25th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
Address-in-Reply: Acknowledgment by Her Majesty the Queen.
– I desire to inform the House that I have received from His Excellency the GovernorGeneral the following communication in connexion with the Address-in-Reply: -
Mr. Speaker, 1 desire to acquaint you that the substance of the Address-in-Reply which you presented to me on 18th March, 1964, has been communicated to Her Majesty The Queen.
It is The Queen’s wish that I convey to you and honorable members of the House of Representatives Her Majesty’s sincere thanks for the loyal message to which your Address gives expression.
Governor-General. 8th April, 1964.
– I wish to inform the House that the Minister for External Affairs (Sir Garfield Barwick) departed for overseas on 12th April on Government business, which, as honorable members know, is attending at a meeting of the South-East Asia Treaty Organization. He will be absent until 17th April - until the end of this week - when he will return briefly. He will again depart from Australia on 23rd April and will be engaged on various tasks around the world until early June. During his absences I will act as Minister for External Affairs. As I have been heavily engaged over the week-end, if honorable members want to cross-examine me in my new capacity they might wait until tomorrow.
– I ask the Prime Minister a question relating to the fiftieth anniversary next year of Anzac and a proposed visit to Gallipoli by Australian veterans. Is the right honorable gentleman aware that the sponsors of the scheme are experiencing great difficultyin obtaining firm bookings for the trip and may have to charter a ship. Although it appears that the sponsors will be able to raise the finance necessary for the trip, negotiations relating to transport may present difficulties. If a request is received from the Returned Servicemen’s League, will the Prime Minister sympathetically consider providing Government assistance in the negotiations for the trip?
– The president and the secretary of the federal executive of the Returned Servicemen’s League took this matter up with me in person a month ago. I have had many discussions with them. So far I think we are making headway on the matters that they have referred to. I am perfectly certain they understand that any request they may make will receive the most sympathetic consideration possible.
– I direct a question to you, Mr. Speaker. Since a newspaper this morning published extracts from a statement prepared by the Deputy Leader of the Opposition about short-comings in the Australian Labour Party, and since the statement obviously is of great interest to honorable members on both sides of this House–
– I rise to order. Is it in order for the honorable member to base a question on a newspaper account?
– Order! So far, the honorable member is in order.
– I ask: Since this matter obviously is of great interest to honorable members on both sides of the House, will you ask the Deputy Leader of the Opposition whether he would be good enough to furnish a complete copy of the statement so that it can be made available in the Library for perusal by honorable members?
– The answer is, “ No “.
– My question is directed to the Minister for the Navy. Are the reports dealing with rust damage to the floating dock in Sydney correct? If they are correct, what is the estimate of the damage? When the floating dock was leased to Cockatoo Docks and Engineering Company Proprietary Limited was any provision made in the lease for the company to safeguard it against this eventuality? If the company is not to be held responsible, what is the position of the Navy and what is its explanation of the damage?
– Much has been written about this dock over the week-end. From the notes I have, I will tell the House the exact situation and I believe that in so doing I will answer the various questions asked by the honorable member. Because of the dock’s age and condition and the fact that an expenditure of £250,000 would have been required to restore it to full serviceability, ministerial approval was given in 1957 - with the concurrence of the naval business adviser - to dispose of the dock, which was of war-time construction. It was completed for £300,000 in the United Kingdom in 1942. It was purchased by the Royal Australian Navy from the Admiralty for £75,000 in 1947. It was then in Sydney and it was stationed at the naval dockyard, Cockatoo Island.
With other naval equipment at that dockyard, the floating dock was on lease to Cockatoo Docks and Engineering Company Proprietary Limited under an agreement which provided for normal maintenance excluding fair wear and tear to be carried out by the company. Following ministerial approval being given for disposal of the dock, public tenders were called by the Department of Supply in 1957. Three quotations, ranging from £6,000 to £12,000, were received. All the quotations received came from scrap merchants. It was then decided to retain the dock, without refit, as a static dock, in the full knowledge that it had a very limited life.
In the succeeding years, maintenance for this limited role has been carried out by Cockatoo Docks and Engineering Company Proprietary Limited at an approximate cost of £2,500 a year. In view of the dock’s age and its state in 1957, to which I have referred already, recently it was decided that it should be dry-docked for inspection. That survey has indicated that the dock is now beyond economical repair, and it has been condemned for future naval use.
– Has the Treasurer read this morning’s press reports of Treasury purchases on the bond market yesterday triggering off a hectic wave of selling? Can the Treasurer give any information about the correctness of the reports? If they are correct, what are the reasons behind the Treasury’s action?
– The reports are not an accurate account. As soon as I arrived in Canberra this morning, I took the opportunity to raise this matter with the Treasury. In view of the wide publication given to the matter in the financial pages of various newspapers, I think I should set the record straight. There were no Treasury purchases of short-term securities yesterday. The Treasury is a regular purchaser on the bond market, on behalf of the National Debt Sinking Fund. That fund never - I emphasize the word “ never “ - sells securities on the market. Treasury purchases on the market are at present, and have been for some time, confined to securities with a maturity of roughly three years or more. The National Debt Sinking Fund, acting through the Treasury, is not buying short-dated securities; nor does it ever sell such securities. It is not the practice to make public the activities of the Treasury in this way but in view of the reports and the interpretation that has been put on them I thought I should place these facts on record.
– I ask the Prime Minister whether he has seen reports of a trial in Yugoslavia in which it is alleged that nine men were trained in Australia for terrorist activities and that organizations and leaders in Australia who were named are still dedicating and training men to use force and violence in political activities. Is the Prime Minister aware that a question was placed on notice in this House last October, and was repeated on 5th March when no answer was forthcoming to the earlier question, asking whether these allegations were true? Is he also aware that in October of last year the Minister for Immigration was given documentary evidence to examine and promised an inquiry, but so far no results have been notified? Will the Prime Minister say whether any inquiry has so far taken place? If it has, by whom was it made? Will the results of the inquiry be given as soon as possible? Will an answer be given to question No. 73 on the notice-paper?
– The matter of an answer to the question on the noticepaper has been before me over the last week or so. At the earliest possible moment, when I have satisfied myself as to the terms of the answer, I will make it available. If there is any further question on this matter, I would be very grateful if the honorable member would put it on the notice-paper, as I am not personally familiar with the details of this subject However, it may be convenient to the honorable member if he first receives the answer to his earlier question.
– My question is directed to the Minister for Primary Industry. Has he seen the statement made by Dr. S. K. Kon, a world authority on nutrition, concerning dairy products and their value as a major part of the human diet? If he has seen the statement, can he inform me of the steps he and his department have taken to give maximum publicity to these facts so that full use may be made of the information, thus restoring public appreciation of the vital part dairy products play as the health food of the nation and counteracting the misleading statements that have been made by those interests opposed to dairy products?
– I have seen the statement attributed to Dr. Kon. He is one of the world’s leading authorities on the nutrient values of dairy products. He has been invited to come to Australia by the Australian National Dairy Committee. I am quite sure that the committee will itself ensure that publicity is given to this matter. Dr. Kon is to deliver lectures in various capital cities and I hope that the publicity given to his lectures will be sufficient to restore the confidence of the consuming public of Australia in the important dairy products.
– I address my question to the Minister for the Navy. The Minister will recall that at the inquiry into the whaler tragedy the commanding officer of the troop carrier H.M.A.S. “Sydney” said that the ship was short of crew and that it had only a sufficient complement to allow it to steam for two watches and to have a repair maintenance party on board. Has H.M.A.S. “Sydney” yet acquired a full complement to enable the ship to function efficiently?
– As the House will be aware, H.M.A.S. “Sydney” is at present in Sydney. It has just undergone a refit. I understand that its complement is up to strength. However, I will investigate the matter and if the complement is not up to strength I will inform the honorable member.
– I direct a question to the Postmaster-General. Is he aware that the South Hobart post office has certain unsatisfactory features? If so, what steps are being taken to bring the post office up to standard?
– The South Hobart post office is conducted on a non-official basis. We have been aware for some considerable time that the post office building has unsatisfactory features, but we have been unable to find alternative accommodation. The lease is to expire in July, 1964, and we have been able to negotiate with the landlord to have considerable improvements made during the next three or four months.
(Mr. Uren having addressed a question to the Treasurer) -
– Order! The honorable member’s question relates to a matter which is the subject of Question No. 210 on the notice-paper, and therefore it is out of order.
– I direct a question to the Minister for Primary Industry. Is he aware that the current testing scheme at the tractor testing station at Werribee is in difficulties and almost certainly coming to an end? Are the difficulties at the station mainly due to the unwillingness of manufacturers to have tractors selected at random for testing? Do the manufacturers want machines of their own choice tested? Does this mean the end of the tractor testing station? Would the Government consider supporting this station so that testing of unselected tractors may continue?
– The tractor testing station at Werribee in Victoria has been in operation for about ten years, but little support has been given to this station and only fourteen tractors have been tested over that period. The Commonwealth and State Governments, through their representatives on the Australian Agricultural Council, have considered that this is a position that really should not be allowed to continue, and that wider use of the scheme is essential if it is to be continued.
The honorable member has rightly stated the reason for the disagreement between the National Farmers Union and the Melbourne University, on the one hand, and the tractor manufacturers on the other hand. The tractor manufacturers are not prepared to let the tractors be selected at random. At the last meeting of the Australian Agricultural Council it was decided that my department should again call the parties together to see if they could come to some agreement. A conference was held, but the tractor manufacturers were not prepared to play their part by allowing the testing of tractors selected at random. However, the National Farmers Union proposes to make a submission to me on a future testing scheme. The present arrangement expires on 30th June, 1964.
– My question is directed to the Postmaster-General. Why have Postal Department technicians dismantled and returned to Sydney the microwave mechanism linking the Newcastle studios of the Australian Broadcasting Commission with the Channel 5 transmitter at Mount Sugarloaf? Was this equipment installed following extensive renovations to the Newcastle premises and conversion of the auditorium into a television studio? Was it installed to provide direct local telecasting from the Sydney station? Finally, when can Channel 5 viewers expect programmes of local content and interest to be originated in the Newcastle studios?
– I am sorry that I do not have answers to the many questions which the honorable member has raised. I shall look into them and advise the honorable member.
– My question is addressed to the Minister representing the Acting Minister for Trade and Industry, and it concerns newspaper reports of the tariff concessions proposed to be granted to motor car manufacturers provided the local content of their products reaches a certain figure. In view of the great significance of such a proposal and because of the absence of a ministerial pronouncement on the subject, I ask: Can the Minister give the House some information on this matter?
– The Government has always sponsored the development of the Australian motor vehicle industry. The Government’s long-established policy has been directed towards increasing the local content of motor vehicles built or assembled in Australia. In the near future the Tariff Board will conduct an inquiry into a wide range of motor vehicle components to determine whether they should continue to be imported at non-protective rates of duty. There has also been a series of conferences between officers of the Department of Trade and Industry and the Department of Customs and Excise and representatives of all sections of the motor industry on by-law policy for other automotive components. These discussions have afforded all sections of the industry full opportunity to express their views on the proposals. Of course, the Tariff Board’s report will eventually come before the Government. As a consequence, these matters will be discussed by members of the Government.
– My question is addressed to the Prime Minister. I ask whether the honorable gentleman, in his policy speech in 1963, stated -
Having in mind the educational responsibilities of parents, 15s. a week endowment will be paid in respect of all full-time student children from sixteen to 21.
Does it surprise the Prime Minister to know that thousands of parents of teacher trainees interpreted this apparently clear and simple promise to include their children? Does he know that the same thousands of believing parents, having made formal application for the endowment, are now very unhappily receiving notification of rejection of their claims? Did the Prime Minister deliberately mislead these intelligent and responsible citizens in his quest for votes? What is the Government’s reason behind its discrimination against bonded students as such? Will the Government immediately review its decision on this matter
– The promise made in the policy speech has been performed.
– Oh yes, it has. The question of people who are earning money or who are student trainees is an entirely different matter. It has been raised in several quarters of late and it is under discussion; but the proposition in the policy speech has been put into performance, absolutely and completely.
– I ask the Prime Minister: Has the Australian Universities Commission announced that a third university will be established in Victoria and that it is to be located in or adjacent to the metropolitan area of Melbourne? If so, has the commission the authority to make a decision on the location of the university? Irrespective of whether it has this authority, will the Prime Minister endeavour to have the university established in an appropriately picturesque and peaceful rural region in Victoria?
– Mr. Speaker, I am not aware that the Australian Universities Commission has announced the creation of a new university. That really is not part of the function of the commission. The Governments of the States determine whether additional universities are to be established and where they shall be located. Consequently, all I can do is to convey to the Premier of Victoria the ;powerful argument put forward by the honorable member.
– My question is addressed to the Minister for Air. Was the price quoted for the purchase of the TFX bomber a firm price, or is it subject to variation as a result of cost changes in the development and production of the aircraft?
– It was not altogether a firm price; it would vary depending on costs. Some costs would tend to increase and others would tend to reduce. For example, since the time that the Royal Australian Air Force decided to purchase the TFX the number of those aircraft that are to be produced by the American manufacturers has almost doubled. This, undoubtedly, will tend to lower the price. There will also be other factors which will tend to increase the price, but whichever way it goes we know that it will not be very far from the price that was quoted to us.
– I ask the Treasurer: fs it a fact that former servicemen retain their eligibility for compensation benefits, including payment of medical expenses, if, after discharge, they suffer a recurrence of a compensatable injury sustained while serving in the defence forces? Is it also a fact that former servicemen are also eligible for compensation benefits in the event of a disability, due to a personal injury by accident that arose out of or in the course of service in the defence forces, or an illness, due to the nature of their service, developing after they have been discharged?
– The short answer to the honorable gentleman’s question is, “ Yes “.
– I direct my question to the Minister for Air as Minister representing the Minister for Civil Aviation. Is it intended to build a new airport in proximity to the Sydney seaside suburb of Cronulla? Have Commonwealth authorities been secretly engaged with New South Wales town planning authorities in planning this development for some time? Will this international airport be located in the vicinity of Towra Point on the Kurnell Peninsula on the eastern side of Botany Bay? Will this development constitute serious inconvenience to thousands of householders in the Sutherland shire who will be subjected to noise and danger from international aircraft?
– The matter to which the honorable member has referred does not come within my jurisdiction but within that of the Minister whom I represent. I have no personal knowledge of the matter. However, I will refer it to the Minister for Civil Aviation and will see that the honorable member is given a full reply as soon as possible.
– My question is directed to the Minister for Primary Industry. Does the Minister know anything about secret moves, alleged to have been made by the Australian Wool Board, which could result in the closure of five decentralized wool-selling centres at Goulburn, Albury, Albany, Ballarat and Portland? If not, could he have his department make some inquiries about the matter? Will he give the House an assurance that he will use all means in his power to protect these wool-selling centres?
– I presume that the honorable member is referring to the press report concerning certain moves that the Australian Wool Board is supposed to be making. The 1962 Wool Industry Act provides that the Australian Wool Board is to investigate all aspects of marketing. The board has taken action to do this by appointing a marketing committee, which has investigated all aspects of marketing and which will report to the board. That committee has worked very assiduously and I am sure that we will get that report, through the Wool Industry Conference in the very near future. The board’s function is to investigate and advise. Any determination consequent upon the report made by the committee will be made by the Australian Wool Industry Conference. So it is really a matter for the wool industry itself to make some determination. I assure the honorable member that the Government will keep under close surveillance this matter and all other matters associated with wool marketing.
– My question is directed to the Minister for the Navy. I ask: How many ships of the Royal Australian Navy are at anchorage at Athol Bight, Port Jackson? Are these ships being maintained for service or are they being allowed to deteriorate through age, rust or other causes? What is the ultimate destination of these ships?
– I am afraid that my knowledge of the geography of Sydney Harbour is not sufficient for me to know the bight of which the honorable member speaks. I assume that he refers to the reserve fleet. In the area mentioned, certain ships of the reserve fleet are held. 1 cannot from memory recite the names. Those vessels are kept in a state in which they may be recalled for service if they are needed to meet the Navy’s requirements. Normal maintenance is undertaken, and I think that a caretaker crew is kept on board. The ships are regularly inspected to see whether anything has to be done and they would be available for service in the fleet within certain times that are laid down.
– Are they rusting away?
– No. I may say that I should like honorable members not to follow the lead of some people in the community who seem now to take the view that if a sailor coughs he has double pneumonia and that he has sustained it through neglect.
– My question is addressed to the Minister for Primary Industry. Has the honorable gentleman seen advertisements in the press to the effect that certain brands of margarine made from vegetable oils, such as peanut oil, for example, are less harmful to human health than certain dairy products? Can he say whether these advertisements are false and misleading? Has he seen also press statements to the effect that school children in New South Wales cannot be induced to drink milk supplied in the schools? If this is so, can he say whether any thought has been given to making the stuff palatable by mixing it with peanut oil or some other substance, with consequent advantage to the two primary industries concerned?
– I have not seen the particular advertisements mentioned by the honorable member, but I imagine that every advertiser boosts his own product to the best advantage, even exaggerating its qualities in certain circumstances. 1 cannot say whether that has happened in this instance. Peanuts, of course, are always good. I can recommend them. As to the mixing of peanut oil and milk - if that is suggested by the honorable member - I have not tried such a mixture. I have tried a mixture of peanuts and honey, and I recommend it. Milk, of course, is always good on its own.
– I wish to ask the Minister for Social Services a question. Is he aware that the pensions paid to married couples have been pegged at the same rate since 1961? In view of this injustice, will the Minister consider an immediate increase in the rate for pensioner married couples, commensurate with the increase that has occurred in the basic wage, to enable them to meet in some way the high cost of living under the administration of this Government?
– No one knows better than does the honorable member who discusses these matters with me at regular intervals throughout the year, that the general question of the rates of social service benefits will come up for consideration in the normal course of events when the Budget is being prepared, and that the matter that he now raises will be considered then.
– My question is also addressed to the Minister for Social Services. Is child endowment paid to the parents of Australian children in the Territory of Papua and New Guinea? If not, what is the reason? What is the position of an Australian family in relation to child endowment if the family returns to Australia? If an Australian family moves to Papua and New Guinea for how long does its entitlement to child endowment continue thereafter?
– Neither child endowment nor indeed any social service benefit is paid to people who are resident outside Australia unless there is reciprocal agreement appropriate to them or unless they are recognized as residents of Australia for purposes of the Income Tax and Social Services Contribution Assessment Act. Benefits which are paid to persons who previously qualified cease when they reside outside Australia, but when they return to Australia payment of the benefits is resumed immediately.
– I direct my question to the Prime Minister. Is it a fact that from 1949 until early this year a clause in the official Liberal Party policy promised to introduce entitlement to social services without the application of a means test? If so, will the Prime Minister tell the Parliament why the renewed official Liberal Party constitution and policy which was reprinted last month omits any mention of the abolition of the means test?
– I take leave to say that I am fully responsible for policies which I announce on the platform and which I present to this House. I do not think it is any part of my function to determine the platform of the party nor to argue the reasons, though they could very well be argued successfully, for any changes made from time to time.
– Has the Minister for the Navy seen a report that the carrier H.M.A.S. “Melbourne” may need additional repair work costing millions of pounds due to the possibility that the steam catapult which launches aircraft from the vessel’s flight deck was severely damaged in the collision with “ Voyager “, and that its repair will be a lengthy and expensive job? Will the Minister advise the House what is involved, both as to the structural repairs necessary and the estimated cost thereof, and when it is expected that “ Melbourne “ will be ready for recommissioning?
– After the collision occurred great concern was felt about whether the catapult of “ Melbourne “ had been damaged because, if it had been damaged, this would have entailed very high repair expenditure. On inspection it was learned that no great damage had been done. In fact, it was felt that no damage in that respect had occurred, and the ship underwent the repairs of which honorable members are aware. After any refit the alignment of the catapult is tested. This test has been carried out, to the extent that it can be while the ship is in dock, and a slight adjustment, which is regarded as normal, is necessary. This adjustment will be made when the ship is at sea. Of course, the cost will be negligible. There is absolutely no reason to believe that “ Melbourne “ will not fit into the schedule already laid down. Once again, this report was a highly exaggerated tale of something that was not true.
– Is the Prime Minister aware that many people come to Australia, take up employment for a period and then return to their countries of origin taking from Australia more money than they brought in? This trend is noticeable in the radio, television, theatre and, indeed, other industries. Is the Prime Minister aware that this practice affects a great number of jobs throughout the Commonwealth? In view of this, will he examine the law operating in the United States of America which protects the American worker by exercising a rigid control over the earnings of aliens entering that country, and consider introducing similar legislation in Australia?
– This matter does not come under my direct administration. If I may, I will treat the question as being on the notice-paper and will discuss it with my various colleagues who are concerned. I will provide the honorable member with a reply in due course.
– I ask the Minister for the Navy a question. In view of the fact that a commissioned officer stationed at a major naval establishment unsuccessfully attempted recently, in a pressing emergency, to contact vessels anchored in a nearby bay-
– Order! The honorable member is referring to a matter that is sub judice, and he is therefore out of order. The circumstances of the collision between H.M.A.S. “ Voyager “ and H.M.A.S. “ Melbourne “ are sub judice and should not be raised in the House.
– I preface my question to the Minister for the Interior by reminding him that on 19th March last, while saying that he did not believe a referendum should be held to decide whether Canberra water should be fluoridated, he undertook to give the matter consideration. I ask the Minister: Has he had an opportunity to consider this matter further? Has he found one valid reason why the people of Canberra should be denied the right to say by their votes whether they want fluoride added to their water supply? Would the elections which are to take place at the end of this year for the Australian Capital Territory Advisory Council provide an excellent opportunity for the conduct of a referendum, with ample time between now and then for the dissemination of the case, for and against, to those who are entitled to vote?
– On an earlier occasion I told the honorable member that the Australian Capital Territory Advisory Council had discussed this matter and had recommended to the former Minister for the Interior that fluoride be introduced into Canberra’s water supply. The Minister did not act on that recommendation. Some time elapsed and ultimately the Advisory Council formed a committee to investigate the matter thoroughly. The committee comprised a doctor, a scientist and one other member. The committee thoroughly examined all aspects of fluoridation, without any emotionalism. Following the committee’s investigations the council again recommended to the Minister that Canberra’s water supply be fluoridated. The Minister on his part obtained all the evidence he could about fluoridation throughout the world in an endeavour to ascertain whether there were any harmful effects resulting from fluoridation and to see whether there was any doubt about the beneficial effects of fluoridation. The Minister found that there was no evidence to support a claim that fluoridation had harmful effects.
Referendums have been held on this question in the past. Whenever such a referendum has been held a great deal of emotionalism has been introduced, which has created doubts in the minds of the people. The honorable member for Newcastle is interjecting. He must be well aware of the attitude of the New South Wales Labour Government towards referendums. That Government does not propose to hold a referendum on the question of fluoridation of Sydney’s water supply. The history of referendums has shown that in most, but not all, cases the issues put to the people have been rejected. In America the people have accepted 40 per cent, of issues put to them at referendums and have rejected 60 per cent. In a matter such as the fluoridation of a water supply I think it is better to decide the issue on scientific evidence rather than by introducing emotionalism, which usually happens when referendums are held.
– Is the Treasurer aware that certain American companies are negotiating for the take-over of long-established and successfully-run Australian food processing firms? Is the right honorable gentleman aware that the Deputy Prime Minister said in 1961 that there was an increasing tendency for overseas capital to take over established Australian flour mills, bakeries and dairy factories, and that we were selling a bit of our heritage each year? Does the Government intend to take any action to prevent overseas investment from buying or, should I say, taking over our Australian heritage?
– Dealing first with the latter part of the honorable gentleman’s question, he is clearly trying to engage at question-time in a general debate on national policy in relation to investment in this country. At different times he has been put in possession of the Government’s views on this matter. He knows, because it has received publicity, that at present a committee of inquiry has included in its terms of reference the question of overseas investment generally and that it will be making known to the Government in due course its comments on these matters. As to the introductory part of his question, the honorable gentleman asks whether I know that some American concerns are making offers for established Australian organizations. Of course, I can read the press and learn what is occurring from time to time. So far as I am aware this practice is not confined to American companies. When honorable gentlemen opposite were in office these things occurred from time to time. The activities to which the honorable gentleman has referred represent a very small proportion of the total activity in this country, and Australia’s economic base is widening all the time. I do not propose to debate the matter at this stage. I direct the honorable gentleman’s attention to the latter part of my answer.
Debate resumed from 18lh March (vide page 587), on motion by Mr. Harold Holt -
That the bill be now read a second time.
.- On behalf of the Opposition I move -
That all words after “ That “ be omitted with a view to inserting the following words in place thereof: - “ this House, whilst not declining to give the bill a second reading, is of opinion that the financing of the purchase of aircraft by Qantas Empire Airways Limited should be met from revenue and not from a loan raised overseas “.
