House of Representatives
15 March 1966

25th Parliament · 1st Session

  1. House of Representatives
  2. 25th Parliament
  3. 1966

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

page 203

QUESTION

EUROPEAN LAUNCHER DEVELOPMENT ORGANISATION

Mr MORTIMER:
GREY, SOUTH AUSTRALIA

– Will the Minister for Supply inform the House of any advances made by foreign interests, other than those already established, for the use of the Woomera range, and its other facilities, or for participation in any project at Woomera? Does the European Launcher Development Organisation plan curtailment of some or all of its activities in the area? Finally, what effect will these matters have on Woomera’s future?

Mr FAIRHALL:
Minister for Defence · PATERSON, NEW SOUTH WALES · LP

– There is no definition of the future E.L.D.O. programme. As the honorable member is probably aware, the United Kingdom in recent months has shown an inclination to consider very carefully whether or not its national interests would best be served by staying in the European Launcher Development Organisation. If the United Kingdom Government should withdraw from the project, one could well imagine either a great curtailment of or, in the extremity, perhaps the collapse of the E.L.D.O. project. I do know that the European countries which are members of the Organisation would be considerably upset about this, and I should think that they would have conveyed those views to the Government of the United Kingdom. There was to have been a general conference in Paris at the end of this month which would have settled the future of E.L.D.O., but in view of the fact that the British elections are coming on so soon it has been delayed for a month.

By the end of April we will have a pretty good idea of what the future of E.L.D.O. will be. If E.L.D.O. withdrew from the rocket range, this obviously would have some effect on the work load, although not a vital one. There are new projects coming to the range. I think the first part of the honorable member’s question refers to these. One or two nations have indicated an interest, but this may take some time to develop. In the meantime, there is one pro- ject coming in in which there is a joint United States, United Kingdom and Australian interest. This will obviously take up some of the work load if the E.L.D.O. project is retarded. All in all, I do not think we need to worry about the future programme of E.L.D.O. It always has fluctuated. This will merely be another downward fluctuation, and one hopes it will be temporary.

page 203

QUESTION

NEWCASTLE DISEASE

Mr BRIDGES-MAXWELL:
ROBERTSON, NEW SOUTH WALES

– My question is directed to the Minister for Health. Is it a fact that the strain of virus causing the present outbreak of Newcastle disease in our poultry industry is one that has no effect on a bird’s ability to grow or produce eggs? Is it a fact also that the only method of diagnosis is by a pathology test and that there are no visible symptoms? Is it further a fact that the disease has now been found in Queensland, New South Wales, Victoria, the Northern Territory, Western Australia and Tasmania, and that South Australia has not detected it yet? Finally, is it true that all the States except Victoria have lifted the embargo on poultry and poultry products being imported into their areas and that the Victorian Government has announced its intention to retain the embargo for 12 months?

Dr FORBES:
Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– So far as is known at present, the strain of Newcastle disease which is in Australia now has no visible effect on the ability of Che birds to grow or to produce eggs. It is true that the only means of diagnosis are laboratory tests such as the isolation of the virus or serological tests designed to indicate whether birds have been exposed to infection. It is also true that none of the characteristic symptoms of the disease has been observed in this outbreak. The virus has been recovered from only one bird in Queensland, but positive reactions to serological tests have been found in all States except South Australia, and surveys are continuing.

In answer to the final question asked by the honorable gentleman I say that, with the exception of New South Wales where serological tests disclosed widespread exposure to the disease, I am not aware that any State has lifted its ban on the import of poultry or poultry products into that State.

Of course, Queensland has never had such a ban. I also .joint out that the control of a poultry disease or of any animal disease within a State is a matter for the Government of that State. So the question of whether poultry or poultry products are allowed into a State is a matter for the State Government concerned. Finally, I believe that the Government of Victoria did impose a ban for 12 months. Whether that will be lifted within 12 months or extended is entirely a matter for that Government.

page 204

QUESTION

NORTHERN TERRITORY PASTORAL LEASES

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

– Will the Minister for Territories say whether reports which indicate that the Government has agreed to extend the terms of existing pastoral leases in the Northern Territory for a further 50 years are correct? As these leases have at least 40 years to run now, would not an additional 50 years make them the longest term pastoral leases in existence in Australia? Further, if the reports are not correct, will the Minister say whether any other alterations to the existing leases have been agreed to?

