself is very good. Every country, of course, wants to have a favorable trade balance, but naturally every country cannot achieve this objective. However, we are very favorably situated with Asian trade. It is interesting to note that Japan is now Australia’s second-best customer. It buys more goods from us than does any other country except the United Kingdom. That is very heartening and doubtless in some ways is the result of the Japanese Trade Treaty. Japan is a large industrialized country with an everexpanding population, and our trade with it should increase.
I want to say a few words about trade with China. Some people, for conscientious reasons, object very strongly to our trading with Communist China. They claim that because the philosophies of China and Australia are poles apart, we should not do anything to encourage the growth of communism, even by trading with China. These conscientious ideas may be sound to those who promulgate them, but this approach seems to me to be very haphazard. If we refuse to trade with a country because we do not like its political philosophy, our trade activities not only with China but also with some other countries will be largely curbed. Our trade with China has shown an appreciable increase over the last few years. In 1955-56, Australia’s exports to China amounted to only £2,700,000 and in 1959-60, they were worth £16,000,000. But these figures will pale into insignificance when our export figures for this year are revealed. This will arise largely from th huge sales of wheat to China. Certainly some of this wheat was sold on credit, but nevertheless these sales must be reckoned in our trading figures.
We must not neglect any future opportunities to trade with China, because China has an extremely large internal market. Estimates of China’s population vary considerably. Some people say it is 500,000,000, others say it is 600,000,000; and I do not suppose the Chinese Government itself really knows the true figure. But the fact remains that an extraordinary number of people live in that country and trade possibilities are enormous. I hope the Government will not become obsessed with the idea that we should sell only comparatively small quantities of our goods to China. It should at all times seek to enlarge the sale of our primary products to Chin; I am satisfied that the intentions of the Chinese Government in purchasing our wheat are quite legitimate; it wishes to feed its people. We have had difficulties in recent years in disposing of portion of our wheat crop and we would be very foolish to neglect this opportunity. I hope thi’ Government will not be stampeded by these conscientious people who say we should not trade with China. I do not object to their voicing their opinions, but I hope the Government will not prevent further trade with China. China presents large trading opportunities for the future.
It is also interesting to recount that trade with Malaya is increasing. This is promising. Australia is now the second largest supplier of food to Malaya, and this is another market that is capable of expansion, because the population of this country is certainly increasing. Unfortunately, not all Australia’s promotional activities have produced satisfactory results. Trade with India has fallen steadily over the last five years. This is to be regretted, because India could provide us with a very large market. I am not certain why this trade has declined. The facts are that last year our imports from India amounted to £18,000,000, while our exports to that country amounted to only £16,000,000. This set of conditions should not remain unchallenged by the Government. I hope that it will accelerate its trade promotional activities in India. I know that we have trade consulates in that sub-continent, but the fact remains that £16,000,000 worth of goods is altogether too small an amount to sell to a country which has such a large population. I do not know why the value of our exports is so low. There must be some reason for it. I hope that the Government is fully acquainted with the problem and is doing its best to meet the challenge and to accelerate our trade with that continent. As the matter now stands, our trade should be of much larger dimensions than it is.
Overall, Australia’s trade with Asia during the last five years has been very encouraging. It has increased from £276,000,000 a year to £383,000,000, an increase of £107,000,000 in five years. Not only has the value of our exports increased, but the proportion has also risen. In 1951-52 our exports to Asia represented 14.5 per cent, of our total exports; in 1957-58 they were 23 per cent., and in 1960-61 they were 32 per cent.
– Order! The honorable member’s time has expired.
.- As usual, the honorable member for Batman (Mr. Bird) has made a sincere contribution to the debate. He complimented the Government, and the Department of Trade in particular, for their activities over the last few years in relation to our exports. The honorable member mentioned three points, first, that the Government, through the Department of Trade, has endeavoured to find, and has found, new markets for our products; secondly, that the Government has promoted new products for those new markets and has been successful in obtaining business in them; and, thirdly, that the Government has tried to diversify production in Australia to meet the requirements of those markets. I am very pleased that it was left to an Opposition member to tell us the home truths about the Department of Trade. The honorable member could easily lose his seat on 9th December, so if he would change his policy we could even endorse him for the Batman seat.
The Department of Trade is a major department and its activities affect our economy and our balance of payments to a much greater extent than do the activities of any other department or section of the Commonwealth. Although I do not want to develop the suggestion at this stage, I believe that in the future the need will arise to have a Minister for Manufacturing as well as a Minister for Trade. In the ultimate, a Minister for Manufacturing will be an essential part of the Commonwealth establishment.
Manufacturing contributes almost double the amount that primary industry contributes to our gross national product and, at the same time, absorbs a much greater proportion of our labour and our wealth. This thought is engendered by the necessity for manufacturing in Australia not only to contribute to our internal needs in the way of finished products but also to build up a competitive export business so that, in turn, we can build up overseas credits and augment the efforts which have been made by primary industry for several decades. We all must realize that in relation to exports primary industry has carried our national economy until now. There has been an approximate export contribution by secondary industry of £50,000,000 a year. During the trade and export convention which was held in Canberra last year it was stated that we had to increase the value of our exports of secondary products by £50.000,000 a year or a total of £250,000,000 in five years.
We as a country have passed the stage at which we can depend on favorable balances of trade unless we produce competitively. Although through the good years since the war we have allowed our cost structures to increase out of all proportion to those in many competitive countries, we now are at the cross roads and manufacturing industries must aim at exporting sufficient of their production at least to cover the imports where they are needed to sustain secondary industry. In other words, secondary industry takes approximately 70 per cent, of our imports for its manufactures so the result must be that our manufacturing industries must contribute to a larger extent than they have previously. Over the years manufacturing has depended on primary industry to build up our essential overseas balances, but those days have passed and in future the effort must be the joint responsibility of all productive groups.
Fortunately, the Department of Trade has foreseen many of the difficulties which now confront us and, as mentioned by the honorable member for Maribyrnong (Mr. Stokes), has built up our Trade Commissioner Service from seventeen representations in 1949 to 37 in 1961. At the same time, our overseas trade missions and our participation in trade fairs has increased immeasurably over the past two years. These missions have had the objective of selling Australia in every corner of the globe. I believe that the Department of Trade has done more than has any other department to set a pattern for the manufacturing industries of this country, but it cannot sell the goods produced. I have heard manufacturers remark on many occasions that the department does not bring in the orders, but a government department in a free enterprise economy is not designed for that purpose. The manufacturers themselves must appreciate the lay-out which has been established by the department, and then make contacts in the various countries where we are established, and take the orders if our prices are competitive. The Australian Government is not in a position to do that kind of work. The manufacturers themselves must go out and sell.
Admittedly there has been a significant increase in the export of our manufactured goods over the past months, but generally the lethargic mental attitude of industry staggers me. It has to be seen to be believed. Of course, there are many notable exceptions. Many Australian companies export overseas on a very successful basis. Recently I had occasion to contact both the Department of Trade and the Chamber of Manufactures in Victoria. Both groups agreed that we are faced with a tremendous task in awakening in Australia the need for exports, not because we cannot produce the goods, or because we cannot produce them competitively, but because manufacturing management is not awake to the opportunities which exist. In the past it has developed its production and economic objectives on the basis on what the market in Australia can take, not on the basis of what the overseas markets will accept. Many countries have free enterprise economies similar to our own, and their governments have been able to guide and plan for the development of the national economic growth. Japan, West Germany and France each have had phenomenal growth since the war, and the economic expansion of each has been based largely on careful long-term planning on a government level, that is, by the use of government officials in their departments of trade or departments of manufacturing, if that is the correct title, together with representatives from industry.
Planning of this nature is already practised in Australia for very different purposes, as no budget could be presented by the Treasurer (Mr. Harold Holt) without some form of effective long-term planning. In other words, this kind of planning is not new to Australia. It has been used since federation because every Treasurer, when producing a budget, has used it. As recently as last year we saw very capable planning whereby, actuarially, it was possible to produce a formula and, subsequently, taxation concession legislation with respect to government loans, which ensured that a great proportion of insurance and life office funds would be diverted to the planned purpose. The recent loan which the Prime Minister (Mr. Menzies) was proud to say was over-subscribed by more than £32,000,000, was oversubscribed because the life assurance and life offices diverted more of their funds to Commonwealth loans than has been the case in the last five years. This type of planning can be done. It is my belief that in this country we have four indigenous products or raw materials which should enable us to compete overseas at all times, provided that private enterprise is encouraged to exploit those raw materials at a rate faster than previously. The products to which 1 refer are wool, iron ore, bauxite and coal. I have classed wool as an indigenous product because we are the largest wool-producing country in the world.
Due to our high standards of living and high rates of pay to workers we should look at these products objectively. If we do so we must come to the conclusion that our future, from a manufacturing point of view, lies in the heavy engineering field. We should concentrate on iron ore, bauxite and coal. I shall take each of these products in turn. We are now producing 3,500,000 tons of steel per annum and we hope that this output will increase to 7,000,000 tons by 1970. At the same time, Japan is producing 22,000,000 tons of steel per annum and by 1970 this will have increased to an estimated 48,000,000 tons. We, as a country, have the iron ore deposits and the coal required for coking. We also have the dolomite to repair the furnaces. But Japan imports all of her iron ore and coal and, as we all know, is seeking these raw materials from Australia.
Furthermore, we, as a Government, in collaboration with State governments, are assisting tremendously with capital to build up wharf and handling facilities, to construct roads, and generally to streamline the way for exports to such countries as Japan. In the short term this is an excellent procedure but, in my view, only in the short term. Is it realized that we have some of the richest iron ore deposits in the world and that provided we technically equip ourselves to transform these resources into finished products, we can compete with any country for markets. I know, as do all honorable members, that Broken Hill Prorietary Company Limited has wrought remarkable changes in the steel industry since 1935, but infinitely greater progress is required than can be attained by one company. I would like here to pay a tribute - as would most members - to the late Mr. Essington Lewis. He was the spearhead of the efforts of Broken Hill Proprietary Company Limited from 1935 until the present day and was an industrialist of whom
Australia can be proud. I feel sure that the industry itself will pay tribute to him.
There are new processes for converting iron ore to steel and the industry overseas is undergoing many technical changes which substantially reduce costs. The B.H.P. is well aware of these changes and, in fact, has reported that it will be in production with its Linz Donawitz furnaces early next year. It is this Linz Donawitz process and variations of it which are allowing undeveloped countries to enter the steel industry and produce their own requirements of steel at much reduced costs, primarily because processing is so much cheaper than the standard blast furnace methods now used. In addition, the capital cost of the equipment required and the general ancillaries is infinitely less than for the normal equipment now being used in Australia.
It is useless for us - or for the B.H.P. - to say that we have extensive and expensive batteries of coke ovens in operation which we cannot afford to replace. For the well-being of Australia’s economy we must make the effort. Unless this is done, this industry will be signing its own death-warrant. I see no reason why, over the years, an independent and, if desirable, an overseas steel organization could not be induced to initiate such a programme, which must ultimately benefit the industry and the economy of Australia.
I mentioned bauxite. Undoubtedly part of our economic future rests on the aluminium industry. At Weipa in Queensland and in the Darling Ranges in Western Australia we have 75 per cent, of the world’s known bauxite deposits. At present we are producing annually about 12,000 tons of aluminium ingots, which is onethird of Australia’s requirements. Comalco is building up the conversion of alumina to aluminium to meet Australia’s demands and, in addition, Alcoa is preparing gigantic operations near Geelong, also to undertake the final processes of converting bauxite to aluminium. However, from a national point of view, these plans must be expedited and Australia should very shortly become a net exporter of aluminium products, thus building up our overseas balances from our mineral and manufacturing industries.
It is a fact that last year we imported 26,000 tons of aluminium ingots at a cost of £6,500,000. We also imported 96,000 tons of bauxite for the production of alumina. Naturally, these imports affect our trade balances overseas and urgent action must be taken to reverse this situation.
Order! The honorable member’s time has expired.
.- The honorable member for Balaclava (Mr. Whittorn) referred to the importance of aluminium and I hope the Government will do something along the lines suggested. The Government of Tasmania has retained its interest in the aluminium works at Bell Bay and is to be commended for maintaining a stake in this industry. It is a pity that the Commonwealth Government sold out its share.
I wish next to deal with some aspects of war service land settlement under the policy of the present Government and that of the previous Labour Government. The total amount advanced by the Commonwealth to the five States under the War Service Land Settlement Scheme commenced in 1946 has been approximately £95,000,000. The Governments of New South Wales, Victoria and Queensland have also contributed something like £95,000,000. Tasmania, South Australia and Western Australia have acted as agents for the Commonwealth and in those States the Commonwealth has supplied the whole of the money expended on war service land settlement. I wish to speak about the scheme insofar as it affects Tasmania. I have taken a keen interest in the development of this scheme in other parts of Australia, but I cannot speak with any degree of authority on the particular problems of the other States. Up to date in Tasmania the Commonwealth has spent approximately £18,000,000, through the agency of the State Government, on war service land settlement. Of this sum, in my electorate of Braddon £3,921,775 has been expended on 108 dairy farms and 59 fat lamb farms on King Island. At Mawbanna £170,582 has been expended on eleven dairy farms. At Preolenna £128,818 was expended on eight dairy farms and at Togari, which is the new name for the settlement of Montague Swamp, £2,240,229 was expended on 46 dairy farms. I might add that at
Togari at present only seventeen farms have been reserved for soldier settlers from the last war.
I shall deal particularly with the position on King Island. Soon after the war service land settlement scheme got under way, troubles began to develop on King Island and there were faults on both sides - the Government and the settlers. The basic problem, of course, is economic and it has been aggravated by the fact that technical difficulties exist which prevent the full use of the land being attained. No effective solution has yet been found to this problem.
As the story about King Island is very long, I cannot deal with it effectively in the time available to me now but, briefly, the position is that the land on which this settlement project has been developed was originally covered with dense ti-tree scrub. No great difficulty was experienced irremoving the scrub with modern machinery but, as so frequently happens, after the land was ploughed, cultivated and sown to pasture, the ti-tree seeds germinated in the ground wilh the result that ti-tree re-growth is occurring constantly. But by far the biggest problem is that after the ti-tree scrub has been removed rushes make their appearance and rapidly spread over the new pasture. There is no easy way, and certainly no cheap way, of controlling this pest. Cultivation of the soil is probably the most effective way of dealing with it. but this is very expensive, especially when it is not possible to recover the cost by sowing crops which may be sold. The use of dalapon has also been recommended for the control of this pest, but this. too. is very expensive, and is beyond the reach of most farmers. When speaking on this matter last year, I did express the hope that the Commonwealth Scientific and Industrial Research Organization would be asked to endeavour to develop some hormone or spray which would keep this pest in check.
Depletion of pastures was the natural result of this re-growth of ti-tree and the spread of rushes. Settlers lost many man hours, and time that should have been spent on such developmental work as pasture improvement was taken up in cutting down the re-growth. In addition, they suffered the handicap of high costs of excessive machinery breakdowns and depreciation mainly because of the manner in which the surface of the earlier-developed blocks had been left. This depletion of pastures, together with high freight charges and high cost of living soon showed up in the settlers’ budgets, which revealed the great economic difficulties with which they were confronted. Inability to meet commitments, economic worry and fear of the future prompted the settlers to petition this Government for a committee of inquiry consisting of members of all political parties, and of both Houses, to inquire into all aspects of war service land settlement on King Island. The Government refused to appoint such a committee, but the Minister for Primary Industry (Mr Adermann), let it be said to his credit, in consultation with the Tasmanian Government, did set up a committee of investigation, which commenced work in July, 1959. On this committee are the Deputy Director of War Service Land Settlement, an accountant from the Agricultural Bank and an officer of the State Department of Agriculture. These men visited each farm and conducted an inquiry into the affairs of the individual settlers. In accordance with the findings of the committee, such concessions as free agistment for stock, superphosphate credits, the writing-off of interest on advances for stock, plant and working expenses, extension of repayment periods for stock, plant and implements and the provision of a mowable area have been granted. The Government has accepted liabilty for some of the earlier mistakes, and re-development work will be done on most blocks. Further, a credit is made in the plant account for undue depreciation of plant used under rough conditions, and for re-growth control in excess of a reasonable level of maintenance control. I have always been of the opinion that this redevelopmental work will take much longer than was envisaged originally by the committee. After fourteen months, ending 6th September last year, this committee had completed investigations into 49 out of a total of 152 farms. This year, the number of farms increased to 156, and, after completing 82 investigations, the committee has approved of the re-development of 5,209 acres, and the crediting of £142,209 to the settlers. That is all very fine, but a great deal of feeling has been aroused on the island because this redevelopmental work is taking much longer than was envisaged for, while the work is being done, the carrying capacity of the farms is reduced, and as a consequence many settlers will have difficulty in meeting even reduced commitments during the redevelopmental period.