– I rise to order. I ask for a ruling as to whether the motion in its present form is in order. If the motion is carried it will defeat its own object, because it will make it impossible to carry the second reading.
– Order! There is no substance in the point of order.
– For the edification of the Minister for Defence (Mr. Hasluck) I point out that the Opposition moved a similar motion twelve months ago when a similar measure was before the House and on that occasion the Minister raised-
– You are only trying to express an opinion, not making an amendment.
– Well, I am entitled to express an opinion. At least I have a better awareness of the forms of the House than ha”s the Minister. All I suggest is that if your point is so tedious, forget it.
The amount of the loan involved is in itself trivial - 25,000,000 dollars, or £11,200,000. We are told that at this stage in Australia history what is called our first line of international reserves stands at something like £800,000,000. Those reserves are backed by something that is referred to occasionally as our second line of reserves, which is our borrowing capacity from various organizations with which we are associated. Our second-line reserves amount to about £200,000,000. At the moment our physical reserves aggregate £800,000,000 in round figures. I believe that we are entitled to ask the Government this question: What are the purposes of these overseas reserves? In a moment, when I am referring to some of the terms that are associated with the loan agreement, I will show that there is some doubt about why the borrowing should be done in this way. Surely the amount involved is small. Basically this transaction is entered into by the Government on behalf of Qantas Empire Airways Limited in order to finance the purchase of additional jet aircraft.
We are not taking any objection to the expansion of Qantas Empire Airways Limited. In a moment 1 will show that the airline has proved itself a good form of public enterprise. The question that we are asking is: Why put ourselves further in debt in order to pay for this necessary equipment? The attitude of the Australian Labour Party on foreign investment has been expressed often enough before. I do not want to go into it in great detail this afternoon. Some of my colleagues will talk about it. The Labour Party has not said that in no circumstances should there be any resort to foreign borrowing. What we suggest is that if such borrowing is to take place it should be undertaken prudently and it should be undertaken only if our international reserves are such that it is difficult to finance a project in any other way.
Lest it is thought that these views are wild and are only those of the Labour Party, I direct the attention of the House to an article which appeared in the Melbourne “ Herald “ as recently as on the evening of Saturday, 11th April - only three days ago. The article is by the “ Herald “ economist and financial editor, Mr. John Eddy, and is entitled “We Should Not Pawn Ourselves For Capital “. In the article he asks this question: “ Why borrow more money?” That is the question that we are asking. The article states -
As Australia’s reserve of overseas funds has risen to more than £80O million, compared wilh £300 million in the crisis caused by over-importing three years ago, I wonder why the Government should want to borrow at all at this particular stage.
On Government borrowing overseas, in sterling, U.S dollars, Canadian dollars, Swiss francs, Netherland guilders and German deutsche marks, our interest liability is now £34 million a year.
Mr. Eddy asks: Why borrow at all in the present circumstances? I believe that the Government is obliged to answer that question. If these aircraft are to be purchased for the small sum of £A.l 1,200,000, why is it necessary for us to borrow at all when our overseas reserves at present stand at at least £800,000,000?
The honorable member for Denison (Mr. Gibson) is interjecting. If he is an expert on this matter, I will be glad to hear his views. So far the experts from his side of the House who have attempted to answer this question have not given a very satisfactory answer. But in him they may have a bright acquisition. I hope they have, because they seem to need one. 1 am asking this question and the Treasurer (Mr. Harold Holt) has not answered it yet: Why resort to borrowing at all for a sum as trivial as £11,200.000 when our overseas reserves stand at £800,000,000? Later - perhaps at the committee stage - will the Treasurer explain what he conceives to be the purposes of overseas reserves? I could go into detail about why our overseas reserves are as they are at present. I have no doubt that my colleague, the honorable member for Scullin (Mr. Peters), will say something about that. I simply ask my question and hope that a civil answer will come from the Government. Again I ask: Why finance this purchase in this way?
The second matter to which I direct the attention of the House is that, because of certain events that have taken place with respect to overseas reserves or balanceofpayments difficulties in the United States of America, there are certain doubts about this loan. In July last year - during the last few months of President Kennedy’s life - the Government of the United States indicated that certain measures had to be taken in that country to control its balance-of-payments position. The United States was facing a situation which was rather the reverse of that which we face in Australia. The United States was facing a great outflow of capital whereas we in Australia have been experiencing a great inflow of capital in the form of investment from overseas.
I commend to honorable members a very interesting document. It is the “ Current Affairs Bulletin” of 2nd March, 1964, which contains an article entitled “Balancing International Payments”. The article goes into considerable detail on the balance of payments of the United States. It shows that, whereas at the end of 1951 United States overseas reserves were 23,000,0000,000 dollars - quite a substantial sum of money - by the end of 1962 they had dropped to 16,000,000,000 dollars. That represented a fall of 7,000,000,000 dollars in a period of about ten years. The position continued to deteriorate during 1963. In consequence, the United States took certain action to preserve its position. I suggest that Australia, too, from time to time should take certain action to protect its international position.
– We have.
– The Treasurer says that bc has.
– I said that we, as a government, have.
– I suggest that the Government has not taken action. It has been living–
– On borrowed time.
– Yes, on borrowed time and on too much borrowed money. As the financial editor of the Melbourne “ Herald “ says, because of the borrowing in which this Government has indulged over the last ten years or so, interest payments alone on those borrdwings aggregate£ 34,000,000, or more than 70,000,000 dollars. I concur with the financial editor of the “ Herald “ on this occasion. Although I do not see eye to eye with some of that newspaper’s other editors, on this occasion I agree with the financial editor in asking the question: Why borrow at all at present for a sum as small as £11,200,000, or 25,000,000 dollars?
Let me go back to what took place in the United States of America. A series of events took place towards the end of 1963, one of which was the intimation by the President that he intended to introduce an interest equalization tax. He proposed that the tax should be retrospective to July, 1963. Honorable members may read the details of the measure in the “ Current Affairs Bulletin “. The bulletin said that the most effective steps taken after the death of President Kennedy to correct the payments deficit were a slight rise in the interest rate, and the announcement that the interest equalization tax was to be imposed on foreign borrowing in the New York market.
The effect of the tax is to penalize American investors who make investments overseas. Of course, the imposition of the tax at home makes it less economically desirable to invest abroad, and the tendency is to make American financiers want to invest at home instead of sending their money out of the country. That is the effect that is sought in an effort to correct the deterioration in the balance of payments. But of course there can be an obverse effect, perhaps an adverse effect, on potential borrowers, and in recent times Australia has been too much the borrower. Some of the likely effects of the American measure are set out in the “ Current Affairs Bulletin “, which is published in Australia though the article is written, it states, by some one resident in the United States of America who has a close knowledge of American high finance. The bulletin stated -
The proposed tax, which had been kept a close secret, created almost a panic in Canada. . . . Canada . . . was able to negotiate quickly for a considerable measure of exemption from the tax. Other countries were less well placed.
Australia is in the category of other countries less well placed -
In Japan the stock market fell by ten per cent.
Japan’s growth rates could fall from 9 per cent. to 6 per cent. - through inability to borrow in New York for developmental projects. This is rather ominous for Australia. The bulletin continued -
This would obviously affect Australian sales of wool, coal, iron ore, bauxite, and other exports to Japan.
The action taken by the United States of America can have that kind of adverse effect on Australia. The only problem that the Treasurer seems to see is that it makes it harder for Australia to borrow in the United States of America. Apparently he is not concerned at this stage about the other effect of the meaure - that is, that Japan will have to cut down its imports from countries such as Australia if it cannot borrow from the United States of America.
I refer now to a provision contained in the schedule to the bill. Like most of these bills, there is more sting in the tail than there is in the measure itself. The bill is comparatively simple. It contains nine clauses and covers only two pages, but the schedule takes up five pages of very close print. Section 7 of the schedule states -
The Commonwealth agrees that if any Bank or the Agent is required to pay any interest equalization tax by any law of the United States of America hereafter enacted by reason of any of the transactions referred to herein, the Commonwealth will promptly, upon demand of the Agent, reimburse such Bank or the Agent, as the case may be, for and save it harmless from-
That is a very quaint expression - any such tax so paid. In such event, the Commonwealth shall have the r’ght, upon at least ten days’ written or telegraphic notice to the Agent and upon payment of all accrued and unpaid commitment fees, to terminate the commitments of the Banks to make loans hereunder. . . .
We are told by the Treasurer that this loan has been obtained on very good terms.
– We do not know what the terms are.
– I would suggest that the provision I have read shows that we do not know what the terms are. If the interest equalization tax does have an impact upon this measure, and the Treasurer seems to think that on balance-
– Not on balance, but in fact.
– Why have the clause in the bill then?
– Because the banks requested it.
– Exactly, because . these wise groups of gentlemen requested it. I will name the banks. They are the Morgan Guaranty Trust Company of New York, the Chase Manhattan Bank, the Irving Trust Company and the Continental Illinois
National Bank and Trust Company of Chicago. For prudence, they want that provision in the schedule to the bill, but apparently they are the doves and the Australian Treasurer is the wise old eagle in this matter. I am not quite sure that that is so. All I am saying is that the provision is there, and I submit that it is a very good reason why the Treasurer ought not to have entered into the transaction at all. He should have said, “ Blow you people and all your fancy measures that are not yet enacted and may be enacted “. After all, the legislative process is much more hazardous in America than it is here, because parliamentary majorities are not as firm there as they are here. No one can hazard a guess as to what may be written into an American measure when it is finally enacted. I would suggest that this degree of uncertainty is another very good reason why Australia should say: “ We will not borrow. Call the transaction off and let us pay this very desirable purchase out of current revenue.” That is the suggestion contained in our amendment.
– Do I understand correctly that you mean to make the purchase out of the Commonwealth Budget?
– Yes, out of the Commonwealth Budget. After all, Qantas Empire Airways Limited has to repay the loan to the Commonwealth as an internal transaction.
– I want to get clear what your proposition is. That would mean an addition to the Budget in a year when we have budgeted for a significant deficit.
– And now, three-quarters of the way through the financial year, you do not look like reaching the deficit for which you budgeted.
– That is right.
– Then surely you still have the flexibility within your own machinery to make a further £11,000,000 available for this transaction.
– Are you recommending to us that this be done on revenue?
– On revenue. Technically, it seems to me to be idle at this stage to argue about whether it should be done out of current revenue or by means of an internal loan. The point is that it should be done internally and not externally. The only external part of the transaction should be to pay for the aircraft on delivery out of Australia’s current accumulation of overseas reserves. This is simple enough. I did not think there was any need to quibble about the meaning of our amendment. The Opposition’s intention seems to me to be very clear. We contend there is no warrant whatever for this loan because, first, if I may repeat for the benefit of my friend who is seeking to interject, the reserves are healthy anyway, and, secondly, we do not yet know what the final rate of interest payable on this loan will be. We may yet have to make good something because of this interest equalization account.
I have here a pamphlet entitled “ Economic Newsletter”, dated April, 1964, issued by the United States Information Service, in which a significant item appears: -
Secretary Dillon Sees Improved Balance of Payment Position. United Stales Secretary of the Treasury Dillon foresees a “ substantial improvement “ in the U.S. balance of payments position in 1964.
This improvement would follow measures such as those of which I have been speaking, but it could, of course, have adverse effects on other parts of the world. This shows how closely the economic development of the world as a whole is linked to-day. The article goes on to say -
In speaking to the Economic Club in Chicago, he said, “Our country has set as its aim the difficult task of eliminating its balance of payments deficit without disrupting the trade of other countries.
The United States has pledged, he emphasized, that this goal will be achieved “ without sacrificing American leadership in the defense of the West, the economic growth of the less developed countries, or the support of forward looking economic policies.”
I suggest it is time that we had some sort of a statement from this Government as to what it intends to do to solve some of the difficult economic problems that face the world. We have said on this side of the chamber - and I repeat - that because of the fortunate position in which Australia is placed, strategically, economically and historically, and for which the Government now in office can take no credit, we have a part to play in the economic growth of the less developed countries. There has been a lot of thought in Australia and in other countries about the more fortunate countries of the world contributing something of the order of 1 per cent, of their national incomes to aid the development of the less fortunate countries.
– With no strings attached.
– With no strings attached. That policy ought to bs carried out through the international agencies of the United Nations. If the matter is looked at on the basis of friendship with the United Slates of America, 1 would think that what we are doing in borrowing money is what the United States is trying to stop, which is this kind of speculative investment in other parts of the world. We ought to be lending money out of our reserves to these less fortunate countries rather than borrowing money from the United States. I think it is about time that the Government made a forthright statement in this matter.
We have heard it said, almost ad nauseam, that the great problem that faces the world at the moment is the disparity between the standards of living of what are called the “ haves “ and the “ have nots “. Levels of national income are as high as 2,000 dollars a head in some countries and as low as 100 dollars a head in others. The national income per head in a fortunate country may be twenty times as great as that in its less fortunate neighbour.
All sorts of political pressures are bound to be applied until something is done to grapple with this situation. In my view, Australia is not contributing anything like its share to improve the situation. At least, the United States Government seems to be more aware than this Government is of internal problems on the balanceofpayments question. I do not think that we are grappling with the problem at all. The United States Government has done something to halt an adverse position. Nevertheless, it recognizes that it has obligations beyond its own shores. Perhaps it is fortunate for the rest of the world that it has seen the situation in this way for so many years. I think this is the time when we should stir ourselves out of our feeling of complacency.
There is a third aspect that I want to touch upon briefly. This bill deals with a loan to expand the activities of Qantas Empire Airways Limited, Australia’s overseas airline, and I again ask - and I think it is about time we got a more definite answer from the Government - Why does not the Government treat the development of our overseas shipping with the same seriousness with which it treats the development of our overseas airline? Qantas Empire Airways Limited is by way of being one of the most successful operators of international airlines in the world. I commend to the attention of the House a table that appeared in that very respectable journal, “The Economist “, in its issue of 23rd November, 1963. It gives some interesting information about various international operators, and with the concurrence of the House I incorporate the table in “ Hansard “: -
The table shows that on the basis of profit or loss as a proportion of revenue, Qantas is the second best operator in the world. BOAC runs at a loss, unfortunately, showing a figure of minus 10.5. SAS gives a figure in terms of financial success, in PAA, which shows a figure of 8.5. TWA shows 1.9. Air France barely breaks even with a figure of .02, which is pretty close to the line. KLM was an unsuccessful operator, with a figure of minus 10.5 SAS gives a figure of 1.8 Sabena minus 2.5, Swissair 2.6, BEA 5.2 and Qantas 7.9. That is a very good record of performance on the part of Qantas. According to the last consolidated balance sheet of Qantas Empire Airways Limited that company now has capital assets of more than £50,000,000, which contrast significantly with the position of the Australian National Line. I have not time to go into the financial position of the Australian National Line, nor, perhaps, is this the place to do so, but I suggest that we should consider the development of our shipping, and particularly overseas shipping, with the same seriousness as we consider the development of our overseas airline. In some ways, perhaps, airlines might be regarded as in the nature of a luxury, but shipping cannot be regarded as anything but a necessity, having in mind Australia’s particular economic circumstances.
A comparison over a ten-year period of the capital growth of Qantas Empire Airways Limited with that of the Australian National Line shows that Qantas has been treated far more liberally than has the Australian National Line. At least Qantas Empire Airways Limited has redeemed itself. It has a good performance record. I have enough faith in the capacity of Australian management, in Australian shipbuilding techniques, in Australian workmen and in Australian seamen to suggest that if the question of developing overseas shipping were taken with the same seriousness as is the development of overseas airways it would pay-
– Yes. I was going to say that it would bear most beneficial fruits for the Australian economy. I will not weary the House with the net annual cost to Australia of its overseas shipping but it is of considerable magnitude - well over £100,000,000. This means that there is a drain on our overseas resources of about that amount every year. At least it can be said in relation to airways that Australians are among the most prolific air travellers in the world. Qantas carried 240,000 passengers in a twelve months’ period - a volume of traffic of about 5,000 passengers a week. If one assumes that half of the passengers were arriving in Australia and half departing from Australia it is still a fairly substantial performance. Australians arc also frequent ship travellers, but our prime problem is the amount of cargo to be carried. Again I do not wish to go into details but I refer honorable members once more to the document, “ The Development of Australia “, prepared by the Stanford Research Institute of the United States of America. I have said here before that this information could well have been compiled within Australia by Australian talents many years ago, nevertheless I commend the institute on the document. Most of it - and this is particularly apparent when the footnotes and notices are read - is compiled from material obtained from Australian sources. It demonstrates how lax the Government has been in treating the very important matter of national development. A paragraph on page 199 of the document states - lt is highly desirable therefore, to mobilize the bargaining power- 1 am sure that my colleague, the honorable member for Lalor (Mr. Pollard) will agree with this statement. - particularly of the exporters of such bulk cargoes as wool, beef, wheat, and mineral ores, in an effort to keep freight rates as low as possible. The range of potential bargaining may extend as trade develops outside the well-established liner and cargo routes.
If (hat is not an indication that we ought to develop our own shipping, what is?
– Order! I hesitate to interrupt the honorable member, but I suggest that while he may make passing references to illustrate a particular point in relation to Ils bill before the House, which is for the raising by way of loan of moneys in the currency of the United States of America, the debate should not be allowed to develop into a debate on shipping and transport generally.
– Why do not you lecture Government members instead of just lecturing our side?
– Order! The honorable member for Reid must cease interjecting.
– I think it is relevant to suggest that the same sort of money that has been used to finance the purchase of aircraft could well be used to finance the purchase of ships.
– I second the amendment.
– Order! The question is, “That the bill be now read a second time “. The honorable member for Melbourne Ports has moved as an amendment -
That all words after “ That “ be omitted with a view to inserting the following words in place thereof: - “ this House, whilst not declining to give the bill a second reading, is of opinion that the financing of the purchase of aircraft by Qantas Empire Airways Limited should be met from revenue and not from a loan raised overseas “.
The question now is, “ That the words proposed to be omitted stand part of the question “.
.- The honorable member for Melbourne Ports (Mr. Crean) proposes an amendment to the effect that what he is pleased to call a very trivial amount - £11,200,000 - should be met from revenue and not from a loan raised overseas. The proposal certainly gets no support from me and I gather from what the Treasurer (Mr. Harold Holt) has said that it will get no support from the Government. Ons would think that if members of the Opposition were consistent they would be in favour of governmental borrowing, yet they are taking still another opportunity to put forward somewhat inconsistent and certainly unhelpful arguments on matters of public urgency and public importance. One would have hoped that the honorable member for Melbourne Ports would have taken note of the arguments adduced by Government supporters only last year in the debate in this House on the Loan (Australian National Airlines Commission) Bill 1963, instead of merely reiterating his own sterile arguments.
As the Treasurer said in his secondreading speech, this bill seeks the approval of Parliament for the borrowing of 25,000,000 dollars, or about £11,200,000, by the Commonwealth on behalf of Qantas Empire Airways Limited. The Government is in effect guaranteeing the loan which is to finance the purchase of three Boeing 707-338C jet aircraft and equipment. In my maiden speech I welcomed the ordering of supersonic jet aircraft for use probably in the early 1970’s. Although there will be a tendency in the future towards the use of supersonic jets, that does not mean that the existing Boeing fleet will be replaced overnight. The Boeing 707 V-jet will continue to hold a valuable place in the Qantas fleet until well into the 1970’s because of its ideal size and economy of operation. I remind honorable members that aviation is a growth industry. Its planning is based on the calculation that the potential market is greater than the traffic - both passenger and cargo - currently being carried. It is to meet a carefully estimated increase in traffic that Qantas is purchasing the three Boeing aircraft.
I remind honorable members that Qantas has operated at a profit for over 40 successive years. Last year its present chief executive and general manager gave the following reasons for its improved profit results; first, the choice of the right aircraft for the job and secondly, careful control of costs. In my opinion the choice of the right aircraft is a critical decision. Honorable members are well aware that in Australia our main problem is dealing with distances. Passengers want frequency of flights, as do the consignors of freight. We may well ask: How does the new Boeing 707-338C jet aircraft measure up to the two-fold requirement? I am informed that, in effect, it is the inter-continental Boeing. Like the Boeing 707-138B at present used by Qantas it has a passenger capacity of 104 - 20 first class and 84 tourist class passengers - but it has the advantage of an increased cargo capacity. It is therefore well suited to our needs. When the new aircraft come into use next year they will enable Qantas to take advantage of the accelerated rate of traffic growth brought about by our expanding economy.
The honorable member for Melbourne Ports asks why we should resort to borrowing at all. A point that seems to have escaped the honorable member is that the growth in our economy has been greatly helped by the inflow of overseas capital. It is obvious to all thinking people that we cannot expand at the rate we need to if we limit our borrowing to the amount that we can save inside Australia, and I point out that this bill is a bad one for the honorable member to use as yet another horse to flog in his losing race against overseas borrowing. The 338C aircraft will be direct earners of foreign exchange.
Most major international airlines borrow to equip themselves with up-to-date aircraft. Qantas Empire Airways Limited will repay the loan from its own resources. I point out to honorable members that Qantas has an outstanding credit reputation with American banks, based on the repayment of loans over the last five years. In his secondreading speech the Treasurer pointed out that including the present loan the Commonwealth has now borrowed 85,400,000 dollars in New York for the purchase of aircraft since 1956, of which 69,400,000 dollars has been for Qantas Empire Airways Limited. Of the earlier loans, that is, the loans excluding the one which is the subject of the present bill, and which total 60,400,000 dollars, an amount of only 30,000,000 dollars, or less than half, remains to be repaid. Figures given by the Treasurer in his second-reading speech are somewhat more up to date than those given by the Minister for Air (Mr. Fairbairn), representing the Minister for Civil Aviation (Senator Paltridge), in reply to a question on notice by the honorable member for Oxley (Mr. Hayden) who had asked -
What is the loan equity ratio of Qantas Empire Airways Limited?
In his written reply the Minister said -
The loan equity ratio for Qantas Empire Airways Limited for the financial year ended 31st March, 1963, was 1 to .95, i.e., Loans £21,500,000, Shareholders’ Funds £20,500,000.
The Minister then went on to list the loan equity ratios of other international airline operators and stated that the ratio for Qantas compared favorably with the ratio for the other operators cited. The figures annexed in the schedule to the Minister’s reply showed Tasman Empire Airways Limited as having a ratio of 1 to 1-3; Air India International a ratio of 1 to 0.75; PanAmerican Airways a ratio of 1 to 0.58; and British Empire Airways a ratio of 1 to 0.2.
The advent of the jet has reduced travelling time and operating costs and fares, and their introduction to the Pacific in 1959 has greatly assisted the growth in the number of tourists to our shores. It is interesting to note that the first flight across the Pacific to Australia in 1928 by the late Sir Charles Kingsford-Smith and the late Captain Charles Ulm took 83 hours and 38 minutes. To-day the turbo-fan Boeing 707 takes about fourteen and a half hours to cover the 7,635-mile journey from San Francisco to Sydney. It is also of interest to note that in 1963 Qantas, by schedule and charter flights, flew 10,300 migrants to our country, and a further 14,000 are expected to arrive by air in the January to June period this year. Qantas was among the first airlines in the word to use jet aircraft, and it is necessary for its fleet to be expanded to keep Australia in the forefront of the highly competitive international aviation industry. I therefore support the bill.
.- The Labour Party believes in the development of the best possible air services for Australia. The honorable member for Denison (Mr. Gibson) would lead people to believe that objection is being raised by honorable members on this side of the House to the purchase overseas of the best possible aeroplanes. That, of course, is absolutely incorrect. The Labour Party realizes that the development, not merely of one country, but the development and material progress of the world, has accompanied the progress and development in transportation. We realize that this has been so from the time of the invention of the wheel through the time of the invention of the steam engine, which enabled sea transport to be facilitated. The invention of the steam engine enabled the creation of the railways, and later came the motorcar and aircraft. All these developments have made for the material progress of nations that have utilized to the fullest the best types of transport available. Countries which took advantage of these inventions were able to develop more quickly and to increase their national wealth more greatly than those that did not take advantage of the progress in methods of transport. The Labour Party maintains that we should buy the best type of aircraft abroad because at the present time Australia, with its limited population, is net in a position to manufacture the aircraft that are necessary to open up and bring closer together the vast areas in this country.
By this bill the Government seeks to determine the method by which the aircraft shall be acquired. It is upon that question, and that question alone, that the Labour Party joins issue with the Government. The Labour Party maintains that the aircraft should be acquired out of revenue or from loans raised within Australia and from moneys which then could be made available overseas to Qantas Empire Airways Limited. The Labour Party contends that if overseas loans are to be used they could be raised in countries other than America to meet these requirements, but that the best method of raising the money to acquire the most efficient and safest aircraft is by using moneys available in Australia at the present time. The honorable member for Melbourne Port (Mr. Crean) referred to an article by John Eddy, who is the “ Herald “ Economist, under a heading, “ We should not pawn ourselves for capital”. In the article Mr. Eddy states -
Inflow of overseas capital to Australia was a record £273 million in the last financial year. In the present year, it is likely to be higher. This follows a dip in 1961-62.