Mr BARNES:
Minister for Territories · MCPHERSON, QUEENSLAND · CP

– I am not aware of the suggestion that the honorable member makes about the extension of existing leases. Of course, leases are matters for consideration by the Government. I think a committee is looking at these matters now. Up to the present no decision has been made. Answering the honorable member’s question, I know nothing of the extension of long term leases in the Northern Territory.

page 204

QUESTION

AFRICA

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– I ask the Minister for External Affairs: Have the British and Australian Governments granted recognition to the new Governments of Nigeria and Ghana? If they have, approximately how long after the recent rebellions was such recognition granted? Also, have Zambia, Malawi and Tanzania recognized these two new Governments?

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– What happened in Nigeria was that there was an attempted rising, which was unsuccessful. Although, unfortunately, the distinguished Prime Minister of the country and some of his Ministers were assassinated, the Government under General Ironsi was in all senses the successor of the former Government, and no formal act of recognition was necessary. We continue to recognise the Government as the successor of the previous Government. Great Britain took the same view. The three African States which the honorable member mentioned have done nothing in this respect; so I assume that they also have taken that view.

In Ghana there was the overthrow of an existing government and its replacement by a new government. After a lapse of time of about a week, when it became obvious that the new Government was stable, we formally recognized it. Great Britain took the same action. I regret that I am unable to say what the three African States to which the honorable member referred have done in the case of Ghana; but I will find out for him.

page 204

QUESTION

LIFE ASSURANCE

Mr PETERS:
SCULLIN, VICTORIA

– Does the Prime Minister remember that on 31st August 1965 and on 2nd September 1965 I asked questions about conditions applied by life assurance companies to policies issued to Australians on active service. I did not receive a reply and on 20th October I again asked the then Prime Minister what was the position. He replied: “ I expect that the information will be available soon.” How soon?

Mr HAROLD HOLT:
Prime Minister · HIGGINS, VICTORIA · LP

– I shall find out and convey the answer to the honorable gentleman.

page 204

QUESTION

RURAL FINANCE

Mr ENGLAND:
CALARE, NEW SOUTH WALES

– I direct to the Treasurer a question which relates to the Prime Minister’s statement to the House last week, particularly to that portion of it dealing with rural finance. In reply to the honorable member for the Riverina last week, the Minister stated that he had already had discussions with the Governor of the Reserve Bank and that perhaps this week he would have discussions with some of the general managers of trading banks. In view of the vital concern of these talks to the whole of the Australian community, particularly to primary industry and that part of the community depending upon it. can the Treasurer give more definite indication of projected talks or can he forecast the time at which additional rural finance will become available?

Mr MCMAHON:
Treasurer · LOWE, NEW SOUTH WALES · LP

– The Government is pursuing administrative action to bring the Prime Minister’s policy statement into effect as soon as possible. I have already stated to the House that we hope to have meetings of the general managers of the trading banks this week, and a meeting will take place on Thursday. We will also be having further Cabinet discussions about it. At the moment I am unable to state precisely the date on which finance will become available.

page 205

QUESTION

AUSTRALIAN ARMY

Mr WEBB:
STIRLING, WESTERN AUSTRALIA

– Is the Minister for the Army in a position yet to answer my question of 8th March relative to Gunner O’Neill’s being handcuffed to a star picket in a weapon pit for 20 days? If this punishment was as alleged, was it contrary to the rules of field punishment? If so, what action is being taken against the officer responsible for ordering such punishment?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– The details of the court martial proceedings arrived in Australia yesterday. These are some 60 pages and they are in longhand and difficult to read. I have given them a first examination. They are now in the process of being typed so that they can be examined in much more detail and more accurately. There will be no avoidable delay in giving the House appropriate information in this matter.

page 205

QUESTION

PILOT TRAINING

Dr GIBBS:
BOWMAN, QUEENSLAND

– I direct a question to the Minister for Civil Aviation. As there is an increasing demand for pilots of all types of aircraft, will the Minister indicate what assistance is available to facilitate the training of pilots in Australia?

Mr SWARTZ:
Minister for Civil Aviation · DARLING DOWNS, QUEENSLAND · LP

– The Commonwealth Government has for many years provided direct and indirect financial assistance in this field. In fact, over the last 10 years an amount of $3.3 million has been allocated for this purpose. In addition to this type of finance, a special Commonwealth flying scholarship scheme was set up in 1962 and we anticipate that at the end of June this year about 250 pilots will have received training under this scheme. In addition to this Commonwealth assistance, the airline operators themselves have schemes functioning. Our international airline, Qantas Empire Airways Ltd., for example, has its own training scheme and is now in the process of extending this scheme into advanced training fields. I understand that in a matter of a few weeks about 25 cadet pilots will move into the advanced training scheme. In addition our domestic lines, Trans-Australia Airlines and Ansett-A.N.A., have their own training schemes which are quite successful. Furthermore, the aero clubs - supported and subsidised, incidentally, by the Commonwealth - and the commercial flying training operators also provide a flow of pilots each year. Despite all this we are only just holding ground at the present time. Accordingly I intend to undertake a full investigation of the position in the near future.

page 205

QUESTION

OVERSEAS MILITARY OPERATIONS

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I direct a question to the. Prime Minister. In view of his announcement of an increase in our military commitment in Vietnam and the decision to send conscript national servicemen to fight in that area, would it be correct to say that Australia is actually at war? If so, does the Government intend to conscript wealth, introduce capital issues control and take action to control prices and profits? If it does not, will the right honorable gentleman confirm or deny that although the nation is at war our efforts are to be limited to the conscription of voteless boys for military service overseas?