The general feeling amongst the settlers is that actual inspections of holdings is dragging out for too long, and there is too much delay before the findings of the committee of inspection are published. There is no comparison between the basis of reassessment on the first holdings inspected and that upon which holdings are being re-assessed now. For instance, the settlers whose holdings were first inspected were treated far more liberally than were those whose properties were inspected later; yet the Minister has refused the right of appeal to any settler who is dissatisfied with the concessions granted to him. Again, settlers who have been on their holdings for seven or eight years still have had no results, whilst others who have been there for only a short time have had their blocks re-worked already. In some cases, this has meant that the man who was in dire need of assistance has received no help as yet. Feeling is running hight amongst some settlers over the delay in making concessions and in getting on with the re-developmental work.
I turn now to the question of rent. The Minister for Primary Industry, who has visited King Island, met the settlers and discussed this problem with them, is well aware of the position. The settlers still feel that there should be a more realistic approach to the question of rentals. Their submission is that rentals should be based upon the actual market value of the farm as a complete unit, that the procedure of valuing buildings, houses and the land separately is wrong. They also say that the option to purchase should be based on the value of the property as a complete unit. It is my personal opinion, too, that a great deal will have to be written off these properties, and that in future rentals will have to be based on the value of the farm as a complete unit. The Minister for Primary Industry has said that to do this would involve an amendment of the legislation. I remind him that that is what Parliament is for. These settlers are isolated on an island half way between Tasmania and Victoria. Their costs are so high and their freight charges so heavy that I suggest this Government should reconsider the whole scheme and, if necessary, amend the legislation to provide for the assessment of rentals on the market value of the property as a complete unit.
At Mawbanna, on the north-west coast of Tasmania, the lowest valuation at which properties were leased to the settlers was £10,000, and the highest £17,000. The State valuer has since valued those properties at between £3,000 and £7,000. In other words, the values at which the settlers first obtained the properties were grossly inflated. These men were settled at both Mawbanna and King Island when primary products were bringing very much higher prices than they are to-day. Some of them have put substantial amounts of their own capital into their properties and, despite all their efforts, they are still not enjoying the return that they should from their labours. Further along, at Circular Head, which has, as I think the honorable member for Macquarie will agree, the greatest potential for development of any area in Tasmania, the settlers are in a similar plight, and I do earnestly suggest that the Government should seriously consider reviewing the whole war service land settlement scheme there. At Togari - that is the new name for Montague Swamp - the original proposal was to establish 120 farms of an average of 100 acres each. That programme has been cut to 46 farms and, in all the circumstances, I suggest that the Government should make some attempt to increase the size of each of the holdings. It is to be hoped that the Government will agree to increase the area of each farm to 150 acres by dividing certain farms into two parts and adding 50 acres to each of the adjoining properties. In this way, the areas would be increased to approximately 150 acres, and this would provide better opportunity for successful settlement. I point out to the Minister for Primary Industry that in this area there is great soil variation as between farms, and therefore it is in the interests of the settlers that the areas be increased to 150 acres wherever possible. We have found in this part of Tasmania that if a dairy-farmer has a holding of 100 acres he can possibly keep his eldest son on the farm, but it is not economically possible to keep any other sons. The district, therefore, is exporting one of its greatest assets, its young men. If this Government had any concern for decentralization, this is one way in which it could help to keep the young fellows on these farms.
There is an urgent need also at Togari for the development of a highland winter run for dairy cattle, and some provision should be made in this direction. I would like to ask the Minister a question about a matter involving Togari that has been worrying me for the last two or three years. I would ask the Minister to obtain for me information about the cost of the initial development of about seventeen farms on the southern side of the main highway, which will never be completely developed under this scheme. Will the/developmental cost of these farms be written off, or will it be added to the cost of the 46 farms on the other side of the Marrawah highway? I am reliably informed that the preliminary work in connexion with these seventeen farms involved 6 miles of main drain 8 feet deep, 24 miles of boundary drains 4 feet deep, 14 miles of gravel access roads 12 feet wide-
Order! The honorable member’s time has expired.
– The honorable member for Braddon (Mr. Davies), like most other honorable members who have spoken, has made a positive contribution to the debate this afternoon. I regret that he did not have sufficient time to complete his speech. There was, however, one honorable member whose speech differed significantly from those of others who participated in the debate. The honorable member for Macquarie (Mr. Luchetti) made a speech that displayed opportunism that is not often evident in debates on the estimates for the various departments. The honorable member displayed a desire to embarrass certain industries that benefit from the administration of the Minister for Primary Industry (Mr. Adermann). He showed no will to assist those industries. However, perhaps that is what we could expect from one who, as 1 am told - my recollection, for obvious reasons, does not extend back far enough for me to have personal knowledge - contested the Macquarie electorate, on the Lan Labour platform, against the revered Mr. Chifley. That was many long years ago, and the realization that he had made a mistake in choosing the wrong side might well have influenced the honorable member’s decision five years or so ago to stay with the majority. That is the kind of opportunism that I am told has been evident throughout the honorable member’s career, and it has been exemplified in his speech this afternoon.
I would like to deal with a particular section of the Department of Primary Industry, the Bureau of Agricultural Economics. The service performed and information gathered by this bureau are of invaluable assistance in the framing of policy. The information that can be obtained from the bureau often gives a clear indication of the direction that government policy should take. We have seen an excellent example of this during the last year. I understand that it was partly as a result of the bureau’s investigations that the Government decided to develop beef roads in Western Australia, the Northern Territory and Queensland. It has been estimated that these roads will, over a ten-year period and on the basis of current prices, bring an extra £22,000,000 in export income to Australia. This is one direct result of surveys and estimates made by the bureau.
I believe, however, that it should be possible to use the resources of the bureau to a greater extent than they are being used at the present time. I appreciate the difficulties involved. As the Minister said in answer to a question this afternoon, there is a limit to what a staff of a given size can do. However, if the bureau, as at present constituted and staffed, cannot do all the work that is believed to be necessary, 1 for one would be strongly in favour of increasing the staff and widening the scope of the bureau.
Another matter I would like to mention is one to which I directed some attention last year. In bringing this matter forward I am looking a very long way into the future, and some honorable members might think that governments should not concern themselves with what may happen 40 years from now. However, if we do nothing about this matter within the next 40 years we will be in very grave trouble and jeopardy. Australia requires about 2,000,000 tons of superphosphate each year. At the present time the reserves on Nauru amount to 65,000,000 tons, on Ocean Island 7,500,000 tons and on Christmas Island 30,000,000 tons. Assuming a consumption of 1,600,000 tons annually from the deposits at Nauru, 310,000 tons from Ocean Island and 800,000 tons from Christmas Island, the reserves at these three places will be exhausted in 40 years, 25 years and 40 years respectively. These estimates of reserves may be, and probably are, conservative, but, on the other hand, they take no account of a rapidly increasing consumption of superphosphate in Australia. Recent experiments have shown that superphosphate is required not only in the southern areas of Australia, but also in the Kimberleys and in the Northern Territory. It is certain that the consumption of superphosphate will increase, and it could increase quite radically. Over the last twenty years consumption has increased from 1,000,000 to 2,000,000 tons a year and there is no reason why this rate of increase should not continue.
It may be said that there are alternative sources of supply. However, there are no alternative sources in Australia that would be adequate for Australia’s needs, and it is almost certain that all our superphosphate would have to be imported. At the present time there are alternative sources of supply in Morocco, Tunisia, Algeria, the United States of America, Russia and Egypt, and on Makatea, a French island in the Pacific. If we had to turn to those sources of supply, the cost of superphosphate to the Australian consumer could be doubled. As honorable members will immediately realize, this would have a dramatic effect on the cost and profit position of a great number of primary producers throughout Australia. In present circumstances there is a pressing need for cheaper superphosphate, not for more expensive superphosphate, and any material obtained from these alternative sources of supply would be very much more expensive than the superphosphate now being imported. These circumstances pose serious problems which need to be tackled not 40 years hence, when we will be up against a brick wall, but right now. We need to show foresight, and we may have to continue to show foresight over a considerable period.
Some honorable members may ask how this future shortage of superphosphate or rock phosphate can affect policy at the present time. I would suggest that information which I have obtained from the Bureau of Agricultural Economics shows that it might be as well to intensify research into the use of rock phosphate and superphosphate, and to increase the scope of services available to farmers, so that they may be given advice on the exact amount of superphosphate to use for different purposes. Services of this kind are available in other countries, but not in Australia, and it has been said that, on present knowledge, they could not be made available. But, having in mind the future shortage of superphosphate, it is obvious that we should be doing as much work as possible in this regard, so that valuable information can be made available to Australian farmers. In this way we could achieve more efficient use of superphosphate. We could also reduce production costs by making the most economical use of superphosphate. It is a fact that in many areas there is no accurate information as to the amount of superphosphate that is required. On some farms where the usage has been very high - as much as a ton or 30 cwt. to the acre - one can find farmers who believe that if they double their use of superphosphate they will get a much greater yield. Others say that the amount used should be reduced, say from 90 lb. to about 40 lb. an acre. But no one knows the correct answer, and a great deal of work needs to be done by way of research.
This is a field in which quite dramatic cost advantages could be given to the Australian farmers if the necessary knowledge were available. It is most important that Australia’s precise requirements of superphosphate be known for future years even after our pastures have been fully improved in the light of present knowledge. It is quite clear that if improved pastures continue to need as much superphosphate as they are given at present, or even more in order to maintain or increase productivity, something will have to be done, and preparations to ensure the supply will have to be made well in advance of the existing reserves of this material becoming exhausted.
Included in the estimates for the Department of Primary Industry, in the group which we are now considering, are items of £300,000 for a grant for the expansion of agricultural advisory services and £250,000 for an extension grant for the dairy industry. It is my belief that these two grants, relatively small though they are, represent quite a notable contribution towards assisting farmers in various areas to reduce their costs. Although extension here is, strictly speaking, a job not for the Commonwealth Scientific and Industrial Research Organization but for the State agriculture departments, the Commonwealth has recognized that there is a situation which demands its attention, that the matter is important and that Commonwealth action is needed urgently. If the Commonwealth had not taken this attitude, it would not be spending £550,000 a year in subsidizing State extension services. The expenditure of this amount in this way by the Commonwealth constitutes a recognition by it that the States, if left to themselves, will not provide adequate extension services.
That statement is not meant to reflect on State officers in the various State agriculture departments. I believe that the officers of those departments do a magnificent job, but their work is done under very great handicaps. One of these handicaps is represented by the fact that, in the States, the main political pressures seem to be related to roads, schools, hospitals and education. Except in isolated instances, political pressure is not engendered with respect to extension services and other agricultural services. For this reason, I believe that the agriculture departments in most States have not received the proper proportions of State funds that I consider they should have received. I think that this fact has been recognized by the Commonwealth to some extent in making these grants of £550,000 to subsidize State extension services.
But it is not only a question of money in these matters. The Commonwealth Scientific and Industrial Research Organization functions outside the jurisdiction of the
Public Service Board, whereas the salaries of the scientific officers in the service of the States are determined by the State Public Service Boards. Therefore, in almost every instance the salaries of State scientific officers provide an inadequate return for the exercise of their scientific knowledge and skill. As a consequence, many administrative and structural changes will have to be made if extension services are to be greatly improved.
The fact that these services are inadequate can be emphasized, I think, by touching briefly on a subject that was mentioned earlier by the honorable member for Farrer (Mr. Fairbairn). In Queensland, there are ten sheep and wool extension officers to meet the needs of 5,000 properties. It should be noted that the properties in Queensland are particularly big ones. In New South Wales, eighteen such officers deal with 35,000 properties. In Victoria, ten officers look after the requirements of 30,000 properties. In South Australia, the proportion is three officers to 16,000 properties. I think that that is one of the worst figures of all - a fact which the honorable member for Wakefield (Mr. Kelly) may not like to hear mentioned. In Western Australia, five sheep and wool extension officers serve 6,000 properties. In Tasmania, two attend to the requirements of 5.000 properties. Not all these extension officers are graduates. Except in Victoria, a minority of them are graduates. It is quite clear from the number of properties which these officers are meant to assist that they have not a chance of attending to the needs of more than a very small proportion. This again. I believe, demonstrates the need to have much more work done in this field and, somehow, to impress the States with the importance of a greater effort.
The importance of this work can be emphasized, also, by reference to the losses that occur in the wool industry at the present time. The average percentage of lambs marked in Australia is about 70 per cent. In Tasmania, the average is 100 per cent. It seems not unreasonable to expect the Australian average to be capable of great improvement. An increase of 2 per cent, would give us an additional 1,000.000 lambs a year. At a value of £2 a head, which is not unreasonable, the return to the industry would be another £2,000,000 a year. At present, 9,000,000 lambs are lost each year before marking. At a value of £2 a head, this represents losses totalling £18,000,000 a year. If the yield of wool were raised by an average of 1 lb. a head a year, the wool clip would be increased by 3.3 per cent, or about £10,000,000 a year, at present prices. So, if the percentage of lambs marked could be increased by 2 per cent., if half the lambs lost each year could be saved, giving us an additional 4,500,000 lambs a year, and if the average cut of wool could be increased by 2 lb. a head, the Australian sheep-growers would increase their income by a total of £31,000,000 a year. This, in any man’s language, is well worth doing. If we are to do it, we must spend more money on research and on extension services. I believe that we most certainly should spend more in this way.
.- Mr. Temporary Chairman, while the committee is considering this group of estimates, I want to discuss trade promotion and proposed expenditure on a number of aspects of trade which will be affected by developments with respect to the European Common Market. Although some honorable members have waxed philosophical about the political aspects of the Common Market and the consequences of likely developments, this is hardly the time or the place to embark on a dissertation on those aspects of the problem. A matter to which I wish to direct the attention of the committee is the very obvious division of opinion and difference of outlook between members of the Australian Country Party and members of the Liberal Party of Australia with respect to developments in the European Common Market. One cannot help but observe the great complacency of the Liberals on this issue. They consider that everything will be all right. On the other hand. Country Party members in this place who represent farming communities or who are themselves farmers are exhibiting definite signs of anxiety.
We all know something of the European Common Market and the problems raised by developments in relation to it. Before
I deal further with those matters, I should like to say that the Minister for Trade (Mr. McEwen), who, metaphorically speaking, strides about the world in search of trade, adopts a curious attitude. We heard him in this chamber earlier this afternoon pleading with the United States of America, with which we have an adverse balance of trade of £168,000,000. We have not been able to break through the sound barrier in trade with the United States, for reasons well known to us all. The hard and solid fact is that we have an extremely adverse balance of trade with that country. So we plead with it, as we do with other countries with which we have an especially adverse balance of trade. On the other hand, we hear from the Government and its supporters a lot of pooh-poohing when it comes to trade with Asian countries, especially mainland China. They hold back and say, “Should we or should we not? “. That is a completely ridiculous situation. The Minister for Trade, who controls the reins of trade, as it were, and is charged with the responsibility for developing trade, has adopted a ridiculous attitude. We must trade wherever and whenever we can. The point that I want to make particularly in the few minutes at my disposal is that plans for the promotion of trade are not being pushed ahead fast enough. The tempo must be increased and some special problems must be dealt with.
The situation relating to the European Common Market presents an overall problem that touches us all. The old idea of sending to Europe everything that we have to sell and filling the gaps in trade as best we can is gone. If Britain succeeds in joining the Common Market, it may not become a totally integrated customs union with high tariff barriers until 1970 or 1973 We, as planners in this Parliament of the nation’s trade, have to face that situation. We cannot do anything merely by sitting down and hoping that things will turn out that way or this way.