The latest high rate of capital inflow is a compliment to Australia. But it raises some questions on how much overseas capital and take-over of local businesses we really do want.
We agree with Mr. Eddy. It is not always desirable to borrow overseas, and if we do borrow overseas we should borrow in the best overseas market. On that aspect Mr. Eddy refers in this article to a statement by the Treasurer (Mr. Harold Holt). He points out that the Treasurer, addressing members of the Melbourne Stock Exchange recently, said that he liked to borrow millions of pounds overseas each year. He added that, because of the temporary tax on overseas investments imposed in the United States of America, he proposed to transfer Australia’s borrowings to the London market. This borrowing overseas is a kind of phobia with the right honorable gentleman. On the occasion that I have just mentioned he expressed a preference. He said that he prefers now to borrow on the United Kingdom market rather than on the United
States market because of the interest equalization tax in the United States mentioned by the honorable member for Melbourne Ports.
This is the first occasion on which there has appeared in a loan agreement a provision like that contained in section 7 of the schedule to this bill, that schedule being the loan agreement that is the subject of the bill. Section 7 provides that the Australian Government shall guarantee the lender of the money against any increase in tax and “ save it harmless from any such tax so paid “ as a result of any increase in the tax on overseas investments imposed by the United States Government. In effect, the section provides that if the interest that we pay becomes worth more in the United States in future than it is worth at present, the American lender gets the advantage of the change. But if the interest paid becomes of less value in the United States than at present, we guarantee to reimburse the lender the difference. The rate of interest that we guarantee ranges from 4J per cent, to 5i per cent., the higher rate being paid for notes of the longest term. But that is not all. Section 6 of the schedule reads -
The Commonwealth represents, warrants and agrees that the principal of and interest on the Notes will be free of all present or future taxes imposed by the Commonwealth, or by any taxing authority thereof or therein, except to the extent that the right to receive payment of the principal of or interest on any Note is or comes to be beneficially owned by any person residing in or ordinarily a resident of Australia, or the Territory of Papua or the Territory of New Guinea.
In other words, so long as the notes do not come to be held by Australians, the holders are guaranteed the specified rate of interest, up to 5i per cent, with protection against any interest equalization tax imposed by the United States Government and all present or future taxes imposed within Australia. That is a very good thing for the holders of the notes.
Why did the Treasurer not do as he said he would do and float this loan on the United Kingdom market? If he has a phobia that compels him to refrain from utilizing Australia’s resources, existing revenue or reserves of overseas funds for the purchase of aircraft for Qantas Empire Airways Limited, and to borrow overseas, why did he not borrow in the United Kingdom where there is no danger of an interest equalization tax like that imposed in the United States, and therefore no danger of us having at some time. in the future to pay interest on the loan at a rate higher than 5i per cent? Is the course that has been taken by the right honorable gentleman to the advantage of Australia? Emphatically, it is not. It is to Australia’s distinct disadvantage.
I lelieve it is important to place on record in the “ Hansard “ of this House the view expressed by Mr. John Eddy, the Melbourne “Herald” economist, in the article that I mentioned earlier and to let the people of Australia see that not only Labour members of this Parliament are emphasizing the danger of selling the country bit by bit to overseas speculators or putting Australia in pawn to overseas money lenders and denying our people the fruits of their work and toil. One honorable member on the Government side of the chamber, however, has expressed his fears. Unfortunately, he is absent overseas at present. I refer to the Deputy Prime Minister (Mr. McEwen), who is leader of the Australian Country Party. He is conscious of the fact that we cannot afford to sell our industries to overseas interests and that we cannot afford continually, by paying high rates of interest on overseas loans, to put the Australian nation in pawn to other countries. He realizes that the time of reckoning comes when you have to pay what you owe by remitting dividends and interest overseas. If conditions in Australia deteriorate because of droughts or other eventualities beyond the control of governments, the financial circumstances of the Australian people will depend entirely on the degree to which Australia’s financial resources have been conserved and kept out of the hands of the overseas money lenders.
We are entitled to ask the Government: When should we borrow? Should we borrow when our overseas funds are very low? Should we at such a time take the view that we cannot afford to reduce those reserves further and that we should borrow in New York, London or some other overseas financial centre if we can? Should we borrow overseas even when our overseas reserves are almost at a record level? As the honorable member for Melbourne Ports has pointed out, at present we have more than £800,000,000 in our first-line overseas reserves. Only once before have those reserves reach such a level. We are entitled to ask whether the Australian Government should borrow overseas at all when we have available and lying idle in this country funds that can be obtained at rates of interest lower than those paid to overseas borrowers. Should we borrow overseas only when all the funds available in this country are being used for productive purposes or command rates of interest higher than those payable overseas? Those are questions that we must ask when considering this loan of 25,000,000 dollars to be obtained overseas. The Government has a responsibility for answering those questions satisfactorily before adding to our overseas obligations.
As I have said, we on this side of the House are in a difficult position. We cannot oppose simultaneously all the views evident on the other side of the chamber, because they vary so much. The Treasurer takes one view about the borrowing of funds overseas. He says, in effect, that the Government will borrow overseas, regardless of the conditions imposed, so long as lenders in other countries are willing to lend. He asserts that this Government will sell, and encourage the sale, to overseas interests of the industries and assets of this country in order to obtain an inflow of foreign capital on a scale that he claims is necessary to promote our development. That is the view of the Treasurer.
The Deputy Prime Minister, however, takes an entirely different view. He says that we should not allow the sale of Australia’s assets overseas on such a scale as will, through the payment of dividends and interest to overseas investors, put the people of this country, to use his own words, in the position of being merely the employees of overseas capitalists.
The Labour Party emphasizes that this fact has to bear upon this rather small question of whether 25,000,000 dollars is to be borrowed overseas. The whole question is wrapped up in whether we have already borrowed a good deal overseas; the rates of interest payable on what we have borrowed overseas; the amount of interest that we have to pay on what we have borrowed overseas and whether there is an inflow of other capital from overseas which creates the demand for the dividends on that capital to be met by our exports. The amount of those dividends is rising rapidly every year out of proportion to the increase in the volume and value of our exports. Those are the inevitable questions that a government must answer when a loan of this description is proposed.
I know that some members on the Government side will ask: “Why make all this outcry about 25,000,000 dollars - only about £11,000,000? After all, we already owe to overseas investors, in the form of loans, over £800,000,000, and our commitments in respect of our assets which have been sold and are now owned by overseas persons amount to something in the vicinity of £2,500,000,000. Why worry about an additional £11,000,000?” We worry because the Government already has got itself into such grave financial difficulties in its commitments to outside financial interests that we do not want those commitments to be increased. We want adopted the principle of living upon our own income when the opportunities for doing so exist. We want to see implemented the ideas of the Deputy Prime Minister of this country, who is the leader of the Australian Country Party. We do not want to see implemented the ideas of the Treasurer, who says, “I like to borrow a few million pounds overseas every year “.
Is it any wonder that Mr. John Eddy, the economist of the Melbourne “ Herald “, said that when the Treasurer made that statement to the Melbourne Stock Exchange there was a considerable raising of eyebrows? Of course, there was a raising of eyebrows. The people on the Stock Exchange do not mind using other people’s money so long as they can make a profit out of it, but they do not believe in this country’s assets being used to provide bigger and better profits for overseas investors and speculators and to that extent reducing their own opportunities to earn profits. We of the Labour Party believe that we should first reduce the opportunities of foreigners to make profit out of the Australian economy, and then curtail the exploiting tendencies of some people living within Australia.
I think that we on this side of the House have made quite clear that of all the means that the Government could have adopted to finance the purchase of these aircraft by Qantas it has adopted the least desirable. As
I have pointed out, the Government could have obtained a loan from London which would not have been subject to the dangers of the interest equalization tax that has been adumbrated by the United States Government and which is likely to come into existence. We could have utilized also the resources of our immense overseas funds to purchase the aircraft required. We could have made a loan to Qantas which would repay the amount to the Government, which had temporarily accommodated it from Commonwealth revenue. AH of this could have been done without overseas debts. We could have raised a loan of £11,500,000 or thereabouts within Australia to replace the amount that had been used from our overseas funds to purchase the aircraft, had that method been adopted.
The point that I particularly desire to make clear is that the Labour Party does not object to the extension, the expansion and the modernization of our airline services and the utilization of the most modern aircraft that it is possible to acquire. The Labour Party believes that, because of the conditions that exist in Australia and the numerical strength of our population, these aircraft can be secured only overseas, so we do not object to going overseas for them. We of the Labour Party believe also that because of the importance of expanding our air services the Government should utilize every facility at its disposal either within or without Australia to secure the aircraft that are necessary.
I have stated our beliefs in this matter in case any honorable member on the Government side should have the temerity to disagree with the sentiments expressed by the honorable member for Melbourne Ports and seek to draw a red herring across the trail by trying to convince the people of this country that we of the Labour Party do not favour advanced methods of transportation. After all, the people generally know that we of the Labour Party are the apostles, in this Parliament, of national development and material progress. As such, we are willing to utilize all the resources of government to develop this country.
We know that aircraft have brought Broome nearer to Melbourne, Cairns nearer to the Mallee and the Mallee nearer to Melbourne. The use of aircraft has enabled the more rapid transportation of goods and people to the outback from the centres of population and has made the attractions of the city available to the drover on the outback station to a greater extent than ever in the past. Because of these things it is we of the Labour Party who seek to utilize the advanced methods of transportation to the fullest possible measure and, of course, to make them as safe as they can be made for the transportation of individuals. As well as being the apostles of national development and material progress, we of the Labour Party are the apostles of the sanctity of human life. We want human life, whether in the air, on the land or over the sea, to be as safe and secure as possible.
In the few minutes left to me I would like to comment on an article in the Melbourne “ Herald “ of 1 1 th April last, written by the “ Herald “ Economist, John Eddy. Under the sub-heading “ Why Borrow More Money? “ he writes -
As Australia’s reserve of overseas funds has risen to more than £800 million, compared with £300 million in the crisis caused by over-importing three years ago-
That was under this Government - 1 wonder why the Government should want to borrow at all at this particular stage.
On Government borrowing overseas, in sterling, U.S. dollars, Canadian dollars, Swiss francs, Netherland guilders and German deutsche marks, our interest liability is now £34 million a year.
We have borrowed also from the International Bank for Reconstruction and Development and the International Monetary Fund. Mr. Eddy continues -
Income payable to overseas companies with Australian branches and subsidiaries is about £120 million a year.
But we must watch out that we are not exploited.
Sitting behind me is the honorable member for Reid (Mr. Uren). He and I for eight years have been saying the things that John Eddy has said in his article. We will continue to say them. We said them before the Deputy Prime Minister said them a year or two ago at the conference of the Australian Country Party. There is mounting evidence of increasing alarm about the extent to which Australia is being sold overseas. By the sale of our assets and real estate we are reducing our heritage and by the borrowing of money from foreign bond-holders we are putting into pawn the future earnings of the people of this country. Those bond-holders, in the case of the bill under discussion, cannot tell us how much our loan will cost us. They say that the interest rate will be from 4J per cent, to 54- per cent., subject to the proviso that if equalization taxes are introduced in America - and the Americans have said that they will introduce equalization taxes - we will pay those taxes also. Not one penny of the taxes paid by the people who earn income from investment in this loan will go to help Australia, but if a loan were raised within Australia and if Government supporters were to invest in that loan, the interest that they earn on their investments would be subject to Australian taxes. For any number of reasons it must be obvious to everybody that in borrowing overseas the Government has chosen positively the worst method of raising money to provide aircraft for Qantas.
.- I support the bill. Having listened to the honorable member for Scullin (Mr. Peters) I have come to the conclusion that he, like some of the apostles of old, seems to be somewhat grey of hair and old of ideas. The honorable member devoted at least half of his time to the subject of foreign capital invested in Australia. I suggest that he tends to look at this subject in a very biased manner. He implied that overseas borrowing is necessarily adverse and bad. This, of course, is not the case. The bill before the House is an instance in which overseas borrowings would seem to be far and away the best and most effective means of obtaining the funds necessary to acquire the replacement aircraft needed by Qantas. That is a point that I hope to develop.
In some instances it is truly worth while to borrow overseas. In other instances borrowings may reach the extent that they reached in Canada, where some Canadian businesses found that their entire operations were controlled from outside Canada. The loan which is the subject of the bill is a typical example of overseas capital being used in an enterprise which will bring in further funds from overseas. In other instances overseas capital can play a notable part in the development of Australia. Where overseas capital can contribute know-how and where it can contribute towards the expansion and development of Australian undertakings, we as Australians should welcome it. We should welcome overseas capital where it can help us to develop, and so to play a continuing and important part in the great task that lies ahead.
This measure is concerned primarily with the re-equipment of Australia’s overseas airline. To-day every airline is faced with the difficult task of keeping up to date. There has been a good deal of discussion in the House lately about a replacement bomber for the Royal Australian Air Force. Civil airlines find themselves facing a similar problem. Qantas is not the only airline so placed. In my electorate East- West Airlines Limited is presently in a similar predicament. Unfortunately that airline is not in the happy position of being able to borrow large sums of money overseas to finance the purchase of aircraft which it needs to provide an effective and efficient service for the people of the outback. I regret that a company such as EastWest Airlines cannot go overseas with a Government guarantee behind it and enter into an agreement similar to the one which it has been possible for the directors of Qantas to enter into this case.
Let me for a moment direct the attention of the House to the amendment moved by the honorable member for Melbourne Ports (Mr. Crean). As I understood him, he has moved his amendment primarily because he objects to borrowing money. He wants to take the money out of revenue. If we look at the schedule to the bill we will see that the interest rates charged to the Government - of course Qantas will be obliged to repay these funds to the Commonwealth - are very attractive. As a business proposition there is no doubt that if you can borrow money at attractive rates, and money is not to be used for the purpose of taking over an existing business but rather to contribute something by way of capital for development of know-how, then you will be in a sorry plight if you do not take advantage of a loan as favorable as the one under discussion would appear to be. In spite of the fact that our overseas reserves are in a very buoyant state, we would be extremely unwise not to borrow funds when the terms offered are as attractive as those in this case. The Government deserves praise for going overseas in this instance to borrow funds with which to replace aircraft in the Qantas fleet. After all, Qantas is not the only overseas airline that is expanding or modernizing its fleet. Qantas is not the only overseas airline that is earning good money by carrying passengers from one country to another. The money is being borrowed from the United States of America to enable Qantas to supplant existing aircraft of its fleet with new aircraft. The new aircraft will materially assist Australia’s overseas airline to earn overseas capital.
The second point made by the honorable member for Melbourne Ports seems to be that he objects to the terms of the loan agreement because the interest rates set out in section 3 of the Schedule are not stated explicitly, in that there is a qualification in section 7. The honorable member quoted the qualification that is included in the second sentence of section 7. That sentence reads -
In such event, the Commonwealth shall have the right, upon at least ten days’ written or telegraphic notice to the Agent and upon payment of all accrued and unpaid commitment fees, to terminate the commitments of the Banks to make loans hereunder, and shall also have the right, upon like notice, to repay all Notes then outstanding at the principal amount thereof and accrued interest to the date of prepayment.
In other words, the Government has reserved the right to say, if it believes that because of the interest equalization tax the interest rates will be prohibitive: “We no longer believe that this is a business-like proposition. We must now terminate this deal and repay the loan.” Under section 7 the Government has the right to say that. I suggest that for that reason the argument of the honorable member for Melbourne Ports has no force whatever. In fact, the inclusion of that provision in the loan agreement shows the capability and wisdom of the advisers and of the Treasurer (Mr. Harold Holt) himself.
Another point that was raised by the honorable member or Melbourne Ports was that because Qantas Empire Airways Limited is an overseas airline it is fitting that the Government should raise money for it. He said that we should give additional attention to an Australian overseas shipping line. In this instance I agree with him. I believe that a great task lies ahead of us in the expansion of overseas shipping. 1 do not like the principle of a government operating any business, but there is no doubt that Qantas has been very efficient and very successful. If further consideration were given to the extension of the Australian National Line to overseas shipping, we might see a similar development to that which has been achieved by Qantas.
However, I think we can differentiate between the needs of an airline and the needs of a shipping line. Modern aircraft become obsolete very soon, and that fact puts an airline in an entirely different position from a shipping line. Although I understand from the honorable member for Denison (Mr. Gibson) that these Boeing 707-338C jet aircraft will continue to be operational for many years to come - possibly until some time in the 1970’s - that does not belie the argument that, unfortunately, aircraft seem to have a very short working life. That applies particularly to aircraft on international routes where competition is intense and it is essential for an airline to keep up to date. If an airline does not keep up to date, it does not get paying customers, and if it does not get paying customers it no longer can provide the efficient service which the business is designed to provide and soon it no longer will have a business.
I believe that in this instance we have a very notable example of an occasion on which the Government has been very wise to borrow money from overseas. There is far more merit in borrowing money for the purchase of aircraft from the nation that will provide the aircraft than in adopting a dog-in-the-manger attitude and saying, “ We are doing pretty well ourselves at the moment, so we will just take the money we need from revenue “. On the basis of ordinary business economics, if the Government can borrow money and use that money to make more money, it would be very foolish not to do that. Any business man would be extremely foolish not to do that in similar circumstances.
.- I rise to support the amendment moved by the honorable member for Melbourne Ports (Mr. Crean). The Opposition’s position on this matter is quite plain. Australia’s overseas reserves at present are in a very healthy state. They amount to more than £800,000,000. We believe that it is not necessary to raise an overseas loan to pay this amount of 25,000,000 dollars or £11,200,000. In fact, the way taxation revenue is coming into the Treasury, the payment of this amount from revenue would not even involve deficit budgeting. As the honorable member for Melbourne Ports explained, the additional revenue flowing in would meet such payment.
This Government has been a disastrous government in respect of Australia’s balance of payments. It has been the most disastrous government in the history of Australia. When the history of the last fifteen years is written, it will show that during this Government’s term of office Australia has gone into debt overseas to the extent of £1,902,000,000. In our trade with the United Kingdom there has been a deficit of £1,812,000,000, and in our trade with the United States of America there has been a deficit of £1,362,000,000 -a total deficit of about £3,100,000,000 in respect of those two countries alone. Of course, honorable members will ask, “How does the overall deficit come down to only £1,902,000,000?”. The explanation is that we have had a surplus of £1,200,000,000 in respect of other countries, such as Belgium, France, Communist China, Japan, the Soviet Union and other eastern European countries. But that surplus still leaves us in the red to the extent of £1,902,000,000. This loan is only one of the book entries that tend to close the gap between the two sides of our balance of payments.
I want to answer some of the criticisms made by the honorable member for New England (Mr. Sinclair). He is a new member of this House. He accused the honorable member for Scullin (Mr. Peters) of saying that we do not want loan money under any circumstances. I have been in this House with the honorable member for Scullin for many years. His approach to this matter has been a very balanced one. His approach has been to say, first, that we should try to export more goods than wc import in order to pay for the capital equipment and technical know-how that we need. If we cannot achieve a sufficient surplus of exports over imports, then in certain circumstances we may have to use government borrowing. 1 say to the new member for New England and the new member for Denison (Mr. Gibson), who claims that we do not like government borrowing, that we realize that it is better to have government borrowing than private capital inflow. The return on government borrowing can be controlled to about 5 per cent.; but some of the money that has come to Australia in the indiscriminate - I use that word advisedly - inflow of private capital from overseas permitted by this Government is earning more than 400 per cent, due to uncontrolled exploitation of the Australian community, workers and consumers.
We are quite sensible in our approach to an order of priorities. An examination of the interest burden on government borrowing is well worth while. In 1950, the first year of the Menzies Administration, the interest burden was £19,000,000; but by last year it had risen to £34,000,000 - an increase of a little more than 70 per cent. The cost of capital invested in private companies has increased from £14,000,000 in 1950 to £58,000,000 in 1962. The figures for 1963 are not available. This is an increase of 310 per cent. The cost of portfolio investment increased from £6,000,000 in 1950 to £13,000,000 in 1962, an increase of 110 per cent. Then we have a new type of cost to the community. I refer to royalties and copyrights, which increased from £2,000,000 in 1950 to £15,000,000 in 1962. This is an increase of 650 per cent. It can be seen from these figures that the increase of private investment has been greater than the increase of government borrowing, which is the lesser of the two evils. We have said this quite plainly, so let us get some balance between the two.
We have said that it is not necessary to raise an overseas loan to provide the £11,200,000 referred to in the bill. We can provide this amount out of revenue. The honorable member for Melbourne Ports put forward the very positive proposal that we should start to build our own overseas shipping line. This would save us at least £100,000,000 a year. We could start an export bank to finance our exports and this would enable us to get out and sell. We could establish our own insurance company to insure the goods that we send to other countries in our ships. In this way we would save another £100,000,000 a year. I want to enlighten the House about some of the costs of invisibles. In the fourteen years of the Menzies Administration, our deficit with the United States has grown to f 1,300,000,000. More than half of this amount or £750,000,000 relates to invisibles. The honorable member for Melbourne Ports referred to this. Overseas shipping freights and insurance form the biggest part of invisibles and we have put forward two positive proposals which would enable us to reduce these costs.
The new member for New England spoke about East-West Airlines Limited. This is a small company and so does not receive attention from the Government. This is a government of monopolies. It helps the monopolies. The honorable member complained that East-West Airlines Limited does not receive from the Government any assistance in the purchase of modern aircraft. The Government will not help this airline because it is giving all the assistance it can to its big, powerful friend, Ansett- A.N.A., which is exerting pressure on EastWest Airlines Limited. Ansett-A.N.A. can get an overseas loan for the purchase of new aircraft, but the little airline that gives a service to the country people cannot. I ask the honorable member for New England to stand up and defend the small businessman. Only one political party in this House stands by the small businessman and that is the Australian Labour Party. Labour supports the workers, the small businessmen and the small farmers, but the Liberal Party and the Australian Country Party support the monopolies. The Labour Party supports those who are struggling. The honorable member for New England should put pressure on the Government to support East-West Airlines Limited. The Government has been in control of the country for fourteen years and we all know how the monopolies have grown during that time.
– Order! I suggest to the honorable member for Reid that he is getting a little away from the subject-matter under discussion. He should come back to a discussion of the bill.
– I accept your ruling. I just want to answer another criticism made by the honorable member for New England. I believe that members of the Opposition have a right to answer him. He complained about foreign investment in this country. I want to read to him a statement made by the Leader of the Australian Country Party and the Deputy Prime Minister (Mr. McEwen). The honorable member for Scullin referred to the statement by the Deputy Prime Minister that we must safeguard the nation’s heritage. When addressing a conference of the Australian Country Party in April, 1961, he said that there was an increasing tendency for overseas capital to flow into Australia, not to establish some new and highly complicated technical activity but to come in to buy out an Australian flour mill, an Australian bakery or an Australian dairy factory established by Australians and operated successfully for more than half a century. He went on to say that we were selling a bit of our heritage each year. The Government has allowed foreign capital to flow into this country without check. The Government has not said, “ We need this type of foreign capital but we do not need that type “.
– Order! I point out to the honorable member for Reid that the argument about foreign capital coming into this country can be used as an illustration when suggesting that Australia is remitting more finance overseas to meet increased interest charges and other costs. However, I once more point out to the honorable member and to the House that the bill does not enable a debate to take place in general terms on the implications of overseas investment.
– Mr. Deputy Speaker, you will find that there has been a fairly general discussion on this subject. All I am trying to do is to answer the criticisms made by the honorable members for Denison and New England. It seems to me that every time a member of the Opposition tries to express a point of view he is given a lecture by the Chair.
– Order! If the honorable member for Reid later reads the remarks that he has made in this debate, he will find that he has spent a considerable time on a subject that does not arise when the bill is being discussed. I would suggest with all respect that the honorable member consider his position before he makes certain remarks.
– I abide by your ruling. I realize that you have the numbers.
-Order! The honorable member for Reid will resume his scat. The question is- -
– Mr. Deputy Speaker-
– Order! The honorable member for Reid will resume his seat.
Motion (by Mr. Uren) put -
That the honorable member for Reid be further heard.
The House divided. (Mr. Deputy Speaker - Mr. P. E. Lucock.)
Question so resolved in the negative.
– I greatly regret that honorable members were not able to hear the completion of a very adequate and comprehensive case that was being put up by the honorable member for Reid (Mr. Uren) concerning the borrowing of money by the Commonwealth on behalf of Qantas Empire Airways Limited. 1 did not intend to speak upon this bill, but I rise to clarify several matters which have been brought up by honorable members on the Government side of the House.