Mr HAROLD HOLT:
LP

– I think the honorable gentleman has been long enough in this House and close enough to the processes of government to know that the question he has put is quite misleading in its implications and in fact constitutes a mischievous attempt to convert a quite serious national issue into an item of party political propaganda. I hope the House can approach this matter in a realistic and balanced fashion. I do not think it is fair either to the young men concerned or to their parents to create an entirely false and misleading impression as to what is involved in the decision of the Government.

I am asked, Sir, whether this country is at war. This country is engaged in military operations at a number of points. We have joined with the United Kingdom forces in resisting Indonesian confrontation in Malaysia. We have joined with American forces and those of South Vietnam and certain other countries in resisting the Communist expansion and the repression and terrorism from Communist sources which are occurring in South Vietnam. We regard the issue as one of critical importance for free peoples throughout South East Asia and indeed for free peoples everywhere. As part of an Australian contribution in this area we have announced the despatch in the near future of a task force group and the Minister for the Army has pointed out that about 30 per cent, of this task force group, totalling about 4,500 people, will consist of national service trainees.

There are 80,000-odd young men in this country in the relevant age group, of whom 8,400 are to be called up for national service training. Approximately one in six of those, on the scale of a task force of 4,500, would be in South Vietnam at any one time. I am speaking in round figures on the basis of the scale that is in contemplation in the planning which has been undertaken. The tour of duty would extend for approximately one year. Before undertaking that service the trainees, as I understand the position, would undergo a period of at least six months initial training followed by three months training of a corps character. A number of national service trainees, after undergoing this training, would then serve in South Vietnam, the total number representing about 30 per cent, of the 4,500 Australian servicemen engaged there.

Mr Calwell:

– Call them conscripts.

Mr HAROLD HOLT:

– Well, the Leader of the Opposition calls them conscripts. I would say that they are responding to the decision by this Parliament that there shall be provided in this way a necessary component of the regular forces to maintain the most effective fighting force on a limited scale, commensurate with the limited nature of the operation that this country has undertaken. Does the Leader of the Opposition advocate that we should have something less than the most effective fighting force that we can put into the field? This Government has acted in accordance with the recommendations of the highest order of military advice that it has been able to obtain. Our decision is based on legislation that has been passed by this Parliament. The honorable gentleman who leads the Opposition said that he would make this the issue at the last Senate election.

Mr Calwell:

– We shall make it the issue at the next one.

Mr HAROLD HOLT:

– The honorable gentleman will not find the Government running away from the issue then any more than it did at the last Senate election, at which the Australian Labour Party was decisively defeated. All I ask is that honorable gentlemen opposite treat seriously, in a balanced way, an issue that is of concern to all people in this country and not attempt to make that issue a tool of their own political propaganda in an effort to conceal the divisions on foreign policy so evident among them.

page 206

QUESTION

ELECTORAL

Mr KILLEN:
MORETON, QUEENSLAND

– I preface my question, which is addressed to the Prime Minister and which concerns eligibility for voting, by reminding the right honorable gentleman that during the last war provision was made whereby servicemen over 18 years of age were entitled to vote. I ask: Will he initiate a study to see whether it would be practicable for provision to be made for all those required to undergo national service training to be given the opportunity to enrol for voting at Federal elections? I respectfully invite the right honorable gentleman’s attention to section 41 of the Constitution which may, in present circumstances, frustrate an attempt to legislate for the purpose that I have suggested.