Let me put the situation to honorable members in hard, cold, statistical facts. The figures relative to Australia’s trade with the United Kingdom and the countries which are members of the European
Common Market have been collated by the Commonwealth Statistician in a preliminary bulletin. He points out that we shall lose a considerable portion of our present trade with those countries. The Minister has admitted, and every economist - every agricultural economist, particularly - has admitted, that we will of necessity lose some of this trade, because despite the dreams of a united states of Europe, the first phase of the three-pronged plan is to develop a commercially integrated Europe, with a balance between agriculture and secondary industry. We exported £200,000,000 worth of goods to the United Kingdom. We exported £154,000,000 worth of primary products to the countries that are now members of the European Common Market. How much of that trade are we going to lose? Our position in relation to the retention of our markets for some primary products is hazardous. Our market for canned meat, which has been bringing us in £6,000,000 a year, will be gone. We are told that our butter, the commodity about which the honorable member for Richmond (Mr. Anthony) worries so much, which brings us in more than £15,000,000 a year, will be unsaleable on the European market after Britain joins the European Common Market. Some of the market for the £18,000,000 worth of wheat we sell will remain, but because of the heavy subsidizing of wheat prices by every European country we must lose a considerable portion of that market. Italy is growing wheat, West Germany is growing wheat, France is growing wheat.
The figures I have cited show the magnitude of our problem while we sit here discussing philosophically what is going to happen - and I should say that plenty is going to happen unless we hop into it and see that something is done. Then there are our other primary exports - apples and pears worth £5,800,000, barley and oats worth £4,100,000, dried fruits worth £4,700,000. These all are threatened. The honorable member for Mallee (Mr. Turnbull) has told us that we sell £8,000,000 worth of dried fruits all round the world. More than £4,000,000 worth of that amount is sold to Europe and the honorable member knows, and has said, that we are in danger of losing the bulk of that market. There is no answer to that.
So there is a sum of money lost at once. Then there is our market in canned fruits, the destiny of which is highly problematical. On top of that, our sugar market, worth £17,000,000 a year, is endangered. One of the plans in Europe is to put in beet from one end of the land to the other and restore sugar beet fanning.
Those are the primary industries, all connected with food, which will be affected. They have a total worth to us in export income of £110,000,000 a year, and a goodly proportion of that will be lost. Where do we go to make up the loss? What are the reasons for this sudden change and the loss of markets? The European market has decided that it is going to be self-contained, and, ipso facto, by virtue of that decision we are forced to live within our own hemisphere. So the natural thing for us to do is to look for trade with Asian countries wherever we can get it and whatever the philosophies of the governments of those countries may be. But we are not doing that. We simply accept what we can get. We are boasting about Japan’s immense purchases of our wool, but you have to remember that recent statistics show that sales of wool went up by only 12 per cent., while sales of synthetics went up by 266 per cent. Admittedly, a judgment on percentages alone could be dangerous there, because there would be a trivial amount of new synthetics, but the percentage is important rather than the quantity.
The markets we get may not be permanent, but we have to get them. The market for our wheat in China may not be permanent, but it has to be cultivated. But the big thing, as far as I can see as an observer in this matter, is that, having lost an immense amount of our primary export trade we have to replace it somehow. The only means of replacing it lies in the Eastern countries, and the only way we can get markets there is by helping to improve the standard of living in those countries. So we just should not sit around hating those people and hoping that they will not succeed in their aims, because we are surrounded by socialist countries - not Communist countries in the main. The AfroAsians are socialists. It is a well-known fact that immediately a colonial master is thrown out the newly freed people do not revert to capitalism, because capitalism is anathema to them. They turn to some sort of guided democracy, some sort of socialism, some bridge to their future. The newly independent peoples are socialists. That applies to the whole of the Afro-Asian republics outside the Communist bloc. It applies to India. It applies to Thailand, where there is some sort of guided democracy supported by American imperialism. In most cases the countries with which we must trade in order to recoup our trade losses, and in order to keep up our own standards of living, are lying around us and waiting for us to do something about them. And we, instead of being just levelheaded traders, are worrying about other considerations. It was Napoleon who said, rightly or wrongly, that the English were a nation of shopkeepers. Whether or not that was true, or whether it was only an expression of the pique of a man conquered by the might of British arms, the fact remains that the British are a magnificent trading nation. Because of that they have given de facto recognition to China. They give de facto recognition to any place where there is a government in the saddle that is prepared to trade and to pay its way. We should be the same.
The Minister claims that we mus’. ‘ something about getting more trade with the United States of America. We cannot ge; more trade with the United States because the whole of America’s trading spread is the other way - to Canada and elsewhere. Sixty per cent, of Canada’s manufacturing industries are owned by the United States, which stultifies Canada’s exports. When we come to the second phase of our development in this country our factories, financed by European or American capital, will be a log round our neck unless we can export - and we cannot export because we will be only the Australian branch. If you want to send something to Malaya the cry from the overseas owners of our factories will be, “ Oh no, we have a factory there “. If you want to send something to Calcutta the cry will be, “ No, we have a factory there “. One of the fundamental mistakes that the Government has made is in respect of foreign capital invested in Australia.
Now I return to the problem that we have at the moment - the problem of our agricultural surpluses. We have to sell them close. We ought to have a map of the Pacific nailed on the wall of every schoolroom and say to the children: “ This is where you live. This is your hemisphere. These are countries with teeming millions of semi-starved people, two-thirds of whom go to bed hungry at nights.” We ought to tell them that the bridge that has to be built between us and those people is one of understanding, that we need not accept the philosophy of those people, but that we have the Christian duty to sell them what we can at reasonable prices because there are too many of them for them to be able to produce all their needs themselves.
We have to build our trade with the East. In doing so we shall be challenged by the Europeans, the South Americans and the North Americans, who will want a share of the market. That market is not just lying there for use to pick up rather disdainfully while we say, “ Well, seeing there is nothing better, we are going to trade with you “. One of the first things that we must do, as I have always said in this chamber - subject to a great deal of misunderstanding - is to put our political levels right, and our diplomatic levels right, in those countries. One of the first sensible things to do is to recognize China. The immense subcontinent of China, with 650 millions of people, has a de facto government buying £30,000,000 worth, £40,000,000 worth or £50,000,000 worth of wheat from us. It is not the best wheat, but is soft milling wheat, as the Minister knows, like the wheat sold to Japan.
The Asian countries are the countries that are going to buy our inferior wheat which we cannot sell elsewhere. The hard milling wheats, the premium wheats, can be sold on the world’s markets, but we have a lot of soft milling wheat which can be sold better to the Asians than to the pernicketty and finicky Europeans. But we have to go out day and night with methods of propaganda to win those markets, because they will not be easy to win. They have to be sold on the idea of buying from us. But if we are going to load that operation with political implications of colour and hatred and all those distressful things, we shall become a little bastion of white arrogance in the Asian sea, and we shall not get any trade, because when those countries have the right to go where they want they follow their emotions rather than anything else, because of the things that have happened to them under the imperialism of the past.
So what I feel we should do in regard to our trade promotion is to get out and get driving, and not just talk about it. The markets we have lost are gone - not gone to-day or to-morrow or the next day, just gone. There will be many a slip ‘twixt the cup and the lip so far as the Common Market is concerned, because it will mean a loss of sovereignty to Britain. It has its own Parliament of 142 members. It has its own social services and its own central and reserve banks. It has its own code of labour. It will take many years to work out all the procedures, but they are on the way. Concurrently with that we should realize that for almost 200 years we have lived in this country we have had an Oedipus complex concerning Europe. We say that it is our natural mother. Well, she has decided she does not want us any more, so let us look round the ocean in which we live. Generations of Australians have been born in this country who have a clearer mind about those things than we older members of the community have. It is in the East that our trade must be developed, and it is not going to be easy.
We hear the Minister speak of the possibilities of getting into the market of the United States of America. Why, the United States is the tightest tariff country in the world, and because of its capitalistic spread not much can be done about it at the moment. Willy-nilly, Britain has had to say to herself about the Common Market: “I am going into this. I am going to lose sovereignty, although I have always stood off the European coast in the North Sea and tried to paddle my own canoe.” They refer to Britain as the tight little island, but Britain has to be integrated with the Common Market for its own preservation. Britain has to face the realities, so what about our being real, too? What about our going everywhere where there is a market - Malaya, Indonesia, Thailand? Not just sending little trade ships or sending out bulletins from the offices of the trade commissioners, but spending millions of pounds trying to develop the markets. It is not going to be easy with these proud, selfconscious and recently resurgent races which are now free in the republics and democracies of some sort or another, if we approach them with any arrogance. We are the trade suppliants and we want to sell them things. The greatest tradesmen in the world live in the Eastern seas to the north. There are the Chinese, the Indians and the Indonesian traders and the old Malays with their praus which we are told about in history. These are the people whom we, the young people of Australia, have to integrate in our future.
Yet we see the attitude of this Government reflected in the small amount of money which is provided for trade promotion. Honorable members on the Liberal side of the Government pretend that Great Britain will have another victory. Great Britain cannot win this fight because she has decided that she will not fight it. I think it will be a fait accompli in the next few years. That is one of the tragedies of this Government. We have a complacent, laisser-faire Liberal Government which is not concerned about its thinking and has not much country interest.
Order! The honorable member’s time has expired.
.- I do not propose to follow the honorable member for Parkes (Mr. Haylen) through his fantasy of ideas as to how he believes this Government is not prosecuting a very modern and vigorous trade policy. I have come to the conclusion that as we are near the end of this Parliament and have only three or four weeks to go, there is likely to be a deterioration in the quality of debate. More and more, some speakers will rely on political points with an eye to the elections. I might be wrong, but that is my interpretation of the speech that was made by the honorable member for Macquarie (Mr. Luchetti). He cast doubts on the quality of the work of the Department of Trade. I think it is common knowledge in Australia that that department has pursued its policy with great vigour. It has a splendid trade service overseas. It has never stopped seeking new markets even in Asia, despite what the honorable member for Parkes has said. The Department of Trade is getting very fine results. The honorable member for Parkes and the honorable member for Macquarie seem to forget that only in 1957, the Australian Labour Party was strongly opposed to the Japanese trade treaty. As a result of that treaty which was negotiated by the Department of Trade, we have made Japan our best customer.
The honorable member for Macquarie spoke about the indecision of the Government regarding the report of the committee of inquiry into the dairying industry. When a government asks a committee of inquiry to investigate an industry, that does not mean to say that it must accept the report. The Government has said that it will negotiate with the industry because we believe that the primary industries must control their own business and that the Government should assist them when assistance is required. The honorable member for Macquarie has accused the Government of indecision. I suggest to him that the Labour Party should accept the report and promise the electors that it will implement the report lock, stock and barrel. That would give some credence to the honorable member’s criticism.
The honorable member referred to the embargo on the export of merino rams. This is a very vexed question. I thought the honorable member for Macquarie approached it with votes in mind. He had an eye on the large number of small sheepbreeders. The honorable member ignored the fact that many small studs are going out of business. If rams were exported, there would be an increasing demand for rams and this would assist the small studs. To discard the embargo on the export of rams without close examination as the honorable member suggests indicates that he has failed to consider the facts and is only aiming for votes. There are problems affecting both sides but the Government believes that these things should be decided by the industry. I ascribe the whole of the honorable member’s speech to the fact that we are near an election and he is out to win votes irrespective of the merits of the case. I do not think that he properly represents a rural electorate. For the remainder of my time I want to discuss the estimates for the Department of Primary Industry.
Sitting suspended from 5.56 to 8 p.m.
– Before the suspension of the sitting, I was directing my remarks to the estimates for the Department of Primary Industry. Primary producers, in common with all exporters, have a very big problem in the cost factor. We are being priced out of the world’s markets. Unfortunately, the basic wage for primary industries must be linked with that for secondary industries. It is not possible to differentiate between the basic wage paid in these industries. Of course, if the wage paid in the primary industries were lower than that paid in secondary industries, primary industries would not be able to attract labour. High wages are very good, provided they encourage higher production. The higher the purchasing power in the community, the greater the home market; and the more the volume of business is expanded, the cheaper production becomes. The farmer ultimately benefits from this. But it all depends on high production following the grant of high wages.
If we are to meet world competition in our farming industries, we must keep our costs low. To do this, we must concentrate on obtaining greater efficiency. The farmer finds it difficult to obtain the latest scientific knowledge, and there is a great need for increased extension services, which must lead to greater efficiency. Certain sums are allocated in the estimates for extension services, but I do not think they are sufficient. Other Government supporters, including the honorable members for Farrer (Mr. Fairbairn) and Wannon (Mr. Malcolm Fraser) have spoken about this matter. At present, graziers and farmers are banding together to employ their own agronomists. They must have available to them the trained expert who knows the latest research developments from the Commonwealth Scientific and Industrial Research Organization and other experimental stations. The agronomist is able to employ his knowledge for the benefit of the farmers in the group that employs him. Employment by a group also speeds up experimental work. The agronomist can spread his experiment over several properties and so cut the time normally taken at experimental stations. So it is to the farmers’ advantage to get this service. However, it is not possible on a private arrangement to employ a sufficient number of agronomists and I believe that there is a need in Australia for more trained personnel, both from the universities and agricultural colleges.
The need to bring knowledge to the farmer is imperative. One way he can meet world competition is by greatly improved methods. Improved types of pastures are necessary if we are to continue to export wool and beef. In old-world countries, through centuries of farming, various districts have developed pastures to suit their conditions. A farmer starting in a particular district has the benefit of this experience and is not involved in the tremendous amount of trial and error that must be undertaken in a younger country such as Australia. Cereal production is in the same position and much experiment is necessary here not only in plant types but in the actual mechanical production of pastures and crops.
Flocks must also be improved. A high proportion of the flocks in New South Wales at present are not classed. Every experienced farmer knows that some sheep are low producers and others are high producers. If flocks are classed intelligently, the rate of production per sheep rises and, of course, costs are reduced. This gives the farmer a better chance to meet world competition. Classing is of great importance in dealing with live-stock, because many low producers are, in a sense, boarders and do not pay their way. The same comment applies to cattle. Beef is becoming an important export item. If we have quick maturing beef and eliminate scrub bulls, we will be able to send high quality beef overseas. We are competing in a market that is becoming more difficult and where buyers are demanding quality.
Most of the improved production in primary industries must come ultimately through finance, and I believe that we should have another look at our banking system. We have a private banking system and a government banking system, but the whole system of banking in Australia is subject to Reserve Bank control. Primary producers require long-term finance at low interest rates. It takes a long time to breed a herd of cattle and during this time the farmer should not be subjected to the credit restrictions and releases that are being used to regulate our economy. The Commonwealth Development Bank is performing an excellent function and is filling a need but it requires more money. I should like all private banks to provide exactly the same facilities for rural loans. Agriculture can be financed through private banks, but this should be done through a separate branch so that the Government will know what finance is being used for primary industry. This branch of finance should not be subject to Reserve Bank control. It is of the utmost importance for the farmer to plan ahead on a long term and to know that he will not suffer from credit restrictions at awkward times.
– Do you think the private banks would make long-term money available at low rates of interest?
– To the honorable member for Port Adelaide, whom I welcome back from overseas, I say that if an activity is made profitable for private industry, private industry will undertake that activity and so meet a need.
– It is the low rate of interest I am interested in.
– At the present moment, private banks have large sums of money deposited in special accounts and they receive 15s. per cent, interest on it., If that money were released to be made available through the private banks for agricultural loans at even slightly higher rates of interest, the private banks would find lending on these terms much more profitable than allowing the money to lie in special accounts.
I would also like to mention the timber industry. This industry is very important to Australia and should be declared a primary industry. If this were done, it would be able to meet many of its problems which arise from the need to compete with imports. Primary industries enjoy considerable advantages in their depreciation allowance for taxation purposes. Depreciation of machinery and plant and so on is allowed at the flat rate of 20 per cent, per annum for five years. An industry can become more efficient by improving its plant and much of the plant now used in the timber industry is out of date. Consequently, it is having considerable trouble in meeting the competition of imports from countries that are more progressive and that have a better system of plant replacement, which enables them to undersell our timber. At present, the timber industry is in a bad way because of the declining demand for its product and because it cannot meet competition from overseas. If the Government declares the timber industry to be a primary industry, I believe it will be much better situated and better able to meet competition.
.- The honorable member for Hume (Mr. Anderson) and the members of the party to which he belongs seem to have become suddenly aware that our primary export industries are in a very bad way. I remind the honorable member that about two or three years ago the Minister for Trade (Mr. McEwen) made a statement to the effect that in order to maintain the existing rate of development and the existing living standards in this country it would be necessary to expand our export trade in the succeeding five years by £250,000,000 a year. The Government has done nothing to develop this programme. All that it has done in the twelve years that it has been in office has been to talk about what it proposes to do to rectify this position; but it never does anything effective to correct it.