One of the points I wish to clarify was raised by the honorable member for Denison (Mr. Gibson) who made it quite clear to the House that in his opinion the Opposition was opposed to the purchase of these aircraft overseas. This, of course, is an entirely erroneous suggestion. We recognize that Qantas, if it is to maintain its position in a very highly competitive worldwide industry, has to have modern aircraft and modern equipment. It is obvious, too, that Qantas sees the need for additional modern aircraft to cover the increased traffic in the years to come. Accordingly, this bill comes before the House.
The Opposition does not oppose the bill. We sponsor an amendment designed to provide that the moneys required be obtained from taxation revenue or loan revenue within Australia, and not he borrowed overseas. This is the crux of the Opposition’s argument: We are not opposed to the purchase of the aircraft. We are opposed to the idea of once again running to the money lenders overseas and asking for a loan. We naturally offer all encouragement to this solely governmentowned and socialized enterprise. I am, indeed, indebted to the honorable member for Denison for mentioning that for about 40 years Qantas has made a profit. I do not want to go back over history, but the history of Qantas is a romantic one. In 1947 all of the shares in Qantas were purchased by a Labour Government and the company became a socialized undertaking.
It was very pleasing to note that the two speakers we have heard on this bill gave Qantas a pat on the back. The honorable member for Denison, and also the honorable member for New England (Mr. Sinclair), said that it was a most efficient organization. It is, indeed, a change to hear honorable members on the Government side talking about an efficient socialized industry. Generally honorable members opposite are extremely quiet when socialized industries, which make a profit, are under debate. They make a great deal of noise about essential services on which losses are incurred such as the railways which provide a service for the people of the outback, using lines on which profits cannot be made.
Here we have an industry which is owned and operated at a profit by the people of Australia, through the Government. Indeed, the Opposition offers encouragement to it. The principal question that should be asked of the Treasurer (Mr. Harold Holt) and of the Government is why, in the present circumstances, the sum of £11,200,000 should be borrowed from overseas. Why should the Australian Government find it necessary to borrow this amount which, after all. is an insignificant amount in relation to governmental finances as a whole? What are the prevailing circumstances? Our overseas reserves probably total almost £1.000.000,000. I understand that we have in overseas reserves about £800,000,000 in hard cash and about £200,000,000 as second line reserves, as the Treasurer terms them, in rights to borrow.
The Treasurer speaks in very glowing terms of our overseas reserves. He is very proud of them and seeks political credit. He says to the Australian people that we have never been better off and that we have tremendous reserves overseas. I ask: What is the value of the reserves unless we use them for the benefit of the nation? It is understandable that if our overseas funds are low and if we are struggling to maintain our balance of payments we should borrow from overseas in order to purchase necessary equipment or, as in this case, aircraft. But surely it is unnecessary in the present circumstances. The money is available in London where we have a reserve of about £1,000,000,000, yet we are approaching the money-lender countries and borrowing money at high interest rates. Surely our overseas reserves render unnecessary the borrowing from the United States of America of the amount mentioned in the bill.
So much for our overseas funds. What is the position at home? Government loans have been over-subscribed and I predict that despite the forecast by the Government in August of a budget deficit, a surplus will have resulted at the end of the year because of the great flood of loan money which has become available to the Commonwealth. The money is available within Australia. Surely the interest payable on the loan of £11,200,000 should be paid to Australian investors who are prepared to make the money available within Australia.
The honorable member for New England agreed that we have adequate reserves overseas - greater than for many years - and that we have adequate financial reserves at home. Australian investors are ready and willing to advance the money, yet again we are to place our country in pawn overseas.
Another point is that if the Opposition’s amendment is accepted, the interest payable on the loan will be taxable and will return revenue to the Government. The legislation before us provides that the recipients of interest on the loan in the United States of America will be specifically exempt from taxation. This is another reason why the amendment should be carried. The home money market is over-supplied, so why should it not be availed of to purchase aircraft from overseas? In the last fourteen years the Menzies Government has placed tremendous dependence upon the inflow of overseas capital. I am indebted to the honorable member for Reid for highlighting this fact. The problem of our balance of payments has been a continuing one while the Menzies Government has been in office.
The honorable member for Denison seems very proud that we have depended so much upon overseas capital. Without the inflow of overseas capital Australia would have been bankrupt. Our trade has not been balanced and despite the great talk by the Government supporters about increased trade and the success of trade drives, in fourteen years the Government has failed by £1,900,000,000 to balance our imports against our exports. We have balanced our international accounts only by borrowing from overseas or by overseas investment and the money thus obtained has been termed the inflow of overseas capital. In the prevailing circumstances why is the Government again borrowing from overseas investors? We have in London adequate reserves of about £1,000,000,000. We have adequate money available within Australia if the Government should decide to float a loan for Qantas, but this is not to be used because the Government has chosen to seek money overseas. It seems to me that the Treasurer and the Government have formed a habit of placing this country in pawn to the rest of the world. We have borrowed money from Switzerland, Canada, America, the United Kingdom and indeed almost every major country in the world.
– And from the International Bank.
– That is true. We have borrowed money to hide from the people of Australia the fact that we have been unable to pay our way in our international trading, despite the great talk of the Minister for Trade (Mr. McEwen). We have become professional bots. We are in hock to the rest of the world. This situation should be corrected. We can borrow money at home without putting any great strain upon the economy. 1 ask the Treasurer why, in the prevailing circumstances, the money should be borrowed from overseas. Not one Government supporter who has spoken in the debate has given an adequate answer. They merely say that that is the best course. Not one adequate argument has been advanced by a Government supporter. It is claimed that the Opposition is opposed to the inflow of overseas capital. That is not true. The honorable members for Scullin (Mr. Peters), Reid (Mr. Uren), Melbourne Ports (Mr. Crean) and others have consistently said that capital which brings into this country know-how and tangible benefits such as those brought by a manufacturing industry is welcome here. It is welcome when it provides employment, but where it is used merely to purchase an existing industry - such as the biscuit industry mentioned here to-day - it is of no advantage to Australia. It means that we must pay additional interest charges over seas. The charges on the loan to be raised under the proposed legislation will be added to a bill of about £120,000,000 in interest and dividends that the Government is forced to pay out every year. Surely a halt must be called. I regret that the Treasurer does not choose to call a halt.
I support the proposed amendment. The honorable member for New England mentioned in passing, as I do, that he was in favour of an Australian shipping line. This is something new. Although the honorable member stated that he is not in favour of a national shipping line, he did state that he wants an Australian shipping line. It seems to me that the Government should be condemned for the fact that although we are a great trading nation participating in a tough trading world, the lifeline of our trading is under the domination of overseas interests over whom we have no control. Now the situation has reached such a ridiculous stage that we are paying subsidies.
– What has this to do with the bill?
– I merely mention this in passing in reply to the honorable member for New England.
– Order! I suggest that the honorable member might pass a little more quickly.
– I do pass very quickly. I merely end on the note that the honorable member for New England mentioned this matter. I should like to say to him, and to all members of the Country Party, that we want an Australian shipping line and that we want a great deal more action about an Australian shipping line, rather than just talk in this Parliament. I support the amendment.
.- I oppose the amendment. I noticed that members of the Labour Party, especially the honorable member for Lalor (Mr. Pollard) and the honorable member for Bendigo (Mr. Beaton), focussed their attention on the Country Party. Therefore, I think it is appropriate that a Country Party member should answer what has just been said. [Quorum formed.] It must be understood that I did not empty the House and cause the quorum to bc formed; it was emptied by a previous speaker whom I will not name. It is very pleasing to honorable members on this side of the chamber, although it must be embarrassing to the Opposition, that some honorable members opposite have said how prosperous Australia is, what wonderful reserves we have overseas and that if the Government floats a loan in Australia it is over-subscribed. These things are very encouraging and it is very pleasing to know from what has been said this afternoon that the Labour Party has realized this. I should like to refer now to the amendment, which states, in part - this House, whilst not declining to give the bill a second reading, is of opinion that the financing of the purchase of aircraft by Qantas Empire Airways Limited should be mct from revenue and not from a loan raised overseas.
I listened last to the honorable member for Bendigo, so I shall concentrate on him first. The honorable member asked, what is the use of these reserves if we do not use them up. The very name “ reserves “ signifies their value. If Australia were an old country, and were self-contained, it might not be necessary to keep the overseas reserves at a high level; but it is a young country, which is growing all the time. Most people are aware that we have had a good run lately but that it is possible for us to have two or three years of drought. If that happened it might be necessary for Australia to import all sorts of things. These reserves are for that very purpose, and it is for that reason they are kept so high.
The honorable member for Scullin (Mr. Peters) referred to a Melbourne newspaper’s financial writer who had said certain things about the reserves, and that it was not necessary to keep them at a high level. The honorable member for Scullin said that he and the honorable member for Reid (Mr. Uren) have advocated this for eight years. Only five years ago the Labour Party was deploring - and we were rather anxious too - about the fact that our reserves were iso low, yet the honorable member for Scullin now says that he and the honorable member for Reid have maintained all the time that it has not been necessary for eight years to have such high reserves. Honorable members opposite are interjecting. While I am giving the facts it is only to be expected that there will be interjec tions. While I am stating the facts, which are the complete opposite of what was said this afternoon by an Opposition speaker, it is only to be expected-
– Do you support your leader?
– I am trying to get on with it, but I get interjections. It is strange that in this amendment the honorable member for Melbourne Ports (Mr. Crean) is condemning the financial policy of this Government and is being supported in his condemnation by honorable members opposite, lt is the sound financial policy of this Government that has brought about the conditions about which Labour has spoken so proudly this afternoon. The main point I want to make is that these high reserves are something of which Australia can be proud. The honorable member for Bendigo said that if we did not use the high reserves that we have overseas we could raise a loan in Australia, and he used that as an alternative. But it does not matter whether we use some of our overseas reserves, and thereby reduce our overseas balances, or float a loan in Australia. The money raised will go or remain overseas just the same, because the aircraft are to be purchased from America. If that money goes overseas there will be less money in this country.
As I have said already, and as I repeat with emphasis, if this were an older, selfcontained country I would have nothing against the arguments advanced by the Opposition; but Australia is a young country. If we cannot borrow money and use money we have in this country, to advantage, there is something wrong with our policy. If we use up our reserves we may soon be in a dilemma. The Labour Party would be very pleased about that. The moment the reserves were down to a certain level, not very much below what they are now, honorable members opposite would be saying that this was a dangerous condition for our overseas reserves to be in. If our reserves were depleted and we had a bad drought what sort of state would we be in? This Government is not looking forward merely to tomorrow but is looking ahead some years to give this country stability and security. Its policy is to keep the economy sound and give us security. Most people are not asking for a spending spree; they are asking for security. I believe that the best security that Australia can have is to be able to borrow when it becomes necessary to buy goods from overseas, and also to be able to buy them with our overseas balances. You do not obtain pounds, shillings and pence overseas, but you do obtain goods for the money that you have in your overseas balances. All sorts of raw materials can be obtained overseas. But the Labour Party, which claims to represent secondary industry, says we should be watching these balances very closely and keeping them as high as possible. Millions and millions of pounds of raw material must be bought from overseas to keep industry working and to keep men employed. It has been very pleasing to read in the press only to-day or yesterday of another big fall in unemployment.
Mr. DEPUTY SPEAKER__ I suggest that the honorable member for Mallee should discuss the matter before the House.
– I believe the Opposition would hate anything to be said about the employment position. You can easily find the tender spots by just mentioning that subject. Immediately there is an uproar. But of course that will not get honorable members opposite very far.
This bill seems to be a pretty pleasing one. Members of the Australian Labour Party have said that the only thing they have against it is the provision for the raising of the required money by an overseas loan. They say that they are not opposed to great progress. This Government points the way and leads in promoting the progress of Australia. What kind of progress did we see in the three years from 1946 to December, 1949?
– Mr. Deputy Speaker, I take a point of order. I direct your attention to rulings given earlier on remarks made by the honorable member for Reid and others, who were asked to confine their observations to the subjectmatter of the bill except when they were answering arguments advanced by honorable members on the opposite side of the House. I submit that if a similar ruling were applied to the honorable member for
Mallee he would have been ruled out of order almost immediately he rose.
– Order! I must confess that interjections from the Opposition side of the chamber prevented me from hearing portions of the remarks made by the honorable member for Mallee. However, I suggest again that the honorable member come back to the subjectmatter of the bill.
– I had not originally intended to discuss this bill. My object in rising was to answer remarks that had been made by Opposition members. The honorable member for Yarra (Dr. J. F. Cairns) has said that, right from the outset, my remarks have been wide of the subject of the bill. That statement is completely wrong. I direct his attention now to one or two things that I said, although I do not like to repeat myself too much. I said that we should not use part of our overseas balances for the purchase of these aircraft because those balances are needed for the purchase of raw materials and to meet our needs in time of emergency. Was that related to the subject of the bill? Of course it was. I said also that if the money needed for the purchase of these aircraft was raised in Australia, we would not be able to raise loans for other purposes and we would not be able to raise all the money that we might need for the provision of social services and State works. Was that matter related to the subject of the bill? Of course those remarks were right on the subject of the bill. The point of order raised by the honorable member for Yarra was completely without substance, as I believe you indicated, Sir.
Let us now get on with the business of the House and put this bill through as quickly as possible. Let us show our appreciation of the fact that we have a government that will keep our overseas reserves at a high level. Let us realize that we can use for all sorts of essential purposes the funds that we can raise from loans in Australia instead of using portion to buy aircraft for Qantas. I believe that this bill is in the best interests of the whole of Australia, and I give it my support.
.- Mr. Deputy Speaker, I rise at this stage to support the amendment proposed by the Opposition, which has clearly shown the relevance of that amendment to this bill and demonstrated that we could raise, without borrowing from overseas, the money to pay for the required aircraft for Qantas Empire Airways Limited. Opposition speakers have demonstrated also that raising the money without borrowing overseas would have had the added advantage, first, of not increasing our already very excessive debts overseas, which have accumulated over the last fourteen years, and details of which were given by the honorable member for Reid (Mr. Uren). Secondly, we would save interest that has to be paid overseas, thereby increasing our indebtedness or reducing our available funds by well over £500,000 every year for the duration of the loan that is the subject of this bill. The honorable member for Melbourne Ports (Mr. Crean), who led for the Opposition in this debate, asserted that Australia at present has reserves adequate to allow us to provide out of them £11,200,000 for the purchase of these aircraft. The issue between the Opposition and the Government on this bill is based precisely on that point.
No one has seen fit, on behalf of the Government, to make any answer to the case made by the Opposition. I speak at this stage to emphasize that the Government has seen fit not to answer, through any of its Ministers or any one in a responsible capacity, the case made by Her Majesty’s Opposition in support of this amendment. That is typical of the Government’s attitude to proposals submitted in this House by the Opposition. The Government tends to ignore and to brush aside any submissions that are made by the Opposition. In this instance, the Government is content to rely on its numbers to force through proposals that have been decided on elsewhere. We cannot be sure where they have been decided on. Whether they have been decided on in the Cabinet, we cannot be sure. Whether they have been decided on by the unnamed executive of the Liberal Party of Australia, we cannot be sure. Whether they have been decided on by four or five large New York money-lenders - who are unnamed in this bill - we cannot be sure. At any rate, it is the policy and practice of this Government to bring bills into this Parliament and to refuse to explain its reasons for rejecting, or even considering or replying to argu ments advanced in support of, amendments proposed by Her Majesty’s Opposition. It is all very well for the Minister for Social Services (Mr. Roberton), who is now at the table, to continue to read the stock exchange reports in the daily newspaper as I speak. It is all very well for the Treasurer (Mr. Harold Holt) not even to be present in this House when the bill is debated. These things are typical of the attitude of this Government, swollen with numbers and complacency, to amendments submitted in this Parliament.
At this stage, therefore, I want to make as clear as I can the position of the Opposition in respect of this bill. First, the amendment asks the House, while not declining to give the bill a second reading, to make certain provision for the raising of the funds required for the purchase of the aircraft. The words, “whilst not declining to give the bill a second reading”, mean that the Opposition agrees that Qantas should have suitable aircraft with which to conduct its operations. This airline was established as an Australian public company by a government formed by the Australian Labour Party. It is a socialized undertaking. This proves quite conclusively and definitely that a socialized enterprise can be one of the most successful in the world. As the honorable member for Melbourne Ports pointed out, on a comparison with all the great passenger and cargo airlines throughout the world, in terms of profit, Qantas is the second most successful. This is a pretty clear example of the fact that a socialized undertaking can more than hold its own with the greatest of the private monopolies that exist throughout the world. Therefore, the Australian Labour Party strongly supports proposals for the provision of modern aircraft for this airline.
I suggest that there is possibly one point for discussion concerning the kind of aircraft to be bought. I have not heard at any stage a case put by the Government to establish that Boeing aircraft are the best type for the purposes of Qantas.
– Did not the honorable member hear what I said?
– I said, “by the Government “. The honorable member for Denison is an expert on some things, but
I do not think that he is an expert on aircraft. Let me now mention a little history. In 1934, a most historic incident demonstrated the great role that Australians have played in the development of flying from the very beginning. In 1934, there was an air race from London to Melbourne. The aircraft placed first in that race was a Comet flown by Campbell Black and Scott. The aircraft placed second was a DC.2 flown by Dutch pilots.
– I raise a point of order, Mr. Deputy Speaker. This may be very interesting, but it appears to be wide of the subject of the bill. I was required to stop giving details to support my arguments, and I submit that the honorable member for Yarra is now out of order.
– Order! I think that the honorable member for Yarra is developing a thesis concerning the purchase of aircraft and that the House can see the point which the honorable member is developing. At present, he is in order.
– As I have said, the first aircraft to reach home in that air race was a Comet, the second was a Douglas DC-2 and the third was a Boeing flown by two American pilots. Those three aircraft which finished first, second and third in the London to Melbourne air race in 1934 are now the three leading aircraft on international airlines.
I do not think that a case has ever been put to this house why Qantas should be equipped with Boeings and not Comets or Douglas aircraft. I know the Boeing and I agree that it is a most efficient aircraft. So also is the Comet. I would have expected the Government, in submitting this bill to the House relating to the purchase of aircraft, to say something about why Qantas had chosen Boeings. I hope that the honorable member for Mallee (Mr. Turnbull) will see the relevance of the point and will develop some interest in the kind of aircraft being purchased for Australian companies. That much aside, the clear issue between the Government and the Opposition is not on the question of whether the aircraft should be provided, not on the question of what kind of aircraft should be provided, but simply on the question whether the aircraft should be purchased by borrowing from New York, or by using funds raised in Australia. That is the question in issue and the question to which this debate could very well be confined. But that is the question which the Government, through its Ministers - or in any way for that matter - has not attempted to answer.
The honorable member for Melbourne Ports pointed out that we have a level of overseas funds of about £300,000,000 and a second line of reserves of about £200,000,000, a total of about £1,000,000,000, to meet Australia’s present requirements. The first question that arises is whether that level of reserves is sufficiently high to justify the withdrawal of £11,200,000. Quite clearly, the amount of those reserves is adequate to allow £11,200,000 to be drawn for the purchase of aircraft. Only yesterday the senior lecturer in economics at the University of Melbourne, Dr. J. N. O. Perkins, said that the level of reserves at present held by Australia was far in excess of the amount necessary. I do not think that what is necessary has ever been clearly stated by the Government, by the Treasury or by any one in authority. Yesterday Dr. Perkins said in Melbourne that he considered that £300,000,000 was adequate for any expected purpose that Australia may need to meet, so, if he was correct, we have at present some £400,000,000 in excess of expected requirements.
– Are you quoting him as an authority?
– I am quoting a senior lecturer in economics, who specializes in international trade, as one giving the kind of opinion that the honorable member cannot afford to brush aside lightly, and I am asking, as I thought I had made clear to the honorable member when I first rose to my feet, the Treasurer or some one on behalf of the Government to say something which we could treat as an authoritative statement. But the Treasurer has chosen to say nothing upon this point. I do not know whether the honorable member for Higinbotham (Mr. Chipp) is expecting to step into the Treasurer’s shoes in this debate or at all, but I think that some one on the Government side could be expected to say something upon this aspect. At any rate, we have the opinion of Dr. Perkins, who is a senior lecturer in economics, that some £300,000,000 would be adequate as Australia’s reserves at the present time, leaving a surplus of about £400,000,000. So if you contrast £400,000,000 with the £11,200,000 required for the purposes of this bill there are, in Dr. Perkins’ opinion, far more than adequate funds available.
If we can be satisfied, or if the evidence indicates, that we have sufficient overseas reserves to allow us to purchase these aircraft, the question arises of what kind of internal financial transactions will have to take place to make this possible. This was debated across the table a little while ago by the honorable member for Melbourne Ports and the Treasurer by interjection. The Treasurer, not by making a speech but by an interjection that was barely audible to any one not sitting at the table, chose to question whether this could be done in Australia. The honorable member for Melbourne Ports dealt with the Treasurer’s interjection, the Treasurer ceased interjecting and seemed to be satisfied that the honorable member had effectively answered his interjection. The honorable member for Melbourne Ports said that because of the state of government accounts it was possible this year to provide internally the funds necessary without any difficulty at all; that it would not be necessary to increase the deficit in any way and that sufficient funds were available to the Government at present to enable it to lend £11,200,000 to Qantas without in any way interfering with or embarrassing or changing government accounts as they will run between now and the end of this financial year. As I have said, having heard this reply from the honorable member for Melbourne Ports, the Treasurer ceased interjecting and very soon after left the chamber. Does this mean that the Treasurer is satisfied that the honorable member’s proposal is financially sound and possible? In my opinion - I have spent quite a lot of time studying public accounts and econnomics - the proposal is quite possible and feasible. The honorable member for Melbourne Ports was right and the Treasurer was wise to cease interjecting and to leave the chamber.
The point is that no one on the Government side has chosen to say that this cannot be done in the way in which the Opposition wants to do it, and to deny that at the same time it would save money for the people of Australia. The Opposition’s proposal would save money, particularly in terms of the interest involved, because the cost of providing the funds in the way the honorable member for Melbourne Ports wants them to be provided would involve very little cost and would involve that cost only in Australia. On the other hand, the method of providing the funds proposed by the Government will involve an interest cost of at least £500,000 every year while the loan is outstanding. This amount has to be paid from our overseas funds every year to the people in New York from whom the money was borrowed. It seems to me that the case for the Opposition’s amendment has been established by its own meaning and logic and that neither the Treasurer nor any one else on behalf of the Government has seen fit to try to answer it. In the absence of any effective contending proof the House should be prepared to support the Opposition’s amendment.
It is most important that this matter should be given serious consideration. I do not want to become involved now in any discussion about the excessive costs that have been imposed upon the Australian economy by borrowing, by the Government and with the Government’s consent, over the last fourteen years, and that this borrowing has in fact proved excessive and most unnecessary on more than one occasion. The Government borrows overseas too easily and is unwilling to use the welldeveloped Australian system of providing funds in Australia for Australian public bodies particularly, let alone private bodies. If Qantas were a private and not a public concern the case for raising the money in Australia by revenue means would not be so strong, but the case for borrowing privately in Australia, as indicated by the honorable member for Bendigo (Mr. Beaton) would be just as strong. The Treasurer has now returned to the chamber, so I say to him that there is no technical difficulty whatever in raising the funds in Australia by revenue means and in making those funds available to Qantas to purchase the aircraft. If there is any technical difficulty involved in this I should like the Treasurer to rise when I end my speech and tell me what it is. If our case cannot be answered in that way, why, then, should not this amendment be accepted? I submit, therefore, that the Opposition has proved its case logically and that that case has not been answered by any one on the Government side. I submit that the Opposition’s amendment should be carried.
– I do not propose to speak at length to the amendment, but I would like to make one or two points clear. The honorable member for Yarra (Dr. J. F. Cairns) assumed that 1 was not aware of what was said in this place. I hear a lot more outside this place than I hear within it.
– Mr. Deputy Speaker, I direct your attention to the state of the House.
– « the honorable gentleman is not interested in an explanation, I do not propose to pursue the matter. [Quorum formed.] I will not deal at very great length with this matter because I would have thought that the issues were so obvious as to be sufficiently elementary to be understood, certainly by the spokesmen for the Labour Party and by those who have claimed to have some intellectual economic appreciation of them. It is quite obvious that when some members of the Opposition speak about overseas reserves they imagine that the reserves form a fund in the possession of the Commonwealth Government. Some members of the Opposition assume that here is a great body of wealth on which we can draw at will. The proposition is so absurd as to baffle comment from this side of the House.
– What is the good of having the reserves if you cannot draw on them?
– They represent earnings by the Australian people. In return for those earnings people have credits established at their banks here in Australia. But this is not a fund on which the Government may draw. We do not turn to the Reserve Bank and write a cheque on the bank in respect of reserves which have been established overseas. The thinking of honorable gentlemen opposite has been clouded by this fallacy for almost as long as I have been in this place.