Mr HAROLD HOLT:
LP

– This matter has been receiving the Government’s consideration. It would not be free from complications, even if there were a general disposition to provide a voting entitlement, because it would involve the question of extending the right to vote also to other categories of servicemen under the age of 21. There are in the Services volunteers who are considerably under that age. There were precedents, to one of which the honorable gentleman has referred, in the action taken in 1918, I think, in the First World War and in 1943 in the Second World War. Those were wars in which expeditionary forces which were away from this country for several years at a time were involved. Our national servicemen are called up in their 20th year and by the time those of them who are sent overseas are so despatched they are very close to the normal voting age. However, the matter is being studied thoroughly at present and I shall have in mind in that consideration the facts the honorable member has put.

page 207

QUESTION

VIETNAM

Mr CALWELL:

– I ask the Prime Minister a question. Is this country at war with Communist China, North Vietnam or the Vietcong? If we are at war with those countries, why has the Government not announced the fact? If we are at war with those countries, why is Australia not put on a war footing so that the wealth of this country shall be in danger as much as the lives of the voteless conscripted kids and other servicemen who are being asked to go and die in a jungle war which is unwinnable and in which, if they do not sacrifice their lives, they will have to sacrifice their health?

Mr HAROLD HOLT:
LP

– I have already made it clear that this country is engaged in a number of limited operations with military forces. It is not technically in a state of- war, but, as my predecessor pointed out, there are military operations proceeding in the areas to which reference has been made. I should have thought that distinction was apparent enough for the honorable gentleman’s comprehension. I do not think that he, for one, would seriously recommend that, having regard to the limited nature of Australian participation, Australia be put on the regimented war footing which obtained when there was a state of general war at the time of the Second World War and when a government, led by those of his own political persuasion, was in office. The country is able to meet the commitments it has to its allies and to those countries to which we feel some obligation to provide assistance within the kind of framework that obtains at present and in accordance with the policies which the Government is pursuing.

page 207

QUESTION

ARMY CLOTHING

Mr WHITTORN:
BALACLAVA, VICTORIA

– The Minister for the Army will remember that considerable criticism was levelled at the Government and at the Department of the Army last year regarding the clothing issued for use by our troops in South Vietnam. Can the Minister inform the House of the present position? Has there been any research into the problems of clothing and equipment which is to be used in areas such as South Vietnam? If so, what have been the results?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– All the information available to me indicates that the clothing issued to our troops in Vietnam is as satisfactory as and, in some instances, more satisfactory than that issued to other troops operating in areas of this kind. Because of the climatic conditions, additional issues of certain items are made over and above what would be issued in Australia. Honorable members will appreciate the reasons for this. Even though we may believe that the clothing issued is satisfactory, there is always the possibility of improvement and, therefore, there is continuing research in Australia and an exchange of information between ourselves, the United States of America and the United Kingdom on these matters.

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QUESTION

NATIONAL SERVICE

Mr O’CONNOR:
DALLEY, NEW SOUTH WALES

– My question is addressed to the Prime Minister. The right honorable gentleman, when replying to a question asked by tine honorable member for Grayndler, said that this year approximately 80,000 young men would reach the age which would qualify them for call up and of that number 8,400 trainees would be balloted for. If I understood him correctly, he went on to say that one-sixth of those 8,400 would serve in Vietnam as part of the task force that is to be sent there. I now ask the Prime Minister: How will the Government determine the required number of conscripts to be sent to Vietnam? Will those personnel be selected or will a ballot be conducted as in the case of the call up?

Mr HAROLD HOLT:
LP

– I think I should make quite clear to honorable gentlemen what was being put to them earlier in regard to numbers and the percentage that might be involved in subsequent call up and service. First, in this particular year more than 80,000 young men are in the age group for call up. I understand that this number will tend to increase in the years ahead. At present the total to be called up is 8,400, which is approximately one-tenth of those who are in the age group for call up. I understand that the task force which I have indicated is to be sent to South Vietnam will contain, in total, something short of 4,500 persons. Although the incidence in particular categories may vary, I think I am correct in saying that of that total about 30 per cent, are likely to be national service trainees. The Minister for the Army has just nodded to indicate confirmation of what I have said. This will mean that of the total of 4,500 personnel in the task force approximately 1,500 will be national service trainees. They will be serving with Regular Army units on a tour of duty which has been planned to be of approximately 12 months’ duration.

Mr Bryant:

– The Prime Minister has not answered the question.

Mr HAROLD HOLT:

– The honorable member for Dalley asked how these men are to be selected. It has already been made clear that the national service trainees will be serving in Regular Army units; they will be spread throughout the various units. According to which particular battalion is sent, either initially or in rotation afterwards, so representation from the ranks of the national service trainees will be resolved. That is as I see the position.

page 208

QUESTION

RAIN MAKING

Mr FAILES:
LAWSON, NEW SOUTH WALES

– I address to the Minister representing the Minister for Works a question which is based on the striking success of rain making operations in the central west of New South Wales over the past week, which were carried out by the New South Wales Government and private enterprise and which were the outcome of years of research and experiments conducted by the Commonwealth Scientific and Industrial Research Organization. I ask the Minister: Can the C.S.I.R.O. offer urgent assistance to the New South Wales Government by way of aircraft equipped for cloud seeding and operators trained in this skill so as, at least, to double present activities that are designed to produce rain in our parched inland? Is the C.S.I.R.O. short of finance to train more men in this field? If so, will the Minister arrange urgently for assistance to carry out this work?

