House of Representatives
9 March 1966

25th Parliament · 1st Session

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

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– I ask a question of the Prime Minister. Does not section 128 of the Commonwealth Constitution provide that a proposed law for the alteration of the Constitution shall be submitted to the electors in each State not less than two nor more than six months after its passage through both Houses of the Parliament? Is not the Government, in abandoning the referendum to have been held on 28th May, flouting not only the mandatory provisions of the Constitution but the clearly expressed wish of both Houses?

Prime Minister · HIGGINS, VICTORIA · LP

– The Government examined the legal position very closely before coming to the decision that was recommended by me to the House last night and to which public reference was made some time ago. I can assure the honorable gentleman that the advice of our own legal authorities was to the effect that it was within the competence of the Government to refrain from the issue of the writ. The Government is not required in a mandatory sense to do so but, at the same time, it was, as I stressed in my statement last night, deeply conscious of the obligation it has to the Parliament in this matter. This was one reason why I included in what I knew to be a very lengthy statement a quite detailed account of the reasons for our action.

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– I direct a question to the Minister for the Army. I ask: Has the Department of the Army set a ceiling for the number of school cadets to be trained? If so, is this ceiling influenced by financial considerations or the availability of instructors? Finally, is the cadet corps regarded as an integral and important segment of our defence organisation and, if so, is it to be further developed?

Mr Malcolm Fraser:

– To answer the last part of the honorable member’s question first the Government and the

Army do regard the cadet corps as forming a significant part of the general defence framework of Australia. A number of cadets who go to the Royal Military College at Duntroon and to the Officer Cadet School at Portsea say they get their motivation for this kind of life and profession through the school cadet corps. The position is that the cadet corps does operate under a ceiling but it is a rising ceiling. The number this year is 41,700 and it will rise to 45,000 in 1967-68. There are two or three considerations involved in the limitation. Finance comes into the matter because the ceiling involves part of the overall defence framework. I do not think the numbers are decided purely by the Army, so finance is one consideration. With the current expansion the Army clearly has been stretched in supplying officers and non-commissioned officers. This is, and will be, another requirement that must be met. That is an additional limiting factor. In some areas appropriate facilities are not always available for cadets. But within these limitations, in general, the Cadet Corps is regarded as being important and valuable.

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– Has the attention of the Minister for Immigration been drawn to reports that trade relations may be terminated and Australians expelled from tha Philippines following the failure of tha Department of Immigration to approve an application for the admission to Australia of a prominent citizen of Manila? If so, will he give full details of the matter to tha House so that all may be fully informed on this important subject?

Minister for Immigration · CORIO, VICTORIA · LP

– I have seen statements of that kind, but always they have been attributed to newspaper correspondents. At the official level there has been nothing of that kind whatsoever. Mr. Locsin’s case was considered by the Department. It has been stated that he was a citizen of outstanding capacity and quality. We have nothing against Filipinos coming to Australia. As a matter of fact, some have been naturalised; some are living here now. Recently an outstanding Filipino citizen and his family were allowed in. There has been no actual prejudice against Filipinos as such.

However, we have the right, under our immigration policy, to look at applicants for entry to Australia and the possibility of their obtaining satisfaction in this country. Just lately we have had the experience of a Filipino citizen who came to Australia on the basis that he was qualified for a certain type of work but who, when he arrived, was not satisfied with what was offered to him. He believed that discrimination had been shown. Although Mr. Locsin probably has some academic qualifications, they had not been proved in practical terms. He was employed with a banking institution as a clerk. Of course, we have nothing against that. But we in Australia do not advertise outside Australia for bank clerks; such employees are recruited from inside the country. When all the circumstances were taken into account, it was decided that the terms of our immigration policy did not permit Mr. Locsin to come as one who could be satisfactorily settled in Australia. No racial considerations entered into this particular case.

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– My question is addressed to the Minister for Health. I refer to an article that appears in a leading Sydney journal of today’s date and in which it is stated -

Blue tongue disease was reported to have been found on a Queensland cattle property.

In view of the serious implication of this suggestion for Australia’s sheep population, is the Minister in a position to inform the House of the substance of the matter and confirm what I believe to be the truth, that is, that at no time was there an outbreak of blue tongue disease and that action taken by the veterinary authorities was purely precautionary?

Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– I saw the article in question. The honorable member’s belief about a reported outbreak of blue tongue disease is correct. There was not an outbreak. What happened was that some semen was illegally imported into Australia from Canada and several cows were inseminated with it. That semen could have contained blue tongue disease, and it would have been highly undesirable to take the risk of allowing the disease to become established and to spread. I should say that the determination of whether the disease is present involves quite a lengthy process. Because blue tongue is a virus disease that may be transmitted by biting insects, such as midges, there is a danger that before its existence can be established it will spread and never be capable of being brought under control. The tests in the present case proved to be negative. The semen did not contain blue tongue. Nevertheless, the immediate slaughtering of stock and the fogging action taken to get rid of the insects in the area were vitally important precautions, particularly when it is remembered that if this disease became established in Australia it is almost certain that it could never be eradicated. This has been the experience in the United States and it would almost certainly be ours. In view of the great dependence of this country on the sheep industry, which is the industry mainly attacked by blue tongue, I am sure that all honorable members will agree that the precautions taken in this case were vitally necessary.

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– My question to (he Prime Minister relates to the three miles off shore limit. Is the right honorable gentleman aware that many countries have extended the three miles off shore limit to 12 miles? As the Australian continental shelf extends in many places beyond the three miles limit, I ask the honorable gentleman: What steps would be necessary to preserve oil interests and fishing interests which lie beyond this limit?

Mr Harold Holt:

– I will ask the Attorney-General to answer the question.

Attorney-General · BRUCE, VICTORIA · LP

– Different countries have different attitudes towards territorial limits. The territorial limit is quite a different matter to the continental shelf. The matter of territorial limits has been the subject of international discussion for some years. The continental shelf was the subject of a convention concluded a few years ago. It is pursuant to the international law expressed in that convention that the Commonwealth and the States are now coming towards the end of a project for joint legislation to deal with the exploitation of the submerged areas of the continental shelf.

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– I address a question to the Prime Minister because I regard this matter as one of great national importance. Will the right honorable gentleman make investigations with a view to making known whether the film “ King Rat “, currently being screened in Australia, is a true record of events in Changi prison camp, Singapore, or a money making project to the detriment of the reputation of many Australians and others who served in Malaya and who were imprisoned in Changi? If the Prime Minister will make the investigations as requested, will he make his findings the subject of a statement in this House?


– I have no personal knowledge of the film referred to. I have merely seen some references in the Press to the fact that it is being screened in this country. In my experience most films, whether they are documentaries or fictional, are money making projects, so I assume that the film referred to by the honorable member is being screened for purposes of profit. I shall see whether I can secure information for the honorable gentleman as to whether the film purports to be an accurate and factual account of conditions in Changi camp. If this is not the case I shall consider whether it is appropriate for me or some other member of the Government to give some publicity to this finding.

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– I direct a question to the Minister for Shipping and Transport. Has the Government yet decided to establish an overseas shipping line, a proposition which hit the headlines after the Parliament went into recess on 10th December? Is the Government asking private companies in Australia, such as the Broken Hill Pty. Co. Ltd., Howard Smith Ltd., the Adelaide Steamship Co. Ltd., and R. W. Miller (Holdings) Ltd., to operate jointly or singly a fleet of bulk cargo carriers for overseas service? What finally prompted the Government to start this examination of an overseas shipping line, which the Labour Opposition has been seeking for the past 17 years?

Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– On a number of occasions I have explained to honorable members opposite and to this House that the Australian Coastal Shipping Commission Act contains power for Australian National Line ships to trade overseas as and when the Commission sees fit. Legislative authority for Australian ships to trade overseas is already in existence. For quite a considerable time now the Government has been exploring ways and means of carrying cargoes overseas in Australian ships on a profitable commercial basis. Those ways and means are still being examined. As yet no final solution has been found.

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– My question is directed to the Minister representing the Minister for Supply. Is it a fact that Commonwealth vehicles have been directed not to use the new toll road between the Hawkesbury River and Mount White on the Pacific Highway? If this is so, could the Minister advise the House of the reasons for this decision? Alternatively, are negotiations at present under way with the New South Wales Government?

Minister for Defence · PATERSON, NEW SOUTH WALES · LP

– I am not precisely informed on the latest state of negotiations between the Commonwealth Government and the State Government in respect of this matter, but I believe that the Commonwealth is restricting its vehicles for the time being to preserve the status quo, pending discussions. I know that to this point of time Commonwealth vehicles, certainly cars, have been the guests of the State Government on the Sydney Harbour bridge, but in view of the extraordinary high cost of the expressway I should think that there has been a change of view there. However, in view of the fact that the State is constantly coming to the Commonwealth for additional funds and as its requests have always been met in the most generous fashion, I hope that the Premier of New South Wales will find it in his heart to agree that Commonwealth vehicles shall be the guests of the State Government on the expressway.

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– My question is addressed to the Minister for National

Development. I advert to the question which was directed to him yesterday by the honorable member for Mackellar relative to drilling for underground water in drought areas. Is the Minister familiar with the use by the United States Government geological survey of infra-red detector photographs taken from aircraft to locate fresh water hidden in natural underground reservoirs in arid regions by observing variations in heat radiations associated with such reservoirs? Will the Minister consider cooperating with the Governments of New South Wales and Queensland to finance the use of such established scientific principles in a systematic survey for undetected water in drought affected areas in those States?

Minister for National Development · FARRER, NEW SOUTH WALES · LP

– I am not personally aware of this particular method. I shall ask the Bureau of Mineral Resources to give me the details required by the honorable member and I shall pass them on to him. I point out that the search for underground water in Australia is conducted in the States by the State Governments, which have very competent bodies that are able to carry out this work, and in the Northern Territory by the Department of Territories. I understand that the New South Wales Government has just recently ordered one of the latest rigs available. I shall look at this other method and see whether we can get the States to carry out this work on those lines. I point out to honorable members that recently this Parliament made an allocation of some £500,000 to the States to enable them to carry out the search for underground water and also to carry out stream gauging. They should be able themselves, out of these funds, to carry out the kind of work mentioned by the honorable member.

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– I address a question to the Treasurer. Has he seen the White Paper that was issued by the British Government in January of this year entitled “Investment Incentives”? Does the Australian Government intend to follow in whole or in part some of the very liberal incentives about to be given by the British Government to the manufacturing industries in the United Kingdom?


– I have not read the White Paper published by the United King dom Government on the new type incentives. I have had a resume of the Paper presented to me. 1 have ascertained that the United Kingdom Government has withdrawn the investment allowances from the taxation system and has instead decided on a selective method of grants, particularly in depressed areas, to build up investment and the capital equipment of companies. I have also asked the Treasury to investigate the merits of the Australian system as contrasted with the new system introduced by the British Government. If I find it necessary to do so, I will have no hesitation in making a statement to the House on this subject.

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– My question is directed to the Prime Minister. Has a decision been reached regarding the request from Western Australia for further financial assistance for the Ord River project? If so, will the Prime Minister make the decision known within the next few days so that, if the request has been agreed to, full advantage can be taken of the coming dry season? Can the right honorable gentleman explain to the House why it has taken so long to analyse last season’s results if, as we were told previously, a very thorough examination was made of the economics of the whole project just prior to the Government’s refusal of financial assistance last year?


– There has been no Cabinet consideration of this matter during my term of office. Honorable members will have gathered from the statement delivered to the House last night that we have been very heavily occupied on a variety of matters which, in point of urgency, have been more pressing for us than the Ord River project. However, we certainly retain our interest in this project and the possibilities associated with it. As has been pointed out to the House on earlier occasions, we expected to receive some guidance as to our future course of action from the information gained by those who were engaged in cultivation on the project. My colleague, the Minister for National Development, has been closely in touch with this matter. I expect to have some discussion with the Premier of Western Australia on Friday of this week and I assume that we will hear at an appropriate and not distant point of time from the Minister for National Development as to the next step the Government should take in its consideration of this matter.

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– I direct my question to the Minister for National Development. In view of the serious limitation of water for irrigation in the Murray Valley, will the Minister, as a matter of urgency, call a meeting of the River Murray Commission to consider the construction of more dams to augment the supply of water available from the Hume reservoir and thus enable established irrigation areas to maintain full productivity?


– The River Murray Commission is keeping a very close watch on the availability of water in the River Murray. The Commission will meet in just over a fortnight’s time to discuss this question. The honorable member referred to increased storages. I point out that four governments are involved in this matter. The Commonwealth has only a quarter share and, if a decision is reached to build a new dam, it must affect every one of the four governments. But I would point out also that we are building at the present moment at Chowilla a dam which will hold five million acre feet when it is completed in 1969, In addition, the first water has just been turned into the Murray from the Snowy River. When this scheme is operating fully I think an additional 800,000 acre feet per annum will be made available for irrigators in the Murray Valley. This water previously flowed to the sea. So it does seem to me that, in the immediate future, the position of the River Murray should improve quite considerably.

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– I ask the Minister for National Development: In view of the tragic situation which has been brought about because of the disastrous drought affecting valuable country throughout Australia, will the Minister favorably consider now the establishment of a national conservation authority to deal with all the river systems of Australia? Will the Minister make such agreements with States and Territories as are necessary to implement this much needed proposal? Finally, will the Minister make a statement further indicating what action the Commonwealth Government intends to take with respect to the men who find that their services are no longer required on the Snowy Mountains project?


Mr. Speaker, I think the honorable member realises that the constitutional authority for developing and conserving water resources lies with the States and always has been with them. The Commonwealth has assisted in every possible way through the foundation of the Australian Water Resources Council and also considerable amounts of money have been made available for many projects throughout Australia. A great many of these projects have been financed by the Commonwealth Government. But unless and until we get any request from the States for action along the lines sought by the honorable member, this is a matter of policy and we would consider it only if asked to do so by a constitutional authority.

The honorable member mentioned the future of the Snowy Mountains Authority. Again, this is a matter of policy. All I can say is that, at the present moment, the Snowy Mountains Authority is very fully engaged. It is probably more fully engaged than at any time in its history. Many of the 1,500 or so men employed by the Authority will be engaged in work on the Snowy Mountains scheme for a long time to come. It is true that members of a very small branch - the Investigations and Research Branch in which there are about 40 people - are having to do, perhaps, a little less work on the Snowy scheme because this work is being reduced. But we have succeeded in finding most useful work for these men in many other projects. This Branch is at present designing a dam for the Liddell power station in northern New South Wales for the Electricity Commission of New South Wales. The Branch has done work in a number of other States in Australia and it is working also on roads in Bougainville, Thailand and in connection with the Mekong River. So, there is no shortage of work for these people at the present moment.

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Mr Kevin Cairns:

– Is the Minister for External Affairs aware that a club at the Sydney University is to set up a fund known as the “ Vietcong Fund “ to supply medical supplies and assistance for the Vietcong? Will the Minister investigate this proposal and do his utmost to see that the very questionable intentions of this body do not give encouragement to the enemy, especially as the club is reported to be the Sydney University A.L.P. Club?

Mr Reynolds:

– I rise to order, Mr. Speaker. That is quite incorrect. This is another organisation called the “ Labour Club “. The honorable member is misleading the House.


– Order! I call the Minister for External Affairs.

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

- Mr. Speaker, I have no personal knowledge of the facts alleged in the honorable member’s question but I will have some inquiries made. Any action that the Government takes will depend, of course, on the result of those inquiries.

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– I desire to ask the Minister for Territories whether, in view of the decision of Sir Richard Kirby that certain categories of Aboriginal workers are to be paid in December 1968 wages equal to those paid to European workers, the Commonwealth Government is taking any steps to ensure the adequate nutrition of the families of these Aboriginal workers, as I think it is established that the wages paid to European workers in the Northern Territory are such as to enable them to meet the cost of living for their families. By definition, therefore, anything less does not meet the cost of living. Does the Commonwealth Government intend to take steps to ensure the adequate nutrition of the dependants of workers in the categories to which I have referred?

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– This decision of the Commonwealth Conciliation and Arbitration Commission was given only a few days ago. I have not had an opportunity to consider the whole judgment, but I point out to the honorable member that at all times the wellbeing of the Aborigines is of great concern to the Department of Territories.

I believe that the delay which has been advised in the judgment of the Commission gives us a great opportunity, in a sense, to arrange for the transition of the Aboriginal employees of cattle stations, and to bring them up to the stage where we will have an organisation which will provide for their satisfactory assimilation into this system. Obviously a drastic change from their present standard to a much higher standard would cause considerable reaction.

Mr Beazley:

– I know that, but I am talking about their dependants.


– This has to be considered along with the whole question. We will have to make a study of this matter. It is obvious that all Aborigines will not be employed on cattle stations. We may have to prepare our settlements to accept greater numbers to meet the needs of those who will not be adequately cared for. I can assure the honorable member that this matter is of great concern to the Administration. I have nothing further to add.

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– My question is addressed to the Treasurer. To stimulate finance for housing, as requested during the last few days by the Australia and New Zealand Bank Ltd. and also the Australian Clay Products Association Ltd., will the Treasurer inform the House when it is considered the effect of the $24 million to be released by the savings banks of Australia will actually be felt? I refer to the reference in the Prime Minister’s very helpful statement last evening. I ask further: What are the other measures to help housing to which the Prime Minister made reference? When approximately will detailed announcements of these proposals be made?


– Already the Reserve Bank of Australia has asked the savings banks to make $24 million available during the balance of this financial year in order to get house building up to what we regard as a base or reasonable level. I cannot give precise figures, but it is hoped that within the first three months - that is the March quarter - there will be a substantial lift in both approvals and commencements. It is also thought that there will be a more significant lift during the last three months of this financial year. As to the second part of the honorable gentleman’s question, Treasury officers have been instructed to consider other ways and means of giving a boost to both approvals and commencements. I have not yet had a paper from the Treasury as to what we can do or, for example, as to whether it should be done through the Commonwealth and State Housing Agreement or through some other means. As soon as I have discussed the matter with my colleagues and the Prime Minister the House will immediately be informed.

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– I direct my question to the Prime Minister. Now that the Commonwealth Conciliation and Arbitration Commission has made its award concerning Aboriginal employees in the pastoral industry in the Northern Territory, can he say when the Government will grant equal pay to Aboriginal employees of its departments?


– I do not know what is involved technically in this matter.

Mr Bryant:

– Money.


– The honorable gentleman will discover that there are more things in life than money, and one of them is effective administration. Therefore, I shall see what information I can secure from the Public Service Board, if that is the appropriate body dealing with this matter -

Mr Whitlam:

– There are civilian employees of the Army and the Air Force also.


– I shall see what information can be secured from the appropriate authoritative source and shall give a considered reply to the honorable gentleman.

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– My question is addressed to the Prime Minister. Will speedy action be taken by the Government to implement the new policies relating to rural finance which he announced in the Parliament last night and which can be hailed as the beginning of a new era for primary industry in this country? When will banks have at their disposal the funds proposed to be made available under this new arrangement for long term lending? When will finance generally be available for the several categories to which he referred in his statement to the Parliament?

Mr Harold Holt:

– The Treasurer will answer the question.


– There have already been some negotiations with the Reserve Bank of Australia with a view to having the administrative arrangements completed so that the funds that were mentioned can be made available as soon as practicable. However, there first must be negotiations between the Prime Minister and myself and the Reserve Bank and the trading banks so that they can be acquainted with the Government’s wishes and so that we can get their full co-operation. We are already working on the details of the scheme which must, of course, be presented to Cabinet for final endorsement. We are treating this matter as one of great urgency and I hope that Cabinet and the Reserve Bank and the trading banks will be able to deal with it in the near future.

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– Has the attention of the Minister for Health been directed to the article in this morning’s “ Sydney Morning Herald” by Professor Campbell, Professor of Agricultural Economics at the University of Sydney, which criticises some aspects of the administration of the animal and plant quarantine service? Is the Minister aware that there is considerable dissatisfaction in regard to the difficulty of importing into Australia new strains of plants and animals for the improvement of our primary production? Has he any constructive suggestions to make as to the way in which these objections may be met without any breach of the security of quarantine or of the proper protection which quarantine gives us? Has he any plan to put before the House in relation to the valid and weighty points raised by Professor Campbell?


– I have seen the article but I do not agree with its conclusions. I note, for instance, that Professor Campbell is a Professor of Agricultural Economics, which no doubt qualifies him to speak expertly on some matters but his remarks do not necessarily carry great weight when he refers to matters which are more the province of, for example, a veterinarian or a plant breeder. The quarantine laws are based on the proposition that the admission into Australia of some of these exotic diseases - such as blue tongue, of which I spoke in answering the honorable member for Corangamite, and foot and mouth disease - could have an absolutely catastrophic effect on Australia’s livestock industries and therefore on the economic situation and prosperity of this country.

I am afraid that I cannot go along with Professor Campbell’s statement that we in this country should learn to live with something like foot and mouth disease. As far as I know, there is no country which has either blue tongue or foot and mouth disease which would not be glad to be in our situation of not having them. I point out that it has been reliably estimated that production from livestock industries in a country with foot and mouth disease goes down almost immediately by 25 per cent. If we apply that figure to Australia and add the facts mat our meat trade with the United States, which is worth between $100 million and $150 million a year, would be cut off immediately and that our whole trade in livestock and meat with most places in the world would be cut off, I believe there is justification for a very strict and severe policy.

Professor Campbell suggests in his article that we have rather a static, unthinking approach to this matter and that the people responsible for quarantine do not recognise the value to the livestock industries and plant industries, for instance, of introducing new strains and new methods into Australia. I say that they do. It is a question of the balance of advantage in any particular case. To make the point I mention that in relation to blue tongue the quarantine authorities, together with veterinarians, have worked out a method by which bovine semen can be imported into Australia from the United Kingdom and New Zealand, provided that various precautions are taken for a period of two years.

I make that point to show that there is not a static approach and that somebody who wants to improve the strains of our cattle in Australia can bring semen into the country. In relation to crossing Zebu cattle with northern cattle, a study is being undertaken in the hope of achieving the same purpose.

Mr Cope:

– We want the previous Minister back.


– I have a reputation to live up to in this portfolio, and I intend to live up to it. I think I have said enough to show that the quarantine policy is necessary and that it is not static.

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– My question, which is addressed to the Minister for Territories, follows his answer, or lack of answer, to the question asked by the honorable member for Fremantle. Is the Minister satisfied that the Aboriginal employees who will be required to wait three years for adequate wages, presumably while they are qualifying as efficient workers, are in fact not qualified as efficient workers now? Could the Welfare Branch assess the qualifications of Aborigines and ensure that men who are already highly efficient are not being deprived of just payment? Will the Minister ensure that Aboriginal children are not being penalised in respect of education opportunities because of the low wages of parents? Why should these Aborigines have to wait three years?


– At the hearing by the Arbitration Commission the Commonwealth made very clear its ideas on what it required. It is our policy, of course, to bring Aborigines into complete equality with white Australians. We realise that there are problems after a very long period of inequality, but this Government has done more than any other Government before to bring about equality. It is no easy matter to advance people from a static position to equality with Europeans. We made our position clear. The union put its case for the Aborigines and the pastoralists put their case. The Commission, in its wisdom, has given these findings. I think it gave very close attention to this matter, which is a very important one, and I believe that we should abide by what is, in a sense, the umpire’s decision.