Let me deal now with the specific proposal that instead of Qantas securing overseas finance for the purchase of new aircraft the Government should provide the necessary amount out of revenue. In the first place, to do that would involve an addition to the Budget provision which we were required to make this year. It is the responsibility, the duty and the privilege of every government to determine its own financial programme and the means by which that programme is to be financed. Apparently, judging by what is said opposite, we have the choice either of providing in our Budget capital provision for Qantas to purchase these aircraft or financing their purchase by loan raisings here in Australia.
I would have thought it was apparent even to members of the Opposition that it is many years since the Commonwealth raised loan moneys for its own purposes inside Australia. In recent years the Commonwealth has reserved virtually all of the loan field for the States. It is true that in comparatively recent times, when this Government established the strength of the bond market to a degree which has been almost unprecedented in contemporary history, we have been able to apply the amount secured by way of loan beyond the requirements of the Slates for various Commonwealth purposes. The pattern for financing aircraft purchases by this highly successful international organization is well established. We raise the money on very favorable terms - indeed, at a rate of interest lower than could be secured in Australia for an instrumentality of this kind. We repay the principal and we pay the interest out of the earnings of Qantas itself. This is a programme which has proved very advantageous for Qantas and so far as the Government is concerned. The sum involved has not been a direct charge on the Budget at a time when we have had so many desirable objects for Commonwealth expenditure.
Quoting a professor of economics, the honorable member for Yarra said that £300,000,000 would be an adequate level of reserves for Australia. The important thing about your overseas reserves is the direction in which they are moving - the view taken by people in other parts of the world as to whether the economic policies of the country concerned are such as to sustain its reserves at a level adequate for the obligations which that country has to meet. We have found in the past that when reserves have been moving rapidly downwards there has been a disposition for people to refrain from sending capital to this country or to delay payments here in case the rapidity of the movement in the reserves has called for some review by the Government of the strength of the currency and the valuation of the currency at that particular time.
There is room for argument as to what is a desirable level of reserves for Australia. I have heard honorable gentlemen opposite argue from a viewpoint entirely different from that just put forward by the honorable member for Yarra. They have said that when the late Mr. Chifley was Treasurer our reserves stood at a very high figure. It is only in the last few months that we actually passed the nominal level of reserves that existed in the late Mr. Chifley’s time. It has been argued from the other side of the House that the value of money to-day is very much less-
– Now you are talking.
– You have argued that way. You have said that Australia now has really only the equivalent of about half the strength of reserves that it had in Mr. Chifley’s time. There is validity in the point that £800,000,000 of reserves to-day does not represent the same strength as did £800,000,000 of reserves when the value of the £1 was so much greater. So I really do not know which is the official argument of the Opposition - whether it is that we should have a much lower level of reserves than we have at present or whether those reserves are yet barely adequate to the calls that may be made upon them. At the moment the reserves appear to the Government to be strong. Certainly they are at a much more comfortable level than we have known in some earlier times. But most of us who have been any length of time in this place know that seasonal fluctuations - a period of drought or a period of declining prices overseas for Australian commodities - can have a quite rapid effect on the state of our reserves.
I do not want to labour this matter indefinitely. Having regard to all the considerations that were before it the Government decided, as part of its financial programme, that to raise a loan overseas was the most satisfactory way of financing this purchase of aircraft by Qantas. This is in line with the methods adopted in the past and which have been supported in the past by the House. I suggest that the House would do well to support this method again at this time.
Sitting suspended from 6 to 8 p.m.
.- The House is discussing a bill for an act to approve the raising, by way of loan, of moneys in the currency of the United States of America to be lent to Qantas Empire Airways Limited, and for purposes connected therewith. The Opposition is not objecting to the Parliament taking the necessary steps to enable Australia’s international airline, Qantas, to arrange for the provision of funds with which to bring its fleet up to world standard and to continue the high standard of efficiency that it has maintained hitherto. It was well said here this afternoon that Qantas is the best paying proposition of all the international airlines. As one who has travelled on a variety of airlines, I say that in my opinion it is the most efficient and the most satisfactory airline from the passenger’s point of view.
– And the safest.
– Yes. We hope that it will continue to be the safest.
What we members of the Opposition are questioning is the wisdom of this Parliament consenting to the borrowing of the requisite money, to wit £11,-200,000, from United States lending institutions, namely the Morgan Guaranty Trust Company of New York, the Chase Manhattan Bank of New York, the Irving Trust Company of New York and the Continental Illinois National Bank and Trust Company of Chicago. This money is to be borrowed and to be passed over to Qantas. It is to be borrowed at interest rates varying from 3i per cent, in the first year to Si per cent, at the end of eight years, to wit in 1972; plus any additional costs that may be imposed on the lending instrumentalities by the Congress of the United States, and plus the cost of raising the loan. The interest will be £550,000 per annum in round figures.
Whilst we agree with the purpose of this measure, we say that Australia is strong enough financially to back the raising of finance for Qantas from its own resources and from its earnings in other countries. We appreciate that it is of no use to offer Australian currency to suppliers of aircraft in the United States because they will say “ That is no good to us; we want dollars “. So dollars, sterling or Swiss francs have to be found. We believe that the resources of Australia, backed by our present international reserves, are sufficient to enable us to finance this loan from revenue or some other appropriate source within the confines of Australia. That would save Australia the interest which will accrue at the rate of £550,000 per annum and would enable us to stand on our own feet and to have a bit of human dignity.
The Treasurer (Mr. Harold Holt), in the short explanatory speech that he made this afternoon, said amongst other things that this procedure followed a well established pattern. It was a well established pattern in the early days of the State parliaments and in the early days of federation to depend on overseas countries for supplies of money and all sorts of things to a much greater extent than we do now. Surely, when we know that we can obtain the requisite funds from our own resources, it is our function to do so and to avoid entering the shops of the New York and Chicago pawnbrokers. Of course, they are excellent people if you want to borrow money but I am one of those old-fashioned people - I do not suppose that I am very different from the ordinary Australian - who hate to have mortgages around their necks. I have had mortgages as long as boa constrictors in my time. The average Australian householder is always looking forward to the day when he has the freehold title to his house and land.
– Yes, freehold. I do not want the honorable member for Wakefield to draw any red herrings across the trail. I am saying that the average Australian farmer looks forward to the day when he will have paid off his hire-purchase commitments on his machinery and when he will not owe anything to any man. That ought to be the financial policy of every municipal body, every State government and the Commonwealth Government. That should be the ambition-
– Of course, the old supporters of usury, who believe in the perpetuation and multiplication of debt, who believe that the burden that is weighing down the whole of mankind should be continued for ever and ever, and who believe that no government or human institution should ever endeavour to alleviate that horrific burden, say “ Rubbish “. When anybody wants to deprive the money-lender of his means of livelihood and to achieve a situation in which it is unnecessary for anybody to borrow money, honorable members opposite say “ Rubbish “.
Every sensible person, every housewife, every owner of a soundly-based industrial concern knows that it is a good plan to endeavour to meet your obligations annually.
– Should there not be any loan money for young people?
– You were a parson once; but now I suppose you support usury. I am ashamed if that is your attitude. Sound business people look forward to the day when they will have paid off their commitments and will be able to meet their annual obligations out of their earnings. They establish depreciation funds, out of which they hope to meet the cost of installation of new machinery and new equipment. That is a very desirable procedure.
There have been times of substantial prosperity in the history of Australia when the Commonwealth has been well able to meet the cost of governmental purchases and to pay for Commonwealth undertakings out of income tax and other sources of revenue. Somebody will express dissent, but let me tell the House that as recently as 1949, a former government of this country set in motion the Snowy Mountains project-
– It turned one sod.
– Never mind about the honorable member for Mallee, Mr. Speaker. The Snowy Mountains project is a great national work which will confer benefits on the people of Australia for many years to come. In the initial stages of that scheme, Commonwealth revenues, although not as good as they are now, were substantially healthy, despite the facts that we had recently emerged from a disastrous war, that we had heavy commitments and that taxation was pretty high. In the initial stages of the Snowy Mountains scheme, the annual commitments were met out of the revenues of the Commonwealth. Our successor, the present Government, to its eternal credit, for a substantial number of years continued to meet the annual expenditure on that scheme out of revenue and not out of borrowings. But in more recent years it has slipped and now it is borrowing money overseas to meet the costs of money it has borrowed to finance the Snowy Mountains scheme.
There are occasions when borrowing is essential; but this Commonwealth Government, presiding over the destinies of a nation whose annual wealth of production is, in round figures, £3,000,000,000, is now borrowing a mere £11,000,000. Is it beyond the resources of the Commonwealth to pay this amount in cash? Of course it is not. This is a simple matter, even if at the end of the financial year the Government finds its Budget is slightly out of joint. When framing the 1962-63 Budget, the Government, with rather a gloomy outlook - perhaps a justifiable outlook at that time - thought it would be short of the revenue required to meet its commitments. So it informed the Parliament that it was budgeting for a deficit of approximately £130,000,000. Where did it intend to get the £130,000,000, if it was short of this amount? Honorable members may work this out for themselves, but I suggest it would be the same source from which it could get the £11,000,000 now required to provide Qantas Empire Airways Ltd. with the finance to purchase the Boeing aircraft it wants. In addition, our overseas reserves are much stronger than they have been and the Government would have no difficulty in obtaining the foreign currency it required. It would, of course, need dollars for the purchase, or perhaps sterling is now convertible to dollars - I am not quite sure of this.
The Treasurer accused us of not knowing that overseas reserves are not available just for the asking. They are reserves of foreign currency earned by the exporters of this country and held by the banking system. They belong, after all, to all the people of Australia. Arrangements could be made through the present banking system in an emergency or in certain circumstances for the Commonwealth Government to obtain access to the foreign currency that forms our overseas balances. No one will deny that. It is of no use for the Treasurer to tell us that overseas reserves are some mystical fund that no one can touch. Some one suggested that the money required for the purchase of these aircraft could be obtained from our healthy overseas reserves. The honorable member for Mallee (Mr. Turnbull), who should know better, said, “ No, you cannot touch these reserves. What would happen if there were a drought? “ In those words he denied the truth of the statement made by the Treasurer.
– The Treasurer said the same thing.
– Of course the honorable member denied the statement of the Treasurer. The Treasurer said, “ Some members of the Opposition are assuming that some of the money is available.” You implied that the money was available when you said that these overseas balances would be a protective shield if we had a drought. You are at loggerheads with each other.
– How can-
– Don’t apologize, I know what you said. You said that the overseas reserves should not be called upon for this purpose because they were the great sheet anchor that would be needed if there were a disastrous drought and a diminution of our overseas earnings, didn’t you?
– The Treasurer accused Opposition members of assuming that the overseas reserves would be available for this purpose. If they were available for use during a disastrous drought or a diminution of overseas earnings they could be available if it were feasible or necessary to use them for this other purpose. You contradict each other.
Let us look at another angle of this matter. Every one knows that to-day in Australia a farmer could go to the Commonwealth Development Bank of Australia and say: “I have ample security. What about a loan for development purposes? I want to buy a tractor or some other machinery costing £1,500.” The officer would look at his security and probably say: “All right. Here is a loan for so many years at a flat rate of interest.” The interest would probably be 4± per cent. Similarly, a captain of industry could go to the Commonwealth Bank and say; “I want £100,000 to enable me to install up to date equipment in my industrial plant”. He would probably get the loan if his security were right.
The Commonwealth of Australia could be put in a similar position. The Government could say: “ Here is an immense continent with enormous resources and with enormously increased earning power whose overseas earnings are very buoyant and whose reserves have accumulated to the enormous sum of £800,000,000 “. I know that no act enables the Government to compel the Commonwealth Bank to advance money in these circumstances, but the bank can be motivated by other machinery. Is it not sensible to say to the Commonwealth Trading Bank or to the Commonwealth Development Bank or the Reserve Bank: “ You hold this overseas currency. Arrange to let us have a loan for a mere £11,000,000 to enable the most efficient international transport agency in the world, that is, Qantas Empire Airways Limited, to purchase the most modern aircraft that the world has ever produced.” I do not really believe that these are the world’s best aircraft; I would prefer British aircraft, but that is another question. The security for the loan is the accumulation by Qantas of plant, equipment, buildings, capital and good will, and this would be an immense security. Surely in these circumstances it is not beyond the Government to make the necessary arrangements.
The Australian community for a long time, particularly in more recent years, has been living, and encouraged to live, on a beg and borrow policy. Every strata of the community is obsessed with hire purchase and purchase on terms. Companies presided over by people of great distinction with knighthoods and other honours and with famous records have been puffing up the economy by resorting to debentures and all sorts of hollow securities until some of them have bitten the dust. The Commonwealth Government is pursuing the same policy. We can see this loan-raising and loan-mongering business in the Treasurer’s second-reading speech. If this Government remains in office long enough this sort of policy will have to continue in perpetuity. The Treasurer said in his second-reading speech -
Including the present loan, the Commonwealth has now borrowed 85,400,000 dollars in New York for the purchase of aircraft since 1956, of which 69,400,000 dollars has been for Qantas Empire Airways Limited and 16,000,000 dollars for TransAustralia Airlines. Of the earlier loans totalling 60,400,000 dollars, an amount of only 30,000,000 dollars, or less than half, remains to be repaid.
We no sooner get that repaid than we start the wheels turning again and borrow another plaster quite unmindful of the contentions of the supporters of the Government that this country has never been more prosperous, that it has never earned more international exchange than it is earning at the present time, and that we have never had bigger overseas balances at our disposal. Despite this extremely favourable situation, of which we are continually reminded by the honorable members, the Government has to go to the New York loan market and pay 4i per cent., eventually rising to 5 per cent., for moneys that could be raised by another method, so avoiding the unfortunate accumulation of interest burdens. The honorable member for Evans (Dr. Mackay) evidently wishes to say something. I would like to hear what he has to say.
– We have got where we are by the method that you have just described.
– The honorable member’s alibi for his support of this motion is that he has got here by the method I have just described, the method of, in effect, borrow, borrow, borrow. Let me remind him that the Bruce-Page Government got here by exactly that method, but that government is here no longer and it left a plaster of debt hanging around the necks of the people that it took succeeding governments 25 years to remove. Let me remind the honorable member of the power of international exchanges and credit balances because it is his Government that has the taxation weapon. In the time of the Chifley Government we made a straight gift of £15,000,000 to the British Government in its hour of great distress. That was in 1949. We wiped off £25,000,000 of the money which the Government owed on the United Kingdom money market. I asked the late revered Ben Chifley why we did not liquidate the whole of our liabilities to the United Kingdom, and he gave me a straight answer. He said that we did not do so because the position of the United Kingdom was desperate, and if we liquidated all our debt the United Kingdom Government would no longer be able to derive revenue from us in the form of interest payments on outstanding loans. The situation has changed and there is now no reason why we should place ourselves more firmly in the hands of the American money-lenders when we could, by efficient management on the part of the Treasurer and this Government, which has its expert advisers to assist it, raise the necessary £11,000,000 in our own circles. We should not perpetuate the evil system that has- been more and more widely accepted in our community, and which is all wrong.
We cannot wipe out this system of borrow, boom and bust overnight, but we can, at least, make a start. In every part of our community, from the home right through to this Government, we should try to pay our way by using our own revenue. I will support the Opposition’s amendment,
Question put -
That the words proposed to be omitted (Mr. Crean’s amendment) stand part of the question.
The House divided. (Mr. Speaker - Hon. Sir John McLeay.)
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
– Honorable members are aware that the bill before us consists of two parts - the clauses and the schedule attached. During the course of the debate the Opposition has raised certain propositions to which the Treasurer (Mr. Harold Holt) has submitted an answer of a kind; but when the answer is subjected to an examination it is found to be unsatisfactory. I am surprised that the Treasurer has chosen to act in this way. Honorable members will realize from the formal procedure which occurred a few minutes ago that before this bill could be carried beyond the second-reading stage it was necessary to have a message from the Governor-General; in other words, certain financial procedures have to be adopted with a measure of this kind. It has been said that the proposed amendment of the Opposition is not acceptable because the Budget has already been cast and the money could not be found from other sources. I suggest that this objection is thrown out of court by the Governor-General’s message.
Every member of the committee knows that we have had two series of measures that substantially alter the Budget as it was drawn up in August of last year. One was the measure in relation to child endowment. 1 suggest that it is misleading for the Treasurer to give the sort of explanation that he gave this afternoon. Members of the Opposition have asked, in essence, why, in view of the level of Australia’s overseas reserves at the moment, a sum of £11,200,000 cannot be provided out of those reserves. The Treasurer has not chosen to answer the question but has preferred to divert attention by suggesting that the parliamentary procedures of this House would not allow that course to be followed. In my opinion that is sheer rubbish. In my view the Government is obliged to say to the satisfaction of this House what is the purpose of accumulating first-line reserves which stand at present at £800,000,000. In addition, as has been pointed out, we have a second line of reserves - I do not like that argument very much because these second-line reserves are different altogether from the first line. Why cannot the payment of £11,200,000 be met out of the accumulated reserves of £800,000,000? No answer has been given to the question.
– That is not true.
– The honorable member who has just interjected has a very bad habit of saying here that certain things are not true. If he means, as I think he does, that he thinks I am a liar, let him get up and say so. I repeat what I said to the honorable member the other evening - I do not like implications of that kind. I suggest that the Treasurer has distorted the facts in relation to the substance of the Opposition’s amendment.
– Who is making allegations now?
– I am making an accusation on the basis of the fact that we have accumulated reserves of £800,000,000. Everybody here knows that to pay for the Boeing aircraft currently instead of resorting to loan would be a mere technical device on the part of the Commonwealth.
The essence of the Opposition’s proposed amendment is contained in the question: Why cannot the payment be met currently from accumulated reserves? Instead of answering that question the Treasurer has misled the House by suggesting that the parliamentary procedures do not permit that method to be adopted. I call the attention of the committee to the message received from the Governor-General which states that an unspecified sum, which was not mentioned in the Budget of August of last year, is required to be set aside to meet some of the expenditure envisaged in this measure. That is my first point.
My second point relates to the schedule to the bill. The Treasurer stated that the purpose of the bill is to allow Qantas Empire Airways Limited to purchase three Boeing 707-338C jet aircraft. The preamble to the schedule states -
Why is the amount not specified, as was done in previous measures? Honorable members who would like to consult the earlier acts may do so. Why does the schedule say vaguely that the purpose of the measure is to allow Qantas to buy jet aircraft, instead of specifying Boeing 707- 33SC jet aircraft and related equipment? I think that the House is entitled to certain explanations of the way the schedule has been worded. The Treasurer’s speech was specific enough in informing the House that a decision is required to purchase certain aircraft, yet the schedule, which is the major part of the measure, is vaguely worded. It simply refers to the purchase of jet aircraft and related equipment. I think we are entitled to at least some explanation from the Government as to why there is not specified in that schedule that it is not jet aircraft in general but certain jet aircraft, namely, Boeing 707-3 3 8C aircraft. I hope that the Minister for Immigration (Mr. Opperman) who is at the table now, or the Treasurer, who is responsible for this measure, will indicate to the committee why the schedule has been drawn in these terms rather than specifically mentioning the particular type of aircraft.
.- I took down very closely the words uttered by the honorable member for Melbourne Ports (Mr. Crean). He said: “Why cannot the Government meet the costs of these jet aircraft from its overseas reserves? “ The answer is that the Government can meet the cost in that way if it so desires, but its policy at this stage is not to meet expenditure from those funds. I have a great appreciation of the general conduct of the honorable member for Melbourne Ports, but I do not agree with him that the Treasurer (Mr. Harold Holt) did not give an explanation. I sat in this chamber before the suspension for dinner and listened very attentively, and I heard the explanation.
– It was given just before 6 o’clock.
– Yes. We all heard it very clearly. The Treasurer gave many different reasons. He did not say that the Government could not do it, but the honorable member for Melbourne Ports is working on these words all the lime: “ Why cannot the Government do this?” Of course the Government can do it.
– Well, why doesn’t it?
– Because it is not its policy at this stage. That has been explained. The honorable member for Yarra (Dr. J. F. Cairns) has asked me to explain what the Treasurer said, and the honorable member who has just interjected also asked for an explanation. First of all, the Treasurer pointed out, after an interjection from a member of the Opposition, that when Labour was in office and Mr. Chifley was Prime Minister - I was in the House at the time and I heard this - Australia’s overseas reserves were more than £700,000,000. I am relying upon my memory for that figure. The interjector said: “ But they were worth more in those days “, to which the Treasurer replied: “ Yes, of course, they were”. He added, that is one of the reasons why to-day we believe that we should keep them at this height, because if the money to-day is worth only half, that is, only £400,000,000-
– Do you agree that it is worth only half?
– The Treasurer said that if £800,000,000 was worth only half, the value was equivalent to £400,000,000 then. He added: “ This is not a large amount for overseas reserves to-day “. The Treasurer said that, in spite of what was said by the honorable member for Lalor (Mr. Pollard) in his speech, if Australia experienced one or two droughts it might to have import all sorts of things that we bad to import last time we had a big drought. I was not in this country at the time, but in 1 944 we had to import wheat. A Labour Government did that, and as a consequence we are still faced with the problem of combating noxious weeds that were brought into Australia. In 1943, also, the Labour Government had to impose a restriction on wheat acreage.
– That is a lie!
– That was put on by our predecessor, and you know it. 1 have quoted chapter and verse on that in this Parliament.
– The honorable member knows that he is telling an untruth.
– Order! I ask the honorable member for Lalor to withdraw his remark.
– I will ring him up afterwards.
– Do you withdraw the remark?
– I withdraw.
– I certainly will not withdraw my remarks, for the simple reason that this is merely a political trick that has been used. The predecessor government spoken of by the honorable member for Lalor appointed the committee that was empowered to restrict the acreage, but the power was not used under that government. However, when Labour came into office the power was soon used. Now the honorable member for Lalor blames that previous government. He is the one who is not telling the truth about these things. He should stand up and apologize.
– Order! The honorable member for Mallee will withdraw his reflection on the honorable member for Lalor.
– What is it?
– The honorable member for Mallee will withdraw the remark about the honorable member for Lalor not telling the truth.
– Well, I am of that opinion, Sir. 1 understand that to say that an honorable member is not telling the truth is not to make an unparliamentary statement.
– Order! The honorable member for Mallee will withdraw the statement that he made in regard to the honorable member for Lalor.
– I am quite happy to do that, although it has not visibly affected the honorable member for Lalor. The committee set up by that previous government was never used, but when Labour came into office it was used to restrict the wheat acreage. I leave the matter at that. The honorable member for Melbourne Ports has spoken on this measure, but I do not agree with everything that he said. I think the honorable member is a reasonable man. He pointed out various things.
Mr.Uren. - Tell us what you agree with.
– Order! I warn the honorable member for Reid to cease interjecting.
– The honorable member for Melbourne Ports pointed out different matters supported by the Opposition. The honorable member asked why the Government cannot do this, and this was the main point. The Government can do this if it wants to, but at this stage it does not believe that a policy along those lines is in the best interests of Australia. Therefore, it is not prepared to allow the Opposition to take the business of this House out of its hands and it will put the bill through in the form in which it was presented.
.- It is now apparent that the issue in relation to this bill is whether the Government should provide funds to purchase these aircraft by means of borrowing in the United States or by providing the money in Australia directly. We have asked the Government for an explanation as to why it chose the course of borrowing in the United States at an added cost of £550,000 or £560,000 a year rather than the course advocated by honorable members on this side of the chamber. The Treasurer (Mr. Harold Holt) chose to give an explanation. Some honorable members seem to think that that explanation was satisfactory. We do not. I want to state now the explana tion given by the Treasurer and then examine it for a moment or two and ask honorable members whether they think that the explanation is satisfactory.
The Treasurer’s explanation consisted of three points. The first point, he said, was that the Government could not provide funds through a financial arrangement in Australia drawing immediately on overseas funds, because if it did this it would disrupt the Budget. He said that there was no procedure available to the Government through its methods of organizing the Budget, to allow it to do this. I ask honorable members on both sides of the chamber: Is this satisfactory? It clearly is not satisfactory. We have just had a procedure introduced which would enable us to provide the money which it is proposed to provide under this bill. By that procedure the Parliament can authorize the provision of money by appropriation following a message of recommendation from the Governor-General. Such a procedure would authorize the provision of these funds. The question then is how this is entered into the public accounts, and how it becomes part of the Budget. As the honorable member for Melbourne Ports (Mr. Crean) has pointed out, this has been done once before in respect of child endowment.
– On that occasion, £20,000,000 was involved.
– At least £20,000,000 was involved. So this sort of thing can be done with respect to expenditure of that magnitude at least. That expenditure on child endowment was not expected when the last Budget was presented. The committee will remember that when the Budget was presented last year, the Government strongly opposed any increase in child endowment. Only when an election was approaching was the Government prepared to change its twelve-year-old policy of opposing any increase in child endowment. But, having changed that policy after the Budget had been presented, the Government was able quite recently to provide an additional £20,000,000 this financial year for child endowment. Why can it not provide £11,200,000 for the purchase of aircraft for Qantas Empire Airways Limited, if the financial machinery available to the
Government can work in that way with respect to child endowment?