Mr. FREETH__ Naturally the Government was delighted to read of the success of the cloud seeding operations referred to by the honorable member. I understand that of the aircraft used in the operation one belonged to the Commonwealth Scientific and Industrial Research Organisation and the other was a private aircraft hired by the New South Wales Government. Basically it is the responsibility of the State Governments to undertake seeding of rain clouds in their areas. The function of the C.S.I.R.O. in this field is basically one of long term research. For a long time the State Governments have had full information from the C.S.I.R.O. as to the types of clouds suitable for seeding and the methods of fitting out aircraft with seeding apparatus. These facts were known to the New South Wales Government. Coupled with its normal programme of research the C.S.I.R.O. from time to time instructs the State Governments in latest developments. My colleague in another place has said that as far as he is aware the C.S.I.R.O. is not short of funds.

page 208

QUESTION

VIETNAM

Mr GRAY:
CAPRICORNIA, QUEENSLAND

– I ask the Prime Minister a question supplementary to the question asked by the honorable member for Grayndler. When it is being decided how many servicemen are to be sent to South Vietnam is any effort made to secure volunteers from the ranks of national service trainees or are the men detailed for service in South Vietnam without regard to the fact that sufficient numbers could be obtained by voluntary methods?

Mr HAROLD HOLT:
LP

– The honorable gentleman will appreciate that these men are trained in Army units and when a unit was about to be dispatched overseas it would be impracticable to call for volunteers from within the unit. If this were done the ranks would have to be reformed and training begun again. It does not take a great deal of thought to appreciate that the present method of selecting servicemen for service in Vietnam is the only practical one. lt is well known that the United States, which has something more than 200,000 troops in South Vietnam compared with the proposed Australian component of 4,500, has for many years operated a system of induction into the Army which has operated over a wider proportion of the community than does the Australian national service training scheme. My understanding is that the number of persons serving in the United States forces in South Vietnam represents a considerably ‘higher proportion of persons inducted into the United States Army than is the case with the Australian units.

page 209

QUESTION

TELEVISION NEWS FILM

Dr MACKAY:
EVANS, NEW SOUTH WALES

– Is the PostmasterGeneral aware that ATN Channel 7 in Sydney last night screened, as part of its news bulletin, a film of the trial and execution of a war profiteer in Saigon; that the film showed every detail of the revolting killing; and that it was shown at 6.30 p.m. - a time when many young children, including mine, were watching? Will the Minister ascertain the source of this film, how it entered Australia, whether it was subject to any censorship, and whether it is necessary for this type of propaganda to be shown on Australian television, especially at such an hour? Finally, will the Minister obtain for the House the identity of those responsible for the decision so to screen this film?

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– The responsibility for showing the film resides not in individual officers but in the management of the station concerned. Some of the information which the honorable member seeks could perhaps be obtained by the Australian Broadcasting Control Board for use by the Board. I do not think that under the legislation the information would necessarily be available for public use without permission of the station concerned. News films which come into Australia are censored. I appreciate that some people believe there should be more censorship whilst others believe there should be less, but the Commonwealth Censor exercises his responsibility in relation to these matters. As to the source of the film, I believe it is a normal commercial source which is available to many of the news media of this country.

page 209

QUESTION

SNOWY MOUNTAINS SCHEME

Mr SEXTON:
ADELAIDE, SOUTH AUSTRALIA

– I preface my question, which is directed to the Minister for National Development, by saying that last Wednesday the Minister, in reply to a question asked by the honorable member for Macquarie, said that the Snowy Mountains Authority had a large programme of work and the 1,500 employees would be engaged on the Snowy Mountains scheme for a long time to come. I ask the Minister: Is it not a fact that with the completion of the Murray power stations and the Jindabyne, Jounama, Blowering and Talbingo dams, no further major water conservation projects are planned in the Snowy Mountains scheme? As the longest scheduled time for the completion of these projects is six years and as some Snowy Mountains projects have been completed ahead of scheduled time, will the Government regard the future of the Snowy Mountains Authority as a matter of urgency?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– I have made it quite plain, I think, that the future of the Snowy Mountains Authority is a matter of policy. It is being considered by the Government and, when the Government has made its decision, this will be made known in the usual way.

page 209

QUESTION

DROUGHT RELIEF

Mr ARMSTRONG:
RIVERINA, NEW SOUTH WALES

– My question is directed to the Treasurer and is supplementary to the question asked by the honorable member for Calare. In view of the more favourable weather pattern that has already brought relief rains to some areas of eastern Australia and therefore made the need for finance even more urgent, will the Treasurer.when he meets the representatives of the banking institutions next Thursday, use every endeavour to have the new rural credit policy put into effect as quickly as possible?