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Prime Minister · Higgins · LP

– I move -

That to mark the retirement from this Parliament of our former colleague and member for Kooyong, the Right Honorable Sir Robert Gordon Menzies, K.I”., C.H., Q.C., after a distinguished public career encompassing six years in the Parliament of the State of Victoria, and over thirty-one years in membership of the House of Representatives, including sixteen consecutive years as Prime Minister, this House places on record its recognition of his long, able and devoted service to Australia, to the Commonwealth of Nations and to the institution of Parliament, and extends to bini and Dame Pattie Menzies its sincerest good wishes

Mr. Speaker, I am sure that members from all sections of the House, having learned of the retirement, after so long a period of service in this House, of Sir Robert Menzies, would welcome the opportunity which J now present to them of placing on record some expression of our appreciation of his services and of the admiration we feel for him and for his wonderful helpmate, Dame Pattie Menzies. As I indicated to the House yesterday, Sir, there will be an opportunity for the Parliament to meet Sir Robert and Dame Pattie personally at the dinner that we are tendering, as a Government, in their honour in this Parliament House on Thursday of next week. J felt - and my colleagues of the Government shared this feeling - that it would be appropriate if at the first available moment a resolution in the terms that I have put before the House were proposed, so as to provide an opportunity for some public expression of our sentiments in the Parliament itself and, in particular, in this House of Representatives, where the right honorable gentleman was such a distinguished member for so long a period of years.

It is not my intention, Sir, to give a detailed recital of the right honorable gentleman’s long record of achievement. There are in existence, of course, details of this kind in official and semi-official places. The “Parliamentary Handbook”, “Who’s Who “, the Press records of this country and the history of our times as written by various people all enshrine the achievements of the right honorable gentleman. To adopt a phrase which he himself sometimes employed, this is not an obituary occasion. The right honorable gentleman has retired from the service of this Parliament, but he is very much with us as a citizen of the Commonwealth - a very distinguished citizen. He will, I am sure, as long as breath abides in him, continue to seek ways in which he can be of some service to the nation he loves so well.

Sir, when one reflects on his life, one sees how remarkably long a period of our young Federation the public service of the right honorable gentleman has spanned. He came into this Parliament in 1934 but by that time he had already spent six years in the service of the Parliament of the State of Victoria. For more than half of the life of this Federation of ours he has been in a key political situation. He has been frequently at the centre of controversy. Indeed, it would be impossible to write a history of these times without having running through it, as a shining thread, the service and performance of Sir Robert Menzies. His retirement brings to an end what many people will regard - I number myself amongst them - as the most distinguished parliamentary career in the history of our nation - certainly a career which, in achievement of high office, has surpassed greatly that of any other Australian citizen. He had in the office of Prime Minister more than double the length of service of any other Prime Minister in the history of the nation. He served for 18 years as Prime Minister and for six years as Leader of the Opposition.

About such a man - one of those rare persons who become legends in their own lifetimes - a certain mythology develops. I have read with some amusement from time to time, as I am sure he has, the descriptions of him which have appeared in either journals or the Press. As with other public figures - I am sure the Leader of the Opposition (Mr. Calwell) will agree with me on this - there is a similarity about some of these comments, as if they had proceeded from an authoritative source and had been taken up by other commentators as being authentic and accurately descriptive. But some of the comments which regularly have appeared about my former leader have been so far from the actualities as known by those of us who were close to him in the Cabinet that I thought I should make some reference to one or two of them.

He has been presented so often as an authoritarian figure, who left his Cabinet very little opportunity to make a contribution to the matters coming before it. Well, it is not customary to discuss what goes on in a Cabinet. Indeed, as Executive Councillors we are bound by oath not to disclose the details of our discussions, but I think I would not violate that principle in any degree if I made some mention of the manner in which the right honorable gentleman, as the head of the Government, saw his duties in the Cabinet. As my colleagues who have sat in the Cabinet of the nation know, far from discouraging the presentation of independent viewpoints around the table, he not only encouraged it but expected it. A great value we found ourselves deriving from his presence as Prime Minister was that as argument and debate unfolded around the Cabinet table he was able, with that calm, judicial quality of mind which is peculiarly one of his outstanding attributes, to pull the threads of argument together. With that mastery of exposition which has not been surpassed by any other public figure 1 have encountered anywhere in the world in my experience of public life, he would lay so clearly before us the pros and cons of argument that our task of decision became very much easier. We did not always agree with his judgment, yet he would accept cheerfully and readily the decision of his Cabinet when a majority opinion was obvious.

So one turns to other aspects of this mythology. There is the story that goes abroad about an aloofness of manner and a coolness of temperament. Again those of us who were close to him, as I was honoured to be for the whole period of my public life, know what a warm, friendly, charming companion the right honorable gentleman is to all who come intimately into contact with him. I know that in all sections of this Parliament, and certainly in the ranks of the Opposition in great number, there are those who are proud to call him friend and who can reflect today on many an incident in which they were personally involved in his friendship. His geniality, his good humour, radiated to all of them.

I mention these things because here we speak as people who know him intimately and I would not have an unfavourable record linger any longer than public contradiction can prevent it from lingering.

While discussing the conception that there was some aloofness or coolness of temperament associated with the Prime Minister I take my mind back - at a time such as this memories crowd into the minds oi all of us - to a time when he and I, in company with Dame Pattie, were making an inspection of the developments taking place at Weipa. While we were at the mission station at Weipa the Prime Minister called some Aboriginal children over to him. He sat there with an Aboriginal child on each knee, singing to them the song, “The Galloping Major “. I thought that if only we could have had the incident suitably recorded there would be many people around Australia who would entertain a very different view of this great man.

The oratory of Sir Robert Menzies has been the subject of admiring comment not only in his own country but around the English speaking world. I heard the former Presidential candidate Tom Dewey say - and I know that he had made this statement previously - that in Robert Menzies Australia had the finest orator in the English speaking world. A tribute of this kind, coming from a man who had been closely in touch with the great political figures of his time, was indeed a tribute worth recording. Lester Pearson, the Prime Minister of Canada, has described him as whole-souled and of an outgoing temperament, and the admiration which Sir Winston Churchill felt for our former colleague is, I think, widely known.

The right honorable gentleman had, as Australia realised throughout his years of national leadership and in the years when he was in Opposition, a mastery of exposition of the fundamental principles of our public life. He would, I think, regard as one of his own great achievements the foundation of a great political party which stands as a memorial giving expression to the high principles of public office for which he stood - the principles of policy and the principles of conduct. He stands in my mind as a man who has always kept his spirits high in adversity. I do not think I have ever admired him as much as I did through those years immediately following the election of 1961. His spirits seemed to rise with the challenge of near defeat and the prospect that defeat might face us in the future unless we could convince the community of the wisdom and appropriateness of our policies. Although this came towards the end of his long parliamentary career, he revealed a vigour, a strength of purpose, and an application of energy which were matters foi admiration by all of us who came closely in touch with him at that time.

Politics, it is said, is the science of the possible, and here is a science surely in which he greatly excelled. Cleverness, intelligence, wisdom - these are three terms which are not always clearly understood in their relation one to the other. We see cleverness in this place; we see some intelligence in this place, and more rarely we find wisdom. Not often do we find these three qualities embodied in the one man, but here is a man who embodies them, all in ample measure.

His political life covered a period of far reaching change in Australia, lt ran right from the period of the depression in the 1930’s, through the experience of war and into the era of national growth and peaceful development in the post-war years. He was a member of the Government which introduced the first £100 million Budget in Australia and was in the Parliament when the Budget of last year, amounting to more than £2,600 million, was introduced. This gives an indication of the enormous increase of the scope and diversity of the political activities of the Parliament in which he served.

Sir, if he had to specify those achievements in which he had found the greatest satisfaction, I think he would number amongst them the foundation of the Liberal Party and the alliances in the forging of which he had so important a part to play and which have strengthened the security of this country immeasurably. Then there is the love he has for Canberra, the capital of the nation, to the development of which he devoted so much of his time and thought. He must today be deriving great satisfaction from what he sees of the growth in beauty of the capital which is now attracting an increasing body of his fellow Australians as they come to see the work which we have performed here. Sir Robert Menzies must also have found great satisfaction in his achievements in the field of education which, until bis own time of leadership, had been regarded as almost exclusively a matter for the States. I am not overlooking, here, the valuable work which Mr. Dedman did in this field during his period in a ministry. But Sir Robert Menzies led the development of the Commonwealth’s interest in education and, in particular, the development of our universities and the provision of opportunities for young Australians to participate in the life of a growing number of Australian universities. This, too, would stand as one of the achievements he would prize.

But we, sir, think in our more reflective moments, of the contribution he has made to the quality of service and the rectitude of public service in this country. Here is a man for whom the word “ upright “ is so singularly appropriate that we found it running through the whole history of his administration. At no point of time can I recall an instance in which a member of his own Administration or, for that matter, a member of the Public Service, has come under public challenge for some impropriety. He, himself, insisted on the highest standards of integrity and rectitude, and he stands as a model for any member of Parliament or of an Australian Cabinet for the strict adherence he maintained at all times to what he regarded as the standards and requirements of his office. I mentioned earlier the great contribution which had been made to this notable parliamentary life by Dame Pattie Menzies. She has the affectionate admiration of all of us and on leaving the service of the Parliament for the pursuits that lie ahead of them he and she carry our warmest good wishes.

There was not a time when Sir Robert Menzies sought distinction for himself. I am quite certain he would have been very happy to have gone from the Parliament as Robert Menzies; but two distinctions very understandably possessed an irresistible appeal for him. One was the offer held out to him by Her Majesty the Queen of the Knighthood of the Thistle, this ancient Scots distinction of such outstanding order, the highest that has gone to any member of this country from a ruling monarch. Thc.i there was the distinction which, by virtue of its possession formerly by his old colleague Sir Winston Churchill - the Wardenship of the Cinque Ports - came his way as the result of an imaginative and friendly gesture from the Prime Minister of the United Kingdom. This, too, he proudly received as a tribute not only to himself but also to the country he has been serving for all those years.

We hope that, in his retirement from the Parliament, and as he goes about his occasions which will in themselves bring great credit and distinction to Australia wherever he proceeds, he will carry the pleasure of these distinctions with him and we, in Australia, will be sharing in the happiness and the pride that he and Dame Pattie enjoy in them. Sir, a chapter of this notable life is concluded. There are many years ahead, we trust, for this great man, still in the vigour of mind and robustness of physique and temperament that saw him through so many arduous years of leadership in this Parliament. We shall, from all sections of the Parliament, be glad to join in the warmest good wishes to Sir Robert Menzies and Dame Pattie and it is with the greatest sincerity that we subscribe to the resolution I have put before the House.

Leader of the Opposition · Melbourne

– This, Mr. Speaker, is an occasion when even the ranks of Tuscany can scarce forbear to cheer. We are not speeding the departed guest. We have certainly no illusions about any mythology surrounding Sir Robert Menzies. To us he was a very real figure. He was tough. Hewas hard hitting. He was a brilliant debater. He was devoted to his cause and he fought for that cause. He fought against the Opposition of today as he fought, when Leader of the Opposition, against the Government of the day, for the things he believed in and we respect him for that fact. We were not so blind to reality on all occasions that we did not know that sometimes his argument was a little better than ours. But to use the vernacular, we mixed it with him and he mixed it with us. He was a doughty champion for his cause and, if we did not agree with all he said or did, we respected the way in which he put his case and the vigour with which he advanced his cause. When he retired quite recently I expressed the view that practically no member of the Opposition ever agreed with Sir Robert

Menzies on any major issue of importance in the long and distinguished life be spent in this Parliament. I never agreed with him once on any issue of foreign affairs and rarely on any issue of domestic affairs, but that did not diminish my admiration for his qualities or my esteem for him personally.

He is the third Prime Minister of Australia to surrender the Prime Ministership. It is so bard a post to attain that nobody seems disposed to give it up too quickly. It might be said by some that he dallied longer than he should have. Perhaps in the interests of his own health he might have retired earlier. The three instances which I can call to mind of Prime Ministers voluntarily surrendering the Prime Ministership are those of Edmund Barton, who resigned to become a member of the first High Court of Australia; Andrew Fisher, who resigned to become Australian High Commissioner in London; and now Sir Robert Menzies, who has resigned to retire. There was only one Prime Minister in all our history who lost his seat while in office, and that was Stanley Melbourne Bruce. The rest retained their seats though their Governments were defeated, or died in office. In all, there have been only 17 to date.

The retirement of Sir Robert Menzies, because of his long career, has directed the attention of the Parliament and the people to a practice that could well be followed in future - the practice of the Parliament’s making some recognition for long and distinguished service. I am sorry that this idea was not adopted earlier, because I would have liked to see tributes paid to the Right Honorable Dr. H. V. Evatt for his services to this Parliament. When a man leaves the parliamentary sphere, whether to become Chief Justice of the Supreme Court of a State, to fill some other office or merely to retire, he is entitled, I believe, to the ungrudging respect and admiration of those who, while having been opposed to him during his career in politics, would like to savour in the life of politics some recognition of a man’s worth.

The motion contains some very fine sentiments. It seeks to place on record our recognition of the long, able and devoted service given to Australia by Sir Robert Menzies and also his services to the Commonwealth of Nations and to the institution of Parliament. 1 have always thought of Sir Robert Menzies most not for what he tried to do in foreign affairs - whether he failed or succeeded - and not for what he tried to do in domestic affairs, but for his record of service to the parliamentary institution. He sensed at all times that this institution must be guarded, that it must not be injured in the opinions of the people and that its dignity must be maintained. In that respect, he walked in the footsteps of the great parliamentarians in the tradition that we have inherited.

This motion also seeks to place on record a natural, normal, homely and human thing that ought to be said to all people everywhere who lay down their office, lt states that we wish Sir Robert and the good woman who stood beside him in adversity and success a long and happy life in retirement. What more could we wish them? What more could we want to wish them? We hope to hear from them occasionally. We know that they have merited their retirement and we trust that they will long be spared to enjoy it with their children and their growing family of grandchildren. I hope, too, that the former Prime Minister will find other opportunities to nurse children on his knee and sing to them the song “The Galloping Major”. I hope that he will have the opportunity to tell the people all that he wants to tell them at this particular time. As I said when Sir Robert Menzies retired, I hope that he will perform one last, enduring service to the political life of this nation by publishing his memoirs.

Minister for Trade and Industry · Murray · CP

Mr. Speaker, I speak not only for myself but for all the members of my party - the Australian Country Party - in warmly supporting the motion proposed by the Prime Minister (Mr. Harold Holt). The day on which Sir Robert Menzies resigned from the office of Prime Minister of Australia will be recorded as a day of real significance in Australian history. His decision to retire was his own. It is not the privilege of every Prime Minister to go from that great office on his own decision. It is the fate of most to go involuntarily on the decision of others. But it is a matter for record that Sir Robert Menzies, having served this country as Prime Minister for 18 years - for more than 16 years continuously in his last period in office - himself voluntarily decided to call it a day. Surely he was entitled to do that. I think there would be few if any who would deny that his leadership of his party and of the coalition Governments that he led was really outstanding. Those of us who have served with him feel fortunate to have shared the lustre that attached to the period of office of himself and his Governments. We feel privileged to have enjoyed his friendship and to have absorbed the wisdom and experience of this very great man.

In personal terms, the period of leadership of Sir Robert Menzies was really phenomenal. He was completely preeminent on the political stage at home and he achieved, as few Australians have done or, maybe, will do, a stature of eminence as an international statesman - an elder statesman who was so regarded throughout the world, for he was widely regarded as an elder statesman not only in his own country and within the Commonwealth of Nations but beyond the bounds of that Commonwealth. This is due to many things. Not the least of them for a parliamentarian is the fact that his qualities of oratory are superb. Indeed, they are absolutely legendary.

It is undeniable, as I see it, that Sir Robert stood at the helm of the ship of state through a period of unparalleled growth and development. When one stands back and looks at what happened to Australia during the period of office of the Menzies Governments, this feature of unparalleled growth and development is the great factor. The period of the Menzies Governments will be remembered as a time of stable government. It undoubtedly has been a period of widespread prosperity for the nation and for all sectors of the people of the nation. These last 16 years will be recalled as those in which Australia really emerged in the eyes of the world as a proud, self confident nation - a respected nation in the community of nations. Under the Prime Ministership of Sir Robert Menzies, Australia was developed as a nation, balancing its devotion to the production of material wealth against its desire for educational and cultural advancement. One of the greatest things is that as it developed and grew richer it provided equal opportunity for every citizen. From our wealth as a nation, we contribute phenomenal sums to our own less fortunate people, be they less fortunate through age or through illness. Today, Australia speaks in the councils of the world on equal terms with the great powers, for Australia is providing leadership in contributing, from the resources that we have and the wealth that we produce, aid for the less fortunate people in foreign lands.

We now go along as a very homogeneous nation enjoying the leadership of unique, single purpose directed towards all those things which, fairly assessed, are good. All of this, be it remembered, has been achieved or has grown greatly under the Prime Ministership of Sir Robert Menzies. In his time as Prime Minister - this is a quite remarkable thing for me to be able to say - the population of the nation has grown by almost 50 per cent. Industrial development has taken place on a magnitude of scale completely undreamt of 17 years ago. Had one then predicted that 17 years hence Australia would be a great industrial country and the twelfth greatest international trading nation, one would, I think, probably have provoked derision. Today it is a fact. It is not a fact occurring by happy accident but has been achieved by planning, management and leadership.

In this context, I cannot refrain from recalling that during that period, Australia has achieved an efficiency in rural industry unmatched anywhere in the world in terms of production per unit of labour. These developments under Sir Robert’s leadership surely entitle him to take some relief from the burdens those labours have imposed. His retirement from office after such developments is indeed an occasion of real moment. It is also an occasion for those who have served with him in the Parliament, and indeed for the whole nation which has enjoyed the benefits of his great leadership, to express to him their appreciation of his many qualities. For myself and my colleagues in the Australian Country Party I say to him, “Thank you, Sir Robert Menzies “, and to Dame Pattie we extend our warm and affectionate good wishes.

Question resolved in the affirmative.

page 64


Ministerial Statement

Treasurer · Lowe · LP

– by leave - I am sure that all honorable members will be interested to learn how the work associated with the distribution of the surplus in the Commonwealth Superannuation Fund has progressed during the parliamentary recess. As my predecessor indicated when the enabling legislation was before the House late last year, the magnitude and complexity of this task is quite without precedent. It involves a complete reconstruction of contributors’ records, to take account of the reductions in rates of fortnightly contribution; a reassessment of the state of -the fund at 30th June 1962, having regard to those new contribution rates and the new assumptions about the Fund’s earnings in the future; and payments to contributors, to pensioners and to former contributors to the Provident Account.

The first payment, which honorable members may recall was foreshadowed in the second reading speech on the Superannuation Bill 1965, was an interim payment out of the surplus amounting to approximately $2 million to some 16,000 pensioners and I am happy to report that the target of commencing those payments before Christmas was realised. In fact, all the cheques were despatched within days of the Bill’s receiving royal assent and in time to reach pensioners about a week before Christmas.

The next step has been the recalculation of the accounts of all those who have contributed to the Provident Account, which forms part of the Superannuation Fund, since 1st July 1957, to give each contributor the benefit of the higher interest earnings actually achieved since that date. Benefits from the Provident Account are payable on termination of service and there are some 7,000 who have ceased to be contributors since 1st July 1957. They are being notified of the amount to which they are entitled and, because of the changes in address that take place over the years, they have been asked to confirm their current address on the claim form which is being sent to them. Notifications for contributors who ceased duty prior to 1st July 1965 have already been issued. The notifications for those who have retired since that date are being issued progressively over the next few weeks. Cheques for the amounts involved, ranging up to $1,040 and totalling some $806,000 will be posted on return of the completed claim forms to the Superannuation Board. Payment will be made to the widow or other survivor of those who have died. To enable prompt action to be taken as those who are now contributing to the Provident Account retire in the future, the additional amounts of interest since 1st July 1957 are also being credited at the same time to their accounts. In total, the sum involved is $1,034,000.

At the same time, but as a separate computer process, work has been proceeding on the adjustments that flow from the reductions in rates of contribution to the Superannuation Fund which have effect from 1st July 1962. This necessitates repricing the fortnightly contribution payable for each individual unit of pension taken up by the 120,000 current contributors during the period since the Fund was established - more than 40 years ago -and involves many millions of separate calculations. At the same time the new fortnightly contribution is being converted to decimal currency.

These new fortnightly rates of contribution for units held at 30th June 1965 will be introduced in the near future. The Superannuation Board has already circularised departments and statutory authorities to enable them to prepare for this task. Refunds of excess contributions will be calculated to 17th March and the new fortnightly rates of contribution will apply from 31st March 1966 onwards. The total to be refunded will amount to approximately $12,000,000 with individual payments averaging about $60. The arrangements for deductions from salaries at the new rates and for the individual refunds of excess contributions collected since 1st July 1962, will be made through normal departmental pay procedures.

The next step under the terms of the Superannuation Act 1965 is the recalculation of the surplus at 30th June 1962. The necessary statistical data for the actuarial calculations is being produced from the computer in association with these other calculations and the actuarial work of revaluing the fund and reassessing the surplus is expected to take about three months. The distribution to contributors of their share of the surplus assets at 30th

June 1962 and the final distribution of surplus to pensioners will then be made.

page 65


Ministerial Statement

Minister for National Development · Farrer · LP

– by leave - On 24th February I announced the Government’s decision ito offer the States about $20 million in long-term loans over the next five years to help lift the planting rate in Government softwood plantations. Since forestry is a subject which will be new to many members I am making the following statement for the members’ information, to give them the background to the decision and the terms of the Commonwealth offer.

Forestry is a State matter and will always remain so, but now in the second half of this century we are realising that in forestry there is a national interest just as there is a State interest. Perhaps the greatest national interest from the point of view of the Federal Government is the effect that the timber industry has on our balance of payments. We have seen in the past year a tremendous demand for funds for the purchase of timber from overseas. In fact, I do not think there are many people in Australia who realise that we are spending over $200 million per annum on the importation of timber and forest products into Australia and this will rise substantially in the future.

Before I talk about the future, let me give the House the background of the present position in Australia. The area of productive native forests in use in Australia is approximately 30 million acres. Most of this area is hardwood forests, mainly eucalypts. There is less than half a million acres of native softwood forests. In addition there are about 700,000 acres of softwood plantations of which about 500,000 acres are governmentally owned and 200,000 acres are privately owned. About two thirds of the plantation area is pinus radiata.

The demand in Australia for timber and forest products is running at the equivalent of something like 500 million cubic feet of wood per annum of which about two thirds is produced locally and one third imported. This represents a factory door value approaching $600 million of which imports represent over $200 million. It is estimated that consumption will rise to 670 million cubic feet by 1975 and to over 1,100 million cubic feet by the year 2000. If forestry programmes are continued only at the current rate the annual yield of logs in Australia in 1975 would be less than 500 million cubic feet and would be of the order of 700 million cubic feet by the year 2000. On this basis it is estimated that the cost of imports required to maintain the supply of timber and other forest products, based on present costs, would be $280 million annually by 1975 and of the order of $600 million annually by the year 2000, the actual cost depending upon the rate of growth of population. However, it is most unlikely that future imports will be obtained at present day costs, lt is also by no means certain that overseas supplies will be available to fill our future requirements. Recent studies forecast increasing deficiencies between supply and demand for timber in the Asia-Pacific region and in Europe. A similar position will probably apply in Africa and it is likely that the United States of America will require virtually the whole of the exportable surplus from Canada by the end of this century.

New Zealand exports considerable quantities of timber and is the -main supplier of plantation softwoods to Australia. The Government recently concluded a free trade agreement with New Zealand which guarantees ultimate duty free trade between both countries for a wide range of products, including forest products. At present we obtain approximately 10 per cent, of our requirements in New Zealand and while we can look to increased supplies from New Zealand the estimated export availability from there in the year 2000 will still represent only 10 per cent, of the expected forest products market in Australia. Thus we cannot rely on ready availability of overseas supplies in the future and it is almost certain that the cost of imported supplies will increase substantially. I think all honorable members will agree that the Government would be remiss if it continued to count on overseas supplies to make up a deficiency as large as that at present forecast. This is the position facing Australia and it was basically because of this that the Commonwealth Government set up the Australian Forestry Council in consultation with the States. The Forestry Council is a national advisory body on forestry matters and a particular function is to look at ways of developing Australian forests to meet our requirements of timber and forest products both for our own use and for export. 1 had the great honour of chairing the first meeting in August 1964 which occurred shortly after I became Minister for National Development.