One of the great problems confronting the primary export industries to-day arises from the fact that the Government to which the honorable member for Hume belongs and to which he renders unswerving support has allowed inflation to run unchecked in Australia. The primary industries, with the prices they are receiving overseas, would be in a satisfactory position to-day if the Government had controlled internal inflation. For a number of years the Government told us that there was nothing wrong with inflation as long as it was only creeping inflation, that is, if it did not extend beyond 3 per cent, each year. So as time went on the position became worse day by day. Now our export primary industries are confronted with probably a greater threat than ever by the evident intention of Great Britain to join the European Common Market. I have heard honorable members on the Government side condemn Britain’s attitude in this matter. No member of the Australian Labour Party welcomes the prospect of the United Kingdom joining the Common Market because of the great effect it will have on our own economy, but we have to recognize that the British Government represents the British community and that it has to do what it thinks best for its own country. If we begin to examine Britain’s position we will recognize that the compulsion and the pressure on the United Kingdom to join the Common Market is the result largely of the anti-British policy which this Government has followed.
This Government entered into a trade agreement with Japan. It has made a great feature of the fact that Japan now has become the greatest purchaser of Australian wool, but the Government was able to secure the market in Japan for Australian wool only by adversely affecting the Australian market for British imports. The Australian manufacturers were not the only ones affected by the importation of Japanese goods. As a result of this Government’s action the volume of trade which was done by Great Britain has been decreasing continually in recent years. So it was pressure from this source which was largely responsible or Britain adopting a different attitude in relation to the European Common Market. When the United Kingdom’s admission was proposed originally the British Government rejected the proposal. Great Britain was not desirous of entering the European Common Market, but apparently economic pressure has now compelled it to adopt a different attitude.
Why has this Government not done something about inflation? When Labour left office in 1949 it is perfectly true - I have heard this argument used in many debates in this chamber - that inflation had started to appear in Australia; but it only began to appear as one of the features of our economy after the defeat of the prices referendum in 1948 when the members of this Government during the campaign told the Australian community that price control could be exercised more effectively by the State governments. It was on their recommendation that the majority of the Australian people foolishly rejected the proposal to vest this Parliament with the power to control prices in this country. Inflation began to move in Australia from 1948 and, with the advent of this Government in 1949, it moved with great rapidity.
The Government now declares that our difficulties are largely the result of restrictive trade practices. It claims that monopolies are exercising an adverse influence on the economy. No longer does it argue that supply and demand determine the price of any commodity because the great monopolies, exercising their restrictive trade practices, decide what prices in Australia will be. The great difference between the attitude of the Labour Party and that of the Government on price control is that the Government believes that the great monopolies, which are not answerable to this Parliament or to any one but themselves, ought to exercise price control whereas the Australian Labour Party believes that price control should be exercised by the Parliament of the country in the interests of the Australian community. The Government does not propose to do anything about monopolies or restrictive trade practices. It suits this Government politically to talk about this matter frequently, as no doubt it will during the forthcoming election campaign; but it has never intended to do anything about the problem.
Honorable members will recall that when the Government abolished quarterly adjustments of the basic wage it claimed that the changes in the wage scales were too frequent, that they were causing disruption in industry, and that a longer period than three months should elapse between determinations of the basic wage. So the court declared that it would review the position every twelve months and adjust the wage according to whether the commodity price index figures rose or fell. Now we have the astonishing; position of the Minister for Labour and National Service (Mr. McMahon) claiming that even twelve months is too frequent and that there ought not to be any automatic adjustment of the basic wage. He wants the wage determined on the Industrial Commission’s assessment of what industry can afford to pay. Any one who looks at this matter realistically will realize that no court in this country is in a position to determine, on the evidence submitted to it, what industry can afford to pay. When an employees’ organization appears before a tribunal seeking an adjustment of the basic wage it has to produce witnesses and evidence to support its claim. That evidence is then examined by counsel appearing for the employers. But no employers’ organization is required to place before the court for its examination and for examination by representatives of the trade unions any evidence relating to its financial structure, the amount of invested capital, and the returns the investors are receiving or to produce its balance-sheet and profit and loss account. Evidence of that kind is never submitted to the court All that the court does is to determine, on the very vague and indefinite evidence which is before it, what in its opinion industry is able to pay.
The Minister for Labour and National Service made a statement recently to the effect that the basic wage in Australia to-day is more than sufficient to meet the requirements of the average Australian family of a man, his wife and two children. So if the Minister had his way, and if the wage were to be determined merely on the basis of the Industrial Commission’s opinion of what industry can afford to pay-
– Order! I appreciate the point that the honorable member for East Sydney is trying to make and his attempt to relate it to overseas trade, but I point out that the emphasis of his speech is not being directed directly to the estimates now before the committee.
– In view of your ruling, Mr. Chairman, I feel that I have said sufficient to establish that this Government is not genuine and sincere in its desire to arrest inflationary trends in this country.
Let me turn now to another phase of the Government’s campaign. Of all people, the Prime Minister (Mr. Menzies) was called upon to open a “Buy Australian” campaign. I was amazed when Australian manufacturers invited the Prime Minister to open such a campaign because in February last year it was this Government which opened the flood gates and allowed the Australian market to be flooded with the imports of the cheap labour countries of the world. After it had done this, it then set out on a campaign to influence the Australian people to buy Australian goods. While the Government was making this appeal to the Australian community, as the honorable member for Blaxland (Mr. E. James Harrison) said, and at a time when heavy industries in Australia were dependent upon orders from week to week to maintain employment for Australian workmen, the Government placed its order for rolling stock for Commonwealth Railways not with Australian industry but with a Japanese manufacturer. The Minister for Shipping and Transport (Mr. Opperman) argued that the Government was quite justified in placing the order in Japan. He said that Australian manufacturers could not compete with the prices tendered from Japan. If that is the basis upon which the Government believes all transactions should be conducted, what is the use of appealing to the community to “ buy Australian “? The Minister for Supply (Mr. Hulme) has said that the retailer is unfair to the Australian manufacturer by not pushing the sale of Australian goods. So we can see that the Government has become alarmed and disturbed about the drift in our employment position.
I now turn to another matter in the time left at my disposal. I refer to the sale of wheat to the People’s Republic of China. I am not opposed to surplus wheat being sold to any people who are facing famine conditions. But the strange thing about this transaction is that what the Government is actually doing, in order to sell wheat on credit at a price below the Australian cost of production in Australia is to levy a tax on the Australian community. Let us examine the position. The Government has never announced the exact terms of the sale of wheat to China, but I am able to tell honorable members that the wheat is being sold to China, as it is to other countries, at less than the cost of production, and that the Wheat Stabilization Fund is now insolvent. According to an answer given to a question which I asked the Minister for Trade (Mr. McEwen) the Government will have to provide between £8,000,000 and £9,000,000 for the No. 23 pool and the No. 24 pool will also have to be subsidized to the extent of some millions of pounds.
Up to this point the Wheat Stabilization Fund has been able to carry on with the contributions received from the industry but, when the Government has to subsidize the fund, it obtains the money required by taxing the Australian community. This means that the Australian taxpayer is being taxed in order that this Government may dispose of surplus wheat to the people’s government of China at a price lower than the cost of production in Australia. That is the position which exists at the moment and it shows up the hypocrisy of this Government. I would far prefer to see the hungry people of the world, no matter what may be their form of government, get the wheat than that it should be stored in this country and its quality deteriorate. I have mentioned this matter only to show the hypocrisy of this Government in its declaration, from time to time, that it is allegedly so strongly anti-Communist that it will not recognize the Government of China or see that country get a seat in the United Nations. The Government will not advocate trade with China openly, but does so surreptitiously. It does not want to claim the credit for the wheat deal with China, because it considers that would be politically unwise, so it says that the Australian Wheat Board is solely responsible for the sale of the surplus wheat to China.
Time will not permit me to develop at length the other matter to which I want to refer, but if I get the opportunity later I will be able to show this committee that many decisions of the Department of Customs are based on favour to those who have political pull with members of the Government. I have one case here which I would like to mention briefly. It relates to the importation into Australia under by-law, free of duty, of two electric incubators costing £11,000. The decision to import under by-law free of duty was made, against the recommendation of officers of the Department of Trade, by the Minister for Customs and Excise (Senator Henty) himself.
– Order! The honorable member’s time has expired.
– Mr. Chairman, the actions of the Commonwealth Government so far as trade and primary industry are concerned are commendable in every way and deserve the support of this chamber. When the honorable member for East Sydney (Mr. Ward) makes erroneous statements such as he has just made, without any substantiation, I think it is wise to correct them, I wonder what his attitude is. He says the Government is taking money out of Consolidated Revenue for the Wheat Stabilization Fund and he seems to disagree with that. Yet no doubt he and his colleagues, acting on the instruction of the outside executive of the Australian Labour Party, which formulates that party’s policy, will shout from the rooftops that the Labour Party, if returned to power at the next election, will subsidize exports. Is that not the policy of the Labour Party? Yet the honorable member for East Sydney says it is hypocritical for us to do it! Why does he not be consistent so far as stabilization of the wheat industry is concerned?
The Wheat Stabilization Fund operates under an act passed by this Parliament and, no matter whether I or somebody else is Minister, while this legislation is on the statute-book it must be implemented. The Parliament has established the Australian Wheat Board as the marketing authority for Australian wheat, consistent with the legislation enacted by the State governments. So, it is an agreement between the Commonwealth and the States that the Australian Wheat Board shall market the wheat. I tell the honorable member that it would not have mattered tuppence whether we sold the wheat to China or not; the position of the Wheat Stabilization Fund would have been exactly the same to-day because the act specifies a guarantee of a certain price, as determined from year to year, for wheat for home consumption, plus a guarantee on 100,000,000 bushels of wheat for export. We sold 182,000,000 bushels of wheat for export in the last financial year, so the sales to China have not affected the position. It is the 100,000,000 bushels which counts. The sales to China have not necessarily been made at a loss. The wheat was sold at world export price, consistent with sales made to other countries. If honorable members opposite believe that it would be better for the wheat-growers to have that wheat stored, not sold, let them say so; but they will not get the support of the wheat-growers.
– You are ashamed of what you have done.
– Order! I warn the honorable member for Yarra.
– I am not ashamed of anything I have done. I wish to repeat, as far as wheat stabilization is concerned, that the price determined for last year was 15s. 2d. a bushel on domestic sales plus 100,000,0X10 bushels for export. As I have said, we exported 182,000,000 bushels over the year. The total crop was 251,000,000 bushels and we had 60,000,000 bushels carry-over, so we had a total of 311,000,000 bushels to sell. The honorable member for East Sydney said the Government had done nothing about expanding the production of primary industry. Taking the figures for 1936-39, the peak years prior to the war, and the presentday figures, we find that the expansion of primary production has amounted to 63 per cent. We have done something about it. What is more, we have extended our trade promotion campaign into many new countries. We have opened up new trade commissioner services and spent money in every possible avenue in seeking new trade. We have sent out trade ships, and this year we are providing for an expenditure of almost £1,000,000 on trade promotion. I remind honorable members, too, that our expenditure on research and sales promotion in 1960-61 was over £3,500,000. That sum is being increased substantially this year to £4.792.000 including contributions from the producers, which should convince honorable members opposite that this Government is research minded, that it is keen on encouraging research and extension services with a view to increasing the sale of our products.
When the honorable member for East Sydney (Mr. Ward) says that we are antiBritish in our trading, he ignores the fact that already we have entered into several trade agreements. For instance, we have a meat agreement under which we have a guaranteed market for good quality meat in the United Kingdom for fifteen years. We also have a wheat agreement under which we have a market in the United Kingdom for 28,000,000 bushels of wheat, and we have a sugar agreement under which we have a guaranteed market in Great Britain for 300,000 tons of sugar annually at a negotiated price that is considerably better than the average world price for sugar. That agreement will remain in force until 1968.
The honorable member for East Sydney said that price control would have kept down the cost of production. It certainly would have kept down development, and it certainly would have allowed black marketing in Australia to prosper. At the time when we defeated the Labour Party, petrol rationing was being continued and there was black marketing in every direction. The people of Australia had become so sick of the Labour Government’s approach to trading that they dismissed Labour from office and have kept it in Opposition ever since.
I come now to the honorable member for Braddon (Mr. Davies). He delivered a wellreasoned speech on war service land settlement. There can be no objection to what he said, but he did fail to stress the fact that this Government has been most generous to the settlers, to those on King Island in particular, although I think he did mention the kind of assistance we are now giving. I should point out, however, that the cause of much of the present trouble is the fact that in the early days there was so much pressure from all sides, from the ex-servicemen’s organizations in particular, for speedy settlement of these men that they were placed on the land before necessary development had been completed. And that applies just as much to King Island as to anywhere else. When I inspected the position at King Island I did take action to give very generous consideration to the settlers there, and the honorable member for Braddon was fair enough to admit that. The investigating committee which was set up was instructed to do all work necessary to raise the level of productivity of those holdings to the agreed standard. In every case where that had not been done, and it was evident that the settlers were suffering because of poor productivity of the property, the committee submitted recommendations as to the amount which should be credited to the settlers for slashing regrowth, and for development in excess of the agreed level which the settlers could normally be expected to do as routine maintenance of standard farms, the extent of undue depreciation of settlers’ plant due to its operation under rough conditions and the amount of credit which should be allowed as compensation. The recommendations also covered credit for any part of the basic level of fertilizer application, namely, 7 cwt. per acre of superphosphate, including one minor element dressing, which the settler financed himself, and any credit due to settlers as the result of the decision to allow free agistment to be given prior to the assistance period for 30 milkers or 600 breeding ewes. In addition to these credits, interest on advances for stock, plant and working expenses to standard levels accrued prior to the assistance period are being written off the settlers’ accounts. I think the honorable member for Braddon (Mr. Davies) did say that already £142,000 has been credited to those settlers whose properties have been inspected. That work will be continued. I am sorry it is not progressing as rapidly as he would like it to do, but it is essential that we do the job thoroughly.
The honorable member also referred to rentals, and he seemed worried about whether the loss incurred on seventeen farms on one side of the road would be included’ as part of the cost of development upon which rentals would be based. He can forget all about that. The basis upon which rentals are decided is either the cost of development or the cost of bringing the farm to a state of production, whichever is the lesser. In those States where cost of production has been extremely high, the Commonwealth has written off as much as 50 per cent, to avoid penalizing the settler unduly. Everything possible has been done to ensure that the cost of making a property productive is kept to a figure which will enable the settler to make a reasonable living from it. If the actual cost of development is lower than that at which he can be expected to make a reasonable living, he gets the benefit. In this case, the loss incurred on those seventeen farms on Montague Swamp which were not proceeded with will be borne by the Commonwealth and the State between them, according to the agreement arrived’ at. We have already done that in connexion with some of the settlements in Western Australia. Again, we have been able to assist many farmers on the Clare settlement in north Queensland, where they were in trouble. In that case, the soil was not suitable for the crops which the settlers were allowed to grow. There would have been no trouble had the settlers been able to obtain a cane-growing assignment, but, under the system of cane growing in north Queensland, that was not possible. Because they were unable to grow cane, the settlers were finding it hard to make a living.
After I had discussed the matter with the Premier of Queensland and with the settlers, the Commonwealth offered to provide more land or write off the debts the settlers had accumulated. The settlers unanimously asked that their debts be written off. The Government of Queensland and the Commonwealth Government acceded to that request, and gave the settlers a fresh start. The total cost borne by the two governments between them in that instance was about £560,000. The settlers seemed quite happy. The honorable member for Herbert (Mr. Murray) has, of course, been continually pressing for assistance to be given them.
The Government has made many moves to assist these settlers, not only those on King Island but also others in various other settlements. For instance, I visited the Rocky Gully area in Western Australia, and considerable amounts were written off for the benefit of settlers there. As a mattei of fact, practically 50 per cent, of the total was written off in that case because the development cost is high. At the Clare settlement in Queensland the past debts were completely written off and the settlers given a fresh start. All these actions on the part of the Government have shown that it is indeed sympathetically disposed towards ex-servicemen. So far as Queensland is concerned, our only regret is that the previous Government decided to abandon soldier settlement altogether; but that is another matter. That is all 1 wanted to say, Mr. Chairman. I shall not detain the committee unnecessarily.
.- I am merely uttering a platitude, Mr. Chairman, when I say that the development of this country, its capacity to absorb a greater population and the maintenance of the standard of living of our people depend upon our rural industries. Rural industries provide food for the population. They also provide the major portion of those commodities that are processed in secondary industries. The secondary industries, of course, provide most of the employment opportunities for the people, but, as I point out, the existence of those industries depends upon primary industries, and mainly upon rural industries. Secondary industries depend upon the industries that produce metals or timbers or fibres such as wool and cotton. They depend upon industries producing various other rural products for their expansion and even their very existence.