Mr McMAHON:
LP

– I have already given the assurance that I will do all in my power to have the arrangement brought into effect as quickly as possible. The fact that relief rains have fallen in many parts of New South Wales does not change the position so far as I am concerned. Perhaps it makes the question of restocking more urgent, but we are pressing this matter just as quickly as we possibly can.

page 210

QUESTION

CIVIL AVIATION

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I ask the Minister for Civil Aviation a question. Has it been established that, in certain circumstances, jet aircraft with a high tail wing get into a position where they are out of the control of the pilot? Is it also a fact that United Kingdom authorities have developed a device that anticipates the conditions in which this occurs and automatically adjusts the control of the aircraft? Do the United Kingdom authorities now insist that all jet airliners of this type coming into the United Kingdom be fitted with this device and that new jet aircraft manufactured in the United Kingdom have the device installed from the outset? If these are facts, will the Minister tell us what is being done by the Australian civil aviation authorities?

Mr SWARTZ:
LP

– No fault has been established in the high wing type of aircraft now in operation in Australia. What has taken place in the United Kingdom is this: In early tests certain high tail wing aircraft proved to have a pre-disposition at a certain stage of stall to some breakdown leading to a situation that could be difficult for the crew to control. Many of the aircraft of this type produced in the United Kingdom have fitted to them what is technically termed a stick pusher. This controls stall at a certain stage. The aircraft manufactured in the United States of America, which are operating successfully in Australia and throughout the world, do not reach this position of stall under similar conditions and the equipment fitted to the United Kingdom aircraft is not necessary. This is no criticism of either type of aircraft, both of which operate efficiently.

Mr Beazley:

– Is the Minister satisfied after what has happened in Tokyo?

Mr SWARTZ:

– Yes. The position has been clearly stated following a recent conference in the United States of America in relation to aircraft of this type which are flying at the present time. I refer specifically, of course, to the Boeing 727 aircraft which is operating in Australia. No mechanical fault was proved in any way at all. The aircraft has been declared to be perfectly safe in operation provided that certain operation and ground control procedures are adhered to. We are very happy to know that Australia’s Department of Civil Aviation procedures are in accord, and previously have been in accord, with what has been recommended by this conference in the United States. In other words, complete safety of operation can be expected provided these operation and control methods are maintained.

page 210

AUSTRALIAN REPRESENTATION ABROAD

Ministerial Statement

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– by leave - I am happy to inform the House that the Australian and Mexican Governments have agreed to exchange Embassies. A Charge d’Affaires will be sent initially to open the embassy in Mexico City, and an Ambassador will be appointed at a later stage. Mexico, too, will open its mission in Canberra with a Charge d’Affaires and later appoint an Ambassador. The opening of an embassy in Mexico is a further step in the efforts the Australian Government has been making to strengthen its contacts with Latin America. Last year a delegation from the Australian Parliament, comprising members from the Government and the Opposition parties and led by the Minister for Works (Senator Gorton), visited a number of Latin American countries including Mexico. There are many direct interests and contacts between Australia and Mexico, and our two countries have been brought physically closer now that Qantas Empire Airways Ltd. is to have four flights a week through Mexico - twice a week in each direction between Australia and Britain. This has led to a marked increase in the number of Australian businessmen and other visitors to that country. The holding of the Olympic Games in Mexico City in 1968 will attract many more.

Mexico is one. of the largest and most influential of Latin American countries. Australia greatly values the political contacts which already exist between Mexico and Australia, particularly in the United Nations. We look forward to the strengthening of understanding and co-operation between the two countries as a result of the exchange of diplomatic missions.

Mr WHITLAM:
Werriwa

– by leaveMr. Speaker, might 1 compliment the

Minister for External Affairs (Mr. Hasluck) on the arrangements which he has announced? No State in Latin America has developed greater political stability, economic progress and cultural eminence than has Mexico. Mexico City is a centre from which Australia can make itself more widely known and favourably understood throughout an area where economic, political and diplomatic trends are going to absorb an increasing amount of the world’s attention. These arrangements are admirable. I compliment the Minister on having brought them to fulfilment.

page 211

NEW ZEALAND-AUSTRALIA FREE TRADE AGREEMENT

Ministerial Statement

Debate resumed from 10th December 1965 (vide page 3958), on motion by Mr. McEwen -

That the House take note of the following paper -

New Zealand-Australia Free Trade Agreement -Ministerial Statement, 17th August 1965.