The Australian Forestry Council comprises the six State Ministers for Forestry, the Minister for Territories and the Minister for National Development. Under it is a standing committee consisting of the Director-General of the Forestry and Timber Bureau, the head of each of the State forestry services, and the chief of the Division of Forest Products, Commonwealth Scientific and Industrial Research Organization. The first task which the Council undertook was an urgent examination of Australia’s present and future requirements and the potential for meeting these requirements from our own resources. As a result of this examination the Council reached the view that although the long term forecast was for a substantial deficiency in timber and other forest products this could be made good economically from timber produced in Australia. To meet the deficiency the Council estimated that Australia would require a softwood resource of about three million acres of plantations by the year 2000. It was estimated that such a resource together with improved production from the native forests would be likely to make Australia reasonably self sufficient as to total requirements for wood for the Australian population expected at that time.

Consequently, the first recommendation of the Forestry Council was that the rate of establishment of softwood plantations should be stepped up from the present 40,000 acres per annum to 75.001) acres per annum for the next 35 years. The Council estimated that if this rate of planting were achieved the lag in production would be substantially overcome by the turn of the century. This is not to mean that we will no longer have to import. It is very difficult to estimate so far ahead. There are so many factors which can influence consumption and production. There will be deficiencies in particular types of timber and we will always need to import special purpose timbers which cannot be grown in Australia. However, with a softwood resource of three million acres of plantation, production would more nearly balance consumption and we would not face an import bill nearly as large as $600 million.

If we are to avoid dependence on substantial imports in the future it will also be necessary to concentrate our attention on increased production of timber and forest products from our native forests. This can be achieved by better management of the natural hardwood resources that we have and this is another avenue to which the Forestry Council has been turning its attention. However, our. most urgent need is to increase substantially our plantings of softwood timbers. There has been spectacular success achieved in Australia with the planting of pine species from overseas. This is particularly so in the case of pinus radiata plantations which have already been established in Australia. Average growth rates several times as great as those obtained in the traditional softwood exporting countries in the northern hemisphere have been achieved. In addition to the large balance of payments savings which would result from an increased planting programme there would also be substantial benefits in the contribution the programme would make to decentralisation. Forestry and forest industries by their very nature attract population to rural areas, and the establishment of new or larger saw mills and processing factories in country areas will provide increased employment opportunities and consequent benefits to business in country towns. Australia is fortunate in having more than sufficient suitable land to carry out the proposed programme. Following its investigations the Forestry Council estimated that an area of more than four million acres could be made available for planting softwoods without encroaching on the better areas of the hardwood forests.

Having reached a view that a planting programme of 75,000 acres per annum was necessary, the Australian Forestry Council turned its attention to the financing of such a programme. The Council estimated that private forest owners will contribute on the average at least 10,000 acres a year to the programme. This left 65,000 acres a year to be planted by the government forest services. At present the governments are planting at the rate of about 30,000 acres a year so ‘that the programme envisages an increase by them of about 35,000 acres a year or more than doubling their present rate of plantings.

The State Ministers on the Council indicated that their respective Governments were already allocating a substantial proportion of State funds to forestry. While supporting the programme as such they pointed out that they would have great difficulty in allocating additional funds to accelerate their planting programme and requested me as Chairman to approach the Commonwealth Government for additional funds for the expanded programme. As I have already announced, the Government has responded most generously to this request by the States. Forestry is a revenue earning activity, and our investigations have revealed that production of softwood in plantations can be a profitable operation in the long term. The emphasis is on the long term, since even with the fast growth rates achieved with pinus radiata in Australia it is 35 years before any substantial income is received and it can be over 40 years before all the trees are finally felled. The Government has consistently taken the view that Commonwealth assistance to revenue earning projects should be in the form of loans. However, in recognition of the long term nature of forestry and the long period between planting and income earning production, the Commonwealth has offered long term loans free of interest’ and repayment of principal in the first ten years.

The initial programme proposed by the States covers the next five years and it is estimated that the cost of the additional plantings over that five years will be about $20 million. The planting programme, of course, covers 35 years so that towards the end of the five years we need to have another look at the programme and consider the question of further support for future plantings. With the assistance of these loans T would expect the planting rate in the Government owned plantations to accelerate rapidly and we should be approaching the target rate of 65,000 acres of plantings a year by the end of the initial five year period. I feel that this is a most important step in the development of Australia’s natural resources. Many of us will probably not be here to see the effects of the plantings, but future generations will, I am sure, look back and thank us for the foresight which led to the acceptance of the Forestry Council programme.

I present the following paper -

Softwood Planting in Australia - Ministerial Statement, 9th March 1966- and move -

That the House take note of the paper.

Debate (on motion by Mr. Luchetti) adjourned.

page 68


Ministerial Statement

Minister for Immigration · Corio · LP

– by leave - As the Prime Minister (Mr. Harold Holt) has already informed the House, the Government has reviewed the operation of immigration policy affecting non-European people, taking into account the experience and changing circumstances of recent years. I wish to give the House details of the decisions and to discuss their significance. When in 1956 the Government reviewed the policy, which had been followed since Federation, of not admitting persons of non-European origin for permanent residence, it introduced several significant reforms. Those people already settled here became eligible to be naturalised; the admission for permanent residence of immediate relatives of Australian citizens was authorised; and it was made possible for highly qualified people to come here for indefinite stay, though under temporary permits. Then in 1957 it was decided that non-Europeans who had been admitted on temporary permits could be naturalised after 15 years’ stay. In 1964, the rules governing the entry of persons of mixed descent were eased.

The Government has now decided upon two further measures which the House will recognise as important but as not departing from the fundamental principles of our immigration policy. First, it has been decided that non-European people who are already here under temporary permits but are likely to be here indefinitely, should not have to wait 15 years before applying for resident status and for Australian citizenship, but should be able to apply after five years’ residence, so ending a situation often criticised for its effect on individuals and families. This does not of course mean that everyone admitted to Australia for limited temporary residence is entitled to stay here indefinitely. Every country makes separate provision for temporary entry as distinct from the entry of settlers. For example, I must emphasise it would be quite wrong and most unfair to the development of countries whence they came to offer to the 12,000 Asian students in Australia the right to settle here after five years’ study. The objective of admitting these young people, to use educational facilities which are both expensive to the Australian Government and in great demand, is to help the students’ homelands by increasing their numbers of qualified people.

The Government’s decision, therefore, does not relate to people expected to leave Australia after limited temporary residence but does apply to those who have been here for long periods or who are likely to be allowed to stay indefinitely. The two main examples of people affected by the elimination of the fifteen-year rule are the highly qualified Asians admitted in recent years for “ indefinite stay “ but on temporary entry permits; and Chinese admitted before 1956 who, if they left Australia, could go back only to Communist China. By a decision of the Government in 1956, they were allowed to stay on but, lacking the status of settlers and citizens, have been unable to bring their wives and children here. I am very glad to say that one important benefit of the Government’s decision to abolish the so-called fifteenyear rule will be to enable many families who have been separated for some years to be reunited much sooner than would have been possible under the previous rule.

The second decision is that applications for entry by well qualified people wishing to settle in Australia will be considered on the basis of their suitability as settlers, their ability to integrate readily, and their possession of qualifications which are in fact positively useful to Australia. They will be able after five years’ stay on temporary permits to apply for resident status and citizenship. They will be able to bring their immediate families with them on first arrival.

No annual quota is contemplated. The number of people entering - though limited relative to our total population - will be somewhat greater than previously, but will be controlled by the careful assessment of the individual’s qualifications, and the basic aim of preserving a homogeneous population will be maintained. The changes are of course not intended to meet general labour shortages or to permit the large scale admission of workers from Asia; but the widening of eligibility will help to fill some of Australia’s special needs.

Examples of those who, under the new decision, will be admitted in numbers greater than previously are persons with specialised technical skills for appointments for which local residents are not available; persons of high attainment in the arts and sciences, or of prominent achievement in other ways; persons nominated by responsible authorities or institutions for specific important professional appointments, which otherwise would remain unfilled; executives, technicians, and other specialists who have spent substantial periods in Australia - for example, with the branches here of large Asian companies - and who have qualifications or experience in positive demand here; businessmen who in their own countries have been engaged in substantial international trading and would be able to carry on such trade from Australia; persons who have been of particular and lasting help to Australia’s interest abroad in trade, or in other ways; and persons who by former residence in Australia or by association with us have demonstrated an interest in or identification with Australia that should make their future residence here feasible.

Applications by such persons and others in comparable circumstances will be eligible for consideration on an individual basis. Those admitted will be able to apply for resident status and citizenship after five years’ stay. Where the Governments of other countries may be concerned over loss of qualified people, there will be appropriate consultation, as Australia must not contradict the aims of the Colombo Plan and other efforts to help such countries’ development. With the same objective, the programme of allowing young people to come from other countries as students will continue. Greater effort is to be made to ensure that courses undertaken will be of recognised value to the students’ homelands when they return there. In view of the need to ensure most effective use of scarce places at our universities and other institutions, the intending student’s ability to undertake his course successfully will be examined carefully at time of application for entry, and his progress will be assessed annually.

Honorable members on both sides of the House have frequently and generously stressed that humanity and discretion have marked the handling of individual cases in the immigration field generally. This, I can assure the House, will be continued, always with Australia’s interests in view, always in the hope of showing sympathy and consideration to men and women in difficulty, and always avoiding unnecessary disclosure of private confidences or misfortunes. Representations from any responsible source will be carefully considered.

Every country has not only a right to its own immigration policy but a heavy duty and a vital responsibility to administer it in the interests of its own people. Our neighbours and friends all have immigration policies that are based on their own interests and are intended to benefit their own people and future. All include elements of control of entry and residence, some with strict numerical and national limitations. No government is to be reproached for aspects of its immigration system developed for its needs and derived from its social history, political traditions and constitutional arrangements. No responsible government condones illegality or deceit, which are poor gateways indeed for the entry of new settlers.

Our programmes and policies have likewise emerged from our history, our respect for law and order and our response to our special needs. Our primary aim in immigration is a generally integrated and predominantly homogeneous population. A positive element in the latest changes is that which will admit selected non-Europeans capable of becoming Australians and joining in our national development. Both the policy and the rules and procedures by which it is effected cannot remain static and must be constantly reviewed. Though redefined from time to time, they must be administered in accordance with the law, on principals decided by the Government, with justice to individuals and for the future welfare of the Australian people as a whole. These will continue to be the main elements in Australia’s immigration policy.

I present the following paper -

Immigration Policy affecting Non-Europeans - Ministerial Statement, 9th March 1966 - and move -

That the House take note of the paper.

Debate (on motion by Mr. Daly) adjourned.

page 70


Reference to Public Works Committee

Minister for Shipping and Transport · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1965, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: - Proposed new laboratories for the Commonwealth Scientific and Industrial Research Organisation at Indooroopilly, Queensland.

The proposal involves the provision of accommodation, facilities and services required for research and routine examinations in the fields of animal health and entomology. It is proposed to erect two separate three storey laboratory wings connected by covered ways to a central two storey administrative block to serve both laboratories.

The buildings will be in reinforced concrete and load bearing brick construction with appropriate finishes and associated engineering services. The estimated cost is Si, 150,000. 1 table the plan of the proposed works.

Question resolved in the affirmative.

page 70


Bill presented by Mr. Freeth, and read a first time.

Second Reading

Minister for Shipping and Transport · Forrest · LP

– 1 move - That the Bill be now read a second time.

The purpose of this Bill is to amend the Australian Coastal Shipping Commission Act 1956-64 in order to meet the needs of the Commission for greater borrowing powers and to give it greater flexibility within its capital structure.

The Commission is faced with substantial capital expenditure over the next few years for the construction of new vessels which it has on order or intends to build and for the erection pf associated shore facilities. The Commission now has on order one 47,500 dead weight tons bulk carrier which is expected to be commissioned within the next few months and it is committed to the construction of a second 47,500 dead weight tons bulk carrier. It has ordered two roll-on roll-off cargo vessels for the MelbourneBrisbane and the Melbourne-Brisbane-North Queensland trades and has announced it has under consideration a proposal to construct a second Bass Strait passenger vessel. There is also a requirement for a new specialised vessel for the Darwin trade.

For some time the Commission has been concerned that it is disadvantageously placed in tendering for long term contracts, particularly for the carriage of bulk cargoes because of the restrictions the existing Act places on its capital structure. Other Australian shipowners can, through the availability of long term finance at reasonable rates of interest, set up a relationship of ordinary share capital to loan borrowings which permits them to achieve a higher earning rate on capital from a lower freight rate than would be the case if their capital were wholly in the form of share or equity capital.

Under the Act as it now stands the Commission has no such freedom. Its capital is determined by section 28 of the Australian Coastal Shipping Commission Act. Its borrowing powers derive from section 30 of the Act under which the Commission may, with the approval of the Treasurer, borrow such amounts as the Minister certifies are necessary for meeting its obligations or discharging its functions. The Commission’s borrowing powers are limited to $10 million - £5 million - under sub-section 6 of section 30, and moneys borrowed by the Commission do not form part of its capital.

The accepted commercial practice in these matters is to achieve an appropriate balance between equity capital, overdraft and some form of loan finance. The Commission is required to pay a reasonable return on its capital and is expected to play a competitive role in its operations. In these circumstances it should have the same freedom to vary the ratio between loan borrowings and equity capital as its competitors, and the purpose of this Bill is to place it in this position.

Whilst the Commission now has access to basically the same methods of financing as are available to private shipowners, its borrowing powers are limited and, if it is to carry through its proposed capital works programme, it must have access to additional funds. This is necessary, particularly if the Commission is to maintain a competitive position in relation to private shipowners, including overseas interests which may wish to enter into Australian coastal trading.

The proposed deletion of sub-section 6 of section 30 will remove altogether the provision that amounts borrowed by the Commission and not repaid shall not at any time exceed $10 million. It will give the Commission greater borrowing powers and the required flexibility in its capital structure. The approval of the Minister and the Treasurer will still be necessary before any borrowings are made and this will provide a means of limiting or controlling the borrowings of the Commisison in the light of its approved requirements for ships and terminal facilities if this proves to be necessary. The House will appreciate, of course, that Parliament still exercises control over the funds available to the Commission through the normal budgetary processes, and through the fact that, by law, the Commission presents accounts and a report to Parliament annually.

The opportunity has also been taken to make provision for the conversion of references to money in the Act to decimal currency. The proposed amendments will result in the more efficient operation of the Commission and I commend them to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 71


Bill - by leave - presented by Mr. Anthony, and read a first time.

Second Reading

Minister for the Interior · Richmond · CP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to provide that as from the date of Che first sitting of the next Parliament the member representing the Australian Capital Territory in the House of Representatives shall have the same voting rights as other members of this House. It will be recalled that the Australian Capital Territory has been represented in the House of Representatives since the beginning of the Nineteenth Parliament although, as members are well aware, the voting powers of the member for the Australian Capital Territory have been strictly limited. Broadly speaking, he is entitled to vote only on a proposed law which relates solely to the Territory, on a motion for the disallowance of an ordinance of the Territory, on an amendment to such a motion, on a motion for the disallowance of a regulation under an ordinance or on a motion for the disallowance of a modification or variation of the plan of layout of the city of Canberra. Over the yearsthere have been many requests that the member for the Australian Capital Territory be given full voting rights, but the Government has held firmly to the principle that this could be considered only when the enrolment for the Territory approached the average enrolment of the electoral divisions.

When the first member was elected to represent the Australian Capital Territory, the number of electors for the Territory was approximately 11,800 and most people would agree that there could be no justification for the granting of full voting rights to the member until the number of electors for the Territory approximated the average enrolment for the States. Although that stage has not yet been reached, the number of electors enrolled for the Australian Capital Territory was 43,401 at the end of January last. At that time, the average enrolment for the electoral divisions, excluding the Australian Capital Territory and the Northern Territory, was 49,236. It is expected that the Australian Capital Territory enrolment will reach 47,000 by the end of this year. The population of the Australian Capital Territory at 30th June last was 88,571 and will be approximately 100,000 by 31st December next. In the normal course, several months will elapse before the next House of Representatives election but the Government believes that this legislation should be put on the statute book without delay so that the people of the Australian Capital Territory, being aware of the Government’s intentions, will appreciate fully the important responsibility vested in them in choosing their future parliamentary representative.

I know that there are many members in Parliament who feci that if the member for the Australian Capital Territory is given full voting rights, then a similar right should be given to the member for the Northern Territory. However. I would again emphasise that we are only giving this voting right to the member for the Australian Capital Territory because it conforms with the principle that we have always adopted. That is that the right should be given only when the enrolment for a territory approaches the electoral quota. The population of the Northern Territory as at 30th June 1965 was 34,803 plus about 20,000 Aborigines, while the number of electors enrolled for the Territory was 17,565 as at the end of January this year. I should, however, like to inform the House that it is the intention of the Government to re-examine the question of the voting rights of the member for the Northern Territory when the size of the Parliament has been determined after the proposed referendum has been held to break the nexus between the House of Representatives and the Senate. This referendum is intended early in the life of the next Parliament. I feel that the Bill will receive the ready support of all parties and I commend it to honorable members.

Debate (on motion by Mr. J. R. Fraser) adjourned.

page 72


Second Reading

Debate resumed from 8th March (vide page 38), on motion by Mr. McMahon -

That the Bill be now read a second time.

Melbourne Ports

.- 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 the Australian National Airlines Commission and Qantas Empire Airways Limited should be met from revenue and not from a loan raised overseas.”

It will be remembered that on two fairly recent occasions we considered somewhat similar measures to this. One was introduced by the former Treasurer (Mr. Harold Holt) on 18th March 1964 and the other measure was introduced on 9th November 1964. Each of them enabled borrowing overseas on behalf of Qantas Empire Airways Limited. In those two instances we moved an amendment in similar terms to the one that is now before the House. We did so because we regarded the sums as relatively so trivial that it was virtually bad book-keeping and bad economics that when we had money in our reserves we should resort to borrowing and to placing ourselves under fairly restrictive conditions with overseas banking concerns.

Honorable members will find the names of the concerns involved in this particular instance contained in the schedule to the Bill. They are the Morgan Guaranty Trust Company of New York, the Chase Manhattan Bank, the Manufacturers Hanover Trust Company, the Chemical Bank New York Trust Company, the Irving Trust Company, the United California Bank, the Northern Trust Company, the Bank of America National Trust and Savings Association and the Continental Illinois National Bank and Trust Company of Chicago. All of these concerns are to take a part of the loan that this Bill contemplates. The sum could be as high as SUS54 million - something under $A50 million.

The terms under which this loan is to be borrowed provide for payment at an interest rate in excess of 5 per cent. In fact, the Treasurer (Mr. McMahon) has indicated that the average interest cost over the full period of the borrowing is slightly less than 5i per cent. That means that with a period of repayment of seven or eight years probably nearly one-half as much again will have to be paid to extinguish the loan. In other words, a sum of from $25 million to $30 million will have to be paid by way of interest as well as the principal sum of $US54 million.

Quite an interesting document entitled “ Supplement to the Treasury Information Bulletin “ was issued by the Commonwealth Treasury during the recess. It dealt with the Australian balance of payments. It indicated that Australia’s holdings of gold and foreign exchange at 31st December 1965 were $ A 1,278 million and that in addition Australia had what are known as second line reserves which aggregated S589 million. The relevant reference appears at page 43 of the document. At 30th June 1961 Australia’s gold and foreign exchange holdings had totalled $1,102 million and potential drawing rights on the International Monetary Fund amounted to $266 million. Thus first line and second line reserves taken together totalled SI. 368 million. By 30th June 1964 the first line reserves had risen to $1,708 million, second line reserves to $446 million and the total to $2,154 million. At 31st December 1965 the deficit in balance of payments over the proceeding 18 months had reduced gold and foreign exchange holdings to $1,278 million. Meanwhile, potential drawing rights on the Fund had increased to $589 million, bringing total reserves, both first line and second line, to $1,867 million.

It might be asked why. when holdings are as high as that, there should be recourse to borrowing at all. One may ask: Why when a sovereign government has that much cash at its disposal, should it enter into a transaction with eight or nine foreign banking concerns to borrow the sum in question and to pay an interest toll of Si per cent.? Of course, nothing will be paid by way of taxation. This money will be paid to foreign people. The interest rate of 51 per cent, is gross. There will be no net return to the Treasury, because the interest will be income to people outside Australia. In this instance, the interest will be income to foreign banking concerns and their shareholders. The sum of $54 million which is to be borrowed is so small when related to total reserves, which amount to approximately $1,900 million, that we suggest the sum should not be raised overseas.

The supplement to which I have referred contains in chapter VI some rather interesting reflections on the current situation and future possibilities. At page 44 this passage appears -

A figure between $1,000 million and $1,100 million-

At the moment the figure is above that; it is $1,278 million- would still represent a high level of reserves, especially taken with $589 million potential Fund drawing rights. It can be said that the past eighteen months have exemplified very well the proper function of reserves. They are there to be used and they have been and will be used to tide the balance of payments over a period of deficit which it seems reasonable to classify as temporary in nature. For there has been nothing in the way the deficit has emerged to suggest a chronic and persistent imbalance.

Perhaps later this evening we shall argue whether that is not a rather optimistic outlook. Nevertheless, that is the view expressed in this Treasury document. If we are in a set of circumstances which are temporary in nature, why should we put ourselves in pawn for seven or eight years for a sum as trivial as $54 million? lt is about time that we got an answer from the Treasury about this matter. This is the third occasion within not much more than two years that a measure such as this has come before us. The three measures in question will have involved an aggregate borrowing of more than $100 million on which we are to pay interest for a term of seven or eight years, depending on the length of the loan, at interest rates in excess of 5 per cent. If our present recession in relation to external earnings is temporary in nature, if we have accumulated first line reserves amounting to $1,278 million and if, as the Treasury document states, a sum of from $1,000 million to $1,100 million could be regarded as being reasonable, why not reduce the sum of $1,278 million to $1,224 million by simply paying for these aircraft as we get them? Why should we incur a debt with an interest component of from $25 million to $30 million? I should like the Treasury to say why it regards the proposed method of raising this finance as being prudent. I have no doubt that an explanation will be given and that it will be said that it will be difficult within the next year or two to engage in external borrowing because certain other countries have done what Australia so far has failed to do. I refer to the United States of America and the United Kingdom. Those countries have taken measures to protect their balance of payments and in so doing perhaps have made it more difficult for countries like Australia to borrow in the future. I suggest that it is time that measures were adopted internally in Australia to correct our very disturbing balance of payments situation.

We have accumulated reserves now only because of favourable trading results over thi last 10 or 12 years. The facts are clearly documented in the supplement from which I have quoted. A summary of our balance of payments from 1948-49 to 1964-65 is set out at pages 52 and 53. The material also contains a documented account of the extent of capital inflow into Australia during that period. We have accumulated reserves but not because our exports exceed in value our imports. When we take our balance of trade position on current account and add to it what are called invisible items we find that each year we have had a deficit averaging £250 million or $500 million. The new Treasurer at least has had the opportunity to start the period of his administration with new currency. Some of us are still a little confused at times between dollars and pounds when dealing with these analyses. For a number of years I have been speaking of a deficit of about £250 million a year. That is now $500 million. That deficit has been made good only because of what is called capital inflow. The extent of that capital inflow over recent years is shown in this document to which I referred. I do not wish to go into this matter at this stage, because it is hardly within the ambit of this Bill to make an analysis of our balance of payments position. Nevertheless I submit that it would have been prudent simply to pay for this transaction out of accumulated reserves.

We are not opposed to extending the services of Qantas Empire Airways Limited. In the face of strong competition Qantas has firmly established itself as an international airline. I would have hoped that the success we have had with our international airline would persuade the Government to venture into the field of international shipping. One of the matters clearly revealed in the Treasury’s document is the terrible toll that Australia pays every year on shipping. Australia, having regard to its population and national income, is one of the world’s great exporting and importing countries. International trade is a significant item in our accounts. I think our annual deficit because of shipping freights is about £200 million. This amount represents the difference between shipping costs and what shippers actually pay. I hope that the success of Qantas as an international airline will be a stimulus to the Government to seek similar success with a national shipping line.