Even if the Government were not prepared to provide the funds in that way, any one who knows anything about the public accounts of this country knows that there is such a thing as the Advance to the Treasurer, which makes available to the Government £16,000,000 for expenditure on matters approved by the Parliament during the current financial year.
– Expenditure unforeseen at the time of the Budget.
– That is so. Secondly, additional estimates can be approved if necessary. I challenge the honorable member for Higinbotham (Mr. Chipp), who was talking about untruths a little while ago, to follow me in this discussion and to say whether he thinks the Treasurer was right when he said that the Budget would be disrupted if the funds needed for the purchase of these aircraft were provided in the way that we say they should be provided. I challenge any other honorable member opposite to establish that the Budget machinery necessary to do this is not available. I challenge any honorable member opposite to establish that there is no financial machinery to do what we suggest ought to be done and that such a course would disrupt the Budget.
– The honorable member is not right.
– The Treasurer, of course, was not right. Let us consider the second point that he made, when he said that there was some ambiguity in the Australian Labour Party with respect to overseas funds. Does the right honorable gentleman or any other honorable member opposite say that overseas funds totalling £800,000,000 are not sufficient to enable us to provide £11,200,000 for the purchase of aircraft? Is not £800,000,000 sufficient for the purpose, altogether apart from any arguments about the Labour Party’s views about the level at which our overseas funds should stand? At the second-reading stage, I quoted the views of Dr. Perkins, a senior lecturer in economics, who expressed the opinion that overseas reserves totalling £300,000,000 were enough. We do not need to accept his opinion, but what is enough?
– Did not the Opposition say two years ago that our overseas funds were too low?
– This is not a matter of what we said two years ago. It is a matter of whether overseas reserves totalling £800,000,000 are sufficient at present.
– I take a point of order, Mr. Chairman. Surely the discussion of overseas reserves has nothing to do with the subject before the committee.
– Order! The honorable member for Yarra is stating the reasons for the amendment proposed by the Opposition, and I rule that at the moment he is in order.
– The Treasurer has not said that overseas reserves of £800,000,000 are insufficient for the purpose that we are discussing. He did not appear for one moment to say that. Indeed, he avoided the point completely by entering into an argument about the Labour Party’s attitude towards overseas funds and what they were in fact worth in terms of purchasing power as it has changed over the years. He did not say that present overseas reserves of £800,000,000 were insufficient to justify the purchase of the aircraft in the way that we suggest. On the second point, Mr. Chairman, the explanation given by the Treasurer of the Government’s reasons for rejecting the amendment falls to the ground. So two of his points have fallen to the ground. They have no weight.
What was the right honorable gentleman’s third point? Incidentally, this was the point that he made first. He said that the funds that we hold overseas are not the property of the Government and that there has been some fallacy in the reasoning of the Opposition over a great many years that the overseas funds that are shown in the public accounts are in some way the property of the Government. The Opposition has never taken that view. Therefore, that point is not relevant to this discussion. If the Government or any other authority wants overseas funds for the purchase of aircraft, for the payment of a subscription to a newspaper or for anything else, the authority that wants the funds simply tells a bank that it wants certain funds for a particular purpose. The bank then provides the necessary documents to enable the authority concerned to exercise a claim on those funds in paying its accounts. Quite openly and easily, the Government can go to the Commonwealth Bank of Australia - its own bank and say, “We need £11,200,000 for the purchase of aircraft overseas “. The Commonwealth Bank, having at its disposal all the means and resources of the banking system, can arrange for the Government to have the use of £11,200,000 worth of dollars overseas.
– That is being done in respect of defence contracts.
– As the honorable member says, that is being done with defence contracts every day of the week.
– Ships are being bought for the Navy.
– If Charles F. Adams class destroyers, TFX bombers or any other defence equipment is to be bought, that is how the purchase is made. It is humbug to say that these things cannot be done in this way and that funds cannot be used in this manner. So the third point made by the Treasurer falls to the ground.
It is quite clear that the proposition put forward by the Opposition in this amendment, which is designed to have the purchase of these aircraft financed by funds provided in Australia or out of overseas reserves, would save us an interest cost of about £500,000 a year for the next eight years. This would be of great advantage to Australia and would help us to prevent our overseas debts from rising any higher than the level to which they have risen already. I point out here, Mr. Chairman, that the Government said nothing about this until we almost dragged the Treasurer into the chamber by the ears at a late stage this afternoon. He had said nothing about the matter earlier. When one examines the three propositions that the right honorable gentleman advanced in opposition to the amendment, one finds that not one helps him in any way. The Treasurer, no doubt, is listening in his room to what I am saying. I challenge him to return to the chamber to rebut what I have said. I challenge any other honorable member opposite to rebut my remarks if he can. if Government supporters were prepared to weigh up the situation objectively, they would support the amendment.
– Order! The honorable member’s time has expired.
.- Mr. Chairman, I join issue with the honorable member for Melbourne Ports (Mr. Crean) on this question of our overseas reserves. So frequently in this chamber he has mentioned what happened when Mr. Chifley was Prime Minister and Treasurer and told us how Mr. Chifley built up Australia’s overseas reserves to £700,000,000. Not long ago, when our reserves were somewhat lower than that, the honorable member was asking the Government to do everything possible to restore Australia’s overseas reserves to the level achieved by Mr. Chifley, or even higher. Now, when our reserves are higher than they were in Mr. Chifley’s time, what do we find? We are told by Opposition members that we are conserving those funds unnecessarily and trying to keep them at too high a level. It seems that the Opposition always wants to have its cake and eat it too.
It is time these things were clearly understood. As soon as we build up our overseas reserves in the way that the Opposition asked us to do not many months ago, what do we find? We are told that we are doing the wrong thing. I think that the honorable member for Melbourne Ports ought to be a little more consistent over the years than he is on this issue. Having built up our reserves, we are now told that we should squander them instead of borrowing overseas at reasonable rates of interest to provide funds for the purchase of aircraft for our national airline. The loan that we have negotiated is one that any nation borrowing overseas for such a purpose would be very glad to raise. The Opposition’s present attitude seems to be somewhat at variance with the arguments that it was using not many months ago. I do not wish to take up the time of the committee any longer. I merely suggest that the Opposition ought to be a little more consistent in its attitude.
.- If there is any inconsistency in this debate it comes from the Government’s ranks. I have been in this place for only a few years but I have a very clear recollection of hearing the Treasurer (Mr. Harold Holt) not so many months ago defend the level of our reserves, which then stood at about £400,000,000 or £500,000,000. He said, “ This amount of reserves is adequate for our requirements and there is no need to worry “. Suddenly we are told that reserves of £800,000,000 are insufficient for our needs and that we must not draw on them. Certainly this must seem rather amazing to the average person outside the House.
Despite the fact that we have reserves of £800,000,000 the Government is not prepared to draw on them for the comparatively meagre amount of about £11,000,000, which represents less than i per cent, of the total reserves. This attitude is compounded when we remember that we have second-line reserves of £200,000,000 in the International Monetary Fund. It is completely illogical for the Government to propose to borrow the comparatively small amount of £1 1,000,000 at 5 per cent, interest. Interest charges will probably run to about £1,250,000 - this at a time when we have £800,000,000 readily available overseas.
Surely the Government will not suggest that these overseas reserves are inviolable and must not be touched. Surely honorable members opposite will not suggest that when we make a subscription to an overseas magazine we carefully fold up our £1 notes and send them overseas through a bank which sends them on to Great Britain or the United States of America as the case may be. Surely they will not suggest that when we buy a saucepan from overseas 2s. 6d. in cash goes overseas. Surely they will not suggest that when we buy a destroyer or a frigate £10,000,000 in cash goes overseas. Such thinking would be completely illogical and not quite responsible.
Clearly the argument which honorable members opposite are endeavouring to construct is aimed at deceiving the general public. The funds to purchase these aircraft are readily available. Why place ourselves in debt overseas even though the amount is comparatively small in relation to our total overseas reserves? Why should we place ourselves in the hands of overseas usurers when the money that we need is readily available? Surely this is hypocrisy in the extreme, particularly when we reflect - I emphasize this point, with which I commenced my remarks - that the Treasurer only a few months ago was defending the level of our reserves as being sufficient for our needs. But that time our reserves were less than £500,000,000; they stood at about £400,000,000.
Obviously the Government has some other motive for its action. I would not like to say that it has an ulterior motive, because the amount involved is only small, but the Government’s proposals seems so unnecessary and illogical when we relate that sum to the amount that we have in reserves. Why not draw on our reserves to pay for the aircraft which Qantas needs? In passing, let me say that we are very fortunate in that Qantas has one of the lowest ratios of loans to capital of the international airlines. This is important, lt is certainly unnecessary to cast this country into more debt - unnecessary debt - when we have sufficient reserves readily available.
As the honorable member for Yarra (Dr. J. F. Cairns) pointed out, the Government has never hesitated to draw on these reserves when doing so has suited it, but we have found that the suitable time is only when some dynamic pressure, such as the pressure of an imminent election, has been exerted upon, the Government. Then the Treasurer has found all kinds of facilities for taking action - and taking it very promptly - which has been rather radical in comparison with the stand that the Government is now taking. The Government should review its thinking, because many people in Australia are at present very critical of its attitude of flinging itself and this country completely into the embrace of overseas usurers when it is unnecessary to do so.
I suggest that the Treasurer come forward and give a full explanation. The explanation which he has given, already is not satisfactory, and certainly he gave it with his tongue in his cheek.
.- The honorable member for Melbourne Ports (Mr. Crean) upbraided me a few moments ago for challenging a statement that he made. He said that I was developing the habit of accusing him of telling untruths in this Parliament. I have challenged him on two occasions in the sense that during the course of his remarks [- interjected that what he was saying was not true. I suppose the literal interpretation of that would be the one that he has given it. If he took me as meaning that I called him a liar, 1 apologize. I make the same apology to the honorable member for Yarra (Dr. J. F. Cairns), because I respect both those gentlemen and would never accuse either of coming into this House and telling lies. I hope that they will accept this apology in the sincere spirit in which it is given.
These two Opposition speakers, who are the acknowledged leaders of economic thought on the Opposition side of the chamber, challenged the Government and specifically the Treasurer (Mr. Harold Holt). In fact, before dinner they shouted into the microphone on the table and challenged the Treasurer to come out of his office and answer two main questions. The first was: Why did we not obtain the money necessary to purchase these aircraft from our overseas reserves? The second was: Why did we not provide the money necessary to purchase these aircraft out of revenue? The Treasurer came into the chamber and in his own fashion and to my satisfaction and the satisfaction of members on this side answered those two questions. If the honorable member for Melbourne Ports thinks that I, for one, as a Government supporter, will sit here and listen to him accuse the Treasurer of not answering charges, when in fact the Treasurer has answered them, he is mistaken. I am sorry if my interjection upset the honorable member for Melbourne Ports. If my words offended him I am sorry, but I will take him to task, and will not remain silent in this place if he or any other Opposition member unjustly accuses the Treasurer of a dishonest action. 1 have been disappointed in this debate. We rarely have the opportunity of a good debate on questions of economics in this country and I should have thought that if the Opposition wanted to turn this into an economic exercise it would have chosen more basic grounds on which to do so. The honorable member for Melbourne Ports and the honorable member for Yarra, whose economic knowledge we respect, have been thrown out of court for their statement that we could draw the necessary funds from our overseas reserves. The Treasurer stated quite clearly, and both those honorable gentlemen - both university graduates - know very well, that the £800,000,000 reserves about which they have spoken are not part of the Government’s bank account held in a London bank. I can excuse the honorable member for Scullin (Mr. Peters), bless him, for holding this misconception. I can understand his having this misunderstanding, because he suffers from the socialist trauma of believing, that all industry in Australia is in fact socialized and that there is in fact only one industrial bank account, but when the two honorable gentlemen to whom I have referred advance that argument I must say that I regard them as putting up a sham fight.
Their remarks on the other point I regard as completely inexcusable. They have wilfully come back on course and have accepted the Treasurer’s challenge. They have asked why we do not pay for these aircraft out of revenue. That is a fair statement, but neither honorable gentleman has attempted to draw a distinction between capital and revenue. They confuse the issue even further by referring to social services. I challenge them to tell me, by way of interjection, that they recognize the distinction between a social service payment of so many shillings a week, year in and year out, for the children of Australian families, and the payment of more than £11,000,000 to buy aircraft for an international airline. One is clearly a capital item. Neither of the honorable gentlemen made that distinction. If an industry, to give an analogy, is producing motor cars, it is quite legitimate - good accounting and good business - for that industry to pay its weekly wages bill out of revenue; but surely that industry does not pluck £11,000,000 out of the year’s income and buy a new set of presses or tool up for a new project. The Treasurer came into the House and said that in the opinion of the Government it is good business to pay for capital items into the future. Honorable members opposite may disagree with that statement. The honorable member for Yarra and the honorable member for Melbourne Ports might well say that in their opinion, the present economic circumstances of the country being in such wonderful shape, the economy can stand this move by the Government. Incidentally, it gives all of us a great deal of pleasure to hear from the lips of the honorable members the tacit admission that the economy is in good shape. By all means let the honorable members have their point of view, but for goodness’ sake give us the right of disagreeing. I do not believe, unless it is absolutely vital, that it is good business to pay for capital items out of revenue if it can be avoided, no matter how buoyant the economy may be.
The honorable member for Scullin criticizes the Government every time it raises 2s. on the international money market and he claims that the Government is mortgaging Australia’s future abroad. The honorable member criticized the statement made a few months ago by the Treasurer, who said that in this highly sophisticated and competitive field of international finance you have to keep your “ marker “ in. I fear sometimes that the honorable member for Scullin takes it for granted that we can get into the queue in the international money market in New York any time we choose and take out £11,000,000. Let me tell the honorable member that a great many countries cannot do that to-day because their credit is suspect. They are not trusted. Australia, being a small country “ way down under “, as we are described in sophisticated American language, soon would be forgotten unless it kept its image bright in the international market. The honorable member for Scullin should not forget that the interest rate at which we are borrowing this money is less than the rate we would have to pay if we borrowed it in Australia. If it is a proper analogy to compare a nation with a business, no business can finance its expansion through its own financial resources. Every business known to man that, has ever expanded or developed needs a life-giving transfusion of capital from the stock market or from outside its own resources. Likewise, Australia needs this life-giving transfusion of foreign capital from time to time from this kind of loan raising.
.- The honorable member for Higinbotham (Mr. Chipp), like the Treasurer (Mr. Harold Holt), claims that honorable members on this side of the chamber cannot understand a complicated subject such as international borrowing and the utilization of international funds overseas. The honorable member said that we on this side of the chamber believe that Australia’s overseas reserves, which amount to about £800,000,000, are owned by the Govern ment and that therefore the Government can use that money whenever it likes. Honorable members on this side of the chamber believe no such thing. We know that the £800,000,000 belongs to a variety of people within Australia and that it is held in a number of banking and financial institutions overseas. We further know that if I had £50,000 and went to the Commonwealth Bank and said, “In return for my £50,000 I want £50,000 to be made available to me in New York “, in view of the buoyant position of our overseas funds the bank would agree to my request.
If the Commonwealth of Australia gave to the Commonwealth Bank the Commonwealth’s cheque for £11,000,000, asking that £11,000,000 be made available to the Commonwealth overseas, that money would be forthcoming. That is definitely clear from the bill which we have before us now. Section 7 of the Schedule to the bill refers to the possibility of an interest equalization tax being imposed in America on investment money leaving that country. If the equalization tax is imposed subsequent to the loan being raised in America, the interest payable on the loan by the Australian people will be increased to offset any harm that may befall the American investor as a result of the equalization tax. Is that right? That is what the schedule says. But if the Australian Government objects to the increase in interest, it may immediately - this is what the bill says - pay off the loan in the United States of America. That is, the Australian Government can immediately utilize the money that does not belong to it and which is held in the reserve funds of this country. The Government can use that money to pay off the debt in America immediately after the loan is raised if an equalization tax is imposed upon American investors. Obviously the Treasurer was trying to score points by implying that we on this side of the chamber do not understand the intricacies of international finance. The honorable member for Higinbotham said that the honorable member for Yarra, because he is a doctor of philosophy, may understand these things, but that the ordinary member of the Labour Party could not understand the very simple ramifications of what is called international finance.
The honorable member for Higinbotham said that the interest rate of this loan will be lower than the rate that would have to be paid if the loan were raised in Australia. The interest rate on the loan will be 5i per cent, at its highest and 4) per cent, at its lowest. Section 6 of the Schedule to the bill states that no Commonwealth taxes will be imposed by the Government of Australia on the interest payable overseas, but if a loan were raised in this country - it would not be raised at much more than 4) per cent, and certainly not as high as 5i per cent. - taxes would be payable to the Government on the interest payable to bondholders. So the Government would get its money cheaper within Australia than it would get it outside Australia. The Treasurer ignored the proposition outlined in section 7 of the schedule, which is introduced into a bill of this kind for the first time, which provides for the possible imposition of equalization tax in America, and which would increase the amount Chat we would have to pay bondholders in America. But this is the same gentleman who, when he was in America, protested bitterly to Mr. Dillon, the financial representative of the Kennedy Administration, about the imposition of such a tax. He said that the Australian Government would be forced to go to the United Kingdom and elsewhere in order to raise money.
I ask the right honorable gentleman: By bow much must this interest equalization tax increase the interest payable on this loan before the Government either will pay off the loan out of revenue, as we suggest, or will go to the United Kingdom, where no interest equalization tax operates? We are entitled to ask the right honorable gentleman that question. We are entitled to ask him: If the increase is one-half per cent., will the Government go on with the bill? If the increase is three-quarters per cent., will the Government pay off the amount owing? What will the Government do? In reality, all that we in this Parliament are being asked to do is to consent to legislation which means committing Australia to the amount of interest payable on this loan, which is an idefinite amount.
.- I have not been trained in financial matters; so it is with some temerity that I engage in debate with the honorable member for
Melbourne Ports (Mr. Crean) and the honorable member for Yarra (Dr. J. F. Cairns). They are academics. One is a master of commerce and the other is a doctor of philosophy. They have all the refinements of knowledge and training in financial matters. But we cannot sit here without being interested in their arguments. They say that Australia should pay for aircraft out of revenue or reserves.
When I consider this matter I try to simplify it and put it in terms of ordinary household management in order to keep it in perspective and focus. When a person wants to buy something, particularly a motor car, he has three ways of finding the money. He may find it out of his income; he may have some money in the bank; or he may borrow money from a hirepurchase company. I assume that normally an ordinary person would not be able to buy a new car costing about £1,000 out of his income. Secondly, if he had £1,000 in the bank he would not like to use it to buy a new car because he would want that money as a reserve in case something happened. So the normal thing is for him to buy a car on hire purchase.
In this case the Government does not want to buy aircraft out of revenue. It is perfectly right and defensible for the Government to pay for social services out of revenue. No other course should be adopted. It is right for the Government to pay for defence out of revenue. Very few other courses are available because defence expenditure is incurred and that is the end of it. But if we are buying aircraft or a car, as in my simple example, it is proper to buy on time-payment.
– If you have not the money to pay cash.
– The honorable member for Yarra has just returned to the chamber, so I will weary the committee by going through my example again. The honorable member is put up to us as the new hope of the Labour Party and as a financial wizard. I gave a simple example of a person who wants to buy a new vehicle. He has three methods of paying for it - first, out of revenue or income; secondly, out of his bank account; and thirdly, on hire purchase. He cannot pay for the vehicle out of his income because it is not large enough. He has £1,000 in the bank; but he does not want to use that because he wants to keep it for a rainy day. That is an understandable attitude. So, although he has an income and money in the bank, he buys the vehicle on hire purchase. Normally that is what happens in the United States, so 1 am told; and it is beginning to be the normal thing in Australia.
Therefore, it is normal for the Commonwealth Government not to pay for civil aircraft out of revenue, although other expenditures such as social services, works, the wages of employees of all the Commonwealth departments, repatriation services and health services are properly charged to revenue. The Commonwealth revenues are committed. Commonwealth reserves are protected by buying aircraft for Qantas on hire purchase. This money will not be borrowed for the Government. It will be borrowed by the Government for Qantas. This loan for Qantas will be guaranteed by the Government. The Government borrows the money and then lends it to Qantas on any terms it likes. It seems to me to be perfectly right that the Government should borrow money in order to buy aircraft for Qantas on time payment. That is what the Government has decided to do. There seems to be no other sensible way of acting.
Let us look at what the Labour Party has said about this matter. It began to confuse the issue by talking about our London reserves of £800,000,000, and saying that we should pay for the aircraft out of those reserves. That is completely confusing the issue and misleading the people. This is the reason why the Labour Party is not trusted on financial matters. This is the reason why one unfortunate member of the Opposition said, a few days ago: “ If we had promised what the Menzies Government promised in its last policy speech, we would not have been believed “. He was right. It is true that the people could not have believed such promises by Labour and they cannot believe the arguments that have been advanced in this debate. Any ordinary person without a university education would say when he simplified this matter that the Government was perfectly right. After hearing the Opposition’s arguments he would say: “ These are confusing and misleading arguments. They are putting the matter into the realm of words.” The Labour Party has done that. What the Government has done is perfectly correct. I believe that under the Chifley type of finance the Labour Party would have done precisely the same as the Government has done. The present Labour Party, in its agony of looking at itself, should consider what has been said in the last few hours, which is just as dreadful as anything it has ever done, and is the reason why the party is rejected by the people of Australia.
The Labour Party’s approach is that we should pay for aircraft for Qantas out of our London reserves. Those reserves represent money gained by selling wool and other rural poducts on overseas markets. The Labour Party is saying: “ Let us get Qantas tangled up with our foreign exchange situation. Let us not have a separate account for Qantas.” The Government is saying: “ Let Qantas have this money and it will service the loan, the amortization, the repayments and all the rest of it “. In my view, that is perfectly good accounting practice.
– But that is not done.
– The honorable member for Yarra, the financial wizard, is interjecting. I would be dreadfully wrong if I were able to agree with his philosophy on this matter. If the people fall for it, we will be destroyed. If the Melbourne philosopher can get his philosophy understood and accepted by the people, then heaven help Australia. We have been listening to financial nonsense. The position is that money is borrowed for Qantas Empire Airways Limited, which buys the aircraft and then repays the money out of its healthy revenue. The aircraft will not be paid for by the Australian people but by Qantas Empire Airways Limited out of a separate account. The Opposition’s great man, Chifley, would have done the same thing, but these Opposition members would not. They are now in Opposition and they will stay there if they continue with this financial nonsense.
.- I definitely agree with one statement made by the honorable member for Macarthur (Mr. Jeff Bate). He said that he must be dreadfully wrong. For a man who, on his own confession, is not an expert in finance, I thought he gave a very authoritative exposition on international finance. I regret that I was unable to follow him completely. Our argument basically is: If we have the cash, why go overseas to borrow money, especially such an insignificant amount, in the general context of governmental finance, as £11,200,000 or 25,000,000 dollars? The honorable member for Macarthur said that a person with £1,000 in the bank who wanted to buy a motor car would not draw on his bank balance but would borrow from a hirepurchase company. I would suggest that the honorable member does not know much about the exorbitant flat rates of interest charged by hire-purchase companies. It would be much more prudent for the purchaser of a motor car to examine his bank account, determine what would be a reasonable level of reserves and spend some of the balance for the purchase of the motor vehicle. If we applied this principle to the problem before us, we would look at our international reserves and determine whether they were adequate. If they were adequate or more than adequate, we would see whether we were using them for anything of benefit to the nation.
I have not come across any authority other than honorable members opposite who suggests that a balance of £800,000,000 is not more than adequate for our purposes. Indeed, I would like the Treasurer (Mr. Harold Holt), the honorable member for Higinbotham (Mr. Chipp) and the honorable member for Mallee (Mr. Turnbull), who now is cast in the role of economic spokesman for the Australian Country Party, to say what amount the Government believes is adequate to have as our overseas reserves. Let us have a frank statement from the Government. Should our reserves stand at £800,000,000 or £1,200,000,000? Apparently £800,000,000 is not adequate.
– What do you say the reserves should be?
– I personally think about £500,000,000 should be adequate. That is my own view. Certainly £800,000.000 seems more than adequate, lt seems to me to be a great pity that these reserves cannot be used and we have to put our country in bond to the moneylending countries as we have done for so long under this Government.