Mr WENTWORTH:
Mackellar

. -Mr. Speaker, I think the House will agree that the New Zealand- Australia Free Trade Agreement now before us brings some economic advantages to the countries on both sides of the Tasman. I say “ economic advantages “ because added to them in the future there will be some prospect of added political security and added security against aggression. Because of our situation both Australia and New Zealand need to get closer to each other. I will talk about this matter in a moment. In the meantime, let me speak of some of the economic aspects of this Agreement. Looking forward, there should be a closer integration of the economies of New Zealand and Australia. Both of us are too small to be fully viable. We will both be stronger if we are together. For New Zealand’s purposes, this may be a more urgent problem than it is for Australia because New Zealand as the smaller country depends more not only on exports but also on a much more limited range of exports and because of this might be in a more vulnerable position than Australia regarding changes in the pattern of world trade. Indeed, some of these changes, while not inevitable, are foreseeable. For example, Great Britain has been tinkering for some time with the idea of getting closer into the

European Economic Community. This may or may not happen but at least it is possible. If so, the position of New Zealand might be very much disadvantaged.

There are advantages in achieving this greater integration as soon as possible; otherwise inside both countries a hardening of vested interests, which will have a tendency to oppose this further desirable union, will be growing up. One of the things that we have to think about also is that Australia and New Zealand have very much the same kind of exports and that, therefore, a common policy in our approach to our markets might be of advantage to us both. A greater degree of economic integration might not only help internal trade for both countries but also it might help both countries in the marketing of their common products in some third country or groups of countries. This agreement that we have before us is one for phasing in. It has in it a built in kind of adjustment. This adjustment means that although some sacrifices will have to be made by industries in both countries these sacrifices will not be heavy on any individual industry. Their effect on or their disadvantage for various industries will be more than counterbalanced by the advantage to be gained by the respective economics as a whole.

Exports from New Zealand are, of course, non-diversified whereas Australia’s exports are much more diversified. Hence it follows that the first advantage of any agreement such as this would prima facie seem to be in our favour. But I am by no means certain that this is the type of thing contemplated by the Agreement. Actually, I think the Agreement will operate in the initial stages more in New Zealand’s favour than in ours. Particularly will this give us the chance to get from New Zealand a much higher proportion of our forest products than we are taking at this moment. Only in the last few days the Minister for National Development (Mr. Fairbairn) has told the House about his very desirable plans for the future development of the Australian forestry industry, but we will, I think, be dependent for a long time - perhaps for all time - on imports of softwood products from overseas. There seems no reason why we should not take these products from New Zealaand which is a good customer of ours. Let us show ourselves, in this matter, a good customer of New Zealand.

New Zealand manufacturers will feel no doubt that in some respects this agreement bears hardly upon them, but this may be an illusion rather than a reality. It may be that, in both Australia and New Zealand, certain industries, which are uneconomic because they are too small, will find it difficult to maintain their position, but on the other hand there is no reason at all why some industries should not be concentrated in New Zealand rather than in Australia. One example that comes to mind, of course, is the possibility - it now seems a more remote possibility than it did a few months ago - of higher integration in the aluminium smelting industry whereby Australia might produce the bauxite and the alumina and the reduction of the metal itself could take place in the southern island of New Zealand. Even in the manufacture of light consumer goods, there are instances where the Australian manufacturer is not as efficient as the New Zealand manufacturer. Although this agreement might well bring about some kind of redistribution of secondary industries I do not see why, on the whole, the balance should be in favour of either Australia or of New Zealand. It might be that New Zealand will lose some industries. It might be that Australia will lose some industries. The total number of industries lost by either country may not be the same but the total value is likely to be the same.

As the House knows, the big impediment to the expansion of our imports from New Zealand is the position of our dairy industry. I, for one, would not like to see anything done to hurt the Australian dairy farmer but, looking ahead, it may be that we can make readjustments which will be to his advantage. After all, the world market for meat is expanding. The value of meat is going up. This may prove a real bonanza to Australian meat producers. It so happens that Australian pastures with the exception, perhaps, of some areas in Gippsland, are better suited for meat production than for dairying. It may be that we could obtain greater riches for farmers on the north coast of New South Wales by changing to some extent, the character of their production. This would not want to be done overnight, but I do suggest that the adjustment over the last 20 years has been much too slow. We have contrived, in a way, to keep the north coast of New South Wales, which should be a very rich area, in a state of non-affluence. I was about to use the words “ comparative poverty “, but perhaps that would have been a hard expression to use. The average dairy farmer works very hard and gets very little. While it may not be possible to make a quick adjustment, as that would cause hardship, it should be possible, by means of a gradual adjustment, to enable our dairy farmers to become richer by changing to some extent, and gradually, the character of their production.