Mr Howson:

– Qantas is not handicapped by some of the provisions of the Navigation Act.


– That is true, but I draw attention to the casual manner in which the Government has treated the subject of international shipping compared with the rather grand manner in which we have entered the field of international aviation. It may bs that a certain amount of prestige attaches to an international airline but, equally, some prestige should attach to an overseas shipping line. If we look at the balance sheet of Qantas, which will be the principal beneficiary of this loan when it is obtained, we will find that it has fixed assets and other assets aggregating £70 million or $140 million - this balance sheet was prepared before the introduction of decimal currency. By comparison the capital structure of the Australian National Line, which is confined in its activities to interstate and not international shipping-


– Order! I suggest to the honorable member that the matter he now seeks to raise might be better dealt with as part of the subject matter of the next item to be debated.


– I bow to your ruling, Sir. I was about to point out that the Australian National Line had an asset structure of $50 million compared with the $140 million assets of Qantas. So we suggest that the Government should consider expanding in the future not only our airlines but our external shipping lines as well. On behalf of the Opposition I again ask for a more satisfactory explanation than has been given for the decision to borrow this money. Why incur this interest burden when the Government’s assets are sufficiently liquid to enable it to pay cash? I trust that honorable members will see the merit of my remarks and will support the amendment that I have moved.


– Is the amendment seconded?

Mr Peters:

– I second the amendment and reserve my right to speak.


.- I support the Bill, but I submit that, as this Parliament is approving the borrowing of this money, it should have some control over the choice of aircraft to be purchased. I take exception to the purchase of DC9 aircraft in preference to the BACIII. Seeing that the Commonwealth is acting as guarantor for this loan, which will be used, among other things, to purchase aircraft for TransAustralia Airlines, we should have had expert advice on the relative merits of the DC9 and the BACIII. My views on this subject are confirmed by the fact that the British Aircraft Corporation has firm overseas orders for 170 of the BACIII aircraft and has already exported 75 of them at a total cost of $A200 million. American domestic airlines have purchased 57 BACIII aircraft at a total cost of $A150 million. It is quite evident that the American domestic airlines have found that the BACIII, as an intermediate range aircraft to be used on routes between the cities in America, as it would be used between our capital cities, has certain advantages over the DC9. Although American domestic airlines have purchased 57 of these aircraft, the number would have been greater but for the financial restrictions which were introduced last year by President Johnson.

We, as the guarantors for the money involved in this measure, should have had some say in the type of aircraft to be purchased. There are many reasons why this Parliament should discuss and ascertain the reason why a certain aircraft is to be purchased. We have simply accepted the airline’s request to borrow this money without having any say as to the type of aircraft to be purchased. I think that we should have appointed an expert select committee to advise us on this matter. I think that had we appointed such a committee we would have been advised to purchase the BACIII in preference to the DC9.

Mr. Deputy Speaker, my information is that a DC9 aircraft costs SA3.36 million as compared with SA2.6 million for the BACIII. My. informants have assured me that the BACl 1 1 compares favorably with the DC9 in all facets of air transport. The purchase of BACIII aircraft in preference to DC9 aircraft would have meant a saving of $760,000 on the purchase of each aircraft. I understand that Trans-Australia Airlines, had it purchased the BACIII, would have been able to trade in its Viscount aircraft.

Mr Peters:

– Is the BACl II an American aircraft?


– No, it is manufactured by the British Aircraft Corporation. It has been accepted by the American domestic airlines and it is the only aircraft that has certificates of airworthiness from both Great Britain and the United States of America. My informants have also told me that on the purchase of a number of BACIII aircraft in preference to DC9 aircraft, the terms and conditions would have reduced the overall cost, over and above the initial purchase price, by some $A6 million. I think that’ as guarantors of the loan we should have gone into this matter very thoroughly. T.A.A. has the right to select its own aircraft, providing it is using its own money, but in this case, as we are the guarantors for the loan, I think that this Parliament should have received expert advice on the matter. On evidence that has been placed before me, I am convinced that the BACIII would have been recommended to this Parliament as being the better aircraft for service in Australia.

I make these remarks so that they may be considered before we are asked to approve a similar transaction in the future. We should have expert guidance in this matter, not only on the efficiency and desirability of the aircraft being purchased but also on the financial side of the transaction. I think that in the future we should be advised on these matters before we enter into such a transaction.


.- The honorable member for Mitchell (Mr. Irwin) went to some trouble to point out that he supports the legislation; then he went to a lot more trouble to point out that he is not in favour of purchasing the American aircraft, that he would prefer the aircraft made in Great Britain. Had he read the second reading speech of the Treasurer (Mr. McMahon), who introduced the Bill, he would have found the following remarks -

In general the loan agreement annexed to the Bill follows the form of the November 1964 agreement. Perhaps I should bring section 8 of the Agreement to the attention of honorable members. This contains an undertaking by the Commonwealth that the proceeds of the loan will be used for the purchase of property manufactured in the United States.

Of course, if we are going to run around the world in order to secure loans here, there and elsewhere when loan money is difficult to obtain and when people are beginning to think that we have exhausted the credit resources of other nations, then we have to carry out the obligations, no matter how onerous they may be, that are placed upon the borrower by the lender. One of the obligations placed upon Australia under this legislation is that it has to purchase aircraft manufactured in the United States of America. The honorable member for Mitchell, instead of supporting the legislation should have opposed it.

I do not intend to go to any great length In supporting the proposition that has been advanced by the honorable member for Melbourne Ports (Mr. Crean), that we should endeavour to purchase goods overseas with money raised in this country by loan or out of Government revenue rather than from loans obtained overseas. We want to purchase the most up to date equipment for the air transport of this country, whether it be passenger or freight transport. But we do not believe that every opportunity should be taken to raise money in other countries. What did the Minister say? What reason did he give for seeking to raise money abroad? The only reason he gave was this -

In a growing economy such as ours it is inevitable that there will be a continuously increasing demand for imports of materials, capital equipment and other items which must be obtained from abroad. It is also inevitable that there will be periods such as the present when our foreign currency receipts from exports, capital inflow and so on wilt be insufficient to prevent some decline in our international reserves. The Government therefore believes that it should take advantage of whatever opportunities arise to borrow overseas at reasonable rates of interest in order to strengthen our reserves or to arrest the rate at which they are declining.

That, of course, is the argument that every spendthrift uses to justify his efforts to secure an additional loan. We say that we will not pay for these purchases out of our earnings but we will use to the limit our opportunities to secure the money of others to pay for the goods. That is the attitude adopted by the Government. But are there not other ways to prevent a decline in our overseas funds? Are there not other ways to secure aeroplanes? Oi” course, there are. One obvious way is to make a careful examination of our imports to ensure that we are not paying for unnecessary imports. Another way is to export more goods. We should not take the easy way. We should not say that we cannot earn enough now to pay for the goods we obtain from other countries. If we cannot pay for the absolutely necessary as well as the unnecessary imports with the receipts from our exports, we should at least prevent the importation of unnecessary commodities. By this means we would be able to meet the obligations we undertake when “we obtain goods from other parts of the world.

I know that people will say that this loan is different from other loans. It is different because Qantas Empire Airways Ltd., with its overseas operations, earns enough funds overseas to pay the instalments and the interest on the loan to overseas bond holders and still make a profit. If that is the position, there is nothing much wrong with Qantas obtaining the loan. But this argument does not apply to the internal transport arrangements in this country. Trans-Australia Airlines does not earn overseas funds. But even if the loan for Qantas can be justified on the basis that Qantas earns some overseas funds, it is still more desirable for this country to stand on its own two feet economically and to pay its way as it goes than to resort continually to the very easy and spendthrift proposition of obtaining loans because they are available, whether they be available in the United States of America or in other countries.


.- I have listened very carefully to the debate on this Bill. I listened to the second reading speech of the Treasurer (Mr. McMahon) and to the honorable member of Melbourne Ports (Mr. Crean), who moved an amendment. The amendment suggests that the honorable member generally agrees with the Bill. If is in these terms -

This House, whilst not declining to give the Bill a second reading, is of opinion that the financing of the purchase of aircraft by the Australian National Airlines Commission and Qantas Empire Airways Ltd. should be met from revenue and not from a loan raised overseas.

The honorable member for Scullin (Mr. Peters) spoke in the debate. I have heard him on many occasions speak in the same vein, and I have not agreed with him. If Australia were not a young, developing country, his argument might have some force. I made a note of some of his remarks as he said them and I want to refer to them very briefly. I do not want to delay the House for very long. The honorable member said that, in raising loans overseas, the Australian Government is adopting the attitude of a spendthrift who tries to obtain an additional loan. I do not think that the analogy can be taken seriously, because Australia is not like a spendthrift. The money that Australia has raised overseas in the past has brought into this country the big earthmoving equipment and other pieces of modern equipment that have been used to build roads, increase primary production and aid in the general development of Australia. The honorable member always says that we must examine carefully the goods we import and we must export more goods. The area that he represents - that is, the secondary industries sector of the community - has priced itself out of world markets. Australia is now almost solely dependent on the export of primary products to build up and maintain its overseas balances. Surely honorable members realise that no nation can hope always to sell and never buy. The honorable member for Scullin may be right in saying that we could do without some of the goods that we import, but we buy them as part of our reciprocal trade. Generally the balance of trade in this respect is in our favour. This is the position with Japan. The balance with Japan is very much in our favour. But if we did not buy some goods from other countries, they probably would not buy our goods.

Our overseas balances are still very substantial and we should try to keep them that way. We are a young, developing country. The financial operations of our airways are satisfactory. If they cannot pay reasonable interest on a loan that is obtained to keep them in operation, there is something wrong with their administration. But the balance sheets I have seen would suggest1 that the administration of the airlines is sound.

Australia has been in the throes of a great drought. No man’s mind can envisage what will happen in the future. We do not know whether we will have further droughts or a return to the good seasons that we have enjoyed. These remarks are directed to the Bill and to the amendment that has been moved by the honorable member for Melbourne Ports. It will be necessary for us to draw more on our overseas balances if we cannot maintain the output of our primary industries at the level that they have reached over the past five years. Some 80 per cent, of our exports are primary products. The export of primary products has been the chief means by which we have built up the overseas balances to which the honorable member for Scullin referred.

Mr Peters:

– It has not.


– The. honorable member for Scullin says that it has not. I leave it to the Australian people to decide the matter. We know that our primary industries have been the main factor in the satisfactory balances that we have had and still have overseas.

I shall sum up my reasons for rejecting the amendment and supporting the Bill. We must keep our overseas balances strong in case an emergency arises when we will require them. If we are not able to pay reasonable interest on overseas loans for aircraft and for other productive and developmental equipment then something is wrong with the administration and I believe this is not so. I believe that to obtain capital funds overseas as is proposed in this Bill is sound and that the proposed finance is necessary in the best interests of the safe and economic operation of Australian airlines and is for the benefit of the Commonwealth of Australia.


– I would like to make two points in connection with this Bill. I share to some extent the disquiet of my friend, the honorable member for Mitchell (Mr. Irwin), in regard to the selection of the type of aircraft involved. I do not want to go into this matter in detail: I am not competent to do so. But I do remember that TransAustralia Airlines, for example, was not allowed to select certain aircraft that it wanted. Because of decisions made in the pas:, it may well be that the needs of standardisation now require T.A.A. to take aircraft which are not really the ones that it would have chosen. It opts for them now because it has to keep in line with the fleet that was chosen for it in the past. ] shall not go into this matter in detail. As I have said, I am not competent to do that. But I do share the disquiet which my friend, the ‘honorable member for Mitchell, feels in regard to this matter.

I would like to make one further point. Here I find myself at some variance with the honorable member for Scullin (Mr. Peters). I say “ some variance “ because, to some extent, I agree with what the honorable member has put forward. I think as he does that the degree of dependence upon overseas investment in Australia is unhealthy. I would like to see it cut down. But it can be cut down only if we can improve our own balance of payments position. While we are overspending, as we are at the present moment, on current account, we have to make good the deficiency on capital account just as a firm would have to raise debentures to cover its own cash deficiency in similar circumstances. I agree with the honorable member for Scullin that we should be taking measures here and now to reduce the deficiency on current account. But I do not agree with him - I think this is a point which has escaped the honorable member - in regard to this type of loan. It would be quite unrealistic, especially in this time of drought, to think that the Australian economy could balance its current account overnight. It cannot do that. It will be dependent on overseas capital for some time. I agree that we should try to cut down this dependence.

But it is unrealistic to think that we can eliminate it with the stroke of the pen.

We can take the incoming capital in one of two forms. We can take it either as a fixed loan as this Bill proposes or we can take it as an equity investment, which is selling to people overseas real things like firms, mineral deposits and real estate sites. 1 very much prefer that if this capital is to come in it should come in as fixed loans. It is very much better, since we have to get this capital anyway, that we should be raising loans overseas in terms of fixed amounts rather than that we should be selling Australia’s real assets. For that reason, I do not think I can go along with the kind of amending resolution which has been moved by the Opposition. It seems to me that while we should .be doing much more than we are doing to reduce our dependence on overseas investment, we cannot eliminate this dependence overnight. As we need some overseas investment, therefore, we should be taking as much as we can in terms of fixed loans and as little as we can in terms of equity, namely, the selling of our real Australian assets and the title to them. For that reason, as I say, I welcome what has been done in this regard.

If the House will look back into history it will see that until fairly recently most overseas investment flowed into Australia in terms of fixed loans. A reversal of this general pattern took place 20 or 30 years ago. Since that time, most of the overseas investment in Australia has flowed in in the form of equity. This is, I think, a deterioration. This is a change for the worse. I believe we should get back to the traditional pattern. If we are dependent on foreign capital, as we are, we should be raising much more of our needs in terms of fixed loans from overseas and raising much less of our needs in terms of equity - the selling of the title to the real things of Australia. I shall not go into the figures in this regard. I simply say that the House should be encouraging the raising of loans overseas as the less disagreeable course because the disagreeable alternative is the selling of equities overseas. Indeed, the one reason why I think we are entitled to raise loans overseas, and our one real claim on the overseas fixed loan market, is the fact that we are taking in a large number of immigrants. We are required to build up the capital resources which are needed to employ them, to house them, and to give them transport. As a great deal of this expenditure - not all of it, but a great deal of it - lies in the governmental sphere, I think that the Australian Loan Council might be turning its attention very much more to loans overseas. I reiterate that I should like Australia to adjust its trade so as to reduce its total dependence on the inflow of foreign capital. But while that dependence exists, let us take this capital in the form of fixed loans as provided in this Bill rather than in the form of the selling of Australia’s equities.

Minister for Civil Aviation · Darling Downs · LP

– The carrying of the amendment proposed by the Opposition would result in indefinite delay in the purchase of much needed aircraft by our international airline and one of our domestic airlines. But I think the Opposition is fairly confident that its amendment will not be carried. The very terms of the amendment indicate that whilst the Opposition does not decline to give the Bill a second reading it proposes that, in the opinion of the House, the finance for the purchase of the aircraft should come from revenue and not by way of loans raised overseas. This means, in effect, that the Opposition is suggesting that we should utilise part of our overseas reserves for this particular purpose. It has made that very clear in presenting its case.

I think that two things should be pointed out to the House: One is that the level of our overseas reserves traditionally is subject to wide fluctuations over short periods. Under the existing circumstances, that could occur again in the future. Also, the use of our overseas reserves and our balance of payments is a matter for the economic judgment of the Government acting on advice from its experts. On the first count, therefore, we are not in a position of having unlimited reserves which will not be subject to some form of substantial fluctuation in the future. In addition, our economic judgment must be exercised as to how these purchases should be financed. It should be remembered that the Government really does not own our overseas reserves. They are held by the Reserve Bank of Australia and by the banking system and can be drawn on only if they are purchased in Australia. This can be done by the Government using its revenue, the proceeds of loans raised in Australia, or central bank credit. The Treasurer (Mr. McMahon) has made it quite clear in his second reading speech that he does not wish to burden our budgetary position at the present time.

The second thing which I think should be pointed out is that the proposition of the Opposition probably would not be acceptable to the States. I do not think it would be acceptable to suggest that internal loan raising should cover the financing of the purchase of these aircraft because, as honorable members know, for some years we have been adopting a system of financing Commonwealth works out of revenue and allowing practically all the available borrowings to be used for State works programmes. Under those circumstances, we feel sure that the States would not be agreeable to the proposition that has been suggested. I do not think that the issuing of central bank credit in the existing situation could be contemplated. After considering these facts it comes back to the position that this is the correct way, and the traditional way, of financing the purchase of these aircraft.

This principle does not relate only to the purchase of aircraft. Today the Australian Coastal Shipping Commission Bill was introduced into this House. The Bill was referred to by my friend the honorable member for Melbourne Ports (Mr. Crean). It is designed to extend the borrowing opportunities of the Commission. Of course, the Australian Coastal Shipping Commission is only one other Government instrumentality that operates in this field. There are many other Government instrumentalities, as well as private institutions, which operate in the overseas borrowing field. It is not just a question of taking this particular issue in isolation. A far broader field is involved.

This measure is designed to provide for the borrowing of a maximum of SUS54 million. The money will be paid first into a loan account and then made available to Qantas Empire Airways Ltd. and TransAustralia Airlines. But the significant point is that the two airlines will pay to the Commonwealth all of the funds necessary for the repayment of this loan. Therefore, there will be no net cost involved to the Commonwealth itself. The arrangements, as has already been said, are similar to those approved during a previous borrowing programme in November 1964 when $US30 million were borrowed for a similar purpose, namely the purchase by Qantas and T.A.A. of aircraft. The full proceeds of the loan at that time were made available to the two airlines.

I point out again very clearly that the Commonwealth in this case is acting as an intermediary on behalf of the two airlines which will fully recoup the Government in relation to the loans involved. To indicate the sound commercial practice involved I direct attention to the fact that the loan borrowing period covers about the life of the aircraft. In other words the loan is amortized over the whole life of the aircraft which, during that time, is earning revenue for the company and, in the case of Qantas, is earning overseas currency to assist our balance of payments. Taking all these facts into consideration I am sure that the Opposition, when it gives further consideration to the matter, will appreciate that this is a commercial and sound method of approaching this position. In the circumstances that I have mentioned the Government cannot accept the amendment moved by the Opposition.

I wish to refer very quickly to the points raised by the honorable member for Mitchell (Mr. Irwin) and the honorable member for Mackellar (Mr. Wentworth) in relation to the type of aircraft being purchased by T.A.A. under this loan arrangement. Under the Airlines Equipment Act 1958 the airlines must obtain a certificate from the Minister for Civil Aviation before they can acquire additional aircraft. Where any substantial amount of finance is involved the Minister obviously will refer the matter to the Government for consideration and approval. That was done in this case. The choice of aircraft is a matter for the airlines themselves. The Department of Civil Aviation does assist with technical advice but it does not influence the decision. The airlines themselves must make up their minds in relation to the aircraft which they require. The only conditions the Department lays down are that the aircraft of the two major airlines must be comparable in size and that they must not involve the Commonwealth in unacceptable commitments so far as aerodromes or airport or navigational aid facilities are concerned.

After an independent assessment each of the major airlines in Australia arrived at the conclusion that the type of aircraft they wanted in this particular case was the DC9. After the recommendation was received from both airlines - after they had arrived at this decision independently - the matter was considered by the Department of Civil Aviation on the basis that I have mentioned. We have the facilities to handle the type of aircraft requested and we can programme to provide additional runway requirements in the future. After considering all these facts, approval was given for the purchase of these aircraft.

Consideration was given also to the merits of the BACIII, and other types of aircraft. The points that had to be considered were first of all the suitability of the aircraft for the type of operations to be engaged in within Australia. Secondly, the purchase price and, thirdly, the maintenance cost had to be considered. In relation to maintenance cost, it is a fact that some of the equipment for the Boeing 727 is interchangeable with that of the DC9. The interchangeability of engines is a very important aspect as far as the DC9 is concerned.

In conclusion, I would stress that the decision to purchase these aircraft was arrived at by the airlines themselves completely independently of each other. The recommendations were made independently to the Department of Civil Aviation and were approved by the Department after careful consideration of the facts which it has to take into account. Later, a submission was made by the previous Minister for Civil Aviation to the Government and it was approved by the Government. All that was done before arrangements were made for orders to be placed and the financial arrangements put in hand. The Government cannot accept the amendment moved by the Opposition but wishes to proceed with the Bill as it stands.

Question put -

That the words proposed to be omitted (Mr. Clean’s amendment) stand part of the question.

The House divided. (Mr. Deputy Speaker - Mr. P. E. Lucock.)

AYES: 64

NOES: 44

Majority . . . . 20



Question so resolved in the affirmative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Swartz) read a third time.

Sitting suspended from 5.55 to 8 p.m.

page 81


Ministerial Statement

Debate resumed from 21st September 1965 (vide page 1086), on the following papers presented by Sir Robert Menzies -

Economic Inquiry - Report of Committee (Volumes I, II and Index);

Economic Inquiry - Report of Committee -

Ministerial Statement, 21st September1965.

And on the motion by Mr. Hulme -

That the House take note of the papers.

Suspension of Standing Orders

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

That so much of the Standing Orders be suspended as would prevent the honorable member for Melbourne Ports (Mr. Crean) and the Treasurer (Mr. McMahon) each speaking without limitation of time.

Melbourne Ports

.- The motion that we are debating this evening has stood on the notice paper now for a considerable period of time. It was on 21st September 1965 that the then Prime Minister, Sir Robert Menzies, delivered his statement on the Report of the Committee of Economic Inquiry, which is now known as the Vernon report. Since then the House has not had the opportunity to debate this basic document. This evening we have the opportunity to do so. I think the right honorable gentleman said that in all his experience in the Parliament he had not known a report to be as all embracing as this one. As he went on to speak it was obvious that he did not think very much of some of the recommendations and suggestions that the Committee made.

The Opposition - the Australian Labour Party - does not have to defend the Vernon report. After all, it is not our report. The Report of the Committee of Economic Inquiry, as the document is styled, was commissioned by the Government. The Government chose every person on the Committee. In addition, the Government laid down the terms of reference of the Committee. I believe that it is worth asking why the Government did not seem to like what it received. When we examine in depth some of the recommendations in the report we begin to see why the Government did not like what it received, because in many respects the Committee trod, sometimes not very delicately, on some of the presuppositions of the Government over the previous years. I think most members of the Government parties were a little shocked by the harshness of the criticism that the then Prime Minister made in September of last year. I know that since then some attempts have been made to recognise that there is a lot of valuable information in the Committee’s report.

I believe that it would be unfortunate if the report were to be treated as anything different from what it is in fact. Ir is a systematic examination of the functioning of the Australian economy; an examination of what the members of the Committee thought were matters fundamental to the economic development of Australia. I suggest that it is the sort of thing that does not have to be adopted by a government. In the past we have seen plenty of reports ranging all the way from those by royal commissions down to those by special committees of inquiry. It was never thought that every word that was written in them had to be regarded as holy writ or the opinion of the government that set up the particular committee. I for one was at some loss to understand why the then Prime Minister attacked this report in the way that he did.

The report is a pretty formidable document to read. There is not only Volume I but also another volume which is twice as big again and contains the special appendices which cover almost the whole range of the alphabet. It is a very informative document. It looks comprehensively at the economy as a whole. I believe that it is good for the economy to be looked at as a whole occasionally. The report examines not only the internal ramifications of the Australian economy but also the economic relationships that Australia has to have with other countries as a trading nation importing goods to the value df well over $2,000 million a year and with exports of about the same magnitude. I do not intend to transgress uncharitably on the time of the House. Even with what is called “ unlimited “ time, it is not possible within the scope of this debate to do justice to every aspect of the Committee’s report. So I consider it wise to concentrate on some of what appear to be the dominant aspects of the report.