Let me give the committee a brief outline of the trends that have been apparent in primary and secondary industries in Australia during the period in which this Government has occupied the treasury bench. In 1950, the products of rural industries were valued at £1,000,000,000 per annum. Ten years later the value had increased to £1,200,000,000 a year. In 1950, the value of secondary production, exclusive of primary products used in manufacture and of the value of power used, was £500,000,000 per annum. By 1961, this had increased to £2,075,000,000 per annum. In other words, in the period of ten years the value of rural production had increased by £200,000,000 per annum, whilst the value of secondary production increased by £1,500,000,000 per annum.
This expansion in our secondary industries was necessary to provide employment for our increase in population, both for native-born Australians and for the hundreds of thousands of immigrants that came here. But the small increase in rural production meant that we could not provide sufficient home-grown primary commodities to enable our expanding secondary industries to carry on. We had to import those commodities, and the Minister for Trade (Mr. McEwen) informed me that in the year ended 30th June, 1959, the value of goods coming to this country from overseas, and which were absolutely essential for our expanding secondary industries, was about £600,000,000.
– They included rubber and petrol.
– As the honorable member says, they included rubber and petrol.
– You cannot grow these things here.
– That is correct; we cannot grow them here. However, let us consider what is going to happen during the next five years. Will the population increase as it increased during the last ten years? The Minister for Immigration (Mr. Downer) says that it will. The Prime Minister (Mr. Menzies) says that it will. If it does, the secondary industries of Australia must expand to the same degree as they expanded during the last ten years.
– Hear, hear
-“ Hear, hear! “ says my friend, but let us consider what this expansion means. It means that while our secondary industries increased production by £1,500,000,000 per annum in a period of ten years, they will have to increase production further by about £1,000,000,000 a year in the next five years. Instead of production from secondary industries being worth £2,075,000,000 a year as it is to-day, it will have to be worth £3,000,000,000 a year or considerably more. Where, then, will we get the primary commodities that are essential to the maintenance and expansion of those secondary industries?
– We had £700,000,000 worth of surplus primary products which we exported last year. What are you talking about?
– Yes, we exported £700,000,000 worth of primary products to pay, or partially pay, for the imports that came here. We will have to export a good deal more than £700,000,000 worth if we are to carry on our secondary industries. It will be absolutely necessary for us to produce more than £1,100,000,000 worth of primary products per annum for processing in our secondary industries.
– Rubbish! We will be producing our own oil before long.
– The honorable member says we will be producing our own oil. I agree that that would be a way out of the difficulty. If we could cancel our orders for £500,000,000 worth of oil per annum our difficulties would be considerably lessened. But if we cannot produce oil we will have to produce other primary products. We will have to grow more diversified crops for use in our secondary industries or we will have to produce crops that we can sell overseas to the value of £250,000,000, £300,000.000 or £400,000,000 per annum additional to what we do to-day in order to buy overseas the goods that are absolutely essential to the maintenance of our industries and of employment opportunities for our people.
– Make a few suggestions.
– “ Make a few suggestions”, says the honorable member for Mallee. What has this Government or the relevant Ministers done about developing the hinterland of this country? The honorable gentleman spoke about soldier settlement. During World War II., 80,000 primary producers and rural workers went into the armed forces. On their return from war service, 50,000 applied for settlement on farms throughout Australia under the war service land settlement scheme. The various governments accepted 40,000 as eligible and suitable for settlement, but only 17,000 were in fact settled.
What has been the effect of this state of affairs on primary production? The Minister for Primary Industry told me, when I asked how many farms there were in 1939, that the number was 253,000. He told me, when I asked, that only 17,000 returned servicemen were settled under the war service land settlement scheme. If we add this number to the number of farms that existed in 1939, we can say that there ought to be a total of at least 270,000 farms for the whole of Australia. However, I asked the Minister how many farms there were in Australia to-day, and he replied that there were 251,000.
– Many of the pre-war number were small 2-acre plots near Sydney. The honorable member’s argument is as old as the hills.
– The honorable member may think so. Not only has the number of farms decreased, but tens of thousands of rural workers have left the land. All this has happened over a period in which Australia’s population has increased by more than 3,000,000 persons. Not one farmer’s son, not one resident of a country town who wished to become a farmer, not one returned serviceman, not one migrant has gone on the land without displacing some one else from rural production. That is the record of this Government. Instead of allowing those things to happen, the
Government should have set the lead in peopling Australia with farmers. This is necessary not only in the interests of those who want to become farmers. As I have pointed out before, it is essential to the well-being of the economy of this country. We have to increase rural production in order to provide raw materials for processing by secondary industry, which continues to expand by leaps and bounds, or to sell overseas in order to earn export income with which to buy goods and materials that are needed for processing and expansion by our secondary industries. But this Government, which is led by the representatives of big business, has led us into a position in which we are not able to do that.
Before the few minutes that remain to me run out, I want to deal very briefly with the Government’s trade policies. At one stage, we had a favorable balance of trade with Japan of about £80,000,000 a year. The Government, no doubt induced by Japanese interests, decided to enter into the Japanese Trade Agreement. Its argument was that this was only fair because Japan bought annually about £100,000,000 worth of primary products from us and we bought only about £20,000,000 worth of goods from Japan. The Government suggested that we ought to buy more from Japan. As a result of this trade agreement, Japan now sells to us about £50,000,000 worth a year more than she previously bought from us. So we have converted a favorable trade balance of about £80,000,000 a year to an unfavorable balance of about £50,000,000 a year. Our adverse balance of trade with the United States of America and the United Kingdom totalled more than £1,800,000,000 over ten years. But our favorable balance of trade with Japan of about £80,000,000 annually and a favorable balance of trade with West Germany of some millions of pounds a year, as well as a favorable balance of trade-
– Order! The honorable member’s time has expired.
Mr. WHEELER (Mitchell) [8.561.- Mr. Chairman, I wish to relate my remarks to the provision made in the estimates for the Department of Trade for the maintenance of trading posts overseas. The establishment of these trading posts is a wise move, for the more markets we can establish outside Australia for our goods, the better will be the position in Australia. I believe that there is now just as great a need as ever to develop a selling technique within Australia, as the home market is badly in need of a stimulus for the sale of Australian goods. Local selling has become a lost art, and we have not kept up with marketing techniques. For some time past, the whole emphasis has been on production, with a consequent lack of attention to the problems of marketing. But the age of selling by telephone has now ended, and there is a need to pay more attention to marketing and marketing research.
This need becomes all the more urgent because industry expanded under the protection of import restrictions and their removal overnight exposed the raw nerve of high costs. The consequence was that many industries found it impossible to compete with imported goods. As a result, suffering appeared in a number of industries, which could languish and fail if immediate tariff protection is not afforded. Consequently, it behoves the Government to grant sensible protection as expeditiously as possible. This applies not only to secondary industries, but also to primary industries. Over the past few months, I have stressed the need for the protection of certain of our primary industries, having in mind the serious damage done to the poultry-farming and pig-raising industries in my electorate by unrestricted imports of canned chicken and canned ham.
Reaction to the removal of import controls differed according to the interests involved. It is a sad commentary on our national outlook that many are protectionists when they have something to sell, but are freetraders when they wish to buy something. The various chambers of commerce cheered the unrestricted entry of goods into Australia. Maybe they felt that manufacturers had had their own way for far too long and that the flow of imported goods would provide an element of competition which would bring local prices down. However, they showed little concern for Australian industry and the Australian workers. Their main consideration seemed to be to get cheaper goods on the shelves to sell. They ignored the fact that the result would be that Australian products which are as good as imported articles would be pushed off the counters if the prices of the Australian products were higher than were those of the imported goods, and that manufactured goods would accumulate in local factories and unemployment would be the inevitable result.
Manufacturers, on their part, revived a “ Buy Australian “ campaign which had languished in recent years. Australian manufacturers had to fight hard for years to establish their products and cultivate an appreciation of the fact that Australianmade goods were equal to any in the world. The pity is that, having won this recognition for Australian products, the manufacturers eased off on the job and let the easier protection of import controls take the place of selling effort. I consider that if Australian manufacturers are to solve their problems now they are faced anew with a task of restoring pro-Australian sentiment among Australian consumers. The manufacturers cannot do this if they are unable to compete with imported goods which have been allowed to enter this country since import controls were removed by government direction.
One seeks the answer to one of our pressing problems - the problem of what is to become of accumulated stocks of locally manufactured goods. Industrialists might say that this is not a problem of their creation; that it stemmed from the Government’s decisions last November. There is no doubt that the Government’s decisions of last November have affected thousands of employers and workers alike, and it is natural enough that each one should view the situation from his individual point of view. In the long run, however, the situation to which the Opposition refers as the “ boom and bust “ policy will find its justification, and it will be recognized that some of the measures adopted were correct. It must be conceded, however, that the Government’s decisions were taken against its own interests, and involved the prospect of a decline in popularity at the next general election. They were decisions bound to react against the Government’s own electoral prospects.
Undoubtedly the first step to cure the present situation is for industry to go out and sell. It has to re-establish the Australianmade article in the favour of the buying public. Our economy is still basically healthy. There has been little evidence of any decrease in long-term capital investment. In fact, the indications are that longterm investment from overseas is increasing. Thus, the capita] investment which determines the level of economic activity and production and employment in the community is assured. The weak spot in the economy at present is the consumption demand - that is, the level of purchases made by the average person to meet his household and personal wants. It is because of a decrease in consumption demand that employment has fallen below the level that existed last year. At that time total community demand was more than sufficient to ensure that all productive resources were fully employed.
The decrease in consumption demand could be attributable both to the Government’s action last November and to the consequent loss of confidence throughout the community; but it could also be attributed to the deplorable actions of the Opposition, which has done such a disservice to the country by exploiting for political purposes this temporary loss of confidence. In fact, these gloom merchants have little thought for the sufferings and privations of the unemployed, but pray for higher unemployment figures so the Government may be embarrassed. The immediate problem that the community has to face is how to restore consumption demand sufficiently to ensure that once more our productive resources get back into full production, and thus provide greater employment. Where a temporary set-back occurs it is natural enough for a manufacturer to attempt to ride out the recession without lowering existing profit margins. In most instances, in the present situation the manufacturer has been able to do so, but by doing so he has forced the factory hands to take more than their share of the impact of the recession.
I believe that the time has come when manufacturing industry and free enterprise at large must consider ways of relieving the pressure which the recession has placed on the labour force. The private sector in an economy can meet in three ways a recession caused by reduction of effective demand. First, it can reduce its labour force, but this, in turn, leads to a further reduction in demand. Secondly, it can lower money wages, but in a society such as ours the lowering of money wages is quite out of the question, and its effect on consumer buying and general conditions would be disastrous, as was shown by the depression in the 1930’s. Thirdly, it can lower profit margins by reducing prices, provided, of course, that the level of profits is sufficient to cover costs and leaves sufficient incentive to remain in business.
I submit that the time has come for certain industrialists - and I stress the words certain industrialists - to consider the alternative of reduction of prices wherever there is sufficient margin to permit it in relation to stocks which have accumulated, and which are clogging the pipelines of the economy. We are all familiar with the practice of retail stores of clearing their shelves of slow-moving stock by marking down certain lines in order to enable them to regain their expended capital, which is then re-used for the new season’s purchases. For industries seriously affected by loss of demand this may be an opportune time to apply this practice of converting accumulated stock into hard cash. This should not be interpreted as engaging in a bargain sale, but as an orderly disposal of goods, and any price-cutting war should be avoided. Appropriate steps should also be taken to ensure that the public is aware of the situation regarding prices, and that the retailer passes on price reductions to the consumer.
A reduction in the price of goods, although temporary in nature, would increase the real income of the wageearning section of the community, which generates the larger proportion of consumer demand. Tt would do this in the only concrete way in which real income can be increased in the long run - by a given amount of money buying more goods and services. The fact that this reduction was temporary and designed only to clear accumulated stocks would also carry with it a strong inbuilt stimulus to demand, in that people would want to purchase goods while they were offering at lower prices. Once consumer demand for locally manufactured goods was stimulated by an increase in real income produced by lower prices and the temporary nature of the offer, manufacturers would return to levels of production calling for the reengagement of dismissed workers. Thus, workers whose effective consumption has been drastically cut as a result of their changing from the receipt of normal weekly wages to, in many cases, the receipt of unemployment benefit, would return to normal spending power. This would increase the community’s effective demand for consumer goods to a level sufficient to support something much closer to a full employment level of production than exists at present.
Once having tried this experiment, manufacturers might consider examining their profit margins to see whether they could retain prices at levels competitive with imported finished consumer goods. If they could, this would divert local demand from imports now able to flow into the country to the local product. A leakage of spending power could be closed, and the spending power channelled back into the generation of more local wages, more local production and more local sales. This, in the long run, would be a far more effective “ Buy Australian “ campaign than spending money on millions of words of advertising. In the present position, the real “ Buy Australian “ campaign will be best served by executive attention being devoted to the problems of market research and marketing techniques.
.- The honorable member for Mitchell (Mr. Wheeler) represents an electorate which still has many primary producers, and which now has also a very great number of industrial workers resident in it. The pig farmers to whom the honorable member referred have been injured in their livelihood by the swine fever, which accompanied the tinned and preserved meats that his Government admitted last year. The poultry farmers have been affected by the importation of canned chicken, which his Government permitted. The industrial workers have been affected in their livelihoods by his Government’s decision to reduce purchasing power and employment in order to reduce imports after it abandoned import licensing last year. His constituents are now finding greater difficulty in paying off their houses and their household goods as a lingering consequence of the third credit squeeze and the third increase in interest rates imposed by the Government which the honorable member supports. The honorable member now seeks to reconcile and reassure the various victims of his own Government’s policy.
Everybody knows that, as the result of the Government’s abandonment of import licensing in February of last year, imports started to flood into this country at such a rate that once again some form of import control had to be imposed. On this occasion the Government decided that it would try the same form of import control as it tried in conjunction with the horror Budget of August, 1951, and the supplementary Budget of March, 1956. That is, once again it told the banks to lend less money and charge a higher interest rate for the money they lent. It did, in fact, also impose a few new refinements. For the first time it deferred part of the wheat payments to wheat-growers. It openly asked th Arbitration Commission to skip last year’s increase in the basic wage. It devised various new forms of tax which made it more difficult for hire-purchase companies to raise money which they in turn could lend.
By all these methods of reducing the purchasing power of the Australian community in both the rural and the industrial sectors, the Government has at last curbed imports. It decided to control imports by the indirect, indiscriminate method of the credit squeeze instead of controlling imports by the selective and fair method of licensing for importation what we require and excluding what we do not need or cannot afford. In the past ten years, Australia imported goods the value of which was £1,800,000,000 greater than the value of the goods it sold overseas. In that period the only two years in which Australia imported goods less in value than that of the goods it exported were when our imports were controlled in the financial years following the horror Budget of August. 1951, and the supplementary Budget of March, 1956. That is the way this Government decides to control imports; that is the harsh form of control in which it believes.
The Government’s trade policies have been the most disastrous of all its policies over the past few years. One of the difficulties facing our exporters is the great inflation which has occurred within Australia. The United Nations Statistical Year Book for 1959 stated that the cost of living in Australia in the previous ten years increased by 105 per cent. The two countries which the United Nations compare with us in export and trade matters are New Zealand and South Africa. During the same period, the cost of living increased in New Zealand by only 55 per cent, and in South Africa by only 48 per cent. Therefore, on the very threshhold, Australia is penalized by twice the amount of inflation under which any similar country labours. The 1959 Year Book of International Trade Statistics points out that the price per unit which we receive for our exports has dropped more than that of nearly any other country in the world and certainly more than th-»* of any comparable country. From 1953 to 1959, the price per unit paid for Australia’s exports dropped by 30 per cent. In New Zealand, the drop was 1 per cent, and in South Africa it was 12 per cent. The very considerable increase in Australia’s exports in quantity was nullified by the record drop in income which Australia received per unit for its exports. Australia’s trading position has declined more than that of any comparable country in the world.
Reference has been made to the export earnings of our primary products. We depend for something like 80 per cent, of our export income on primary products. In the last financial year, 46 per cent, of the money we earned from export income - the highest percentage for 30 years - was already committed for dividends on overseas investments in our companies and in Commonwealth bonds, for repayment of bonds, for freight on our imports, for personal remittances, for overseas travel and for other invisibles. That is, nearly half of our export income was already committed before we got a penny from it.