The answer given by the Treasurer to the Opposition’s argument was not satisfactory. It was completely demolished by the very adequate speech of the honorable member for Yarra (Dr. J. F. Cairns). The Treasurer said that the Opposition’s suggestion would disrupt the Budget. Clauses 6, 7, 8 and 9 of the bill provide that any moneys required to be paid out shall be paid out of Consolidated Revenue between now and the end of the financial year. Would this not disrupt the Budget? Of course it would. These provisions mean that sums of money in excess of the amounts allocated in the Budget for this financial year would be expended. So the Treasurer’s first argument is demolished.
The Treasurer also said that the overseas reserves should be maintained at their present level. As I said before, £800,000,000 seems to be more than adequate. The Opposition recognizes the need for a safe level of overseas funds. It is true that at the time of the Chifley Government the overseas funds were at about their present level. I took very keen note of the comment by the honorable member for Mallee that money now is worth only half as much as it was worth in the days of the Chifley Government. He made this ready admission. If he looks at “ Hansard “ to-morrow he will find that he admitted that money to-day is worth only half as much as it was worth in the days of the Chifley Government. We have been expecting some such admission to come from Government supporters. They have denied that this is the true value of money.
– I said that it has been said that this is so.
– If the honorable member looks at “ Hansard “ to-morrow he will find that he said that money to-day is worth only half as much as it was worth then.
The third argument of the Treasurer was that overseas funds are not the property of the Government. The Opposition has never said that they are. The honorable member for Higinbotham also put up this argument. This is an old political trick: If you cannot answer the arguments of your opponents, you put up a spurious argument and then knock it down. That is the sort of discussion we have had to-night.
I was interested in a comment made by the honorable member for Mallee. He did not put up an argument for not using the £800,000,000 or part of it, and after all we want to use only £11,200,000. He said merely that it was Government policy not !o use this money. I presume that, as the economic spokesman for the Australian Country Party, the honorable member, taking a businesslike attitude, would think that capital should not be left lying idle. If he believes that the £800,000,000 should be left lying idle in reserve, I can well imagine him putting his money away in an old tin under the floorboards and not making it work for him. He would readily agree that this idea is ridiculous in these days of banking, when capital is put to work to earn more money and to develop the nation. This is the sort of argument he has put up about our overseas funds, and clearly it is not good enough.
The Opposition has demolished all the points put up by Government supporters. The answer given by the Treasurer to the Opposition’s submission was far from satisfactory and I am sure that a great many financial authorities in Australia will agree with our suggestion. Surely we should not borrow overseas when we have the cash or the credit available within Australia to purchase these aircraft. Already we send about £120,000,000 a year overseas in payment of interest or dividends. Every time the Government borrows overseas it puts a legacy of debt around the neck of the Australian community, and it is time the Government stopped doing this. The borrowing of £11,200,000 will add £500,000 or more each year to the debt hanging around the neck of the Australian community. It is high time the Government examined more closely the need for borrowing overseas. I strongly support the views of the Opposition.
.- The honorable member for Bendigo (Mr. Beaton) has given us the gist of the Opposition’s argument. In one sentence in his words it was this: If we have the cash, why go overseas to borrow money? This, of course, is the very crux of the argument in which we are engaged. Opposition members, as well as Government supporters, have reminded us that our overseas reserves now approximate £850,000,000. Many of them have been agreed that this is a very desirable state of affairs. However, we are indebted to the honorable member for Bendigo for venturing the opinion that this level of overseas reserves is more than sufficient, and that it is, indeed, too high. He has suggested that £500,000,000 would be enough. I hope honorable members will keep this well in mind, because it may be interesting to recall these words at some future date. The implication is that in this growing nation, in which not tens but hundreds of millions of pounds are required for development, and in which, because of our lack of capital, we are finding our national resources at the mercy of overseas incoming capital, we ought to go and take the money we require from some mythical reserve. I use the word “ mythical “ because it seems to be suggested ‘ that we can just go and take money out of this reserve as though it were physically there and standing to the Government’s account.
The very fact that we have a strong international financial standing means that we can go to the United States, one of the countries with capital to invest, and borrow money at an average rate of interest below 5 per cent. We can get this money in United States dollars and use it for a very necessary form of national development. This is not a case in which a direct investment of overseas capital is made to gain a part ownership of an Australian industry. The investment made on this occasion is not like other investments with which tha overseas investor tends to take over an Australian industry, or at least to take the lion’s share of the continually growing earning capacity of this nation. I believe it is a feather in our cap, and nothing for which we should be in the least apologetic that, being a growing nation with a growth rate very close to 5 per cent., as we were told in the general election campaign by Labour candidates as well as those belonging to the Government parties, we can borrow money overseas at an interest rate of less than 5 per cent. It seems to me to be pretty good business for us to be able to conduct our affairs in this way.
The honorable member for Lalor (Mr. Pollard) saw fit in his speech to refer to my backing of this kind of project, which he suggested was dealing in usury. He threw in a rather cheap jibe to the effect that perhaps because I was a parson I believed in usury. Perhaps you, Mr. Chairman, would like to give the honorable member an answer to that suggestion. I am rather tired of unhappy, worried-looking little men getting up from the Opposition benches and heaping abuse on me whenever I make a comment. I had expected better of the honorable member for Lalor than I would expect, perhaps, of some other honorable members opposite for whom we should make more allowance.
The honorable member for Lalor went on to make a rather remarkable speech. He deplored all kinds of borrowing. He suggested that the only sound form of financing was that in which you bought everything you wanted out of the money that you had already amassed in your savings. We have already heard this argument demolished. What would it mean for the Australian nation, for example, if we were unable to borrow money for housing? How many votes would be cast for the Opposition if honorable members opposite told the people that they would scrap any form of finance for housing for young couples involving interest rates that might be described as usurious? Should we scrap the Commonwealth Development Bank? Should we abolish hire-purchase transactions involving flat rates of interest? Not all hirepurchase companies are usurers by any means. There are many working men who regard them as the working man’s banks, providing the working man’s overdraft.
This is a nation that is growing rapidly. Our borrowings are far from out of proportion. We are not incurring a legacy of debt. We are in a very sound financial position. It is a robust, profit-earning undertaking that we are dealing with. The fact is that we are able to obtain, at a favorable rate of interest, foreign capital to enable this country to continue growing, to go on earning and to expand significantly in a highly competitive industry and a highly competitive field. I believe this move is to be applauded and that it would be bad business to go and dip into our hard-won overseas reserves when we can obtain money from this source in this way, with out incurring any great legacy of debt, and without any risk of foreign investors maintaining continuing ownership of an Australian industry.
.- The honorable member for Evans (Dr. Mackay) has taken umbrage at my reference to the fact that he was a parson. I should think a man ought to be proud of having been a parson. He referred to me as a worried-looking little man. That may be so, but at least I am not a bald-headed badger like him. In any case the honorable may recall, having been a parson, that Christ drove the money-changers from the temple. All I am suggesting is that if we have any kind of a Christian outlook we should do all we can to reduce the extent to which the Government or the community indulge in usury. That is all I suggest. Now work that one out.
I have said that we should reduce borrowing. Every sound household in this community endeavours to reduce borrowing, and every government ought to do likewise, be it State, Commonwealth or municipal. Honorable members cannot take exception to that contention. I have not suggested that it is possible to abolish usury immediately, but at least I have tried to practice what I preach, and if the honorable member will see me afterwards I will demonstrate, this to him. I have never lent a penny and received interest on it, and I have lent money to the Government of this country during a certain period. At least I can make this claim. I do not know how the honorable member stands.
But let me get back to the point. I wish the Treasurer (Mr. Harold Holt) were here to give me the enlightenment that I probably need. We all know that our overseas balances are held within the banking system, and we all know, or at least we have an idea, that the Bank of England has some association with the handling of our overseas reserves. We know that action is taken by the authorities who control our overseas reserves, in conjunction with the banking system, and particularly with the Bank of England, to see that our reserves are invested at some profit. The honorable member. I think, will agree with me. If it is true that this Government, by an arrangement with the Bank of England through our own banking system, can have our overseas funds invested at a profit, not necessarily in the activities of the Australian community, but perhaps in those of other countries in which the Bank of England is interested, then I suggest it would be desirable to have the Bank of England consider whether the proposition submitted here to-day is not more practicable than the honorable member for Evans apparently believes it to be.
Where is the Treasurer? Here is a matter involving a financial principle. Yet we find that the Treasurer of the Commonwealth of Australia has been, except for a few minutes this afternoon, conspicuous by his absence. It has been invariably the custom of the Treasurer of every Australian government, of whatever political complexion, whenever a financial measure is before the House to do honorable members the courtesy of being present for at least most of the time.
– Particularly in the committee stage of a bill.
– Yes, particularly in the committee stage. Surely, as a representative of 100,000 electors, I am entitled to have from the Treasurer a courteous answer to a query I posed concerning the machinery used for investing our overseas reserves. After all, it is the investment of our overseas reserves that is being argued at present, and the Opposition is asking why we cannot finance this arrangement as an Australian government, out of our own resources. I pointed out earlier this afternoon that the practice we are objecting to has become a vicious circle. It is not only this loan for Qantas aircraft that is involved, but there are also loans for the purchase of equipment by Trans-Australia Airlines and for other purposes through this same particular banking system. It seems to me that we will continue in a vicious circle from which no real attempt will be made to escape. According to Government supporters we are enjoying great prosperity. We have been fortunate with our wheat sales to Communist China. Honorable members opposite have not had their consciences troubled by those sales. We have sold wool to Communist China and Government supporters have remained undisturbed. Now the Opposition suggests that the Government ought to do something practicable, but the Treasurer is not here to listen. Where is he? He is absent and the Minister for Repatriation (Mr. Swartz), who is at the table, does not know a thing about the measure.
– What do you want to know?
– Perhaps the Minister could get up and explain, for instance, what is the machinery of investment of our overseas balances in London.
– You have been told about it but you do not understand.
– The Minister is only being offensive. He says that I have been told but 1 do hot understand. Will the Minister repeat what I was told?
– You can read the Treasurer’s second-reading speech.
– I have the speech here. Perhaps the Minister had better send for his chief and get him to explain it. I have asked a question and I expect to get an answer. I hope that my colleagues will continue to speak in the debate until the Treasurer arrives to give us some information. I confess my ignorance of the way the investments are made.
– I listened with great interest to the speech of the honorable member for Macarthur (Mr. Jeff Bate). Towards the end of his remarks he made the point that in his opinion the accounts of Qantas Empire Airways Limited should be kept separate from our overseas balances. He explained his reasons. The honorable member for Yarra (Dr. J. F. Cairns) said that it does not work that way. The Treasurer (Mr. Harold Holt) made this point very clear in his second-reading speech when he sai’d -
The entire proceeds of the borrowing will be made available to Qantas by the Commonwealth on terms to be determined by the Treasurer. These terms will be the same as the conditions under which the Commonwealth itself has borrowed the money. As Qantas will bc required to meet all charges as they become due under the loan agreement, the Commonwealth assumes a function similar to that of guarantor of the loan, and there will be no net charge on the Consolidated Revenue Fund.
The Treasurer made it very clear that the Government is merely sponsoring the loan for Qantas, and it seems to me that the point made by the honorable member for Macarthur is a very good one. I wish now to reply to the remarks of the honorable member for Bendigo (Mr. Beaton). I appreciate his opinion and I have a great respect for his honesty, but surely he does not think that in eighteen years in this Parliament I have not learned enough not to get up and say that money to-day is worth only half its value in the days of the Chifley government. From a normal sensible point of view, I would be very foolish to say that and, of course, I did not say it. I think that the honorable member was honestly mistaken. I am not sure of my exact words but I did not say that.
I may have said that money is much reduced in value; I may have said that it has been said that it is worth 50 per cent. less. I did say that the Treasurer in answering an interjection had stated that money is not worth as much as it was. He then went on to explain that because of this loss of value our reserves of £800,000,000 might have a value of only £400,000,000, if measured in terms of previous years. But I did not say that money is worth half as much as it was. I would be very foolish to say that. I do not know whether money has a value of three-quarters, one-half or only one-quarter of its previous value. I am not prepared to make statements in this House for which 1 do not have some backing. The honorable member for Bendigo asked why our reserves of £800,000,000 should remain idle in London. The honorable member for Lalor (Mr. Pollard) said that the money is invested on behalf of the Australian Government and it is not lying idle. The honorable member for Bendigo said that if I were controlling the money it would be lying idle and that if I had any spare cash 1 would put it in a tin can in the backyard. That is a very homely illustration and I appreciate it, but I can assure him that I do not have any money in tins in a backyard. Similarly, the Commonwealth has not any money that is not earning interest somewhere, so the honorable member’s argument is not very sound, as the honorable member for Melbourne Ports (Mr. Crean) will realize. It does not matter where the money is, so long as it is not kept in a tin in a backyard. Whether it is in a current account in a bank or somewhere else it is being used by some one and we are hopeful that it is being directed towards the prosperity and progress of this nation. I believe it is.
I will not keep the House any longer as I know that the bill must proceed if Qantas, which has received so much praise from both sides of the House, is to secure the jet planes it apparently requires.
. The hour is getting late and I do not want to say a great deal. However, a few things have been said this evening which warrant reflection. I suppose that it pays all of us from time to time to reflect on what we have said. Members of the Opposition feel that the questions they have asked have not been answered. One question: “ If you have £800,000,000 to your credit in a bank account, why do you wish to indulge in an overdraft to the extent of £11,200,000?
– That has been said many times to-night.
– That may be so, but I want to state what I believe is the essential difference between the two points of view. As I see it, the essential difference is that if the transaction is performed in the way that the Opposition suggests it ought to be, the taxpayers of Australia, in the long run, will be saved interest at 5 per cent, for a period of about eight years on a sum of 25,000,000 dollars or £A 11,200,000. The honorable member for Higinbotham (Mr. Chipp) shakes his head and seems to imply that our overseas funds are earning their keep. That is not true of the total reserves of Australia. As my colleague, the honorable member for Lalor (Mr. Pollard), suggested, perhaps some of the funds are invested and are not lying idle. They are invested after consultation between the Australian Treasurer and the British Treasurer. However, a substantial part of them is held in the form of gold which earns nothing. Another part is held on a daytoday basis and also earns nothing. Members of the Government are in a better position than anybody else to indicate how much our reserves are earning. If honorable members opposite feel that our overseas funds are able to earn more than 5 per cent., they ought to say so. They have not said so and in my view that is not the truth of the matter. 1 suggest that it is imprudent for anybody to borrow when he can pay cash. Much has been said here about resort to hire purchase. My advice to anybody is not to resort to hire purchase unless it is absolutely necessary. Unfortunately, many people in the community have had to resort to this form of finance because of their economic circumstances. They become borrowers by necessity. That is one good reason why in the public interest something should be done to control that form of credit. Nothing is being done at the moment, but that is beside the point in this debate.
The essence of the transaction suggested by the Opposition in this amendment is that 25,000,000 dollars- about £11,200,000- would be withdrawn from Australia’s overseas reserves. The honorable member for Higinbotham quibbled about the fact that the £800,000,000 in overseas reserves is not owned by the Government. It is not owned by any individual either, as he knows. The accumulated balances held overseas at any point of time are merely the final washup of a number of transactions in international accounts. Some of them are debits some of them capital, some are credit and some are of an annual kind. To say that at any point of time those sums could be identified as belonging to Mr. Smith, Mr. Brown or the Commonwealth of Australia is just sheer nonsense. However, they can be identified as belonging to the Commonwealth of Australia as easily as they can be identified with Mr. Smith or Mr. Brown.
The honorable member for Higinbotham asked the Treasurer (Mr. Harold Holt) in this House a few days ago about what had happened to a sum of £25,000,000 or 25,000,000 dollars- I am not sure of the magnitude of the sum, but I do not think it matters very much - and the Treasurer took a very long time to give what was supposed to be a reply. I, for one, was just as uninformed at the end of the Treasurer’s answer as I was at the beginning. From reading between the lines it seems that money is being withdrawn to meet some of Australia’s defence commitments in the United States. There is nothing wrong with that transaction, but there is no essential difference between following that course for defence and doing what we suggest with respect to Qantas. To attempt, as the honorable member for Higinbotham did, to draw a fine line between what are capital transac tions, in which he included the purchase of aircraft, and what are income transactions in Government accounts, is also a little bit of subterfuge. The honorable member knows as well as anybody else in this chamber that for the last ten years at least this Government has been paying out of revenue amounts up to about £100,000,000 per annum for expenditure on capital items. So the sin, if the honorable member sees it as a sin-
– They were payments to the States.
– They were payments for capital works.
– To the States.
– But also to allow the overall transactions-
– Do you approve of that?
– I do approve of it. In fact, the more capital works that are paid for out of revenue the better is the financial prudence of the Government, so far as I am concerned. All that we are asking is that a fine line should not be drawn between internal transactions and international transactions.
I still have not been given an answer about some detail that I asked for in relation to the schedule, where there is a vague reference to jet aircraft and related equipment. The purport of the Treasurer’s speech was that the purchase was to be of three Boeing 707-338C aircraft. I am not suggesting that the money will not be appropriated for that purpose, but I think that we are entitled to ask why the particular kind of aircraft is not specified in the schedule. I suggest that courtesy demands that an answer be given by someone in a position to provide the information. I do not suggest that the Treasurer should necessarily be in the chamber all the time, but I do think that if he is not here he should anticipate some questions might be asked and have the information available. After all, the Opposition is not quite so silly as the Government thinks it is, which is fortunate for the people of Australia. We read legislation just as efficiently as do honorable members opposite, so surely we are entitled to a reply when we ask specific questions. So far, no answer whatever has been given to my question.
At the moment the Minister for Repatriation (Mr. Swartz) is at the table. If he cannot supply the answer I think that he should at least make some arrangements at a later stage to indicate to us whether there is any justification in our fears that perhaps a swifty is being put across in the Government’s failure to specify the kind of aircraft. He should at least allay our fears by telling us that that is not so, rather than just sit there and say that the information is in the Treasurer’s speech. The speech does refer to three Boeing 707-3 3 8C aircraft, but they are not specified in the legislation. I still feel that it is not what the Minister says that is the determining factor; it is what is passed in legislation that is the effective force. I should like an answer on that point.
– Order ! The honorable member’s time has expired.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill (on motionby Mr. Swartz) - by leave - read a third time.
In committee: Consideration resumed from 7th April (vide page 777).
Customs Tariff Bill 1964.
.- Mr. Chairman, I want to discuss briefly the duties that have been imposed on weedicides and insecticides as set out in this Schedule. There has been a continual spate of reports on weedicides and insecticides. Indeed, they have come so thick and fast that one is reminded of an artillery barrage. I shall not go through the history of them in detail. The firstreport was made on 19th June, 1962, when a Special Advisory authority, in a panic move, recommended increased protection for the producers of these commodities. Nine days later, on 28th June, there was a signed Tariff Board report that recommended lower rates of duty. In September, 1962, a Special Advisory Authority reported on the subject again, and the previous high rate of duty was retained. This report was followed by the last report of the Tariff Board on the subject, which was dated 11th October, 1963. That is the report which I shall discuss this evening and which supports the high rates of duty.
One cannot help wondering at the philosophy behind this anxiety so generously to protect the manufacturers of these products. Easily the biggest producer of the weedicides and insecticides in question is Union Carbide Australia Limited, which is a subsidiary of the United States Union Carbide giant. The next largest manufacturer is Monsanto Chemicals (Australia) Limited, which is another giant company with strong American affiliations. The third main producer in Australia is Hardman Chemicals Proprietary Limited. There has been a lot of criticism from the other side of the chamber to-day, and from other quarters on other occasions, about foreign capital coming into Australia. The investof foreign capital here is looked on with a certain degree of suspicion. However, it is interesting to notice that, when foreign capital arrives here, it is feather-bedded into the economy, and Australians who produce for the export market have to pay the cost.
The industry seems to suffer from two main problems. First, it has more production capacity than the Australian market can justify. The Tariff Board has mentioned this several times in its reports. Evidently, errors of judgment on the part of the manufacturing companies have to be paid for by the Australian users of the chemicals produced. The second problem of the industry springs from the high price paid for the chlorine products on which the industry is based. The Tariff Board has recommended continually that prices of the chlorine products on which the industry is based be examined with a good deal of care. I understand that the matter has since been referred to thefull Tariff Board for a report. I hope that, as a result, payment of bounty will be recommended. Payment of bounty would reduce the cost of burden of the industry and many other industries further down the line.
The names of many of the chemicals concerned are frightening. Other honorable members may be able to pronounce them readily, but I find it difficult to get my tongue round them and I shall refer to them by the abbreviations commonly used. I propose to discuss four of these chemicals that are vital to primary industry. We who produce for the export market have to pay high prices for these commodities. Let us consider first D.D.T. This is one of the basic chemicals used in most insecticides, particularly those most suited to spraying for red-legged earth mite and similar pests. This chemical is used continually throughout primary industry. It carries duty, at the most-favoured-nation rate, of lOd. per lb. The manufacturers take full account of these duties in fixing their prices. Indeed, the Special Advisory Authority suggested in his report that if the duties were raised the manufacturers would have an opportunity to raise their prices. They take advantage of the duties all the way. Five hundred tons of this chemical is used in Australia annually, according to the Tariff Board’s estimate. So the duty of lOd. per lb. means that, on 500 tons, the users of D.D.T. pay a total of £46,600 a year more than they would pay if the chemical were imported duty free.
Another important chemical is 2,4-D. This is a basic chemical constituent of weedicides used in the treatment of cereals. The Tariff Board estimates that the annual requirement of this chemical is 900 tons. I should think that this will prove to have been an under-estimate as the acreage of cereals increases. The duty on this chemical is 18d. per lb. at the most-favoured-nation rate. So the users pay annually £151,200 more than they would pay if the chemical were imported duty free. The third important chemical is O.D.C.B., which is used in larvacide blow-fly dressings and which carries a duty of 3d. per lb. at the mostfavourednation rate. The additional annual cost to the producers on a consumption of 300 tons is £8,400. The next chemical to which I turn is 2,4,5-T, which is used most often in the treatment of plant pests such as brigalow which are difficult to eradicate. The estimated annual consumption of this chemical is 150 tons, and duty, at the most-favoured-nation rate, is 40d. per lb. So the additional annual cost to the consumer is £56,000.
So we find that the duties imposed on these four chemicals used mainly in primary industry impose on the users an additional annual cost totalling £262,200. This constitutes a pretty fair subsidy paid to the chemical manufacturers by primary producers. I am sure that you, Mr. Temporary Chairman, are aware how people who open country shows let their hair down, as it were, and urge primary producers to cut their costs. I have seen this happen often at the opening of shows in my electorate. Yet as I have pointed out, an additional burden of £262,200 a year is imposed on primary producers by the duties to which these chemicals are subjected.
We are always told, of course, that the purpose of these duties is to create employment by making possible manufactures of certain kinds in this country. As far as I can make out, after reading the Tariff Board’s report, 100 men are directly engaged in producing the chemicals that I am discussing.
– All of those chemicals.
– Yes. I shall deal with this in some detail later. My estimate is backed by such technical advice as 1 have been able to get. If it is correct, 100 mcn are engaged in the production of these chemicals. If employment is the object of the exercise, every man engaged in this manufacture costs us an extra £2,622 a year. In other words, the users of these chemicals would be repaid if they formed themselves into an association and paid the operatives directly employed £2,622 a year to stay at home and watch television. The number of workers involved was not quite certain. The figures are open to some argument, and probably somebody will pick me up on them. The Tariff Board states that 48 men are directly engaged in the production of these chemicals at the factory of Union Carbide Australia Limited. The board reports, however, that 143 operatives are engaged in production by that company. Which figure one should use is open to argument. As I have said, the technical advice that I have been able to get suggests that the maximum number of men directly engaged in the production of these chemicals would be 100. But let us assume that the number is 200. It certainly would not be more. This means that we pay £1,311 a year, or more than £25 a week, for every operative. This seems a pretty fair subsidy to the manufacturers.
However, this is not the end of the story. The price increases are passed on down the line to the wholesaler and the retailer and eventually to the customer. The duties are on a sliding scale. So, if the overseas price falls, the rate of duty increases and the price in Australia does not fall. This conjures up a rather interesting picture in my mind. When I am spraying weeds, I usually look over my right shoulder to see how the spray plant is working. Everybody, of course, works in a different way. I shall now look over my left shoulder, metaphorically speaking, and see how my competitor in Canada is managing, for he gets weedicides at least 50 per cent, cheaper than I get them in Australia. This will be said to encourage the development of Australia. By the lime you pay all these costs through the wholesaler and the retailer it seems a fair estimate that the producer will be paying at least £400,000 additional each year. And that seems to be a pretty fair contribution to Australia’s development.