I wish to deal particularly with the question of economic growth. In modern economies, economic terms and even economic figures feature much more frequently in the columns of daily newspapers than they used to figure. If a democracy is to be an informed democracy and if a nation is to know its potential economically, the people as a whole need to have some understanding of economic terms and the range of economic activity in the community. The pattern of economic thinking has changed fundamentally in the last 30 years or so. We tend to set the line at about 1937. Since then we have referred rather broadly to what is called the Keynesian revolution in economics. Now we talk about such things as the national income, the gross national product and fixed investment, and we speak of them not in small sums but in sums of considerable magnitude. Now that Australia has converted from pounds, shillings and pence to dollars and cents, in round terms the Australian gross national product is $20,000 million per annum. That is the total of all the goods and services that the community as a whole produces. Sometimes it is pretty difficult to relate amounts of that magnitude to the daily affairs and weekly incomes of most people in the community. Most people in most modern democracies are still wage earners. They are still employed by somebody else. The share of this great sum of $20,000 million per annum enjoyed by the Australian wage earners is really measured by what they get per week in terms of the job which they perform.

It seems to me that in many respects the report underestimates the significance of the weekly wage to most people in a community. In my view, one of the weakest sections of this report is the chapter which deals with wages, prices and so on. I should think that one of the things that a government has to look at closely in the next year or so in this economy of ours is the fixing of wages. It is, perhaps, of some significance that the present Treasurer (Mr. McMahon) was previously Minister for Labour and National Service. At least he knows what some of the difficulties are on the plane of fixing the wages of the great majority of people in Australia. Directly and indirectly the deliberations of the Arbitration Commission determine what share of this great sum, the gross national product, shall go to the majority of people in the community.

We seem to face a dilemma at the moment about the very structure of the Commission itself and as to what should be the determinant of the weekly wage in the annual wrangle that is the basic wage hearing. I believe that shortly a government will have to intervene, at least legislatively, to lay down what might be called guide lines. I do not suggest that it can or should tell the individual people what they ought to do but I think that a government has at least to indicate the lines to be followed. I agree with one statement of the former Prime Minister, namely, that ultimately the government of the day must be responsible for economic policy. I think it is even hinted at in the section ot the Vernon Committee’s recommendations on wage fixing. There is a great gap when what is really the most fundamental question for the majority of the people in the Australian community is not subject to any sort of very logical process.

Mr Chipp:

– What sort of guide lines?


– There is food for a great deal of future debate in this report and tonight I shall not go into any great detail as to what I think should be done. All I am suggesting is that there is no great reason to be satisfied with the situation as we find it at present. I know that there are certain people who will say: “ You mean to say that you are going to tell the Commission what it ought to do.” I am not suggesting that, but I think that a question that ought to be asked is: What is the Commission really attempting to do, and is it constructed in such a way, and has it at its disposal the necessary resources and information to enable it to make that very fundamental decision as to what wage and what scales of margins shall go to those who are still over 80 per cent, of the people in the community who derive income? In my view, very little is said in this report about that very human problem.

In the long run the matter that is significant in a community is the average wage in relation to the total resources. This is a question ultimately of economic distribution. Chapter 2 of the report deals with economic objectives and economic policy. It covers this question of economic growth and how the total economic fruits of the productive and social system are distributed amongst various people in the community. Paragraph 2.46 reads -

Five variables assume a key role in the economy. These are the level of spending, the level of wages, the relation between external and internal prices, the rate of capita] accumulation and the rate of net immigration.

These are all matters upon which the Committee deliberated and most of them are matters in relation to which the deliberations have met with a fair degree of criticism one way or the other. Different people make different criticisms. The Government criticises what are called the ceilings of immigration and so on. On the other hand, I for one would be very critical about the section that deals with the fixing of wages. But every one of those five matters is of quite signal importance.

We have an opportunity here this evening in the course of this debate to look at some aspects of these variables. I want to relate these things to what seems to me to be a fundamental assumption behind the report. The Committee states -

We think that a five per cent, annual rate of growth in gross national product at constant prices is possible but that very considerable effort will be required to achieve it. We therefore regard five per cent, as a “ high “ rate of growth for the Australian economy in the circumstances of the next decade.

I merely comment here that during the last election campaign - now a matter of nearly two and a half years ago - both political sides made pronouncements on what was described as economic growth, and there was not a great deal of variation between the two. I think the Government side suggested that it was possible to achieve a growth rate of 4i per cent. We of the Labour Party suggested that it ought to be possible to achieve a growth rate of 5 per cent. I think it is necessary to define the term somewhat, and the Committee does that. There is quite an amount of documentation in the several appendices that come with the report.

This growth rate, of course, is a compound of two things. First there is the fact that the Australian population - and also its work force - grows by a certain something - and again that something is a combination of what are called natural increase and net immigration. Over recent years it has grown at something like 2 to 21 per cent, per annum, varying somewhat from year to year. There is always the problem of keeping the population in full employment. Both sides of the House are dedicated, if you like to use that expression, to the proposition that full employment shall continue. The maintenance of full employment would mean that year by year we would have to find, roughly, 21 per cent, more jobs, or 21 per cent, more people would have to be placed in employment to maintain the same standard per head of population. That, technically, is not growth at all but simply . continuing at the same rate. The other component that goes to make the difference between the 21 per cent, and the 4 or 5 per cent, which we may regard as ideal comes from what is known as the increase in productivity. That is, by using the same amount of resources, manpower, machines, technical skills and the like, an increasing quantity of production is obtained year by year. Those two things together go to make up this thing that is called economic growth.

A fair summation of the approach of the Committee to this central question of growth is in a statement that appears in a special issue of the Current Affairs Bulletin for December 1965. This document has all the appearance of being a kind of semigovernmental publication. At least, it exists by reason of a subsidy, I understand, payable to the Commonwealth Office of Education by the Prime Minister’s Department. So if it is not the right hand of the Government, let us say that it is the left band. I sometimes think this Government is an armless wonder, with neither a left nor a right hand. However, this Current Affairs Bulletin bears the title “The Vernon Report”. This article or treatise has been prepared by a prominent academic economist. He is anonymous, at least so far as I am concerned.

Mr Chipp:

– Break it down.


– I am not as well acquainted with the inner circles and what goes on there as some honorable members opposite are, but if they care to name him I will be quite happy. AH I suggest is that this is a very good appraisal of the report. It deals with the question of the 5 per cent, growth and with some of the remarks that the Committee made in section 17 of the report, where there is a kind of summing up of its findings. The article says -

Tn other words the achievement of a 5 per cent, growth rate may be rendered difficult.

The first thing that renders it difficult is - the danger of inflation resulting from imbalance between aggregate supply and demand.

The second difficulty is - the danger of imbalance in Australia’s international payments.

Then there is a reference to the third difficulty, what is called sectoral imbalance. We divide our economy into primary, secondary, tertiary sectors and so on. Sometimes we divide it in another way into what are called public and private sectors. At any rate there can be sectoral imbalance, as the article says - especially by a tendency for demand to shift further from manufacturing industries, whose productivity tends to grow relatively fast, towards tertiary industries whose productivity grows much more slowly.

I want to have a look at two out of three of these dangers. I do not want to say very much this evening about the matter of the imbalance of international payments because my learned friend and colleague, the honorable member for Scullin (Mr. Peters), will talk about that matter later, and I understand that another esteemed colleague will talk about some aspects of trade and protection and so on. I want to talk about the other aspects. First, there is the inflation resulting from an imbalance that can occur in an economy if something is moving a bit more rapidly than something else. Then I want to have a look at the very fundamental question - a question for the future - of how our future population is to be employed. I suggest that these are matters of some importance. Last evening the Treasurer - I am sorry, the old Treasurer, the new Prime Minister-

Mr Kelly:

– Not so old.


– Well, he called the Government a new Government. I do not find anything new in it and certainly I did not find anything novel in the statement he made last night. He said that he would stimulate the economy with a substantial additional amount of finance estimated at $24 million, which will be provided by the savings banks for housing in the second half of 1965-66. To begin with, I would entertain very grave doubts that $24 million, in terms of a gross national product of $20,000 million, could really be called a substantial additional amount of finance. We are talking about 24 million new dollars. I suppose that in terms of house building that amount might build an additional 4,000 houses - assuming that people have bought their land. Something like $6,000 is the minimum cost of a house. It is the minimum, certainly not the maximum. On this basis, we find that the $24 million - this great stimulus - represents about 4,000 additional houses.

The Vernon Committee had something to say on the question of housing, particularly in relation to the matter of inflation. Section 10 of the report deals with availability of credit, and of course the availability of credit or the flow of money has at least some relation to the question of inflation. The Committee said that there is a real danger that the availability of more finance may cause an increase in land values and in the price of houses rather than in the number of houses being built. I suggest that here is a matter about which the Government has done very little. However laudable the homes savings grant of £250 may have appeared at the time of an election, I think it could be said that in the two and a half years that have intervened since its introduction the cost of a house has increased by at least £250. At least we had an alternative. It would have been just as equitable to those who are now building houses if we had somehow been able to keep the price of housing at the level at which it was nearly three years ago. It is true that the home savings grant of £250 has been made available, but that

Bum and probably more has been absorbed in higher costs. I believe that the construction of houses is flagging in the Australian community because the people who most need homes are not in an economic position to fulfil that need. The reasons for this are threefold. They are the high price of land, the high cost of building and, finally, the charge that is superimposed on both those factors by the high cost of finance - the high interest rate.

I believe that more people in a community gain when interest rates are low than profit through high interest rates and the whole history of this Government has shown a gradual rise, year by year, in what might be called the overall average interest rate :n the community. The people who suffer most unjustly from a policy of that sort are, on the one hand, those who want to become home owners and, on the other hand, those who want to put furniture, television sets, refrigerators, washing machines and so on into rented homes, and so fall into the toils of another group of gentlemen known as the hire purchase agents.

The Vernon Committee has suggested that something ought to be done to control what are described as the fringe institutions and I find myself in accord with that section of the Committee’s report. I believe that interest rates in Australia are too high and that, in consequence, the majority of citizens are penalised. For years this Government has shut its eyes to the racketeering that goes on in the provision of finance for what are really household necessities. This position arises out of the fact that there are still many hundreds of thousands of families in Australia who, whether they own homes or not, find it difficult to pay at one time any sum in excess of £100. This only goes to show that whilst we sometimes talk glibly about living in an affluent society there are considerable sections of the people whose lot is not affluent at all but a matter of bare survival week by week and year by year, ground down by a system which fixes wages effectively, but does nothing whatever about the prices of goods and services that the fixed wage is supposed to buy.

It is suggested that this section of the report was compiled by some academic economists. The honorable member for Higinbotham (Mr. Chipp) does not like the person who wrote the Current Affairs

Bulletin, but presumably he finds himself more in accord with the gentleman who wrote the section of the Vernon Committee’s report that deals with wages. I think it is a rather ironical comment on wage fixing and the academic theories that lie behind wage fixing, that we seem today to have got down to a proposition that my colleague the honorable member for Yarra (Dr. J. F. Cairns) and I - in the years when we studied economics under an earlier generation of economists - were told was no longer tenable. I refer to what was called the wage fund theory. This theory was that the economy can afford to pay only a certain amount in wage’s and that if you make wages too high you throw people out of employment until the situation reaches its own level again.

A similar theory is at present emergent in wage fixing in Australia. It is a suggestion that wages, or rather what are called real wages - there is a distinction which I have not time to go into this evening - cannot rise any higher. I suggest that to achieve economic co-operation and to make the idea of economic growth a reality, if we agree that it is possible to have an economic growth rate of 5 per cent, per annum, which means a productivity increase of something like 2 per cent, or 2) per cent., we have to decide how we can best distribute the fruits of that increase to the wage earners, who are the great majority of the people in the community. As I see it there are only two ways of distributing such an increase: Either prices should fall or wages should rise. How else can one buy more if there is more available per head for everybody? If your income is fixed and prices remain fixed your standard is the same but, if prices rise you do not even keep your existing standard unless you receive an increase in wages.

This is the kind of fundamental problem that the Vernon Committee ultimately poses. It is easy enough to talk, as we all do, about economic growth, but economic growth is possible only when we have cooperation and understanding between all the participants in the economic process. Why should anybody be greatly interested about the fact that the gross national product is a bit higher this year than it was last year if he knows that there is no device by which he can get more of it?

Mr Chipp:

-. - We have the arbitration system. Why does the honorable member keep saying that there can be no rise in real wages?


– Honorable members opposite talk about splits in political parties. There is a split at the moment over the determination of wages. Of the two schools of thought, which is right and which is wrong? Is the Government prepared to come out and say which it thinks is right or does it’ intend to leave the decision to strikes and direct action and then hold up its hands in horror because the economic process has been brought to a standstill?

There is a question of justice involved here and it is one to which the Government has given very little attention. I do not think the present wage system in Australia can continue unless the Government begins to introduce some sort of price justice as well as what it chooses to call wage justice, but which I think is wage injustice. It cannot look after only one side of the process. The Government may say that price fixing is not possible and that the balance is redressed by means of transfer of revenue payments. If prices rise faster than wages it means that profits have risen faster than wages and one rather inefficient and unjust way of meeting the situation is to drag money back in the taxing process and distribute it in the form of social service payments. It may be that the Government regards this as the only way of meeting the situation but I think that in modern communities, with the process of automation and the shift from primary industry to secondary and tertiary industry, we are. getting to a stage where it becomes difficult for anybody to say that a Cabinet Minister is worth twice as much as a private member, or that a private member is worth three times as much as the person who sweeps the floors in this place. In the “ ad-mass “ that the economic system now is, can anyone say with any sense of logic or justice that everybody gets exactly what he is entitled to? Can you say that nobody gets too much and nobody gets too little? I suggest that if one makes that sort of test one will surely say that in Australia there is no justice at all in the process.

It would be possible, I think, to go on for hours about this, but I shall finish here. I want to have a look at this final matter that the “ Current Affairs Bulletin “ mentioned because it is one of the matters about which the Committee has been subjected to the greatest degree of distortion. That is this shift from what is called the manufacturing industry into tertiary activity as a form of economic endeavour. We in this country know that we have already gone through the revolution from pastoral and agricultural activity to industrial enterprise. If one went back and looked at the year books of the time when this Parliament was formed in 1901 one would probably find that something like half the population was engaged in pastoral and other rural activities and perhaps 15 or 20 per cent, was engaged in manufacturing and allied activity. That pattern has changed and I think it is recognised in most mechanised societies that less than 10 per cent, of the people, working on farms, can produce all that is necessary to feed, clothe and sustain the community. Then there is the change in manufacturing. The tendency now is for mechanisation and automation to produce more of the same sorts of goods with relatively less manpower. So the job becomes one of determining where to put the rest of the people. Again, I suggest that this is a matter that has not been faced up to in this community. It calls for a far greater degree of co-operation between the levels of government, State, Commonwealth and even local, than exists at the moment.

The Vernon report suggested there ought to be better co-ordination between State and Federal Governments in this field and, I suggest, also in the field of government responsibility. I believe that at present there are a lot of children at school throughout Australia who are being trained to do jobs that nobody wants to have done and there are a lot of jobs waiting to be done for which nobody is being trained. This points to a lack of co-ordination between industry, which has to employ the people, and the education system, which has to train them for jobs. I do not mean by this that the purpose of education is only to train people to do jobs. I think education has some purpose other than that. Nonetheless it is still the lot of most people in the Aus tralian community to have to get a job - to be employed by somebody else. Surely changes that will take place in the next five to ten years in the pattern of the economy are significant for the children who are in school today.

I notice that one of the criticisms of the findings of the Vernon Committee was that it tried to forecast. I concede that once one tries to forecast one can make mistakes. However, I believe that in some fields one has to make forecasts. It is of no use, on 1st January 1966, to begin determining the number of children who will attend school on 1st February 1966. One should have done that perhaps as far back as 1956. Similarly, we ought to be trying to assess in 1966 what job opportunities are likely te be in 1976. 1 consider that any government that refuses to look at these things in that perspective is being recreant to its trust. I conclude by referring to one statement that the Vernon Committee made early in its report. At paragraph 10 of chapter 1, it stated -

Since the war, governments -

That means governments from both sides of politics - have been expected to accept responsibility over a much wider area of economic affairs.

I would say that perhaps the thing thu distinguishes the political parties in Australia today more than anything else does is the fact that we in the Australian Labour Party take this matter of accepting responsibility over a wide area of economic affairs much more seriously than honorable members opposite do. At our last Federal Conference, which was held about eight or nine months ago, we wrote into our economic policy a statement that in a modern community the test of a government ought to be the pursuit of purposeful economic policies. I suggest that the feature that characterises this Government is lack of purpose in economic policy and the hope that something will turn out right, although the whole history in these matters has shown that for a lot of people things continue to turn out wrong.

Treasurer · Lowe · LP

Mr. Deputy Speaker, may I first of all thank the House for its indulgence in permitting me to speak without restriction of time in order to explain in some detail the Government’s approach to the report of the Committee of Economic Inquiry, or the Vernon Committee, as it is known? Since the report was tabled in this House on 21st September last, there has been, as was desirable, considerable public discussion of it. I do not propose to debate any of the criticisms of the report itself which have been made in the Press and elsewhere, although I shall say something on particular aspects of the policy suggestions advanced by the Committee. What I shall do is to consider in the first instance certain criticisms of the way in which the Government has dealt with the report. Then, to put the matter in perspective, I propose to contrast some of the main conclusions of the report with the view the Government itself takes as to the economic future of this country and its own broad approach towards the development of the great possibilities that our future unquestionably holds.

It has been said in various quarters that the Government has rejected the report and, by inference, all that turns upon its conclusions. That is certainly a wrong view. The Government did, it is true, find some of the conclusions unacceptable and, for very good reasons, made that fact known promptly and decisively. It had a duty to do so. As the then Prime Minister said, there is a great deal in the report which is entirely acceptable to the Government and, furthermore, a great deal that has been or will be helpful, by way of information assembled and analyses made, in our task of shaping decisions on the problems constantly arising around us. Indeed, I may go further than this. I think I can fairly say that we find reassurance both in the broad tenor of the report and in its findings on particular issues which must be the subject of policy. It appears to us to set the seal on much that we have done, much that we are doing and much that we have it in mind to do.

Much of the report is descriptive and, in large part, constitutes a useful account of Australia’s postwar economic experience. As the Committee expresses it, there has been a “ strong undercurrent of growth in the Australian economy” in the years since the war and it adds that the fluctuations in economic activity which have occurred have been, to use its words - “ minor incidents “. None of these fluctua tions, it says, “ has been serious enough to strike at the roots of long term economic growth”. Rather, the Committee sees Australia’s main economic problem throughout the postwar period as a recurring tendency for pressure on domestic resources to become excessive, with consequences for the level of costs and prices and, also, for external stability. Speaking from our own practical experience, which spans four fifths of the postwar period, we believe this diagnosis to be exactly right.

Like the Government, the Committee gives economic growth and full employment the central place amongst our national economic objectives. At the same time, the Committee fully recognises the manifold problems of a policy which aims at “ high “ economic growth and full employment on the one hand and stability of costs and prices and external viability on the other hand. As to this, the Committee says -

Inflation and balance of payments troubles lend to go hand in hand- and both - may be inimical to long-term growth.

These are the Committee’s own words, and again I say that they ring absolutely true to us.

Yet again, the Committee sees that the management of a growing and fast changing economy, especially one as much exposed as ours to the vagaries of international affairs, presents sharp difficulties for the timing of action to hold the economy on a steady path and keep its resources fully employed. As the Committee states it -

In a fully employed economy expanding at a high rate, it will be always necessary to apply brakes from time to time.

Mr. H. P. Brown, whose name is well known to honorable members, recently put this matter in another way -

Policy making is now primarily concerned with small pushes in what is hoped to be the right direction. The art of managing the economy has developed greatly, and the success of present policy is best indicated by the controversy between those who believe current trends are expansionary and those who believe the opposite. This dispute has continued for nearly twelve months and, as yet, the victory has been with those who actually make policy.

Those words, I think, require no elaboration by me. Consider, also, what the Committee had to say about the Australian standard of living. It gave much consideration to this matter and made comparisons with other countries. After allowing for differences of measurement and comparison, the Committee concluded that -

From what we know of the average levels of national and personal income and of consumer prices in different countries . . . Australia ranks among the half dozen or so countries with the highest average standard of living.

Housing, it said -

  1. . ranks high in Australian thinking as an element in the standard of living.

In other material standards such as health, ownership of consumer durables and education, Australia compares most favorably with other Western nations. A similar position, it says, applies to the more nonmaterial elements in our national life such as social security and working conditions.

But the Committee was, of course, concerned to do much more than record economic history. It directed itself to a host of current problems and, on most of them, it has said much that is worthwhile. For example, one of the most interesting chapters in the Committee’s report is that on costs, prices and wages. Although the Government does not endorse everything the Committee has to say in this chapter, it will command the attention of all who are concerned with these matters.

What, in particular, I find of great value is the Committee’s straightforward rejection of the view that somehow or other inflation and growth go hand in hand. Price stability, it says - and these are its words - . . is desirable not only for its own sake but because of its great importance for the maintenance of steady economic growth.

To achieve a desirable level of price stability the Committee later suggests that, as it says - government should ensure that as far as possible situations of excess demand are avoided so that inflationary tendencies are not exacerbated from this source.

With this, I need hardly say, the Government strongly agrees and it has, indeed, consistently sought to frame its budgetary and monetary policies with that objective in mind.

Perhaps one of the most interesting conclusions reached by the Committee concerns the distributive effects of wage increases, on which it says that its discussion - . . indicates the futility, in the Australian economy, of using inflationary increases in the general level of wages (i.e. increases greater than the growth of national productivity) to preserve or increase the share of wages in national income (excluding export income),-

There are, no doubt, some reservations to make about this conclusion; nevertheless, it is a view which rests on a substantial basis of truth.

Let me turn now to a different field - the availability of credit. The Committee’s discussion of this matter emphasises correctly in my view, that the constraints upon growth in Australia lie in the availability of resources rather than in the supply of money. Increasing the money supply would produce inflation rather than increased production. In the Committee’s words -

As the economy has for the most part functioned at or close to full employment levels during post-war years, any further increases in the money supply leading to increased expenditure would be much more likely to have led to a rise in prices than to a higher rate of economic growth.

And again -

We have seen no evidence to suggest that the general rate of growth of the economy has been held back by mismanagement of the credit machine.

The Government, and those who serve it in these matters, can, I believe, find satisfaction in this forthright endorsement of their record in this field. Of course, no reasonable person would seek to deny that, with hindsight, it could be said that monetary policy has not always responded promptly and precisely to what proved to be the needs of the moment. The Committee is the more to be commended for not relying on hindsight in its assessment of the measures taken from time to time. As it said -

The actions taken by the monetary authorities at the time . . . seem to us to have been ia accord with a reasonable diagnosis of the problem as it then appeared.

I should have said enough by this to show that the Government has by no means found the report to be out of key with its own thought on some of the largest matters. If I might make a personal comment, I found the report a little disappointing in one respect. It seemed to me, if anything, rather over-cautious in its views on the future possibilities of this country. That may seem an odd comment for a Treasurer whose role traditionally is supposed to be that of a watchdog against optimists, a man whose leading joy in life is to deflate enthusiasm and cut idealists down to size. In all frankness, I admit that I cannot resist a feeling that Australia is on the march in a way that it has never known before. There is always a place for caution and a virtue in seeking for pitfalls- the drought is evidence enough of that. But there is also virtue in watching for another danger - the danger of underrating opportunities.

To me, the great fact of our economic state today is the emergence of quite unparalleled opportunities - opportunities for greater production, new production, more advanced forms of production, larger and more varied exports, greater population growth, and a higher general pace of activity and progress. The central challenge to economic policy is to create the conditions that will enable these opportunities to be realised.