In many of our products, the position is getting steadily worse. The percentage of the world’s wheat which is sold outside the country of production is steadily falling. In the financial year before last - the last one for which figures are available on a com parable basis - the price for wheat sold outside the country of production was £29 per metric ton. In that year, the price paid to wheat-growers in Belgium was £42; in Germany £45, and in Italy £47. The same pattern can be seen in the case of all our primary exports. On an average we are receiving only two-thirds as much for the primary products we send to other countries as is paid by those countries to the producers of similar products within thenown boundaries. It is not that our products are not as wholesome, fresh or valuable; it is just that this Government leaves the whole conduct of our overseas trade in foreign hands, and the income we are receiving as individual producers and as a nation is therefore continually falling.
One constant factor which affects all our exports and imports is shipping freights. At present, all our exports and imports are carried in foreign ships. We are the only country in the world so situated. The existing services go to declining markets and not to potential markets. Our customers handle our primary products and our competitors handle our manufactured goods. I shall give the committee a few figures of the comparable freights charged on our exports of manufactured goods. As honorable members know, it is well over twice the distance between Europe and the United Kingdom and Singapore as it is between any Australian port and Singapore. The freight on steel, for example, between Australia and Singapore is 170s. Australian per ton; between Europe and Singapore, it is 120s. Australian per ton. The freight on steel between Europe and Hong Kong is 143s. 9d. Australian per ton; between Australia and Hong Kong it is 178s. 6d. Between Europe and Indonesia it is 162s. 6d. and between Australia and Indonesia - only 40 per cent, of the distance or less - it is 175s. per ton. Between Europe and the west coast of the United States of America the cost is 14 dollars a ton, but between Australia and the west coast- 1,000 miles less - it is 20 dollars a ton. In every case, the freight which is charged by foreign shipping companies between Australia and its potential markets is very much greater than the freight charged by those companies from the countries where they are domiciled to our potential markets.
The Government resolutely refuses to have any Australian participation in the transport of Australian products, primary or secondary, to any of its existing markets or its potential markets. I am assured by the Broken Hill Proprietary Company Limited that the stevedoring costs and loading rates at the Newcastle steel works wharf and the Port Kembla inner harbour are better than those in ports in the United Kingdom and Europe.
To-day, the Minister for Primary Industry (Mr. Adermann) tabled the annual report of the Australian Meat Board which states -
Freight rates to the United Kingdom from New Zealand and Argentina have increased by slightly more than 25 per cent, since June, 1955, whereas corresponding rates for Australia have risen by 62 per cent, for frozen beef, 40 per cent, for frozen lamb and 34 per cent, for frozen mutton.
The same companies serve both markets. We are being charged all that the traffic will bear, because we have no Australian ships engaging in the trade, whereas New Zealand and the Argentine, using their own ships, have.
The Government should also deal with the subject of export franchises granted to Australian manufacturers by their overseas principals. The post-war companies which dominate or completely own our motor, oil refining and chemical industries, will not allow or encourage exports from Australia to overseas markets. The motor industry, of course, is the worst of all. The companies which are owned in Great Britain are not allowed to export a single vehicle from Australia, although the same models come from Great Britain to countries only a few hundred miles from our shores. Whereas Great Britain and Germany export half their motor production, France a quarter and Italy a third, we export less than 2 per cent. We import £90,000,000 worth of motor cars and parts every year and we export £9,000,000 worth. This, our largest industry, has a vast home market which should enable it to compete overseas, but it is not allowed by its British owners and is deterred by its American owners from selling Australian products overseas. Our largest industry neither meets the local demand nor earns its own overseas dividends.
Even if we are condemned under this Government to be a British farm or a
Japanese mine, we do nothing by commodity agreements to produce a better income from our exports of mineral or primary products. The great industrial complexes of the world - North America, western Europe, the Soviet bloc and Japan - cannot, or cannot economically, produce enough metals for their own industries. They depend on central Africa, South America and Australia for the minerals they require to keep their industries going. Instead of approaching the other mineralproducing countries to stabilize and advance our export incomes, this Government completely leaves the exploitation, the extraction, the transport, the processing and the marketing of our mineral products to companies owned on either side of the North Atlantic. This Government does nothing to produce a reasonable return, either for our primary products or for our mineral products. Our mineral products and most of our primary products, notably our wool fibres, are required by the rest of the world, but are not achieving a proper return for their producers or for this country. Again, this Government refuses to allow our marketing boards themselves to sell our products.
– Order. The honorable gentleman’s time has expired.
.- The Deputy Leader of the Opposition (Mr. Whitlam) referred to the motor industry’s share of the export markets. I am afraid he has not studied this situation very clearly or, if he has, he has not given a true impression to the committee. The situation is that the old established motor industry in Australia is in fact gaining a greater share of the export market all the time. I have had some close personal association with the activities of these companies overseas and I know the efforts they are making in the export markets. They are meeting with more success each year. What the Deputy Leader of the Opposition has not said, of course, is that the newer British manufacturers, which only recently commenced manufacturing in Australia, have not yet had an opportunity to enter these markets. Negotiations with the parent companies of these organizations are well in hand, and we hope that franchises will be extended so that we will have an opportunity to enter markets, not only in New Zealand but throughout the whole of Asia, with the products of British manufacturers just as we have to a growing extent with the products of the American manufacturers.
The Deputy Leader of the Opposition also referred to declining trade balances. I know he has not seen the latest figures, so I had better quote them for him. These will show that the situation is exactly the opposite of the impression he tried to convey. For the first month of this financial year, July, we had a favorable balance of £16,500,000. This continued through the first week in August, when we had a favorable trade balance of £21,200,000, and for the rest of August, I understand, the figures are running at about the same level. When we add this to the very favorable overseas reserves of well over £500,000,000 that we had at the end of the last financial year, we have a favorable balance at present, with a continuing inflow of capital both private and government, of over £550,000,000. I think this is the answer to the complex suffered by the Deputy Leader of the Opposition, which shows itself in a lack of confidence in his own country.
In discussing the estimates for the Department of Trade, I want to refer to the Australian tariff system. First, I want to pay a tribute to the Chairman, the deputy chairmen, members and staff of the Tariff Board for the tremendous national job they have been doing, particularly over the last year, and for the very satisfactory results they have attained. It is pleasing to see that these men are so devoted to their duty that they have been able to get through a tremendous volume of work in the past year in a way satisfactory to Australian industry. When we examine the estimates, we find that the cost of this system is relatively low. The total cost of the Tariff Board for the whole of this year is only in the vicinity of £148,000. Considering its ramifications and the importance of its task in a national sense, this is a very cheap service.
To understand the tariff system, it is necessary to go back over the history of the system in Australia. We find that the tariff has been used to protect local industry since federation. The first tariff was introduced in the form of a proposal in 1901 and the first legislative measure, the
Customs Tariff Act, was introduced in 1902. It was on a moderately protectionist basis. It represented a compromise between the protectionists, led by the State of Victoria, and the free traders, led by the State of New South Wales. At the same time, it was also introduced for obvious reasons to meet some revenue requirements of the Commonwealth.
In 1920, tariff protection was given to industries established during the First World War, and in the same year a system of deferred duties was implemented to encourage the establishment of new industries, notably iron and steel. The principle of deferred duties was that a protective rate was inserted in the tariff and industry was told that it would operate when local production commenced. By this time in our history, free trade opposition to tariffs had largely disappeared from the Parliament. However, because of the limited range of local industry, only relatively small numbers of tariff items carried protective duties.
In 1921, the Tariff Board Act was passed by the Federal Parliament. This constituted the Tariff Board to advise the Government on tariff matters. The first real results from the board were seen in 1925, when duties were increased on some 50 items as a result of Tariff Board recommendations and were reduced on a few minor items. During the world depression, imports were restricted and heavy tariffs used to encourage industry. These were imposed by the Scullin Government at that time. Incidentally, the tariffs were fixed without reference to the Tariff Board. The Lyons Government had campaigned in 1931 on the basis of reasonable tariffs and the Tariff Board system. When it attained office, it removed many of the Scullin Government increases, and others it referred to the Tariff Board for review.
However, a new note in the Australian tariff system was introduced in 1932 with the signing of the Ottawa Agreement between British Commonwealth countries. This provided that tariff protection should be limited to industries reasonably assured of sound opportunities for success and should not exceed a level that would give the United Kingdom producers an opportunity to compete on the Australian market. The Ottawa Agreement also marked tb” first significant use of the tariff in bargaining for trade opportunities for Australian exports. Up to that time, a few tariff preferences had been exchanged with the British South African colonies in 1906, and preferences had been accorded unilaterally to the United Kingdom for certain products in 1908. But it was not until 1932 when this agreement was signed that the United Kingdom Government agreed to give preferences in her tariff, and that preferences were introduced over nearly all items in the Australian tariff. The Ottawa Agreement has been superseded now by the new United Kingdom-Australia agreement, but the same principle is still inculcated in the agreement whereby tariffs may be used for bargaining for opportunities overseas for our products. Much advantage has been taken of that method over the last two or three years.
A further significant historical development was the trade diversion policy of 1936. which was designed to switch business to Australian industry and to “ good customer “ countries from “ poor customer “ countries which at that time included the United States of America and Japan, strange to say. This was attempted partly through tariffs and partly through a system of import licensing. The licensing controls were removed largely by 1938 and some of the tariffs were reduced, although many still remained in operation at the outbreak of the Second World War. From 1932 to 1939, protective duties were fixed only after Tariff Board inquiries, except that some of the duties under the trade diversion policy were fixed first and then sent to the Tariff Board for review. However, with the outbreak of the Second World War the board’s normal work virtually ceased, but the Government, recognizing the importance of having the board as an established expert body in the post-war period, took action to keep it intact. This was done by constituting its members as an advisory and consultative committee reporting to Cabinet through the Director of Economic Co-ordination, and by requiring it to conduct inquiries under the national security regulations. Its reports in these roles were not published but were concerned largely with industry matters.
Following the war, the Tariff Board reverted to its normal functions. With an increased work load its membership was increased to seven in 1953, to enable two boards to sit concurrently, and to eight in 1960. In addition, in 1960, provision was made for the board’s two deputy chairmen, who since have been appointed, to examine the necessity for temporary duties under legislation introduced at the same time. The introduction of the temporary duty legislation, in 1960, adapted Australia’s tariff system to the quicker tempo of the post-war period without sacrificing the principle of a tariff, based on careful examination of the effects of particular tariff proposals, fixed by an independent and qualified authority.
It has been claimed to-night that for the first time Australian industry has achieved a stage of comparatively high development, but that it now has complete dependence upon the tariff system as its only means of protection because import licensing was removed last year to a very substantial extent. This claim has been made the basis of an Opposition argument for the re-imposition of selective import licensing to safeguard certain industries. The claim that the tariff is failing as the sole instrument of protection has not been supported yet by any evidence. Some of the figures which I mentioned to-night bear that out. On the contrary, even during the period or maximum inflow of imports during the second part of last year and early this year, Australian primary and secondary industries continued to develop and to expand not only on the home market but also in the export field. The temporary duty legislation to which I have referred was introduced last year to enable industries affected by import competition to obtain emergency tariff assistance to help tide them over while their case for normal protection was being examined by the Tariff Board. This system already has been proved in practice, and several industries now are benefiting from it.
The argument for the use of import restrictions as the means of protecting Australian industry appears to lead inevitably to the conclusion that industry is to be protected regardless of considerations of cost, economy or efficiency. However, even if it were envisaged that industries which would receive licensing protection would first need to demonstrate their economy and efficiency to the Tariff Board or some similar body - it is by no means certain that the supporters of import licensing envisage any system analogous to the Tariff Board system, and the Opposition has not stated yet whether it intends to set up some such body - once protection through licensing has been given the stimulus of import competition is removed since local industry is assured of a proportion of the market. This of course has an adverse effect on the cost system and is also inflationary in tendency. Australia’s international commitments also preclude the use of quantitative restrictions except for balance of payments reasons. Article XII. of the paper which was tabled in the House by the honorable member for Lalor (Mr. Pollard), who was then the Minister for Commerce and Agriculture, is in these terms -
This Article permits any party to restrict the quantity or value of merchandise permitted to be imported, in order to safeguard its external financial position and balance of payments. Import restrictions may be imposed only for the purpose of fore-stalling the imminent threat of, or stopping, a serious decline in its monetary reserves, or for achieving a reasonable rate of increase in its reserves.
Restrictions applied shall be progressively relaxed as conditions improve.
When the amendments were made by regulation in 1955 the wording was somewhat similar to that contained in Article XII. The paper to which I have referred was confirmed by the International Trade Organization Act, No. 73 of 1948, which was introduced by the previous Labour Government. It is interesting to learn that the Opposition, which committed itself to the provisions of that act in 1948, apparently now is prepared, in circumstances which have been mentioned, to breach the act which it introduced at that time. Apparently one’s attitude when in opposition is different from one’s attitude when in government. Acts of that nature do not carry the same responsibilities for an opposition as they do for a government. This Government is firmly of the opinion that stabilitiy of international trade is vital to Australia and it is prepared to honour its international obligations as contained in the act to which I have referred.
Another point which must be considered is that Australia has argued consistently against the use of quotas and import restrictions as a means of protecting industry because our export trade comprises largely commodities which are extremely vulnerable to that kind of protective action by other countries. To use the same means ourselves to protect Australian industries would weaken our stand against their use overseas. Continued emphasis of this point by the Opposition again indicates its lack of concern for Australia’s great primary industries. Import licensing gives detailed administrative control of imports to officials.
Order! the honorable member’s time has expired.
.- The speech of the honorable member for Darling Downs (Mr. Swartz) is characterized by completely inaccurate statements of the position which has been taken up by the Opposition. The only conclusion I can draw is that the speech which he read word for word was written long before the Opposition advanced its proposals to the committee to-night. Briefly, his argument was that the Opposition believes that we should again use import licensing because the tariff system has failed. No one on the Opposition side has even hinted at that. No one has suggested that that has anything whatever to do with the case. The honorable member for East Sydney (Mr. Ward) and the Deputy Leader of the Opposition (Mr. Whitlam) were quite clear about the situation. We claim that Australia may have to use import licensing because the alternative is to attempt to control imports by cutting down the demand for everything in Australia. We have the choice of a depressed Australian economy, with unemployment and with insufficient effective demand which apparently is causing the honorable member for Mitchell (Mr. Wheeler) so much concern, or an economy which is functioning at a much better and higher rate associated, perhaps if necessary, with import licensing. That was our argument and the honorable member for Darling Downs has completely misunderstood the propositions that have been made. This causes me to wonder very often, when apparently senior supporters of the Government - the honorable member for Darling Downs has a responsible position in relation to the Department of Trade - are unable to understand arguments put forward by the Opposition, whether they are able to understand anything else. 1 want now to refer at some length to the tobacco-growing industry which makes an important contribution to the Australian economy. About 31,000,000 lb. of tobacco was produced in 1960-61. The recent history of the industry in Australia is an example of the results of unplanned and chaotic free enterprise. People who are evaluating the significance of public enterprise as it is becoming more and more relevant and important to the Australian economy to-day, should bear in mind the history of our economy, because tobaccogrowing is an example of unplanned and chaotic free enterprise. The Government wanted an expansion of tobacco-growing in Australia. In 1952 the then Minister for Commerce and Agriculture (Mr. McEwen) said that it was planned to increase tobacco acreage from 6,000 to 16,000 acres in the ensuing five years - an increase of 166 per cent. But since that date the area under tobacco has increased from 8,199 acres to 30,183 acres - an increase of 268 per cent., or over 100 per cent, more than the Minister said was planned! What sort of plan was it, if that was the result?
On the 28th February last, the senior inspector of agriculture in Victoria, Mr. Walter McDonald, said that if the current rate of expansion throughout Australia was continued for a further two years we could have a potential production of around 50,000,000 lbs. in 1962-63 and a serious disposals problem. The present Government, by encouraging the expansion of production has allowed a disposal problem to come into existence not in 1962-63, as Mr. McDonald anticipated, but in 1961. The Government must accept some responsibility for the over-production that has occurred. The tobacco-growers’ organizations, consisting very largely of large landowners and tobacco growers, told the small growers that everything they produced could be sold. But they had a direct motive for this. They wanted to sell or lease the land which they owned. Therefore they are responsible for some of this trouble. So, the responsibility for overproduction lies to some extent at the door of governments and to some extent at the door of the larger land-owners in the industry. But the cost of the overproduction has been borne almost exclusively by the small growers. Neither the Government nor the tobacco-growers’ organizations are willing to bear the responsibility for overproduction.