As a farmer, I find this kind of talk pretty hard to swallow. We look over our shoulder to see what our competitors are doing. If you go to Western Australia - I am glad to see the honorable member for Moore (Mr. Maisey) in the chamber - you will see the way in which the farmers are using 2. 4-D, a b-ise chemical, to control wild radish. I suppose they will take a rather jaundiced view of this argument of development. If you go to the brigalow country in Queensland - I have just returned from there - you will see the way in which they are using 2, 4-D to control the brigalow suckers in that area. The Tariff Board claims that this chemical is not important. I was told by many people engaged in the industry in Queensland that they would certainly use it if it were cheaper. As the brigalow clearing work continues, the tendency will be to use more of the chemical.
There seem to be three reasons to explain this queer kind of Tariff Board report. First, there appears to be the high cost of chlorine. I hope that this problem will be met by the current inquiry. I ask the Minister whether, if the Tariff Board recommends a bounty on chlorine, the duty automatically will be lowered? Secondly, I cannot help wondering whether the quality of this report has been influenced to some extent by statements which may have been made on the subject from time to time by some Cabinet Minister. I do not know whether this has happened, but you cannot now depend on a Tariff Board report being an assessment of the economy and of efficiency of the industry concerned. It may be influenced by some such riding instructions given in the way that I have mentioned.
The third reason which may excuse or explain the report to some extent is that because of the shuttle service that is now in operation the Tariff Board may have said, “What is the good of submitting a report that lowers the duty when we know that the matter will almost certainly go back to t)»e Special Advisory Authority as it has gone back so many times? “
When the redistribution proposals were being discussed in this House last year we heard a lot of talk about the necessity for a loud clear voice being heard to speak for the rural industries. I recommend to my colleagues in the Country Party that this matter now before us is a fitting subject for eloquence. In conclusion I should like to ask a question of the Minister. Are these insecticides with which we are dealing lethal to beatles?
.- The subject of weedicides and insecticides chosen by the honorable member for Wakefield (Mr. Kelly) for discussion this evening is, of course, just one item of very many that are before us in the legislation now being debated, but, like many other subjects, this one deserves close attention. When speaking in the debate on the motion for the second reading of these tariff bills I pointed out that these weedicides and insecticides were produced predominantly by two companies, Union Carbide Australia Limited and Monsanto Chemicals (Australia) Limited, which themselves form an international organization, very large and with many different sections and departments. Apparently they find, in this small section of the very large industry that they control - the section which produces weedicides and insecticides - that they cannot stand up effectively to competition, partly because of increased costs within Australia and partly because of reduced costs of the imported competing products.
I said in the second-reading debate, and I say again now, that it is time that the Tariff Board, tariff authorities and the Government conveyed to these very large concerns - chemical organizations in this case - that we expect them to develop, as part of their industrial structure, those sections which will produce new or relatively new products, even if at a loss for some time. The greater part of their structure has been developed as a result of tariff protection. They have made very large profits in the aggregate. I should think that both Union Carbide and Monsanto Chemicals are pretty near the top judged by rates of profit and what has happened in the Australian economy in recent years. I repeat, it is time that the Government at various levels conveyed to these large concerns that they are expected to develop, as part of their structure, some new products even if they have to carry losses in those sections for some time. In almost every case the increased cost that the companies claim they face is due to the relatively higher cost in Australia of chlorine, which is basic to the production of the weedicides and insecticides that we are considering.
I welcome the Tariff Board’s report, which recommends that a separate inquiry be made by the board within two years and that a subsequent review of the chlorine products industry be made. I think that a review of the chlorine products industry is long overdue. This industry has an interesting history, which 1 should like to outline to the committee at this stage. After the First World War it was proposed that an industry to produce chlorine should be established in Australia. Some committees of inquiry were set up. One concern which made submissions to the committees of inquiry was the company then known as Imperial Chemical Industries. It was recommended in 1921, I think, and again a few years later, not only that it was then uneconomic to set up a chlorine industry in Australia but also that it would continue to be uneconomic. It was said that Australia did not have economic salt deposits anywhere which would allow a chlorine industry to be set up here.
At that time an Australian company was ready to begin operations in South Australia, even in view of the risks that were involved. The company believed that it could produce chlorine in Australia on a satisfactory basis. However, the company was over-ruled despite the fact that the Labour Government of 1931 had supported it and had accepted its proposal to set up an industry. But in 1931 that Labour Government was defeated and a government of what was then called the United Australia Party overruled the decision to establish an Australian company to produce chlorine in South Australia. A Senator McLachlan in the other place was associated with this. There was some suspicion that the decision was not based upon completely objective facts and further inquiries were called for.
At or just before the outbreak of the Second World War - it may have been in 1939 or 1940 - it was recognized that as the war appeared likely to develop it was most important that Australia should have a basic chlorine industry for defence purposes because chlorine is used extensively in the production of conventional explosives. So moves were made to have this industry set up. Well, lo and behold, who should emerge into the scene to set up an industry but LCL, the company which for a period of, I think, twelve years after the First World War had said that the establishment of a chlorine industry in Australia was uneconomic and would remain uneconomic. But now LCL, in the form of Imperial Chemical Industries of Australia and New Zealand Limited, entered into the field to set up an industry in a country where they said to do so was uneconomic and would remain uneconomic.
The second interesting thing about the establishment of the chlorine industry was that the industry was set up in South Australia in precisely the same place as the Australian company wanted to set it up in the 1920’s and which I.C.I, had said was unsuitable for this purpose. I think one of the gentlemen closely associated with the Australian company did seek some rights with respect to I.C.I, having been able to operate in the place and in the manner in which his company had proposed operations. I think he received some ex gratia payment from I.C.I. It may have been quite a considerable sum of money - perhaps £10,000 or £20,000. He sought some assistance at the time from the Government, the Prime Minister of which was the present Prime Minister (Sir Robert Menzies). I think the gentleman was very disappointed in the lack of support that the Government at that time was prepared to give to him.
It seems to me that the chlorine industry has required for a long time pretty thorough investigation. Once the Tariff Board opens an investigation into the chlorine industry it will be able to obtain quite a lot of interesting evidence about how the industry was established and the circumstances under which it was established. We have a company now - I.C.I. - operating the chlorine industry. That company has said that operation of the industry was uneconomic and was likely to remain uneconomic. The company is now operating the industry at a place where it said its operation was likely to be uneconomic. Clearly, the development of a competitive weedicides and insecticides industry in Australia depends on the development of a competitive chlorine industry in Australia. One is dependent on the other and the second cannot become economic unless the first becomes economic. I understand that the processes used in the chlorine industry in South Australia by I.C.I, are different processes from those used abroad and are considerably less efficient. A considerable amount of capital would have to be invested in South Australia to allow processes that are more efficiently used in other countries to bc used here, lt seems that the market in Australia is not big enough to justify the investment of adequate capital. If this is to bc the case it would appear that the production of chlorine will remain uneconomic in Australia, as apparently I.C.I, in the 1920’s said it would remain.
The Tariff Board therefore has sooner or later to deal with this problem. If the fundamental industry behind weedicides and insecticides in Australia - the chlorine industry - is to remain uneconomic, what is the good of continuing to give protection to the small processes that follow the basic one, such as this one, down the production line as it were? A moment ago it was pointed out that only a very small number of men is involved in the production of this product, and it is argued that tariffs are justified because the industries protected by them provide employment. It is true also that a small number of people is involved in the production of weedicides and insecticides. From an employment point of view we may not be justified in agreeing to a tariff, l think the honorable member who makes this point believes that he has made an effective point. Once he has demonstrated that only 100 men - I think he once demonstrated that only three men were engaged in the production of a product that we were protecting-
– One man full-time and one man part-time.
– Well, one and a half men. The honorable member thought that he had made a very effective point. But he is concerned about increased costs of the product that these very few men are producing. It follows that if very few men are involved in the production of a product, that product is worth in the aggregate very little, and so the increased costs that occur as a result are also themselves not very significant. If an increased cost of 10 per cent, or 15 per cent, is involved in a product worth £100,000, it amounts to £10,000 or £15,000 spread over many thousand’s of farmers in this country. As far as this item is concerned, it may not add very much to the farmers’ costs. When the honorable member for Wakefield has completed making the point that very few men are involved in the production of a particular product he has also completed the point that the increased costs to the indivdual farmer are slight indeed. I think the increased costs that mostly affect the farmer are not those which occur where a few men are engaged in the production of a product under protection but where a large number of men is engaged. I do not think that the point so often made by the honorable member for Wakefield in debates on tariff bills is as valuable as he seems to think it is.
We in the Labour Party believe that we cannot go on indefinitely handing out protection to large monopolistic organizations in this country without having some say in how they use that protection and in what they do with it. I think we must expect the Tariff Board in the years to come to develop the facilities to be able to answer these questions more effectively than it does, because we in this Parliament will always be bound very much by what our experts in and around the Tariff Board <ay about proposals that come before the board. We are not able and never will be able ourselves to act as experts in the particular references that come before us. We will be forced to rely always very much on what the board and the authorities say. But I believe that in the future the Tariff Board and the Special Advisory Authority will not be able to go on handing out protection to industries which have pricefixing arrangements between themselves and arrangements to eliminate and reduce competition. The board will have to be concerned with all these things. That must be one of the functions of the board in the future, but we would not expect such a change in policy from a government of the political colour of the present Government, which wants to be kind and generous to industry even though it is monopolistic.
-(Mr. Brimblecome) - Order! The honorable member’s time has expired.
– I would like to add a few thoughts in this debate. The honorable member for Yarra (Dr. J. F. Cairns) has indicated that he docs not think that the contribution of the honorable member for Wakefield (Mr. Kelly) was very helpful or added anything to the argument.
– Only in respect of one point.
– I agree with that because of the superficial nature of the arguments employed by the honorable member. The subject of cost to industry of tariffs is one that requires a very much greater field than we have open to us tonight to go into. It is not sufficient to pick out some items, as the honorable member for Wakefield has made a habit of doing in these tariff debates, and to say that here is one item, that there are so many tons of it, that duty is so much, and that the cost to the industry is so much. That does not really give a true picture of what tariff protection means to Australia. He overlooks completely the whole complex around which this industry has come to be established in Australia. Why have these people come here - Union Carbide Australia Limited, Monsanto Chemicals (Australia) Limited and Hardman Chemicals Proprietary Limited? They are organizations with which we are concerned in con nexion with this particular item. Why have they established this industry in Australia? The honorable member for Wakefield has tried to write them down. He suggested that even if they had as many as 200 people employed it would not be economical. He just glanced at the problem without considering all the other industries that have been built around them, and all the other aspects involved in producing these particular items. We should consider not only the people engaged in the manufacture of these chemicals but also the whole of the circumstances that surround the industry which makes a contribution to the development of Australia.
The honorable member for Wakefield implied that this was a big price to pay for the development of Australia. But I again ask: Why have these organizations come here? It is because Australia as a primaryproducing nation needs these products. They are the type of products that we should be manufacturing within the confines of this country. We should not allow ourselves to be at the mercy of overseas suppliers of the raw materials so essential to the carrying on of our primary industries. The honorable member has not approached the subject from the point of view of trying to help primary producers nor even from the point of view of trying to help himself to raise fat lambs. As the honorable member for Yarra (Dr. J. F. Cairns) just indicated, the actual cost to the grazier of insecticides or weedicides, whatever you like to call them, is not very much. There is a mix-up in these’ terms because some are insecticides and some are weedicides. The total cost of weedicides to a grazier would amount to i per cent, of the cost of his production. It might sound a lot when you speak of ?262,000 a year additional duty, but it is not a lot of money to spread over the production of a country like Australia which is proud of its record in primary production. Surely this is not something that is going to drive graziers into the bankruptcy court. I think that the honorable member is making a mountain out a molehill. His whole approach to the problem overlooks the basic facts behind the establishment of this industry.
Let us consider some details. The Australian Tariff Board, after an inquiry much more exhaustive than the honorable member for Wakefield has ever been able to make in this chamber, gave reasons for the disabilities that affect the industry. The board had evidence produced to it by the National Farmers Union. I think that that union would be better informed than the honorable member for Wakefield. The Tariff Board had evidence also from the Australian Tariff Council. After considering the evidence given to it by people who were experts the board said that the industry was suffering a disability. Why? The honorable member for Yarra gave us a number of reasons. One was the high cost of chlorine. Let us consider that. The high cost of chlorine is due to two things - the high cost of salt and the high cost of electricity.
In Australia electricity costs probably about Hd. per unit. If you can get electricity at 1.6d. per unit in any industrial undertaking in Australia you are getting it at a very good price. How does this compare with the price of electricity paid by our overseas competitors? In the United Kingdom the price is .87d.( in France it is .37d., in Belgium .62d., and in Germany .65d. per unit. Those are important considerations. The cost of transporting salt is another reason that is given for the high cost of the Australian industry. I should like to point out that it costs £7 a ton to transport salt from Adelaide to Sydney whereas it costs only £4 a ton to send salt to Japan. In fact, it is slightly cheaper to ship salt from Adelaide to Japan and back again to Sydney than it is to send it from Adelaide to Sydney direct. That is a reflection on another section of the Australian economy, but it is one of the reasons why protection is required by this industry to enable it to bc established in Australia where we want it.
Why do we want it? There are definite advantages in having a local supply. I should like to remind any one who may think that the primary producers are hard done by in having some little extra cost put on to them, that in 1962 there was a national prolific weed growth - one of the unexpected but inevitable things that does happen in nature. We had on the spot people to whom we could turn. We could ask them to put on extra people and make an extra effort to get on with the job of controlling these weeds. Does the honorable member for Wakefield want us to be able to do that, or does he want us to have to wait six months until we can get extra supplies from overseas? I know that he would not want us to have that extra wait because he has too much consideration for his confreres in primary industry.
These big people have brought something of value into Australia. In introducing their manufacturing complexes they have not only brought their machinery and knowhow to Australia but they are also doing research here. They have technical staffs that are able to assess our particular requirements and decide what will suit Australian conditions. We do not want to get something that is on the shelves in Germany, France, England or somewhere else. We want to produce in this country the things that we need for the job that has to be done.
Insecticides, cattle dips and weed killers have been developed for use under Australian conditions. These are the things that the research departments of these organizations have produced. For instance they have produced the sort of product that can control cattle tick and enable the Australian cattle industry to produce a product which gives control over this damaging -
– Yes, this parasite which has fastened on to our cattle industry. These organizations have given the industry control of its pests because they have the machinery to make the chlorated hydrocarbons such as DDT. By doing this they have helped our meat export trade. These people are anxious to help us in our export drive. I should like to point out that we have here in Australia, specially developed to suit our conditions, a plant desiccant and weed killer which has been widely used for the control of cape weed. Of course, that is of value to our Australian industries.
I could give a few other examples of troublesome weeds which Australian farmers normally would not have been able to control, but because these industries have been set up in Australia the farmers are able to control them. The cost of research into insecticides and weedicides undertaken by one company which has two research stations is in the vicinity of £70,000 a year. Does the honorable member for Wakefield call that a cost on industry? Of course, it is a factor affecting costs of production, but Australian primary producers are gaining the benefit of it all along the line.
I believe that it is high time we had a lot less of this criticism of Tariff Board procedures. The criticism is directed more at the Special Advisory Authority than at any one else. Instead of implying that the Tariff Board and the Special Advisory Authority are not doing the right thing by Australia, as the honorable member for Wakefield does in all these speeches that he makes, he should support these procedures, which are doing much to further the development of Australia, in which I know he is very keenly interested.
Schedule agreed to.
.- I shall deal first with the tariff on electric lamps, particularly automotive lamps. For once I read the Tariff Board’s report with very great pleasure, and I have very much pleasure in supporting the action that the Government took on it. This was a clear example of how protection can work. It was a vindication of a wise protective policy. No one could read the report without having a warm feeling that our tariff system, of which I have been critical in its retailed application, works well in many cases. In this case it has worked well.
However, I want to make one complaint. It is only a minor complaint. The duty on fluorescent lights is mentioned as ls. per lb. I just cannot imagine how much a duty of 1s. per lb. on fluorescent lights would be. If any honorable member can tell me, I will be happy.
– What is the ad valorem rate?
– The Tariff Board does not tell us. That is what is worrying me. If the Tariff Board would finish off this excellent report by giving the ad valorem equivalent of a duty of ls. per lb. on fluorescent lights, my cup of happiness would be running over.
The other item mentioned in this schedule is covered by the report dealing with galvanized iron or steel tube and pipe fittings.
– There is not much galvanizing on them.
– They are still galvanized iron pipe fittings for this purpose. I wish I could be as complimentary about this report as I was about the report on electric lamps. The same criticism can be advanced against this report; that is, that the ad valorem equivalent of the duty recommended is not given and it is not easy to find out. Figures are given in the report. I went through them to the best of my limited mathematical ability. I have not had the experience of these matters that the honorable member for McMillan (Mr. Buchanan) has had. It seems that the duty recommended - ls. 6d. per lb. - works out at an ad valorem rate of 64 per cent. I can well understand why the Tariff Board did not want to mention that. The board, in its report, hints that the duty is very high, but one would not think that it would be as high as 64 per cent.
Evidently, the Japanese can buy our iron ore, coal and tin, ship them to Japan, make them into pipe fittings and ship those to Australia, and the Australian industry still needs protection at the rate of 64 per cent. That is intensely disappointing, particularly after the previous report that I mentioned. The board says that the four local manufacturers are formed into a close association and they offer certain discounts, up to 30 per cent., to certain customers. Those people who cannot get into the ring have to import pipe fittings or go under. This duty certainly will ensure that they go under, because no one could pay duty at the rate of 64 per cent. and compete. It is no wonder that the Tariff Board asked that the malleable cast-iron pipe fittings section of the industry be considered again in three years’ time. I only hope that when the next inquiry is held the board will not be quite as lenient as it has been this time.
Schedule agreed to.
Fifth Schedule agreed to.
Remainder of bill - by leave - taken as a whole, and agreed to.
Customs Tariff (Canada Preference) Bill 1964, Customs Tariff (New Zealand Preference) Bill (No. 1) 1964 and Customs Tariff (Papua and New Guinea Preference) Bill 1964 - by leave - taken as a whole together, and agreed to.
Bills reported without amendment; report adopted.
Bills (on, motion by Mr. Fairhall) together read a third time.
House adjourned at 10.58 p.m.
The following answers to questions were circulated: -
b asked the Minister for Labour and National Service, upon notice -
In view of the report on “ Characteristics of Persons Registering for Employment with the Commonwealth Employment Service “, what action is intended to (a) equip youths with the necessary skills to enable them to secure employment in this changed industrial world and (b) train unskilled menand skilled men who have to turn to other avenues of employment due to mechanization and automation?
– The answer to the honorable member’s question is as follows: -
Electoral. (Question No. 22.)
d asked the Minister for the
Interior, upon notice -
How many aborigines whose address was (a) Leprosarium, Derby, (b) Alice Downs Station, (c) Ord River Station, (d) Go Go Station, (e) Fossil Downs Station, (f) Christmas Creek Station, (g) Lombadina Mission, (h) Beagle Bay Mission, (i) Table Lands Station, (j) Gibb River Station, and (k) Forrest River Mission, were enrolled and eligible to vote at the general elections of last November?
– The answers to the honorable member’s questions are as follows: -
The electoral records do not distinguish between Europeans and aborigines but the following is an estimate of the number of aborigines enrolled and eligible to vote, viz.: - (a) Leprosarium, Derby, 122; (b) Alice Downs Station, 12; (c) Ord River Station, 31; (d) Go Go Station, 61; (e) Fossil Downs Station, nil; (f) Christmas Creek Station, 67; (g) Lombadina Mission, 14; (h) Beagle Bay Mission, 39; (i) Table Lands Station,(j) Gibb River Station, 22; (k) Forrest River Mission, 12.
Electoral. (Question No. 23.)
d asked the Minister for the
Interior, upon notice -
How many of the aborigines enrolled for the Electoral Division of Kalgoorlie who were eligible to vote at the 1963 election and whose address was (a) Leprosarium, Derby, (b) Alice Downs Station, (c) Ord River Station, (d) Go Go Station, (e) Fossil Downs Station, (f) Christmas Creek Station, (g) Lombadina Mission, (h) Beagle Bay Mission, (i) Table Lands Station,(j) Gibb River Station, and (k) Forrest River Mission, did actually vote?
– The answers to the honorable member’s questions are as follows: -
No record is taken distinguishing the aboriginal voters from the European voters but the following figures represent the total number of votes recorded at the respective polling places, viz.: - (a) Leprosarium, Derby, 127; (b) Alice Downs Station, 11; (c) Ord River Station, 32; (d) Go Go Station and Fitzroy Crossing, 46; (e) Fossil Downs Station, nil; (f) Christmas Creek Station,50; (g) Lombadina Mission, 20; (h) Beagle Bay Mission, 45; (i) Table Lands Station, 13;(j) Gibb River Station, 27; and (k) Forrest River Mission, 17.
Electoral. (Question No. 24.)
d asked the Minister for the
Interior,upon notice -
How many of the aborigines enrolled for the Electoral Division ofKalgoorlie who were eligible to vote at the 1963 election, and whose address was (a) Leprosarium, Derby, (b) Alice Downs Station, (c) Ord River Station, (d) Go Go Station, (e) Fossil Downs Station, (f) Christmas Creek Station, (g) Lombadina Mission, (h) Beagle Bay, Broome, (i) Table Lands Station, (j) Gibb River Station, (k) Forrest River Mission, (1) Derby, (m) Wyndham, (n) Port Hedland, (o) Roebourne, (p) Broome, and (q) Onslow, were marksmen and therefore unable to record a postal vote?
– Details are unavailable.
Electoral. (Question No. 25.)
d asked the Minister for the
Interior, upon notice -
– The answers to the honorable member’s questions are as follows: -
ser asked the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions are as follows: -
y asked the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions are as follows: -
Television. (Question No. 84.)
d asked the Postmaster-
General, upon notice -
– The answers to the honorable member’s questions are as follows: -
Australian Capital Territory -
New South Wales -
Newcastle-Hunter River. lllawarra.
Upper Namoi (Tamworth).
South-western Slopes and Eastern Riverina (Wagga-Cootamundra).
Central Western Slopes (Dubbo).
Murrumbidgee Irrigation Areas (Griffith).
Murray Valley (Swan Hill).
Wide Bay (Maryborough).
Southern Downs (Warwick.
South Australia -
Spencer Gulf North.
South-east (Mount Gambier).
Western Australia -
Southern Agricultural (Katanning-Albany).
Central Agricultural (Northam-York).
on asked the Minister for Repatriation, upon notice -
– The answers to the honorable member’s questions are as follows: -
The League has also asked that “all returned servicemen of the First World War and prior wars be granted free Repatriation hospital and medical benefits.” In view of the lack of reliable information about the number of surviving exservicemen of the 1914-18 War, and the probable variations in expenditure on a year to year basis, as well as other factors, estimates of cost in this area cannot be made with precision. On the best available information, however, the cost of this proposal by the League, including both initial capital and annual recurring expenditure, could range from a minimum of £2,200,000 to considerably more than £3,000,000.
n asked the Minister for Trade and Industry, upon notice -
– The Acting Minister for Trade and Industry has supplied the following answer: -
The United States-Australian Meat Agreement provides that either Government may terminate the agreement, effective at the end of a calendar year, by written notice given at least 180 days prior to the end of the calendar year. This means that if either Government gave written notice by 4th July, 1964, the, agreement could be terminated at the end of 1964. I might add that similar provision for termination is usual in international trade agreements, particularly those, like this agreement, of indefinite duration.
n asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows: -
China. Forty-seven members of the United Nations as follows: -
The other four are Switzerland, East Germany, North Korea and North Vietnam. Senegal recognizes both the Republic of China and Communist China, but since it has diplomatic relations with the Republic of China, it is not recognized by Peking. Nigeria recognizes both the Republic of China and Communist China but has diplomatic relations with neither.
According to my latest information, 38 of these countries have diplmatic representatives in China, but we do not have details on which of these countries have representatives with specific trade functions.
This cannot be assessed accurately but in the light of purchases by Communist China from Australia, it appears that existing trade connexions operate satisfactorily.
n asked the Minister for Primary Industry, upon notice -
– The answers to the honorable member’s questions are as follows: -
Organization. He specializes in fishing vessel design and the purpose of his visit to Australia is to examine design developments of Australian fishing vessels. I am advised that Mr. Traung has been favourably impressed with the general condition of fishing vessels in the various Australian ports he has visited but that he has commented on the cleanliness of some prawning vessels.
n asked the Minister for Trade and Industry, upon notice -
– The answers to the honorable member’s questions are as follows: -
The Department of Trade and Industry made available a trade consultant to accompany the general manager to North America to provide additional assistance in the investigation of market prospects. An early announcement of further assistance to be made available to the Australian wool textile industry through Awtec Limited is anticipated.
s asked the Treasurer, upon notice -
– The information sought by the honorable member, at the latest date for which it is available, is set out in the following table: -
Cite as: Australia, House of Representatives, Debates, 14 April 1964, viewed 22 October 2017, <http://historichansard.net/hofreps/1964/19640414_reps_25_hor41/>.