Frankly, I miss something of that note in the report. It was concerned, properly enough, to point out the difficulties and dangers that may lie ahead, the imbalance that may occur in our external account if things go one way rather than another, the costs we may incur if, say, we push migration too hard and have to spread our resources of capital too widely, and so on. The Committee did well in this; it was its responsibility. And yet I confess I would have liked a little more play of sunlight on the picture.

I have indeed been led to wonder how much this apparent mood and approach on the part of the Committee may have influenced some of its recommendations which the Government found cause to reject. Certainly it relied on a pessimistic view of our prospects - excessively so, we thought. It seemed to assume that, more often than not, events would break the wrong way for us. That could prove to be so; but I can see no necessary reason for assuming that it will, and it could clearly be harmful if we were always to found policies on the least hopeful assumptions. But before I go on to discuss any of these recommendations I should perhaps relate just why it was that the Government, having reached a view of them, decided to make that view known promptly on tabling the report.

It was a decision taken not lightly but very deliberately indeed. We had studied the recommendations at great length. We found the reasons advanced for them unconvincing.

We saw that they cut across well-considered views of our own. We had no grounds for expecting that they would command wide public support or that such public debate as might occur would be other than inconclusive, in which respects 1 think we can say that we were right. It would therefore have come close to deception to put these recommendations forth, knowing that we could not adopt them but without telling the public that. But we had stronger reasons still.

Dr J F Cairns:

Mr. Deputy Speaker, I rise to order. If the honorable gentleman would like to have this speech incorporated in “ Hansard “ I will raise no objection to that course.


– The honorable member’s objection does not really cut any ice with me. He would be better off if he started thinking of his own future.


– Order!


– AH those recommendations had great practical significance - immediate significance. Potentially they involved such measures as a ceiling on immigration at recent levels, a ceiling on new private capital inflow, selective controls on overseas investment, and a full-scale inquiry into the credit system. To leave undeclared the attitude of the Government on matters such as these could have caused great uncertainty. The public had a right to know where we stood on them and to know there and then. Had we not declared our attitudes I am sure there would have been the strongest demand that we should do so promptly.

Let me now turn to some of those aspects of the Committee’s report with which the Government has not felt able to agree. The first is that of immigration. I look with pride on Australia’s achievement on immigration through the postwar period and in doing so may I say once again that I give the greatest credit to the vision displayed in this field by the honorable gentleman who now leads the Opposition. It would surprise me to hear one voice raised within this House against that policy today. What is the essence of this question? It is that we have a stupendous task in hand in this country and that we do not necessarily have unlimited time in which to carry out that task. The prospects for the growth in our native-born work force are reasonably good but necessarily limited. Over the next decade or so we might hope to add to the work force from that source at a rate of perhaps 1.4 per cent, per annum. But if we are to build our nation at the speed for which 1 know we all hope, we shall need a great many extra hands and, increasingly, it becomes less certain that we will always be able to command them. The fact is that people and labour of the kind that suits us are coming more and more into demand throughout the world and there are already competing pressures upon our own sources of supply. We must take them as and when we can get them and I am sure it would be most unwise, in these circumstances, to rein back unnecessarily the level of net immigration to some artificially selected figure, such as the 100,000 per annum which the Committee suggested we should not exceed until the late 1960’s or early 1970*s. I am of course alive to the implications of such a view. Some of them were stated by the Committee, though I cannot but feel that its views overrate the disadvantages and underrate the offsetting benefits, even from an economic viewpoint, which a high and increasing level of immigration brings in its train. Even, however, if the Committee’s view were entirely correct from this narrow economic angle, the fact is that governments cannot look at such matters as this only through economic spectacles. We do not propose to do so.

I turn now to one of the reasons which the Committee advanced to support its views on the proper immigration policy for the Government to adopt. It is that, because of a rapidly growing work force, the level of investment in fixed capital, both private and public, within the economy will have to rise over the decade ahead. On the basis of its calculations the Committee pointed out, in varying places throughout its report, that the level of fixed investment would need to increase from the 1962-63 figure, which it put at 24.S per cent, of gross national product, to a figure of 25.9 per cent, of gross national product by the year 1974-75. Even if the Committee’s figuring were accepted - and there are reasons for regarding it as open to doubt - I should not, even so, have found it highly compelling. If the price of building up our work force at the pace which an increasing level of immigration could provide were to be some sacrifice in terms of current living standards, I do not have much doubt that most Australians would think the purpose worthy of the sacrifice. How, after all, was this country built up except through sacrifice? Is it to be suggested that, because some sacrifice is entailed, the Government and the people for whom it speaks should shy away from it?

Tn point of fact, the Government and the people of Australia have already rejected such a course. The Committee, as I have said, put the necessary rate of fixed capital investment at 25.9 per cent, of gross national product by 1 974-75. May I draw the attention of the House to the fact that last year, 1965, the actual figure was already no less than 26.8 per cent.? Sir, it is a matter of common knowledge that, defence expenditure apart, there are no two areas of expenditure which have recently been rising faster within the economy as a whole than private fixed investment on the one hand and public authority investment on the other.

I am led next to consider the views taken by the Committee on the role of overseas capital in our economy. It acknowledged that such capital can bring many benefits to Australia but feared an excessive growth of overseas ownership of Australian industry and an excessive bill for earnings payable abroad. So it suggested a ceiling on new capital inflow and the possible need for selective control on such investment. Much of the argument rested on certain calculations as to the growth of income payable abroad to foreign investors. The ex-Prime Minister has, of course, already had something to say about the calculations made by the Committee in its projections of investment income payable abroad and of the growth of foreign ownership of Australian company assets. Figures recently published by the Commonwealth Statistician regarding investment income payable abroad in 1964-65 confirm and, if anything, strengthen the points made by Sir Robert Menzies at that time. Indeed, what he had to say has) I think, been for the most part accepted in subsequent discussions and I do not propose to cover the ground again.

In any discussion of overseas investment there is, I think, a useful analogy to be drawn with what I have just been saying about immigration. Just as, in order the more effectively to develop this country within a reasonable time, we find it necessary to supplement our work force by bringing new people to the task from overseas, so we must accept that, if the economy is to grow at the pace we want to see, we must take in overseas capital - at any rate within any limits that seem feasible. I said earlier that labour becomes increasingly scarce. If anything, capital available for investment internationally is probably even scarcer and, by the look of things, may well become more so. It is, I think, too seldom realised that, within recent years, there has been onlyone net exporter of private long term capital in significant proportions in the world - that is, of course, the United States of America. Even the United Kingdom, to which we ourselves have looked for a great and valuable proportion of our own capital imports, has itself been a considerable importer of private capital of recent years, with the result that the trend of its net private capital exports has been downwards.

We will, I hope, have an opportunity on some later occasion to debate this whole question at much greater length than is possible now. Suffice it to say that, although the actions already taken by the United States of America and the United Kingdom in this field do not appear so far to have greatly affected the entry of new capital into Australia, we cannot necessarily assume that this will always be so. But, for the reasons I have already stated, our problem in building this great country seems likely to be less one of worrying about the particular issues that arise from some aspects of overseas investment than of getting our hands on enough capital, overseas or from our domestic savings, to do the job we have before us in the time open to us.

The Government has of course a lively sense of the drawbacks that go with overseas capital, especially some forms of it. In the broad we think these are greatly outweighed by the advantages and we are up against the fact that whereas we are bound to need more overseas capital, there is increasing world competition for a supply that may itself be diminishing. As to some of the drawbacks which can be associated with it, this is a matter of working out, mainly by the exercise of good sense on both sides, satisfactory relationships as between overseas investors and ourselves. They have something to gain in this country and something to contribute. We likewise have something to gain and a cost to meet. I do not think we have anything to gain by resort to the device of arbitrary ceilings and arbitrary controls.

Our overseas balance of payments is of course very much involved in this question and it is in this area that I find the Committee’s report most disappointing, lt presents what I think is an unwarrantably gloomy picture. In part this stems from the Committee’s exaggerated views regarding the likely growth of investment income payable abroad. In large part it stems also from what can only be described as a despondent view of export prospects. In the field of mineral exports particularly the Committee seems to have written our prospects down beyond anything the known facts could justify. For 1974-75 it projected, on the basis of some detailed examination of prospects, exports of some $330 million. Sir Harold Raggatt, who may be allowed to know something about these matters, some time ago publicly suggested that by 1975 a figure of $600 million for mineral exports seems wholly reasonable. A more recent forecast in the Treasury publication “ The Australian Balance of Payments “ suggested that mineral exports could rise to a figure well above $600 million by the mid 1970s.

Again, as to rural exports, even if we do no more than continue the postwar trend, ignoring for that purpose any short and medium term effects of the current drought conditions, we reach a figure for 1974-75 considerably greater than that of $2,350 million fixed upon by the Committee. Simple calculations of this kind are not, of course, in any way conclusive; if anything, we can say the trend in the volume of rural exports over the past decade or so has been more strongly upward than the trend over the postwar period as a whole.

For my own part, I would be the first to say that we cannot possibly foretell the future for exports, or indeed for much else in a growing and changing economy, with any real precision 10 years hence. The Treasury paper I have referred to points this out very clearly, I think. The point is, of course, that if long term projections are to rest only upon what one knows today, they are almost bound to be wrong. The whole essence of making long term projections, I suggest, lies in the reasonableness or otherwise of the allowances that are made for those matters one does not know about. These can go against us; but they can also go in our favour. Again I fail to see why we should necessarily lean to pessimism.

I have already said that I view with much scepticism the possibilities of mapping out, with any useful degree of precision, the future 10 years, or even less far, ahead. Accordingly, I do not accept the importance which the Committee appears to attach to the setting of specific growth rates for the economy as a whole. Still less for individual sectors or industries thereof. The then Prime Minister, in his election policy speech of 1963, stated the Government’s expectation that over the five years from 30th June 1963 the gross national product as measured at constant prices would grow by some 25 per cent. That, for the benefit of honorable members who, like myself, find some difficulty with compound interest, means an average rate over the five-year period of nearly 4.6 per cent, per annum. The Committee, as is well known, suggested the adoption of a target rate of 5 per cent, per annum which, it said, would be a high rate but one not impossible of attainment.

It has been suggested that there is really very little difference between the Committee’s approach and that stated by the then Prime Minister. That is far from true. The Committee suggests the setting up of a target towards the achievement of which the main branches of economic activity would be guided. Sir Robert Menzies, by contrast, stated it as the Government’s reasonable expectation, given good government, that growth equivalent to an average rate of 4.6 per cent, per annum would in fact take place- He did not, that is to say, set up this figure and make its achievement a dominating object of policy. It was seen rather as a result which could be expected to emerge from the efficient utilisation of our resources and capacities in response to the normal forces of demand. There was no thought behind it of governmental direction or even persuasion to warp the natural development of the economy in one direction rather than in others.

I see danger in adopting the alternative and what I may call the mechanical approach to this question in that, as soon as one begins to set tip statistics of gross national product at constant prices as a bench mark for policy, one opens the door to figure mongering which may be at best misleading and at worst a good deal more than that. The reasons for that comment are, in large part, technical and I do not wish to detail them here. Suffice it to say, by way of illustration, that merely because of the way in which these things are measured by the national income statisticians, growth in output in the socalled tertiary industries - which include building and construction, transport and communication and various other highly important activities - shows up less favourably than growth in industries, such as manufacturing, in which increases in productivity lend themselves more readily to precise measurement. But, judged by the experience of those few countries in the world, such as the United States, which enjoy a higher real income per head than Australia, our needs and wants seem increasingly likely to be directed towards the products and services provided by the tertiary industries. It is, in other words, a matter of experience that what people in Australia are demanding and what the current phase of our development requires is not simply more or better motor cars, refrigerators, or products of ‘that kind - desirable though they all are - as much as more and better housing, schools and hospitals, larger and more efficient transport and communications facilities and so on.

Lest there be any misunderstanding, manufacturing is of vast importance and, as the then Prime Minister said, ours is a protectionist government which will always see to it that manufacturers get a fair go - even, perhaps, a shade better than a fair go. It is, rather, that I state a faith - the faith that the interests of the nation as a whole are likely to be best served if the pattern of economic activity is able to adapt itself freely to the changing pattern of national and individual demands. Having said this, however, I nevertheless reject emphatically any idea that the Government is opposed to planning in any useful sense of that term.

The Government does plan wherever, within the limits of its constitutional powers within a Federal system, planning is feasible and can lead to useful results. Doubtless it could do so to an increasing extent. What the Government is not prepared to do is plan for the sake of planning, which so often leads to plans being imposed on sectors of activity which do not lend themselves to it. We will not allow planning to become a fetish with us or try to extend it beyond its practical and useful limits.

We believe that, without committing ourselves to an overall plan, with all its restrictive and bureaucratic overtones and all the doubts as to its statistical foundations, it is still possible to have a firm, coherent and yet flexible economic policy which will serve our national needs; indeed, serve them better than an elaborate overall plan could. That policy is set within our clear objectives of full employment, increasing productivity, rising standards of living, external viability and stability of costs and prices. Much that the Government is doing is of course directed specifically towards the achievement of those objectives. I may quote as examples our immigration programme, our encouragement of exports and our persistent widespread drive to enlarge export markets, our strong support of public works programmes and our large array of special developmental projects, our massive assistance for roads in general, our support for housing, our large and growing contributions for universities and now for technical training, our very large and varied list of subsidies and tax concessions to encourage particular industries, and our fast growing research and advisory services.

There is a positive quality about all these measures, and a consistency. They form a pattern, a constantly changing and enlarging pattern, but one that hangs together and in which each element contributes towards the main objectives. Co-ordination takes place at the level of the Government itself, assisted by the higher departmental machinery for advising the Government. lt remains for me to add a few comments on the suggestion by the Committee for a continuing Advisory Council on Economic Growth, which, as it appeared to me, occupied a pivotal position in the Committee’s general scheme of policy prescriptions. The Committee did not spell out the precise form this organisation should take, but it was to be broadly patterned on the Economic Council of Canada, though with less detailed terms of reference. On that basis it was to be formally established under an Act of Parliament which would confer on it statutory functions and powers. It was te have all necessary freedom as to how it pursued its activities within its terms of reference, on which, no doubt, it would, within limits, place its own interpretations. It would consult with such bodies and groups as it thought necessary, including Government departments and instrumentalities. We may suppose that it would have called fairly heavily on the latter for information and other forms of assistance.

It was to have, above all, extensive powers to publish its views and conclusions. It was to have a strong secretariat, probably drawn in part from the Public Service but also from the universities and elsewhere. Tie secretariat in its turn was to have the right to publish papers on subjects chosen by itself without necessarily getting the approval of the Council. The Council was to concern itself primarily with medium to long term trends and problems but it was also to report each year on what was described as the growth experience of the economy.

In practice that could mean only one thing. The Council would report on the performance of the economy over the past year or so; but, since policy measures are necessarily an element in any economic situation, it would have been reporting - giving its views, that is - on any policy measures the Government had taken and on what their results appeared to be. Let us be quite clear as to what it was this Council was intended to do. It was to gather, collate and study economic information. It was to take the views of various people and organisations. It was to engage in analyses of economic trends. Up to this point it may seem to have been envisaged as little more than a research organisation with a right of publication. But it was to do more than this. It was to be an advisory body; that is to say, it was to have the role of recommending to the Government courses of action on economic matters - in other words, to frame and propose policies. There are several things to say about this. First of all, it would constitute a system of advice additional to our existing system of advice - the higher echelons of the Government Public Service. On that I can be brief. We have behind us men of ability, knowledge, qualifications and experience of an order most unlikely to be surpassed by any body of persons within Australia. It would also be additional to our existing system of consultations with industry, commerce, finance and trade unions. These are not only extensive; they are also, in an important sense, continuous. Literally, we are in everyday contact with people in these areas. They tell us their ideas. They put before us their problems, their difficulties, their criticisms, lt is wholly a myth that the Government works in a vacuum, remote from the real world and out of touch with it.

Besides this day to day contact, we have, of course, formally constituted bodies like the Manufacturing Industries Advisory Council and the Export Development Council, and, at least twice a year, consultations such as those recently concluded with representatives of industry, commerce, finance and the trade unions, who put before us and discuss with us their considered views on the trend of the economy and suggest measures that might be taken in relation to it. 1 do not say this system of consultation is necessarily perfect. It may well be capable of further development. But it has one important merit in my eyes; it provides for direct consultation. We meet and talk with the people actually concerned in business; we do not merely get their views as reported to us or filtered through some other body.

The other and still more serious objection is the one on which the then Prime Minister particularly dwelt. The proposed Council would make recommendations to the Government on courses of economic policy and it would also, as we understand it. publish its advice. Indeed, the Committee lays some stress on the importance of influencing public opinion in these matters. The Committee said that the Government would be free to accept or reject the advice of the Council - as indeed one would hope it would. If the Government accepted the advice, presumably all would be plain sailing. But it might well find good reason for rejecting it. lt might, for example, put a different interpretation on events and trends. After all, it would, with its permanent advisers, have gone over the same ground as the Council and have all the information the Council had, and probably more. Or it might frankly judge that the action recommended would not be acceptable to the public or sections of it - and that could be entirely a sound and proper judgment for it to make.

Such a situation could arise in two ways. First, the Council may have based its advice on strictly technical considerations. But as the then Prime Minister reminded the House, it is but rarely that a Government can take a decision on technical grounds alone. In economic matters, as much perhaps as in any others, all manner of considerations have to be brought in. Government in a democracy is, after all, the art of the possible. Secondly, and even more importantly, it would be naive to expect such a Council in all, or perhaps even most, cases to arrive at its views in this strictly technical way. Men of the status which would necessarily be involved have views on many matters, by no means all of them necessarily within their own experience. They would be most unlikely to hold themselves bound to formulate their advice purely on the basis of economics. They would on the contrary, be bound to seek to use the power which such a forum would give them to bring pressure to bear upon the Government to give effect to their own ideas of how the economy should be run and for whose benefit. There is, I think, little doubt about this. It is a fact of political life with which we are all familiar.

Were the Government, however, to reject the advice of the Council on any matter, it would have some explaining to do. lt would appear to be defying authoritative opinion. lt would be disowning the body it had created to assist it. It would offend people who had been influenced by the views of the Council. This is the coercive aspect of which the then Prime Minister spoke. In short, I do not think this notion of an independent Advisory Council, even if it were to work out as ideally as its proponents envisage, would offer net advantages over the system we have now - of technical advice given by competent, responsible permanent officials and of direct consultations with business.

I do not regard this system as beyond improvement, lt has evolved a long way but it can be developed further. There is need for wider economic studies, more forward looking studies, more studies in depth of particular problems and areas of activity. There is much room for extending and coordinating our contacts with the various sectors of the economy and the people who are working for their advancement. None of this, however, must be allowed to weaken the established relationships of an administrative service responsible to the Government, a Government responsible to Parliament and a Parliament responsible to the people.

Dr J F Cairns:

.- There have been two very significant changes in the position in life of the Treasurer (Mr. McMahon) in recent times, and one would have expected them to have stimulated and enlightened him. But neither has. Certainly we see no improvement in his style of debating over that of previous years.

Mr McMahon:

– The honorable member is smashing his own Party. Does he want to smash everyone else?

Dr J F Cairns:

– It is most unfair of the Treasurer to be so hurt by such mild remarks.

Mr McMahon:

– That is what you are doing - smashing your own Party.

Dr J F Cairns:

– I think it shows the Minister’s susceptibilities, which are a little surprising. However, I think we all have to conclude that this Parliament has become considerably duller because of the retirement of the former Prime Minister. I do not object to the Treasurer putting the House to sleep, but I think it is most unfair of him to put me to sleep when I have to succeed him in the debate. This is the kind of thing about which I am complaining.

Obviously somebody has culled out of the Vernon Committee’s report everything that supports what the Government has done over recent years and has given that result to the Treasurer who has presented it tonight in the form of a speech. He took about three quarters of a very long speech to tell us what has been found in the Vernon Committee’s report that praises or supports what the Government has done. He said nothing much about what could have been found in the report that would have assisted the development of Government policy and which might have provided guidelines or targets for subsequent development. He referred to only one proposal that the Vernon Committee put forward that might have guided the Government in developing its future policy - one suggestion only for improvement. Of course, the Treasurer dismissed it out of hand. It was the proposal about a planning commission. He was very abstract and theoretical about planning. He dismissed the suggestion because of some theoretical and abstract considerations, but the case for planning in Australia is very realistic and practical. It is a case that arises out of the obvious deficiencies of the arbitration system that were outlined more than three quarters of an hour ago by the honorable member for Melbourne Ports (Mr. Crean), lt is a case that arises out of the obvious deficiencies of the tariff system which the Vernon Committee took to task considerably as I am sure the honorable member for Wakefield (Mr. Kelly) will do when he speaks in this debate.

Practical and realistic considerations arise out of the need for the development of Australia. Regional development and northern development are matters that provide practical and realistic reasons why we should be considering planning much more seriously than the Treasurer has been prepared to do. We have heard a speech, three quarters of which contained culled references from the Vernon Committee’s report that imply some credit to the Government for what it has done. We have heard a speech which has ignored all the substantial parts of the Vernon Committee’s report that might have stimulated the Government into some improvement and which might have been of some benefit in influencing its future policy. However, I suppose we have to be grateful for what has happened. After all, the Vernon Committee was appointed on 13 th February 1963 and here we are debating its report three years later in 1966. This is a measure of the sense of urgency that the Government and its advisers have. There is no sense of urgency about any of these matters. There is a sense of complacency, a sense of self satisfaction, as the Treasurer has underlined tonight by the nature of his speech.

We, of course, heard from the former Prime Minister, Sir Robert Menzies, last year. On the whole he rubbished the Vernon Committee’s report. After having given it perhaps a second thought he did say something that suggested there might be something in the report that was worth considering. But what about the present Prime Minister (Mr. Harold Holt)? What does he think of the Vernon Committee’s report? We have not heard. The Treasurer does not think much of it, except where it supports what his Government has done over the last few years. I think one of the reasons for this emerges from what he said about the economic council or commission that the Vernon Committee recommended. He said this was recommended as an advisory body, additional to the existing system of advice that the Government receives - in other words, additional to the existing system in the Public Service. I think this was one of the main reasons why last year’s Prime Minister came into this House and rubbished the report I think that the proposed body was seen by the Government’s existing advisers in the Public Service and in industry as something which might rival them - as something which might diminish their influence. I think that the gentlemen in the Public Service who had the ears of the Prune Minister whispered into those ears very effectively for a week or two, and then the right honorable gentleman came in here and told us their story. That situation is not good enough. The Committee has produced a worthwhile document, a considerable document, and in many ways a very conservative document. There is hardly anything in it about which a progressive government need have any apprehension.

It is impossible to do more in the time that I have than to indicate half a dozen points of significance in respect of this report which the Treasurer completely ignored in his speech tonight. One of the basic propositions appears on page 17.13 of the report - this strange numbering system that the honorable member for Melbourne Ports referred to. The Committee said -

We believe that the growth and anticipated growth of the economy will be powerful incentives making for a high level of private investment although, as we have suggested, the distribution of this investment will need to be watched. It is for the Government to ensure that the required public investment is forthcoming, and there is probably scope for more effective planning and co-ordination for this purpose.

Instead, the Treasurer takes from the report reasons which justify complacency about public investment. Anyone who knows the condition of development of Australia - basic development, regional development, northern development; anyone who knows the condition of education - the crisis that exists in our schools system; anyone who knows the inadequacies of research and technical development; anyone who knows the inability of industry to overcome the problems of relatively rapid automation as they exist in Australia today, cannot be complacent about the situation. It is not just a matter of economic growth. It is a matter of the allocation of resources to meet the needs of the development of this country. The basic proposition that I have referred to as coming from the Committee indicates that we must have a plan. We must have a series of targets in different sectors of the economy. This involves priorities. It necessitates deciding that it is better for the nation to have this rather than that. Here is the great economic problem that exists today.