This has fallen almost entirely on the small growers. The crisis in the industry has existed for the greater part of this year, and intensely since the beginning of June. There is an unequal struggle at tobacco sales. The growers who are sellers in large numbers face only four buyers on the Australian market, Rothmans, Wills, Phillip Morris and Godfrey Phillips. Clearly those four buyers are in a position to come to arrangements and agreements with one another in their dealings with thousands of individual growers. The position is totally unbalanced and unequal - another characteristic of free enterprise.
In this situation of crisis the Minister for Primary Industry (Mr. Adermann) told us in a statement on July 7th that the Government did not intend to take action to compel the inclusion of unusable leaf in the manufacture of cigarettes and tobacco for consumption by Australian smokers. He said it had no intention of seeing usable leaf left unsold. From the very outset the Government has acted on commercial principles. It was prepared to agree that usable leaf should not be left unsold, but it would do nothing in regard to unusable leaf. Now the decision as to what is usable leaf and what is not lies almost entirely in the hands of the buyers and it is a commercial proposition that the Government is prepared to accept.
A committee was appointed by the Government to examine the unsold leaf from the last sales in Victoria and as far as I am aware no more than 3 per cent, of that tobacco was classified as usable. As a commercial proposition, therefore, less than 3 per cent, of the tobacco left unsold is capable of forming any basis for a return to the growers. On 16th August, with the weeks going by and still nothing being done, a deputation met the Minister for Trade (Mr. McEwen) and he said he was concerned to see that a stable basis was achieved for the production of leaf acceptable to Australian smokers at prices that would enable the industry to survive as a paying proposition. He should have said “ leaf acceptable to the Australian buyers or manufacturers”, because they are the sole judges and their publicity and advertising campaigns are such that they could sell posts and rails to the Australian smoker and get away with it. It is not the Australian smoker who determines the kind of tobacco that is sold in Australia. It is the Australian tobacco manufacturers, with their high pressure advertising campaigns, who do it.
When the Minister for Trade talks about giving a stable basis to this industry he is using words which are meaningless. On 17th August, still with days going by and nothing being done, the Minister for Trade met a committee of the Australian Tobacco Growers Council for the second time. He said that there was an indication that another committee might come into existence to make a full examination not only of the auction results but also of the general problems associated with the industry. On the same day the honorable member for Wide Bay (Mr. Bandidt) introduced a bit of realism into the situation. He said that the difficulties of the industry needed investigation and action. He also said -
It is significant that last year the prices realized were close to the reserve or appraised prices. This year, on the average, they are by no means near the reserve price. My investigations have led me to the conclusion that there is no rhyme or reason for the difference this year between the reserve price and the sale price.
The honorable member said it was not possible to guess what kind of leaf the buyers wanted and that an ill wind for the growers was a favorable wind for the buyers. He also said -
It seems that the buyers have not adopted the rule that price is governed by the law of supply and demand. Apparently they have adopted a different rule - the rule of engineered lack of demand. The result has been ruination for some growers, great hardship for others, and uncertainty for all.
The honorable member for Wide Bay, a supporter of the Government, believes that the blame rests fairly on the buyers, yet I assume that he will continue to vote for this Government which has done nothing to come to grips with the situation which he has analysed for himself. Certainly the Government has not come to grips with it.
On 13 th August the honorable member for Indi (Mr. Holten) said that the Tobacco Growers Council might ask the Commonwealth and State Governments for assistance to conduct an investigation into the general problems of the tobacco-growing industry. He asked the Minister for Primary Industry a question and the Minister replied that the request had been made and that the Commonwealth was willing to assist. Weeks went by. The Commonwealth is willing to assist! But the other day, in answer to a question which I put on notice, the Minister said that no money whatever had been provided for the tobacco investigating committee to give assistance in hardship cases. This is nearly three months since the crisis developed.
– The committee operated within a week or so of when I said that.
– Has the committee recommended any assistance to anybody? Has the Government provided one penny to assist anybody?
– The committee is still sitting.
-Yes, it is still sitting while people are going broke. How long is it to sit? That is what the people in the industry want to know. The following typical figures show the inability of growers to sell tobacco: - Of 49 bales sent for sale, twenty were sold; of 86 bales sent for sale, 24 were sold, and of 22 bales sent for sale, three were sold - and at half price. These people have had only one-sixth of the income that they had last year yet committees are sitting and investigating and have been doing so since the beginning of June. If this is the record that the Government wants to be judged upon, I hope it will be judged upon it. This is not the responsibility of the smaller growers but of the buyers in a situation where the Government encouraged production until it became over-production.
On 12th September the Minister for Trade said there was a great deal of evidence that types of tobacco leaf which had found a ready sale in other years are being unsold this year. Types of leaf bought in previous years are regarded by the growers as a guide in planting. They followed that guide and produced that leaf. I have some of it here. It is exactly the same as was sold in previous years but this year they could not get a bid for it. While all this is happening, hundreds of growers are going broke. They cannot meet their commitments, and they are being pestered by the hire-purchase companies who are seeking to repossess their tractors and other assets necessary to the carrying on of their occupations. The Australian tobaccogrowing industry is in a serious plight, and this is an industry which contributes between £15,000,000 and £20,000,000 to Australia’s balance of payments because if the tobacco were not grown in Australia we would have to import leaf to that value. This Government is responsible for the situation that has been created because it encouraged the growers to produce more leaf, as did the big men in the tobaccoprocessing industry who have profited out of pushing the small growers into their present difficult uneconomic situation. I have said that in the Ovens Valley area alone between 300 and 400 growers are in a serious position. The Minister has denied that. Let me tell him that in the visits 1 have made to the area I have interviewed between 70 and 80 growers who are in a serious plight, and I am confident that any honorable member who knows the position will agree that between 300 and 400 growers there are in difficulties.
– Who encouraged them to expand?
– The Government did.
– I warned them against increasing production.
– When did you warn them?
– I warned them.
– Mention cases and give me particulars. You have said that you want to stabilize conditions in the industry. Is this the way to do it? Can you hope to stabilize conditions by allowing them to increase their acreage by 50 per cent, last year and by another 50 per cent, this year?
– The States are responsible for production.
– You are the responsible Commonwealth Minister. You say you warned them against over-production.
– And was not that part of your responsibility as Minister for Primary Industry? As a result of this over-produc tion, hundreds of growers are now in difficulties. The honorable member for Wide Bay (Mr. Bandidt), one of the Government’s supporters, says that the blame rests with the buyers. It is not the four great monopolies in this country who will be carrying the cost; it is the 300 or 400 small growers who will bear the burden.
Order! The honorable member’s time has expired.
.- As my time is limited, I shall not waste it in replying to the honorable member for Yarra (Mr. Cairns), who referred to the tobaccogrowing industry. I shall leave that to the honorable member for Indi (Mr. Holten), who has specialized in the problems confronting this industry. I shall refer mainly to the wheat stabilization plan, and the importance of the wheat-growing industry to our export trade. I remind honorable members that the wheat-growing industry is second only to the wool industry as an export income earner for Australia. In 1959-60, the total value of wool exported was £410,000,000, and last year it was £356,000,000. In 1959-60, the export income earned by the wheat industry was £77,000,000, and last year that figure increased to £122,000,000. The third highest income earner from export trade is the meat industry, which returned £89,000,000 to Australia in 1959-60 and £62,000,000 in 1960-61.
I point out, too, that although the figure for wheat includes the return from the sale of flour, it does not include income earned from the sale of such coarse grains as barley and oats. Last year, we had a record wheat harvest, and although the total income earned by the industry for 1960-61 was increased because of that good harvest, that does not necessarily mean that the harvest this year will have a similar effect upon the export income earned for the 1961-62 season, because there is a carryover of wheat from season to season. Therefore, the effect of the record harvest this last year will be spread over two years, but I have quoted these figures to emphasize the importance of the wheat industry to Australia.
As all honorable members are aware, the wheat stabilization plan was renewed in 1958 for a further five years. That fiveyear period will terminate with the 1962-63 harvest. The plan provides for a guaranteed price to cover cost of production for 100,000,000 bushels of export wheat, and all wheat consumed on the home market. Many people believe that the cost of production is guaranteed for all wheat exported. That is not so. The farmers receive cost of production only for all wheat consumed within Australia, plus 100,000,000 bushels of exported grain. The amount of wheat consumed within Australia last year was 60,000,000 bushels. This means that the guaranteed price was paid for a total of 160,000,000 bushels, which includes 60,000,000 bushels consumed within Australia and 100,000,000 bushels exported. I point out that a further 90,000,000 bushels were exported last year, but this would be sold at world parity prices.
The honorable member for East Sydney (Mr. Ward) has said that the Government deliberately sold wheat to red China at below the cost of production. That statement is a long way from the truth. Certainly it was sold at below the cost of production, but not deliberately to benefit red China. It was sold to red China for no more and no less than world parity prices. Therefore, the charge by the honorable member for East Sydney that this Government is deliberately selling wheat to red China at the expense of the Australian taxpayer is without any foundation whatsoever. In making the statement he did, the honorable member for East Sydney has indicated quite clearly that he has no knowledge whatever of our primary industries. Other honorable members opposite have on many occasions evinced a similar lack of knowledge. It seems strange that, right on the eve of an election, honorable members opposite should seek to discuss such matters as the wheat and tobacco industries, about which they know nothing.
I suppose one should at this stage congratulate the Australian Wheat Board on its magnificent achievement in arranging for the disposal of this huge harvest. When we consider that we had a carry-over last year of some 60,000,000 bushels, and that another 250,000,000 bushels was added this year, and that practically all of that wheat has been cleared, with the exception of the normal compulsory carry-over of at least 20,000,000 bushels, we must agree that congratulations are due to the board for securing the markets for our wheat. But I am afraid I cannot entirely endorse all the actions of the Australian Wheat Board. Of course, this is a democratic country and one is allowed to voice an opinion about something with which he does not agree.
I do not agree with the recent sale of wheat to mainland China on credit. Admittedly, the wheat sold to mainland China has not all been on a credit basis. I understand that some wheat was sold earlier for cash, but the balance has been on the basis of so much down, so much after six months, and so on. I do not believe we should consider selling wheat at this stage on credit to Communist mainland China. Selling on credit could create quite a precedent. We have from time to time sold wheat to other countries, and I contend that we should not give preferential treatment to such countries as mainland China, when there are other countries that have been regular customers of ours for some years. If any credit is to be given, I believe that it should be given to those countries. I realize that the interest rate that we are to receive in respect of these credit sales is greater than the rate payable on the overdraft on No. 24 pool, but this is a case of principle rather than of actual pounds, shillings and pence.
I also suggest that we should keep in mind this Government’s stated policy of refusing to sell strategic materials to such countries as communist China. It seems to me that food could be classed as a strategic item, because we all understood that the Communists regard trade as their No. 1 weapon in international affairs. This is a point that we must bear in mind. Of course the Communist’s money is as good as the next man’s but I believe that while we should adopt a Christian outlook in relation to this issue, we must be mighty careful of possible repercussions.
This evening I have two suggestions to make to the Government. I suggest, first, a continuation of the present stabilization plan - naturally with improvements - and, secondly, an increase in the guaranteed amount. It is most desirable that the stabilization plan be renewed. I do noi suggest that it should be renewed in its entirety, but I believe that it should be renewed in the interests of the wheat industry in general. Furthermore, as the current agreement covers only one harvest after this year’s harvest, the Government should indicate its views to growers, so that they may make their advance preparations. My second suggestion is for an increase in the guaranteed amount. This, of course, could become a very contentious matter, but I believe it is the policy of this Government, as it would be, I think, the policy of a Labour government in the remote chance of the Labour Party being returned to power on 9th December, to ensure thai our exports are increased in every possible direction. The wheat industry is one on which we should keep a very close check in order to ensure that the value of its product continues to increase. With the increasing population we must have increasing consumption. An increase of population will also result in increased imports, and this in turn will require increased exports. Wheat-growing is one industry that I believe we can expand if the grower is given sufficient encouragement. One way to give this encouragement is to increase the guaranteed amount.
Much has been said about the bill that the taxpayer will have to foot, but we must remember that there has been a period of low home-consumption prices, in comparison with the high export prices of some ten years ago. This has meant that the growers have remained about £200,000,000 behind. I believe, therefore, that it is not unreasonable to expect taxpayers to accept their responsibilities by assisting the stabilization fund. The guaranteed amount is now 100,000,000 bushels. I suggest that we should consider 100,000,000 bushels as a basis, and that a percentage of all wheat exported in excess of 100,000,000 bushels should be added to the guaranteed amount. In this way the grower would not be penalized for producing more wheat for which he would receive only world parity prices, which are below the cost of production. I urge the Government to consider this suggestion and to take appropriate action in due course.
– I wish to make a few comments on the subject of trade. I had intended to speak only on the subject of world trade and the effect on Australian trade of the projected entry of the United Kingdom into the European Common Market. I do wish to warn this Government and the people of Australia that we have reached a position in respect of world trade that will require a good deal of consideration.
Recently I attended, as a representative of this Parliament, the meeting of the InterParliamentary Union at Brussels. One of the resolutions that were discussed concerned the “ effects on world trade of the policies followed by the regional economic community “. A long resolution was considered by the council of the InterParliamentary Union when it met in April last. This Parliament was represented by a member of this House and a Senator, and the council met to consider what would be placed before the conference at the meeting in Brussels. The representatives of the 61 countries that were represented at the conference gave us the views of those countries on the effect of economic communities on world trade. I am sorry that I have not time to place before the committee the full text of the resolution that was debated at the conference of the InterParliamentary Union and full particulars of the recommendations made by the conference. 1 happened to be in London on the day when Mr. Macmillan, the United Kingdom Prime Minister, spoke in the House of Commons on the European Common Market. I was unable to get a place in the galleries of the House, because they were crowded, but I obtained a seat in the galleries of the House of Lords and 1 heard Lord Home explain, as the Prime Minister had done in the House of Commons, what the United Kingdom was doing about the Common Market. I then heard Lord Alexander, who spoke for the Opposition after Lord Home had finished. I must say that both those gentlemen were very non-committal about what England intended to do. I have at home a copy of the “ Hansard “ report of both of those speeches. After Mr. Macmillan had concluded his speech, I was able to get into the galleries of the House of Commons, and I heard Mr. Gaitskell reply to the Prime
Minister’s speech on behalf of the Opposition. The speaker from the Government side who followed him was bitterly opposed to Great Britain’s joining the Common Market. 1 can tell the committee that all the delegates present at the conference of the Inter-Parliamentary Union in Brussels were very deeply interested in the outcome of Britain’s application to join the European Common Market. A report presented on behalf of a committee that had considered the matter explained the resolution that was submitted to the conference and recommended that it be approved by the delegates. Representatives of some countries proposed amendments to the resolution. 1 found that the problems of world trade are uppermost in the minds of the authorities in all the countries represented at the conference. I had the honour to speak first on behalf of the Australian delegation in the debate on the resolution on this matter I told the conference that we in Australia had obtained very little information about what the six countries which are members of the Common Market had done or intended to do. Indeed, the information that we obtained from the committee which inquired into the matter on behalf of the Inter-Parliamentary Union was very little indeed. I pointed out that the only positive result achieved by the Common Market was the practical forcing of the United Kingdom to apply for membership and said that we wanted to know what the countries which were members of that organization intended to do about the United Kingdom’s application. I stated that we in Australia felt very strongly about the possible effects on this country.
The general feeling expressed by the representatives of country after country who spoke on this resolution before the conference of the Inter-Parliamentary Union, particularly the representatives of the countries which have only recently attained independence, indicated that many of them have an absolute belief in free trade. Amendments to the resolution were proposed, and the statements made indicated that some countries would prevent Australia from doing even what we do now to protect the producers of butter and wheat by fixing home-consumption prices.
– That applied not just to primary industries but also to secondary industries.
– 1 am speaking only of primary industries now. I am very much afraid that if Britain joins the European Common Market we shall be seriously affected. I say again, as I have said before, that the Government of the United Kingdom is entitled to do what it considers best in the interests of that country, just as the Government of this country must do what it considers to be in the best interests of Australia. The questions that I put to the Inter-Parliamentary Union conference were: What are The Six doing? Are they doing something to improve trade between all countries, or are they just doing something that will be for their own benefit? My opinion is that they are just protecting themselves and not doing anything for others.