From 1931 to 1951 the most advanced economic thinkers were satisfied if full employment were maintained. Since 1951 advanced economic thinkers have been satisfied provided economic growth has been maintained at 3, 4 or 5 per cent. We have now reached the stage where economic growth at that rate should satisfy us. But we have now to be concerned with allocation inside that growth total. That is the way economists are thinking about the question in the United States of America, for example, where men like Chairman Ackerley, of the President’s Committee of Economic Advisers, have pointed out that governments should not be satisfied with 4 or 5 per cent, of growth, regardless of how it is made up, but should be devising machinery to determine the allocation of resources necessary to solve the nation’s problem. There was no indication in what the Treasurer had to say tonight that he is even aware of this kind of problem. There was no indication that he is aware of the necessity for national priorities in the development of this country or of the necessity to think of new forms of machinery - social and economic institutions - to achieve those priorities. I repeat that there was not one word in what he said to indicate that he is even aware of these things. Of course, there may be some justification for his omission in the fact that the Vernon Committee’s report has not laid sufficient stress upon the matter. That is why I say that in some ways the report is quite a conservative document and that it should not have worried the Government at all.

Mr Chipp:

– Will the honorable member give us an example?

Dr J F Cairns:

– If we turn to page 17.13 of the report we find that the Committee identifies some basic inconsistencies in the development of the economy and points out that the manufacturing sector is out of line. It points out that the pattern of production is heavily weighted towards manufacturing which does not correspond to the pattern of expenditure in the economy. The rate of growth in manufacturing will decline unless, by some anticipated changes in the levels of expenditure, we can establish some consistency between these things.

One thing that the Committee does not emphasise in sufficiently clear terms is that there is a pattern of need which is heavily weighted towards public services and the production of things like education, research and development, which does not correspond to the pattern of expenditure. There is no automatic process to achieve the kind of public service and production that we need. That production is not geared to the market system significantly. Thus we rely a lot upon taxation. This Government, during the 16 or 17 years that it has been in office, has been unwilling, through taxation, to obtain sufficient to keep the public sector of the economy developing rapidly enough. So we have had regional decline rather than regional advance. We have had country decline, we have had. provincial centres falling off, and we have had education crises and so forth. In what the Treasurer has had to say tonight there has not been any recognition of the urgency of this problem.

The honorable member for Higinbotham (Mr. Chipp) asks questions consistently of honorable members on this side of the

House, particularly upon economic subjects, and I am glad to note that tonight he is still asking questions. Let me tell him that one of the things we must bear in mind in the future is the need to expend more of our resources on matters like education - the training of teachers, the improvement of the system of education technically, and a reduction of the size of classes. We should also provide more resources for research in combined operations, one might say, with industry. In all countries, research expenditure has come predominantly from the public side of the economy. It is important to think in terms of the development of public enterprises for the production of minerals such as iron and bauxite, and of gas. We have only to look to Italy to obtain a lead in this respect. The way in which great public corporations have developed the natural resources of Italy probably has contributed more than anything else to the rapid development of that country in the post-war period. Nothing of this kind really is taking place in Australia. Our public enterprises are no more progressive now than they were 25 years ago. These activities must be coupled with regional development, because these basic resources are regional.

Turning to manufacturing, I believe we must look at our system of arbitration. The Vernon Committee has indicated some of the lines along which development of our arbitration system might be undertaken. The Committee had this to say at page 17.8 of its report -

The decisions o( the Commonwealth Conciliation and Arbitration Commission should take fully into account their expected economic, distributive and industrial consequences, and should pay particular attention to the maintenance of stable prices.

Our arbitration system is quite handicapped in this respect today. Our arbitration system must be developed in the very near future if it is to be able to do as the Committee suggests. Really, there can be no wage policy in this or any other country until there is a prices policy. It is quite impossible for a conservative government like the present Government to continue for very long trying to impose a wage fixation system while it is totally unwilling to look at what is happening in regard to prices. The emphasis laid upon this matter by the honorable member for Melbourne Ports would have justified the expectation of the Treasurer having something to say about it. But the honorable gentleman ignored it altogether. Seeing he was formerly the Minister for Labour and National Service, it was a surprising omission from his speech.

The arbitration system must be developed more along the lines of a planning authority acting in consultation with industry so that it may know what industry is thinking and what it is capable of allocating in wages from year to year, Then some agreements must be worked out between the parties involved so that the development of industry may take place along anticipated lines and not haphazardly as happens at the present time. I should like to refer to the obvious development that must take place in relation to tariffs. One could speak for an hour or two on this subject alone.

Mr Chipp:

– The honorable member for Wakefield will do so.

Dr J F Cairns:

– No doubt he will. What is more, he will do it very well. Broadly speaking, our tariff system is in exactly the same condition as it was a quarter of a century ago. This is not nearly good enough. No government can long expect to hand out protection and subsidies to industries without expecting to have something to say how those industries will handle that protection and those subsidies. We need a price policy such as the Vernon Committee’s report indicates we should have.

Mr Kelly:

– Where did the Committee say that?

Dr J F Cairns:

– It said so at page 14.15 of the report.

Mr Kelly:

– Will the honorable member give me the paragraph?

Dr J F Cairns:

– I shall read the passage. I did so last year. It is a wonder that the honorable member has forgotten it. The Committee said -

A request for an undertaking about price policy, if high protection is given, would not be unreasonable, especially where the product concerned is an essential raw material.

This is perhaps one of the most important indications of future development in the forms of tariff that the Committee’s report provides for us. The Committee wants a simplification of tariffs. It speaks about not protecting an industry if it cannot operate at normal profits with a tariff protection of something like 22i per cent, or 30 per cent. That is rather too artificial, but it is an indication of the kind of simplification that I believe our tariff system could benefit from. The point I am making is that I do not think that tariff protection or subsidies should merely be handed out to industries without there being some supervision by some public authority of what those industries are doing and some sharing of decision making in relation to both what they are to do and what they are to provide in the distribution of income. We cannot hope to get the most rapid rate of economic development or the allocation of resources that is necessary for national purposes unless we have an income and price policy that will allow that development to take place.

Although these problems have been wrestled with with some measure of success by almost every country that is as advanced as Australia, there are no signs of the fact having been recognised by this Government or at least by those of its supporters who speak as Ministers in this place. One would expect that somewhere on the back benches we would have younger men who were looking to the future problems of this country rather than to the past successes of the Government. The surprising and disappointing thing about the Government and its supporters is that there seems to be a complete absence of any new or radical thought in the field of economic policy.


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


.- I hope that the honorable member for Yarra (Dr. J. F. Cairns) will not be offended if I say that in some respects he sounded like some of my farmer friends. I do not know whether that is a nice thing to say about the honorable member. I am sure that many of my farmer friends would resent the comparison. The honorable member did sound like a prophet of doom. I know that this is a fundamental trait of farmers. They all say that they will be ruined. I have been saying this for years but it is surprising to hear the honorable member for Yarra speak with such gloom about an economy which he admits, by implication, and which the honorable member for Melbourne Ports (Mr. Crean) admitted quite definitely, is doing pretty well. Anybody would think that we were all being ruined. Indeed, our past performance, considering our difficulties, is one that we should survey with a great deal of pride.

I pay a tribute to the Treasurer (Mr. McMahon), first for laying down the Government’s policy in great detail on this issue. This certainly needed to be done. I am glad that the Treasurer paid a tribute to the members of the Vernon Committee for the vast amount of work put into their report. I would add my meed of praise to the Committee for its efforts, because I was one on this side of the Parliament who urged the Government to set up the inquiry. I realise what a tremendous amount of work went into it. It was refreshing to hear the Treasurer’s commendation. But I was surprised to hear the Treasurer refer to what he described as a trait of pessimism that ran through the report. I did not think it was so much pessimism as realism. I think it is proper for the economic facts to be spelled out as clearly as they can be. Surely it is not for us to be critical because errors were made. It is obvious that if you are to make prophecies and projections, in some way they must always be wrong. There has been too much castigation of the Committee for making . projections, but if it had not made projections I think it would have been failing in its obvious duty.

I was a little disappointed to hear the Treasurer say that it was wrong of the Committee to concentrate on a 5 per cent, growth rate. I cannot see the difference between an expectation of a 5 per cent, growth rate and a target of 5 per cent. There may be some difference. All I can say is that the Committee had to have a starting point. It took one pretty close to one that all of us would hope it would take - a 5 per cent, growth rate. The Committee had to do its arithmetic on some basis. It would have been remiss of the Committee not to do its arithmetic. I cannot see the force of the criticism that the Committee made rate of growth a fetish. In fairness to the Committee I should quote paragraph 2.21 of its report, which reads - . . We believe that economic growth should have high priority, but we recognise that its uninhibited pursuit may endanger the attainment of the other objectives of government policy. Therefore, we take a high rate of economic growth to mean the highest long-term rate consistent with our interpretation of the other objectives now to be set out.

With the best will in the world I cannot see what the Treasurer is growling about in this acceptance by the Committee of a 5 per cent, rate of growth as a starting point. I repeat that there had to be a starting point and this seemed to me to be a reasonable and acceptable one.

It is obvious that a report of this magnitude cannot be dealt with fully in 20 minutes. Also, it is inevitable that an honorable member will have a natural bias towards those portions of the report with which he agrees. I make no apology for the fact that I propose again to deal with the two tariff chapters of the report, and you, Mr. Deputy Speaker, will be glad to hear that I propose to be briefer in my remarks than I have been on other occasions. I dealt with these two chapters in some detail last year. I will not go through them in close detail again, but because I have been taking a lonely line on this tariff question in this House and because the whole trend of the Committee’s recommendations follows almost exactly the line I have been taking for so long, you would expect me naturally to rub it in a bit, and this I will now do yet again.

I think the Committee may be said to have come to five general conclusions in the tariff chapters of the report. The first conclusion .is that the tariff system has in the past served Australia well but in the future care in tariff making will be more essential than in the past if we are to become more and more industrialised. The second conclusion is that industries once in existence are not necessarily entitled to protection in the future. This is something that I have often said and I have been heartily abused for my efforts. The third conclusion is that we should not look to the tariff to solve our unemployment problems and that secondary industry, particularly protected secondary industry, does not loom as large as most people think

In the employment spectrum. The Committee made some remarks about the Special Advisory Authority system and pointed out that the integrity of our tariff system would be jeopardised if we continued our past policy of shuttling references backwards and forwards between the Special Advisory Authority and the Tariff Board. The Committee then proceeded to do something that had to be done. It laid down the general bench mark which industries should be expected to approach in the future if not immediately. The general bench mark which the Committee laid down is that an industry could be said to be economic and efficient if it could work with the most favoured nation tariff rate of 30 per cent. The Committee did not say that the tariff should not exceed that figure, but it did say that if the tariff did exceed 30 per cent., the matter should be looked at with care. I think you will agree, Mr. Deputy Speaker, that this is the kind of thing I have been saying in this House almost ad nauseam - trying to ram it down the throats of an unwilling and indifferent House. Yet strangely, some of the critics of the report have made the criticism that it is a high protectionist report. One reason for the criticism may be the fact that there is in existence a table used by the Australian Industries Development Association which shows that the Australian tariff was lower than the general bench mark which the Vernon Committee used and that the average rate recommended by the Tariff Board was between 11 per cent, and 12 per cent. I dealt with this table rather effectively in a speech on 14th August 1963. The table is still being used. It was used by die Minister for Trade and Industry (Mr. McEwen) in his Roy Milne lecture in Brisbane on 5th July 1965. That this table is wrongly based there is no doubt, as the Vernon Committee said in a footnote to paragraph 13.17, which reads -

Moreover, it is a source of controversy in Australia. Some bodies submitting views to the Committee, for example, the Australian Industries Development Association, quoted this index with apparent approval. Others were critical of it. It is, in our view, a bad index and ought not to be used.

It may be true that our general tariff level is low. I have never contested that. But it is also true that many of the tariffs which have come into this House recently have a general rate much higher than this general bench mark of something under 30 per cent. Indeed, there is a tariff proposal on the table of the House awaiting our attention at this moment. For example, there are on the Table of the House, proposals for tariffs of 55 per cent, on cotton textiles, 55 per cent, on man made fibres, 35 per cent, on components of cars, 35 per cent, and probably 45 per cent, on built up cars, and so on. The tariff schedule abounds with similar high tariffs. There is a tariff of 85 per cent, on stationary engines and 60 per cent, on vinyl acetate monomer. These and similar matters are the things that should be looked at with care and which indeed I think the House will admit I have been looking at with care.

The consideration that is important is that in tariff making there is no such thing as a free ride. Someone has to pay. It is usually the export industries or the consumer, and in many cases it is the secondary industries that use the highly protected’ product. The Vernon Committee spelt out these recommendations with, I thought, gratifying clarity. What I find alarming is that nothing seems to have happened about these matters since the report was presented.

Sir, leaving tariffs, although you will be surprised to hear that I shall come back to them, I should like to deal briefly with the question of savings, the need for an increased pool of savings to use in the development of our country. I know that the Vernon Committee recommended that we should increase our taxation rate to supply the capital required to deepen and widen the economy. I admit that I am not enough of a statistician or an economist to be able to analyse critically whether the Committee is right or wrong in that recommendation. I do know, of course, that a general rise in taxation to do this would tend to dampen down the incentive to work well and so would hinder the development of the country. And 1 realise the temptation that any government would face in having such a pool of savings. It would feel tempted to use the pool to make a good fellow of itself. In saying so I am not being critical of the Government. My statement is critical of democracy as a system. Lt would be difficult for any government not to use up the pool in some unwise way.

I know, too, that our rate of saving is much higher than is the case in most other countries, but there is one thing of which I am certain, and it ought to be emphasised in this House more often. Australia is a very difficult country indeed to develop. Because of that factor we need to have a higher level of savings than most other countries. In this House, as the honorable member for Dawson (Dr. Patterson) will soon realise, we have a very happy knack of solving all these problems with a few well chosen speeches. It is something that comes easily to us. Performance is always much more difficult. The size of the country and the arid nature of a great deal of it pose great problems which will be solved only with difficulty.

I admit the potential, but I do not admit that the realisation is going to be easy. Noone can deny that, in this milk bar economy into which we have drifted, we are making it easy. If we really want to do something about developing Australia, we have to do something about the milk bar economy - the opera houses, the ten pin bowling alleys and so on. If we are earnest about these things, we have to pay a price for them. So in my opinion we need to have a bigger pool of savings.

For that reason I urge the Government to think seriously - I do not pretend that I have examined this matter in detail - about having a compulsory savings scheme for young unmarried people, the money to be returned to them with interest at the time of marriage. This would do four things. It would give us a revolving fund to use for development. It would reduce the spending power of young unmarried people, leaving more resources available for other things. It would make young unmarried people realise the value of money, and would give them money when they needed it most, that is, when they were homemaking. The honorable member for Mackellar (Mr. Wentworth) has mentioned this kind of thing often in this House. I hope that the Government will have another look at it. We have to get more savings from somewhere if we are to do this job of development about which we are all so eloquent. I think Government action on the lines I have suggested would help both our country and our young people. We must recognise that this action would not be popular with the young people and it would not be popular with the people who do very well out of supplying them with luxury goods.

The other matter I wish to discuss briefly is the vexed question of Government planning. The Government was unable to accept the idea of economic planning by a special project’s commission or by the bigger economic advisory council. I can understand the Government’s attitude. It would feel that, if the special projects commission were to recommend that a certain project be undertaken, so much steam would be generated that it would be difficult for the Government to resist the pressure, even if it thought that the project was not soundly based. This would apply also to the more important economic advisory council. But this procedure seems to have worked pretty well with the Tariff Board. In many instances, the Government does not follow the Board’s report and no-one seems to worry very much, except me.

Mr Chipp:

– Not in many instances.


– It does happen sometimes but not frequently. The need for outside advice would not be so necessary if the Government would spell out the economic facts, as I think it should. I know it is not easy for the Government to accept this proposition. Since the report of the Vernon Committee the Treasury has put out some perfectly splendid White Papers. This is the kind of information that should be supplied to us more, frequently. The White Papers may be slanted according to the policies of the Minister, but at least they spell out the facts so that we can look at them. On the other hand, a special projects commission would naturally be biased according to the personalities of its members. The facts will be slanted a bit one way or the other, but at least they will be spelled out for us. Let me give an example of what I mean. Many people have expressed a great deal of enthusiasm for the Ord River project. The Western Australian Government prepared a not altogether unbiased statement and indeed the previous head of the Northern Division of the Department of National Development also prepared a not altogether unbiased statement. I think he would agree with that comment. I do not deny his right to be enthusiastic, but I do not regard his statement as the kind of clear exposition I want. I want a clear statement of what it will really cost; whether it is right for the cost of the engineering work to be borne by the taxpayer and not the farmer; what would be the real effect on the cattle industry in the area; what would be the effect on cotton growers in the Namoi Valley; and whether pests in a tropical environment will increase. These are the questions that are worrying me and, I should think, are worrying the Government. My complaint is that I have not yet seen the facts set down for me to examine as I ought to examine them if I am to do my job as a member of the Parliament. If we are not to have a special projects commission let us at least have the facts spelled out for us.

Let me turn again relentlessly to my tariffs. The Government’s policy has always been to protect economic and efficient industries. No-one has ever argued about this. The Vernon Committee made a rough stab at measuring the effect of tariffs. But since its report has been published not one single statement has been issued by the Department of Trade and Industry saying whether it agrees with the report or not. It must either agree or disagree. If it agrees, it would be helpful to tell us. If it disagrees, then it should say so and tell us why it disagrees. As it is, we are inclined to wander from one ad hoc decision to another. I presume that the Government knows what it thinks about the Committee’s report. What I want is a clear exposition of the Government’s thinking. Not to have a clear exposition makes it difficult to resist the plea for outside advice so that these matters will be spelled out for us. Sir Robert Menzies said that if the Government consented to the Committee’s recommendations for outside committees of advice democracy would have ceased and a technocracy would have begun. That is fair enough. But if we are not to be given the facts it is only fair to say that democracy has ceased and bureaucracy has begun.


.- The report of the Vernon Committee is a vast volume. The report cost between £100,000 and £200,000 of the taxpayers’ money to produce. It took three years to compile. It was compiled by economists and businessmen whose attitude towards political issues was, generally, the attitude of the Government. The Government selected the members of the Committee.

As has been pointed out, it is impossible to deal with every issue that is brought forward in the report. However, one section of the report deals with our overseas commitments and the inflow of foreign capital to Australia. I am particularly interested in those matters. My interest is such that when the announcement was made that certain people would constitute a committee to inquire into them, I sent to the committee quite a lot of the information that I had at my disposal, pointing out the amount of foreign capital that had been flowing into this country and the type that it was, and giving the opinions that had been expressed by members on this side and on the other side of the House, including the Deputy Prime Minister and Minister for Trade and Industry (Mr. McEwen), in connection with the influence of that inflow of foreign capital upon the economy of Australia.

The Vernon Committee made a report in connection with the inflow of capital. It did, of course, what was the obvious thing to do. First, it investigated the extent of the inflow of capital to Australia. It discovered that £2,499 million of overseas capital was invested in Australia between 1947 and 1964. Since 1964, another £258 million had been invested. This makes a total of £2,707 million. But people may ask: “What do thousands of millions of pounds mean in relation to the wealth of this community? “ Well, 34 of the municipalities of Melbourne, including the City of Melbourne itself, are valued for municipal purposes at approximately £1,800 million. Therefore, the value of the foreign capital invested in this country is nearly twice the value of the whole of the Melbourne metropolitan area, including buildings and lands. The Committee also pointed out that it was estimated that 25 per cent, to 33 per cent, of the industrial undertakings of this country were under foreign ownership. The Committee said that with a continuance of annual new investment in companies at the same rate as in the year 1963-64 - that was £201 million a year - the percentage of foreign ownership will rise from the current figure of about 25 per cent, to 54 per cent, by 1975.

At the rate of £201 million per annum inflow of foreign capital, within 10 years - that is by 1975 - Australian industries will be 54 per cent, foreign owned. To demonstrate the conservatism of that estimate let me show how the inflow of foreign capital has increased during the last 15 years. In each five year period it has doubled. It increased from £300 million to £600 million and has now reached nearly £1,200 million. As the Vernon Committee pointed out, overseas investment in Australia last year amounted to £201 million. In other words the industries of Australia were taken over by foreign interests to the extent of £201 million. If that rate of capital inflow continues, by 1975, according to the report of the Vernon Committee, 54 per cent, of Australia’s industrial undertakings will be foreign owned.

During the first six months of this financial year more than £200 million of foreign capital has flowed into Australia. That means that in 1965-66 the inflow of foreign capital will approximate £500 million and not £201 million. If at the rate of £201 million per annum Australian industry will become 54 per cent, foreign owned in a period of 10 years, I leave it to the mathematicians of this House to work out what proportion of our industries will become foreign owned if the increase in the inflow of foreign capital during the next two years continues in the geometrical progression of the past few years.

Let me quote some official figures in connection with our overseas trading operations. For the September quarter of 1 964-65 we had an adverse balance of payment of £97 million. For the September quarter of 1965-66 our adverse balance was £158 million. In other words the adverse balance of payments for the September quarter of 1965-66 is £61 million worse than it was for the previous year. For the December quarter of 1965-66 the adverse balance of payments was £120 million. For the same quarter of 1964-65 it was only £74 million. There has been an increase of £46 million as between the December quarter of 1964- 6* >“<! the December quarter of 1965-66. Combining those two quarters the adverse balance of payments is £107 million greater for the six months from July to December of this year than it was for the corresponding six months of the previous year. In the previous year we ended ultimately with a deficit of £392 million which was the second greatest deficit in the history of this country. It was exceeded only by the deficit of 1952 which amounted to £544 million. On that occasion the former Prime Minister of Australia walked to the microphone and said: “ We must impose restrictions on imports into this country otherwise we will face international insolvency”.

At the end of this financial year our adverse balance of trade will be greater than at any time in our history - even greater than it was in 1952. That position must be met. How will it be met? It will be met by the inflow of capital from overseas, by foreign interests taking over more and more Australian industries. As I have said, at the rate at which they are being taken over now, much more than 54 per cent, of them will be foreign owned by 1975. I believe that closer to 70 per cent, of Australian industries will be foreign owned by 1975. Further, the majority of Australian industries will be dominated by outside financial groups long before 1975.

I know there are people who say “ Well what does that matter? What does it matter whether someone within this country owns our assets or whether someone outside this country owns them? “ Let me answer that question in this way: According to figures supplied by the Commonwealth Statistician, at present we are sending overseas £201 million a year. If the foreign content of Australian industries doubles or more than doubles within 10 years and if the present dividend rates remain the same as they are now, or even nearly the same, then there will go overseas not £201 million a year, not twice £201 million a year, but much more than that. When this money goes overseas it will be lost to Australian industries, ft will not be used for the development of Australia. It will not pass from hand to hand within Australia, from industry to industry, from shopkeeper to shopkeeper and be subject to taxation which would mean that the people of this country would pay lower taxes. No. It will go overseas and will help to develop other countries of the world.

There is another feature which is most disconcerting. Whoever owns the industries of this country will dominate. the economy of this country; whoever dominates the economy of this country will dominate the Government of this country. These interests will determine who will work and where the people will work. They will determine what goods will be sold within this country and what goods will be sold outside this country. They will determine what goods will be exported and what goods will be imported. To a large extent, they are already determining these things. In the end result, this dependence upon foreign investment in Australia which is increasing daily will, in the words of the Deputy Prime Minister (Mr. McEwen), rob the people of this country of their freedom. He said that dependence on foreign capital means the destruction of the freedom of the people who depend on it.

The members of the Vernon Committee said, in effect: “ We are amazed at the amount of foreign capital. We think action should be taken.” They pointed to other countries which already take action to restrict and determine the kinds of overseas capital that are invested in them. They said that that should be done in Australia, too. They added that the State and Commonwealth Governments should not actively encourage any more investment. Of course, this Government encourages the investment of foreign capital by concessions of every description. Freight concessions, taxation concessions, provisions in connection with opportunities for reasonable access to shipping facilities and all kinds of inducements of that nature are provided. Now the Government even goes so far as to permit indentured labour to come from other countries, such as Japan, in order to develop this country. So foreign capital not only develops Australia but also brings other nationals to do the developing and exploiting of it.

The Vernon Committee said that the annual rate of new foreign investment should not be more than £150 million a year. Last financial year it was £201 million. In the first six months of this year it was more than £200 million. So this year it will be about £400 million, which is more than £250 million greater than the Vernon Committee said should be permitted. The Com- mittee went on to say that the formal approval which the Reserve Bank gives to non-sterling foreign investment should be extended to the sterling bloc to aid potential control of overseas investment, that takeovers of Australian enterprises by foreign companies should be approved by the Government, and that the Reserve Bank should maintain a register of all overseas investment. Not only the Vernon Committee but also other bodies throughout the nation are now waking up to the fact that there is a great danger in this inflow of overseas capital and in the takeover of industry after industry by overseas people.

I have given the House some figures and the Vernon Committee has provided some figures. Whilst they are official figures, they are not the real figures. They relate to industrial stocks that have been purchased by foreign interests. As the official documents point out, they do not include the value of leasehold - 57,000 square miles of leasehold land in the Northern Territory is held by foreign investors - or the farming estates in the south that are held by foreign investors such as the Governor of the State of New York and Linkletter, the American television personality. Nor do they include the vast amount of real estate in the capital cities and country towns of Australia which is owned by Chinese interests in Hong Kong and other international interests. As the Vernon Committee says, the first thing that we should do is maintain a proper register of ownership of all kinds of industry and all kinds of real estate by overseas interests, so that the people will know from day to day exactly how much of this land that we call our country remains in the hands of Australian residents and how much is, in reality, in the possession of overseas people.

Debate (on motion by Mr. Hallett) adjourned.

page 105


Political Designations - Vietnam - Television - Telephone Services

Motion (by Mr. Fairbairn) proposed -

That (be House do now adjourn.


.-! shall detain the House for only two or three minutes. I should like to refer to a question which was directed by the honorable member for Lilley (Mr. Kevin Cairns) this afternoon to the Minister for External Affairs (Mr. Hasluck). The essence of the question related to an organisation in the University of Sydney which calls itself the University Labour Club, which apparently was seeking support for the Vietcong in Vietnam. No doubt, the question was intended by implication to link this Labour Club with that of the New South Wales Branch of the Australian Labour Party. As a member of the New South Wales Executive of the A.L.P., I should like to inform the honorable member for Lilley that this club is not an affiliate of the A.L.P., nor is it associated with that Party in any manner, shape or form.

In addition, at the University of Sydney there is another organisation which calls itself the A.L.P. Club. This club also is not affiliated or associated with the A.L.P. As a matter of fact, the officers of the New South Wales Executive of the A.L.P. have publicly announced the facts that I have stated. In addition, the Leader of the Opposition in the New South Wales Parliament, the Hon. J. B. Renshaw, has made statements in the Legislative Assembly denouncing these pseudo organisations.

As the honorable member would know, there is no lawful restriction upon any organisation’s functioning under a name of its own choosing. For example, a group of university students could form a Liberal Club or a D.L.P. Club, and they could take decisions in direct contrast to the policies of those two political parties. Nothing could be done about it except to deny their affiliations with the Liberal Party or the Democratic Labour Party. So I ask the honorable member for Lilley to ascertain the facts in future before asking a question in which he endeavours to slander the A.L.P. by implication.


.- I wish to take up the time of the House for a few minutes, also to refer to a question addressed to the Minister for External Affairs (Mr. Hasluck). This was a question which I addressed to him yesterday and which, I submit, was couched in courteous language. I repeat it -

I address a question to the Minister for External Affairs. Has the Australian Government asked the British Government to take such action as would be appropriate to prevent ships flying tha British flag from supplying materials to North Vietnam?

He gave a reply, Sir, which I respectfully hold to be quaint. This was his reply -

The Australian Government has not made such an approach to the British Government. Before considering this question the Government did - as apparently the honorable member has not done - exam ne the figures relating to the trade. The trade is extremely small.

I want to say to the right honorable gentleman that there is a supreme danger in arguing from either one or a set of a prior assumptions, and if the right honorable gentleman takes the view that I have not bothered (myself with this, and he insists on maintaining that view, let there be no complaint from him if he has either his feelings or his hide lacerated.

Every member in this place is entitled to ask questions of Ministers and to seek information from them. I would not like to think that any member of this House would get up and say. “ Look, Killen, the question you asked the Minister for External Affairs was uncivil or improper “. The question I asked was a perfectly proper one and I resent the impertinence displayed by the Minister in the reply he tendered to me.

But what was singular about his reply was that there was no denial of the fact that ships flying the British flag are going into Haiphong. The Minister said in a tendentious way that the trade is extremely small. Well, obviously if the right honorable gentleman is in a position to make that claim he has in his possession information to support it, and I would invite him to lay on the table a document setting out the relevant information for, say, the last two years, which would seem to me to represent the critical years in terms of the South Vietnamese struggle. I ask him to give us the following information covering the last two years: The names of the British ships that have gone into Haiphong, the tonnage that they have carried and a dissection of the materials they have carried. I also invite the right honorable gentleman, seeing that he is such a stickler for authority, to tell us, in support of the information in his table, the sources from which he has gleaned the information. That would seem to be a perfectly reasonable request for me to make.

T direct the attention of the right honorable gentleman to a news item which appeared in the London Times “ of 19th February 1966 and which referred to a telegram sent to the President of the United States of America on behalf of 29 unions which are members of the American Federation of Labour-Congress of Industrial Organisations’ maritime trade department. This is the text of the telegram -

Trade with North Vietnam puts blood money in the pockets of shipowners and other profiteers and so-called allied nations. We believe the time for pussyfooting is long past. We must inform you, therefore, that very soon our members will begin to demonstrate their protests on all waterfronts in this country directed against any and ail ships of those nations which permit trade with North Vietnam.

Whether or not the conclusion of the “ Times “ was well founded has no relevancy, I submit. But in any case this was the conclusion -

The boycott, which will take the form of refusing to work such ships in United States ports, is expected to affect hundreds of vessels registered in Britain, Norway, Sweden, Denmark, France, Italy and Egypt.

If the right honorable gentleman is unimpressed by that information, 1 direct his attention to a news item which appeared in the “ South China Morning Post “ on 14th February 1966, in which there is a plain statement by the agents of a British ship called the “ Shirley Christine “ to the effect that they had not been officially informed of the ban.

Unlike the Minister, I have not at my disposal a large government department and instrumentality, but I do try to exercise my mind in the sense of at least acquainting myself with the broad outline of information, if I can get it, from such sources as are available to me. I resent very much indeed any Minister sitting on the front bench treating any member of this Parliament, whether on this or the other side of the House, who makes a genuine request for information, with less than courtesy, and failing to give such a member any help that can be given. Therefore I again respectfully invite the Minister for External Affairs to produce a table setting out the information I have asked for. I do not imagine the right honorable gentleman would gainsay the fact that I hold views about the South Vietnamese struggle as strong as those which he holds. I feel very warmly about the issue oi ships that fly British flags carrying supplies to Haiphong to be made available to the North Vietnamese Government. The quantity involved frankly does not impress me but the principle does concern me greatly. I hope the right honorable gentleman will reflect on the rather unfortunate reply he gave to the question yesterday and will respond to the invitation I have issued to him this evening.

Mr Allan Fraser:

– I appreciate the presence of the Postmaster-General (Mr. Hulme) in the chamber. In this chamber and outside of it 1 have striven to persuade him that he should enable a commercial television programme as well as a national television programme to be received throughout Eden-Monaro, and 1 have criticised him strongly for his refusal to act in that direction. So it is a particular pleasure now to take back that criticism and to thank him for a decision which will enable the provision of programmes from CTC Channel 7, Canberra, throughout a substantial area of the Monaro, lt is not all that we sought, but it is much more than the Minister’s recent attitude indicated that we would get. So I compliment him on having had another look at this matter and I thank him for the result, lt is a good result for a large part of the electorate. In accepting it, I would like the Minister to be sure that we will not rest until people in every part of Eden-Monaro can enjoy a choice of two television programmes, like the people in the great cities of Australia. From the way things are going, I think that that may not be far off. So I say to the Minister: “Thank you. So far, so good. Now let us press on further with the provision of television services in this area.”

I now turn to other matters, upon which the Postmaster-General is entitled not to praise but to the severest condemnation. I have just received from him one more refusal to allow telephone subscribers at Jindabyne South to have local call access to Cooma. I say “ once more “ because there have been many refusals previously. The only thing I can say to the PostmasterGeneral in praise is that I do appreciate the courteous way in which he has refused all our requests and the lengthy explanations that he has given to the Department’s decision. But why does the PostmasterGeneral think that the people of this area go on fighting this issue? Why does he think that the people of Jindabyne South and Ingebyra do not bow to his ukase? I will tell him. It is because their case is based on simple justice and sheer common sense and because the persistent refusal, even though couched in thousands of words of officialese, is just simple, plain, unadulterated, obdurate and obstinate red tape. lt is useless for the Postmaster-General to portray for us the charms and beauties of his darling E.L.S.A. E.L.S.A. is a pain in the neck to the people of this remote area and to the people of many other bush areas. It is a burden on those struggling to maintain a bearable existence in the bush. If the Postmaster-General is so fond of E.L.S.A. as he professes to be, let him clutch her to his own bosom and remove her from us, because we do not want her or any part of her.

Mr Hulme:

– Would they rather go back to the former system?

Mr Allan Fraser:

– These people would much rather go back to the former scheme under which they had local call access to Cooma for 4d., instead of being burdened with E.L.S.A. and being required to pay 2s. for each call. The subscribers of Jindabyne South feel so strongly about the rough treatment that they are receiving from the Postal Department that they have authorised me to say to him in this House tonight that unless he will remedy the situation he can take away the exchange, because they do not want it any more. They are prepared to give up all their existing telephone services rather than put up with what they consider to be complete injustice and utterly rough treatment. Previously, as I have told him, the subscribers in this area enjoyed local call access to Cooma, but now, in the sacred name of E.L.S.A. - extended local service area - the same call is charged for at 2s., an increase of 600 per cent. Where is the benefit in that? Where is the progress? This is progress backwards. In the country areas we have to see retrograde instead of progressive action over and over again in the field of postal administration. This is an insult and an injury to these people, and they are not prepared to put up with it.

Cooma has always been the business centre for this area. Adjoining communities still have local call access to Cooma. The people of Jindabyne South had this right for very many years. It is only since the new exchange has been built and the establishment of the E.L.S.A. system that they have been deprived of it. They have been deprived of it because of official adherence to an arbitrary line - a line which has no relation to the business needs, the economic development or the social circumstances of this district.

I know that E.L.S.A. has some virtues in some circumstances. But E.L.S.A. was made for telephone subscribers, not telephone subscribers for E.L.S.A. The Postal Department is supposed to be a business enterprise. No other business that I know of would be crazy enough to impose on its customers a 600 per cent, increase in charges because of some arbitrary decision made within its ranks. I beg the Postmaster-General to look at this matter once again and to apply not red tape but common sense and simple justice to its solution. The mere fact that people live in the bush is no reason to treat them with contempt. The Minister has received our representations with courtesy but he appears to have treated all our arguments with contempt, because he does not seem to have seen the force of them but keeps reiterating to me in very long and courteous letters the red tape attitude of the Department.

I now turn to what I consider is a pretty shocking state of affairs that has just developed at Michelago in my electorate, Mr. Speaker. Michelago is a pleasant village about 35 miles from Canberra. Because it has more than 40 telephone subscribers - either 41 or 42 - it is entitled to a continuous telephone service. The PostmasterGeneral has not been prepared to provide a continuous service and therefore the people of the village have had no service on Saturday afternoons or Sundays except for an hour on Sunday mornings. That has been the position until this week, although we have been pressing for a continuous service. I have now received from the Postal Department a letter informing me that at last Michelago is to have a continuous service. A new postmaster has been appointed and he has agreed to provide continuous service. I suppose you would think, Sir, that I would be praising the Minister and expressing pleasure to him at that decision. But look at what the Department dares to do in this matter.

The present subscriber’s rental in Michelago for the existing service is £8 a year. Now that service is to be provided on Saturday afternoons and Sundays subscribers with exclusive services are to be slugged for an additional £12 a year. The rental for an exclusive service in the village of Michelago is to be increased from £8 to £20 a year. For subscribers on party lines the increase will be even greater. Because this benefit of continuous telephone service which most subscribers in Australia normally enjoy is now to be provided, the rental for a party line serving two subscribers is to be increased from £6 or $12 to £18 or $36 a year per subscriber - an increase of 300 per cent. For people who are unfortunate enough to be on party lines serving three or more subscribers, the rental is to be increased from £5 or $10 to £17 or $34 a year - an increase of more than 300 per cent. The only reason given for these increases is that the village of Michelago lies in the shadow of the growing national capital, Canberra. The village is 35 miles from Canberra and its people deal with Cooma. That is their business centre. But because they have the misfortune to be situated in the area that has been chosen as the extended local service area for the national capital, their benefit of continuous service is to be accompanied by these extortionate rentals. No other reason has been given to me. I ask the PostmasterGeneral: Will he please look into this matter?

PostmasterGeneral · Petrie · LP

.- Mr. Speaker, I thank the honorable member first for having given me notice that he intended to raise these matters this evening in the debate on the motion for the adjournment of the House. I thank him for his comments about television in the Eden-Monaro area, particularly with reference to the proposed translator station in the Cooma region. He was not quite correct when he said that I was always opposed to this proposal. I was not opposed to it at all. I considered that the most desirable service for the area would be provided by the issue of a full licence to an applicant company. Last year for the second rime in some five to seven years, I caused applications for a licence to be called for this area. When no satisfactory application was received, I agreed that there should be a translator station and I would hope that at some future time there may be another translator station in another important part of this area. I appreciate the comments of the honorable member. I am pleased to see the extension of television to as many places as possible having regard to the economic considerations associated with the extension of television.

The honorable member for Eden-Monaro referred next to the charges from the Jindabyne South telephone exchange to Cooma, lt is as well to look back a little before making a judgment on this matter. The honorable member commented on the E.L.S.A. scheme and suggested that it was not worth while. The E.L.S.A. scheme was developed and introduced in 1960. When it was introduced the Postal Department lost, from a revenue point of view, no less, than 40 million trunk line calls because people who had been called upon to meet a trunk line charge were brought on to a local call basis. To suggest to me and the House that the forgoing, if I might use that term, of 40 million trunk line calls is not a service to the community is, of course, ridiculous. This figure indicates the advantage that has been accrued to the people of Australia. It was said by the Posmaster-General of the day, my predecessor who introduced this scheme, that in the development of these local call areas there would be, of course, a few people who might be disadvantaged because of it. But as with many other things which Governments have to do, we took into consideration primarily the greatest good to the greatest number of people. I might mention that when I talk of the local call area, I am speaking not of the 80 square miles within which people could make a local call prior to the introduction of E.L.S.A. but to the extension of that area to 800 square miles. The area brought within the local call area was ten times the area prior to the introduction of E.L.S.A. So, again, on this basis to say that E.L.S.A. has not been of advantage to the people of Australia would not be correct.

Let us look at the service from Jindabyne South to Cooma. In general terms, the area served on a local call fee basis is an area within 20 miles of a particular exchange. Near the metropolitan areas this is the provision. But there are many areas in the country where we believed the community of interest demanded that we go a little further than 20 miles. So we went to 30 miles. Jindabyne South is 38 miles from Cooma. Ii we extended the provision to 40 miles, many members would rise in the House and say: “ Within my area, there is a place 42 miles from a particular centre and we want this brought in, too “. What is to be the limit of such extensions? I suggest that this would mean a complete re-organisation of finances in relation to telephones throughout Australia. We have organised the charges in relation to the costs of providing telephones to the Australian community. If we have to make this sort of re-adjustment - and this is not the only one for which I have received a request in the past two years I have been in this position - we will have to review rentals and the charges in relation to all telephone calls. I submit to the House that merely to look after a local situation like Jindabyne South to Cooma is, having regard to the whole of Australia, an unreasonable attitude to expect the Post Office to adopt.

Mr Allan Fraser:

– But does not the Minister understand that they were paying only the local call fee before?


– As I have said, in this situation a few people were disadvantaged, but the vast majority were substantially advantaged. I feel that we were justified in looking at this matter on that basis. The honorable member referred also to subscribers connected to the Michelago exchange who, because the exchange is continuous and because it is in the Canberra local call area, are required to pay an increased rental. This applies to every area throughout Australia where this situation occurs. The honorable member said that the Post Office is responsible for this situation, but I remind him that the proposed charges were submitted to the Parliament and that the Parliament endorsed the charges which are now being made for the types of services which are being provided. I know that we can all argue about details, but again I say to the honorable member that, if we do not accept the position, then we ask for total reorganisation of charges throughout Australia. It was determined by the Parliament that all those who were in the Canberra area would pay the rental which applies to all capital cities plus Newcastle and Canberra. People in these cities have a tremendous advantage because they have such a substantial number of people whom they can contact on ‘a local call charge basis. I believe that the constituents of many other honorable members would be delighted to have access to the number of people that those in Michelago have available to them. I believe that many members of the Country Party represent constituents who, while paying increased rental, would be very pleased to have the opportunity to make local calls into a much greater area.

What has been done has been determined by this Parliament. Therefore, every one of us has a responsibility for what has been done. I do not feel that this is a matter which should be directed solely against the Post Office because the Post Office does as we request it to do. I must admit, of course, that I made the recommendation to the Government, but the Government accepted the recommendation and Parliament endorsed it. I believe that if honorable members consider this question in relation to the overall Australian situation, having regard to the telephone services which are provided and the charges which are made - and they must think in terms of the tremendous distances for communications - they will realise that most Australian people are well satisfied with the service that they are receiving, notwithstanding that here and there some people may appear to be paying a disproportionate charge when it is compared with charges in some other area. I say to the honorable member for EdenMonaro that I can hold out no hope that any reconsideration I can give will alleviate the situation in Jindabyne South or in Michelago.

Question resolved in the affirmative.

House adjourned at 10.59 p.m.

page 111


The following answers to questions upon notice were circulated -

Papua and New Guinea - School Teachers. (Question No. 1487.)

Mr Reynolds:

s asked the Minister for Territories, upon notice -

  1. How many non-indigenous persons joined the Public Service of Papua and New Guinea as

    1. primary; and
    2. secondary teachers in each of the last five years?
  2. Over the same period how many of these teachers resigned from the service?

Mr Barnes:

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

  1. Number of non-indigenous primary and secondary teachers who joined the Public Service of Papua and New Guinea in each of the last five years were:
  1. Number of non-indigenous primary and secondary teachers who resigned from the Public Service of Papua and New Guinea in each of the last five years were:

Northern Territory: Education. (Question No. 1517.)

Mr Whitlam:

m asked the Minister for Territories, upon notice -

What is the nature and extent of loans, grants, subsidies, supplies, concessions and scholarships from public funds for private bodies for educational purposes in the Northern Territory?

Mr Barnes:

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

  1. For the education of non-Aboriginal children -

    1. The Government provides loans to church and mission organisations for the erection of residential accommodation for children from outback areas who have to .ive away from home to obtain their education. Loans are repayable over 60 years at 1 per cent, interest. $1,860,000 has been advanced to date for this purpose, $28,246 of this amount being advanced during the current financial year.
    1. Under a scheme recently introduced, the

Government provides capital assistance for the construction of independent primary and secondary schools in the Northern Territory. The Government will repay the amount of loans for approved projects over 20 years, and will also make an annual interest payment. So far no financial provision has been made for expenditure under this scheme.

  1. Pre-school committees which include some committees for privately conducted preschools are subsidised for the purchasing of items of equipment for pre-schools. An amount of $6,200 is provided foi this purpose during the current financial year.
  2. Pastoralists who conduct schools on their properties may receive a maximum subsidy of $1,970 per annum for a teacher. $6,000 has been provided for this purpose in 1965-66.
  3. Assistance is available as follows for children attending both government and private schools -

    1. Children living more than .en miles from a suitable school may receive a boarding allowance of up to $280 per annum plus fares assistance. About 300 students are receiving this allowance at present, and provision of $90,600 has been made in the current financial year for this purpose.
    2. Children in necessitous circum stances receive free books and all secondary students receive a book allowance ranging from $16 to $20 per annum. A provision of $3,120 has been made for free books and $19,240 for the secondary book allowance this year.
    3. The Government provides a con veyance allowance to parents who drive their children to school daily. An estimated $8,400 is spent annually on this. (ti) Students attending tertiary institutions outside the Territory may receive annual return fare ($3,200 provided this year). The Government also meets the surcharge imposed by the University of Queensland on correspondence students ($1,000 this year).
    1. For the education of Aboriginal children -

    2. As mentioned above, the Government provides loans to church and mission organisations for the erection of residential accommodation for school children. These organisations are obliged to accept Aboriginal and part-Aboriginal children.

  4. Under certain conditions, the Government meets the cost of capital projects for Aboriginal education on mission stations. An amount of $62,000 has been provided in the current estimates for this purpose.
  5. The Government pays a subsidy of $1,970 per annum for each qualified teacher employed in mission schools, and an amount of $312 for each Aboriginal teaching assistant This year provision of $94,480 Mas been made for 44 teachers and 25 Aboriginal teaching assistants.
  6. Teachers employed by pastoralists also receive a subsidy of up to $1,970 per annum (see (A) (iv) above). An amount of $12,940 has been provided in 1965-66 for this purpose.
  7. The Government provides school books and supplies and furniture for mission and subsidised pastoral property schools.
  8. School committees and parents’ organisations on settlements and missions receive a $ for $ subsidy for the purchase of extra school equipment ($2,000 in 1965-66).
  9. Selected part-Aboriginal children who under take education and training in the southern States may receive up to $600 per annum for maintenance ($28,000 in 1965-66).

Department of External Affairs: Pamphlet. (Question No. 1522.)

Dr J F Cairns:

rns asked the Minister .for External Affairs, upon notice -

  1. What is the cost of publication of the pamphlet entitled “ Vietnam “ issued under the authority of the Minister for External Affairs November 1965?
  2. What is the cost of distribution of this pamphlet?
  3. How many copies have been -

    1. published;
    2. distributed; and
    3. returned?
Mr Hasluck:

k. - The answers to the honorable member’s questions are as follows -

  1. $1,544.
  2. $1,600 (approximately). 3. (a) 75,000.

    1. As ait 8th March 1966-71,000.
    2. No copies have been returned by recipients to the Department of External Affairs.

Office Accommodation. (Question No. 1485.)

Mr Cross:

s asked the Minister for the Interior, upon notice -

  1. What Commonwealth departments and instrumentalities are occupying rented premises in Brisbane and what are the annual rentals involved?
  2. When does he anticipate that his own department will be able to move back into Commonwealthowned premises?
  3. Are plans in the course of preparation for extensions to the Commonwealth Offices in Adelaide Street?
  4. When does he anticipate that construction will commence?
Mr Anthony:

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

  1. Departments and instrumentalities occupying rented premises in Brisbane as of 31st January 1966 and the annual rentals payable are -
  1. On completion of the proposed extensions to the Commonwealth Offices adjacent to Anzac Square, which on present expectations will be about the end of 1970.
  2. The Department of Works is preparing sketch plans for submission to the Parliamentary Standing Committee on Public Works later this year.
  3. Subject to endorsement by the Parliamentary Standing Committee on Public Works and to the normal programming arrangements, it is presently anticipated that it will be possible to call tenders by mid-1967, and that construction could be commenced towards the end of 1967 or early in 1968.

Cite as: Australia, House of Representatives, Debates, 9 March 1966, viewed 22 October 2017, <>.