We can see what will happen if the United Kingdom joins the Common Market. If Great Britain does not resist demands for preference, by the existing members of that organization, we shall lose our preferences as a Commonwealth country. France, with much lower costs of production, will be able to export wheat to England at a price lower than that at which we can afford to export. This will make the situation very difficult for Australia with respect to wheat. Then we have to consider fruit. I travelled practically right through Italy by road and saw what the Italians are doing in their orchards. Tasmania depends very greatly on its exports of apples, but, having seen what the Italians are doing in their apple orchards, I am afraid that we shall suffer disastrously from their competition if they are allowed equal access to the United Kingdom market for apples. We shall suffer if the preferential treatment that we get at present is ended.
Much the same can be said about other commodities that Australia exports to the United Kingdom at present. I saw something of the intensive methods of cultivation on the volcanic soils of Italy, where three crops a year are produced. For example, beneath the apple and peach trees vegetables and other crops are to be seen growing. Our guide told us of the tremendous output of these products in Italy. After arriving in England, I read an article in one of the journals which dealt with the low cost of production in Italy. It pointed out that Italian farm workers receive wages only half as great as those they could get in industry, but that they prefer to remain on the farms. All these factors emphasize the possible serious consequences for Australia if the United Kingdom joins the European Common Market and the countries which belong to that organization are given preferences in the English market equal to those that we receive.
We have not been able to get any very definite information on these matters. As I asked when addressing the conference of the Inter-Parliamentary Union: How are we in Australia, about 13,000 miles away, to keep our trade with England in competition with European countries if they are given equal access to that market? We could not sell at competitive prices. We know what is happening already in respect of butter. We know the prices at which European countries sell it in England compared with the price at which we sell. The members of the Australian Country Party who sit in this chamber know the difficulties in that respect very well indeed. And those difficulties will be intensified.
It seems to me, Sir, that we have to seek alternative markets for many of our export commodities if we are likely to lose our advantage in the United Kingdom market. We hear much talk about the undeveloped countries and what we can do for them. Many of them seem to think that it is their right to be given what the developed countries have to offer. In their view, the haves ought to give to the have-nots. The undeveloped countries want to promote free trade throughout the world. They would prevent us from imposing even quantitative restrictions on imports of any kind. I take a very serious view of the situation in view of the fact that so many countries want to give effect to that policy. The effects on Australia could be very serious indeed.
We talk much about prospective markets in Asiatic countries. But, as honorable members on this side of the chamber said earlier to-day, they will be able to buy from us only if they can improve their standards of living. They cannot buy at the prices that we would need to get in order to meet our cost of production, unless they have much higher standards of living. This Parliament and the Australian nation have to look very much into the future. I can well understand the anxiety of the Minister for Trade (Mr. McEwen) about prospects for this country. We have to export manufactured goods to countries that want to be allowed to export their goods to Australia without hindrance. To-day we hear discussed the question of the limitation of Japanese imports, mainly textiles. The general tendency in the world to-day is for countries, while maintaining their own trade restrictions, to try to get other countries to abandon theirs. One delegate from one of the undeveloped countries said that there should be no expenditure on armaments. We in the Labour Party believe that, too, of course. But he said that the money now spent on armaments should go to the undeveloped countries - not to our own people, but to the people in those countries. The fact is that the people in the undeveloped countries have been for so many years on a low, miserable standard of living that they think they ought to be brought up to our standards right away, and that we ought to do it for them. I say that every child in Australia is entitled to a fair share of our production, but the people from those countries go further than that. They say that every child in the world is entitled to a fair share of the production of the world, and it would be hard to argue against that. The point I want to make is that we see countries to-day that want to alter what we have been doing in the field of trade and tariffs. They want to abolish all tariffs - not just lower them. They do not want tariffs to be utilized to protect an industry such as the poultry industry mentioned by the honorable member for Mitchell (Mr. Wheeler). We had the honorable member for Yarra (Mr. Cairns) pointing out that the tobacco industry needs protection. We have to protect that industry, but if the undeveloped countries had their way all that kind of thing will be wiped out, and there would be no protection.
I understand that Ireland, as well as Great Britain, now wants to go into the Common Market. Ireland is not anxious to enter the Common Market just in order to benefit the rest of the world. Her desire is to give herself a better chance in trade.
– Order! The honorable member’s time has expired.
.- I want to address myself mainly to the embargo on the export of merino rams. I have always had the impression, recently confirmed, that this embargo is a completely ridiculous restriction. The argument used to justify it is twofold. First, it is argued that the embargo stops other countries from having access to fine wool merino blood which, if they could have it, would enable them to compete with us in the sale of fine wool. The second argument is that the embargo prevents rams from becoming dearer, and this is supposed to be a good thing for the wool industry.
The argument that other countries are precluded from getting access to fine wool blood I answer by saying that Australia has natural advantages which suit the breeding of fine wool sheep. The effect of climatic conditions on the breeding of fine wool can be seen within the borders of Australia itself. In Victoria, particularly in the wetter parts where the climate does not suit merino breeding, you find a much greater proportion of crossbreeds or British breeds. We have been exporting merinos to New Zealand for years, yet quite definitely there has been hardly any increase in the number of merinos in that country. Plenty of merino blood went overseas, particularly to South Africa, before 1929 - enough to enable overseas countries to grow all the merino fine wool they wanted to, if they could. The position simply is that the conditions in those countries do not suit a large increase of merino breeding. This was brought home to me very clearly this year in Nepal, where I was told that there were four breeds that I should look at - Dorset Horns, Corriedales, Romney Marsh and Rambouillets. I remember spending about four hours on a rough track in a jeep, and another four hours struggling up some very big hills, and suddenly coming to an experimental station. As a Dorset Horn stud breeder myself I was disappointed with the performance and the appearance of the Dorset Horn, Corriedale and Romney Marsh sheep there. The outstanding sheep were the Rambouillets. The Rambouillet is a firstclass animal, a big bold sheep with very fine wool. This superstition, almost, that only Australia can grow big, bold fine wool sheep is wrong. These Rambouillets were outstanding in constitution, maybe a bit woolly in the head and a bit woolly in the points for us, but for the production of fine wool they were really excellent. That brought home to me as never before that Australia is not the only country that has the ability to breed fine wool sheep.
The truth is that it is the environment that determines the suitability for breeding fine wool. We should not delude ourselves that we have all the stud breeding ability in the world. Nobody denies the quality of our stud breeders, but we should not think that we have a monopoly. You find a similar quality in Britain, where the stud breeders have been exporting their top quality stock for many years, and the rest of the world goes back to them continually. It is not access to fine wool blood which is important, it is the environment in which it is run, and there are not many parts of the world in which the environment is suitable.
Now for the second argument - that if the embargo is lifted the prices of flock rams will go up. I say that that is completely ridiculous, and I speak as a stud breeder, though not a merino stud breeder. I know that this particular branch of rural industry follows exactly the laws of supply and demand. What happens if the price of rams does go up? First, the high price leads to an immediate increase in the incentive for the young stud breeder who has to go through a very expensive and trying time in establishing his flock. It is not an easy job to take on. If he has the thought that he may one day break into this bracket of people selling high priced rams this gives him an incentive to go on. The other and most important point is that if the price of flock rams goes up the demand is very quickly met, because there is an incentive to produce. Being a man of some modesty, Mr. Temporary Chairman, I do not like to follow this argument to its logical conclusion, but there is one certain way of getting more rams, and that is by having fewer wethers. That is the kind of attack that the stud breeder would take. He would say, “ There is going to be a greater demand, so I will breed more,” and in two or three years time the prices would come back. Even if I am wrong in my assessment, and the price of rams were not affected, I think it has to be admitted that if, in fact, the price of stud and flock rams went up all through the Commonwealth it would be a good thing for the stud breeding industry.
Many people are under the delusion because they read of high prices that stock breeders get at stud sales - and it is common knowledge that some are rigged to a certain extent - that this is a very profitable industry. The fact is that it is just on the balance. There are people coming into and going out of it all the time. If you look at the stud merino register, you will find that there are as many going out as coming in. If the price of rams does not go up, it destroys the argument for the embargo. If it goes up, it would be a good thing for1 the wool-growing industry which is our chief export industry. If I was wrong on the first conclusion - that the embargo does not make any difference to the amount of fine wool that is sold in competition with us - that would be a good thing also. We certainly need more fine wools in the world. The manufacturers of synthetics would go all out if others were to take up the production of synthetics because they know that the more synthetic materials there are, the stronger is their competitive position. I say definitely - and this would be supported by the industry - that the more fine wool there is in the world, the better would be our competitive position against synthetics.
There are other arguments that can be used against the embargo. The first is that because we have an embargo, it weakens our position when we argue against the imposition of the United States tariff of 25i cents per lb. on wool. It ill behoves us to argue against restrictive trade practices in this regard when we ourselves have a restrictive trade practice. The second argument is that we allow the export of Polwarths and Corriedales. I would say to members of the Opposition who have been fairly vocal in this matter that I defy most of them to tell the difference between a young Polwarth ewe and a merino ewe. What a ridiculous state of affairs it is when we can export a Polwarth which is three-quarters merino but cannot export a merino. Any stud- master worthy of the name overseas, if he concentrated on the fine strain of Polwarths wool, could breed from Polwarths a fine wool sheep equal to a fine wool merino in ten or fifteen years. The other argument is the export income. Everybody is urging primary producers to increase our export income. Here is something that we could do which is quite simple, and it seems ridiculous that we turn away this opportunity. In my opinion, the embargo on the export of merinos is quite ridiculous. This embargo was introduced in 1949 under a Labour government. lt has been in force for twelve years under a Liberal-Country Party Government. The reason given by the Minister for Primary Industry (Mr. Adermann) - and I think I quote him correctly - is that the lifting of the embargo has not yet been requested by all the industry groups. I find that attitude fairly hard to understand. If it is as clear to the Minister as it is to me and to most thinking people interested in the wool industry, I would think that the Minister would accept the challenge and would say, “I am not going to wait foi all the wool industry groups to come together and express an opinion in favour of lifting the embargo”. I believe that at some stage the Minister should give a definite lead in this matter.
There is a growing tendency to-day to leave things too much to the agreement of industry groups. There is too much shilly-shallying. Look at the beef industry research levy and the hesitation there was within the industry on it. Think of the vacillation in the Victorian committee on wheat research and the hesitation there was on the appointment of a committee of inquiry on wool. At a time like this, the Minister and the Government should be prepared to take their courage in their hands and give a lead rather than be pushed from behind by industry groups. I have not been in politics very long. I have always understood, in the old-fashioned life that I used to live, that if a thing was right you tried to do it and if it was wrong, you tried to prevent it being done. There is room for more of that thinking in the rural sector.
But even if these criticisms might be thought to be somewhat harsh in relation to the other rural industry matters I have raised, on the question of the merino embargo I and anybody interested in or knowledgeable about the wool industry would agree that the case is clear-cut for the abolition of the embargo. I appeal to the Minister to take his courage in his hands, launch out and get rid of an incubus which we cannot properly defend. If we can have a better or more flourishing stud industry, we will have a better and more flourishing wool industry and will be better off.
.- Mr. Temporary Chairman–
Motion (by Sir Garfield Barwick) put -
That the question be now put.
The committee divided. (The Temporary Chairman - Hon. W. C. Ha worth.)
Majority . . …26
Question so resolved in the affirmative.
Proposed votes agreed to.
Motion (by Sir Garfield Barwick) proposed -
That the House do now adjourn.
Motion (by Sir Garfield Barwick) put-
That the question be now put.
The House divided. (Mr. Speaker - Hon. John McLeay.)
Question so resolved in the affirmative.
Original question resolved in the affirmative.
House adjourned at 10.51 p.m.
The following answers to questions were circulated: -
r asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows: - 1, 2 and 3. As I indicated on 28th April, 1960, in reply to a similar question, road construction and maintenance outside the Territories are constitutionally matters for the States and their associated authorities. The Commonwealth, under the Commonwealth Aid Roads Act, is providing an increasing amount of money to assist the States in carrying out these responsibilities. The Government does not consider that the road between Cooma and Bega can be regarded as one towards which the Commonwealth should make special contributions.
m asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows: - 1 and 2. The following ships were on charter by the Commonwealth in the last year: -
Department of Primary Industry -
L.F.B. “Estelle Star”: To survey tuna resourcesoff south-west Western Australia. “A.K. Paxie”: To survey pearl shell beds off the north coast of Australia. Department of External Affairs -
M.V. “ Magga Dan “: To relieve Australian Antarctic stations and for coastal exploration of Antarctic territories.
M.V. “Thala Dan”: To relieve Australian Antarctic stations and for coastal exploration of Antarctic territories. Department of Immigration -
M.V. “Fairsea”: To convey assisted British migrants from the United Kingdom to Australia.
M.V. “Fair Sky”: To convey assisted British migrants from the United Kingdom to Australia. (Note. - Under arrangements entered into in 1957 with theS.I.T.M.A.R. Line, the “ Fairsea “ and “ Fair Sky “ carry assisted British migrants on their voyages to Australia. On the return voyage to the United Kingdom these vessels are operated on the owners’ account for the carriage of private passengers.)
In addition to the ships listed, there are, of course, those launches occasionally hired by the Department of Customs and Excise for customs purposes. In the Territories, geographical and other conditions also mean the hiring of launches, small luggers and like craft, if government-owned craft are not available. Landing craft, for instance, may be chartered where heavy equipment and construction material is to be transported to places which do not possess wharfage facilities.
m asked the Minister for External Affairs, upon notice -
In what instances is it not intended to accede to or ratify treaties drafted or reviewed at conferences attended by Australian representatives or observers since 1950?
– The answer to the honorable member’s question is as follows: -
I have carefully considered the honorable member’s question. I believe that it is not in the general interest that the Government should make any statement which might tend to preclude at some future time ratification of particular international agreements. Whether or not Australia is to ratify or accede to a treaty is a matter of Government policy to be decided at the appropriate time in the light of all the surrounding circumstances.
m asked the Prime Minister, upon notice -
What are the names of the First and Second Division public servants who have resigned in each of the last five years?
– The answer to the honorable member’s question is as follows: -
First Division officers - 1960-61- Sir John Crawford, C.B.E., Secretary, Department of Trade.
Second Division officers - 1956- 57- D. J. Hibberd, First Assistant Secretary, Department of the Treasury; K. C. Porter, Deputy Director, Commonwealth Serum Laboratories, Department of Health. 1957- 58 - J. N. Lewis, Assistant Secretary, Department of Primary Industry. 1958- 59- W. A. Wynes, External Affairs Officer, Grade 6, Department of External Affairs; H. J. Brown, Controller, Weapons Research Establishment, Department of Supply. 1959- 60 - H. P. Weymouth resigned as General Manager, Australian Shipbuilding Board, Department of Shipping and Transport, but continued on a part-time basis as Chairman of the Australian Shipbuilding Board and as Deputy Chairman of the Australian Coastal Shipping Commission. 1960- 61- S. Dodds, Stipendiary Magistrate, Northern Territory, Attorney-General’s Department; P. A. MacLean, Deputy Director of Lighthouses and Navigation, Department of Shipping and Transport; R. W. Greville, Senior Medical Officer, Department of Health.
m asked the Minister for Immigration, upon notice -
– The answers to the honorable member’s questions are as follows: -
s asked the Minister for Immigration, upon notice -
– The answers to the honorable member’s questions are as follows: -
d asked the Minister for Immigration, upon notice -
What is the basic difference in the circumstances associated with the case of the two
Malays, Mr. Daris Bin Saris and Mr. Jaffa Madunne, who were recently refused permission to remain in Australia, and that of Mr. Martin Wang, a former Chinese consular representative, who was permitted to remain permanently and who was granted full Australian citizenship rights? ;
– The answer to the honorable member’s question is as follows: -
The basic difference between the cases of Mr. Martin Wang and the two Malays, Mr. Daris Bin Saris and Mr. Jaffa Madunne, is that the two latter men have been under immigration restriction as indentured pearling operatives which has been renewed from year to year while they have been working in the pearling industry, whereas Mr. Martin Wang has never been under such restriction. Mr. Wang was Consul foi China at Melbourne from 1937 to 1951, when he became Consul-General for China in Sydney. When he ceased to be Consul-General, on 1st December, 1954, he was permitted to remain in Australia for permanent residence and later was naturalized after having been in Australia some nineteen and one-half years. Non-Europeans under immigration restriction may apply, after fifteen years’ residence here, for permanent residence and if the latter is granted, they may apply for naturalization. The two Malays do not meet this residential requirement.
Cite as: Australia, House of Representatives, Debates, 3 October 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19611003_reps_23_hor33/>.