It may well be that New Zealand’s advantage in terms of butter tat is greater than ils advantage in terms of milk protein because of its colder climate and better spread rainfall. But, on the whole, one would think that the Austraiian farmer would be better off by gradually changing his emphasis from dairying to meat production. As I have said, this cannot be done quickly. There are impediments because of vested interests in the structure of production. We would not want to be too hard or to go too fast. Nevertheless we come back to the position where we want the Australian dairy farmer to be a richer man, living more prosperously. You do not always promote the patient’s recovery by keeping him dependent on crutches. It may be that this is what we have done with the Australian dairy industry. It may be that some of the money we have spent on subsidies would have been better spent - I do not mean just in relation to the economy but from the point of view of the dairy farmer himself - if we had spent more of it in helping the individual dairy farmer with finance and by other structural alterations to enable him to switch his production to meat and to the products for which his country is more suitable. It is notable, for example, that in Gippsland, where conditions are comparable to those in New Zealand, the dairy farmer is very prosperous. This is illustrated by the hundreds of pounds an acre he is able to pay for Gippsland dairy farming land at current Australian prices. He is a very prosperous person, living in a different kind of world from that of the north coast dairy farmer of New South Wales whose land is not quite as suitable for dairying, but is, I think, very suitable for meat production, which could become a bonanza.

For all these reasons, one welcomes this phasing-in agreement. It is a good agreement. In matters such as this a government has to start slowly but at least this Government has started. It has made a greater advance than any previous government has made and the House should give support and encouragement to what has been done. This is not the end of the line but at least a very good’ start has been made. The advantages, as I have said, are economic. The Agreement will help to bring about a bigger and more efficient economy on both sides of the Tasman. Integration will mean economic help. Co-ordination in the marketing of common exports will help both countries, but, in addition, it will draw the people of Australia and New Zealand closer together. That, after all, is the basic reality of the situation. New Zealand and Australia are isolated communities. We can no longer depend on the invulnerable might of the British Navy. We have to get together to plan our common defence and our common foreign policy if we are to survive.

These questions of national survival are paramount even over economic considerations. One hopes, therefore, that there will be a closer integration of all policy following this agreement; not only economic policy but eventually some kind of political union. Sentiments are now being expressed in opposition to this on both sides of the Tasman. New Zealand feels that it does not want to be swallowed up by Australia. There is no question of that; but surely under the stress of defence necessity that kind of feeling will diminish. Australia feels that certain of her highly protected primary industries should not be exposed to the sharp south eastern winds from across the Tasman. This may be a more impractical nut to crack. However, under the force of our common necessity to get together for survival, surely these differences will be resolved. One welcomes the agreement which the Government has put before the House.

Mr GRAY:
Capricornia

.- The New Zealand-Australia Free Trade Agreement which we are now discussing has come into prominence because of the items taken from it which impinge unfavourably on our domestic primary production. The items contained in the schedule are extensive, and apparently any of them could be brought forward on to the free list. There are nearly 30 closely printed pages in the schedule which commences with live horses, asses, mules and hinnies and concludes with antiques of an age exceeding 100 years. It would be impossible to say how many items are covered because many of them are multiple. For instance, “other live animals” could mean anything.

It is interesting to note that wool is included. I imagine that if the Government made any attempt to import wool it would have another hornet’s nest about its ears.

Mr McEwen:

– The honorable member does not know what he is talking about. We import a lot of wool from New Zealand. We always have.

Mr GRAY:

– This agreement grants the right to import all types of wool, not only wool for carpet making. In this instance we are concerned particularly with cheese and pig meats. The Government surely could not expect the farmers to accept this proposal without some protest. It is very easy for the Deputy Prime Minister (Mr. McEwen) to state, as he did in this House during the last sessional period, that this might mean a matter of only £2 or $4 a year to the average farmer. Although no pig meat has yet been imported into Australia under the provisions of this Agreement, the effect of the proposal in the area from which I come was immediate. It must be remembered that in Queensland pig meat is sold at auction. The immediate result of the Agreement was a fall of 6d. per lb. in the price paid at auction. The price fell from 2s. 8d. to 2s. 2d. No-one would need to know very much about farming to realise that this is a lot more serious from a financial point of view than an average £2 or $4 a farmer. The 6d. per lb. which was lost to the farmer reduces the profitthat he normally receives. Anything that is lost to the farmer comes out of his profit. He still has to meet the same production costs. The amount he pays for his feed, fuel and rates does not fall. A loss of 6d. out of 2s. 8d. is a very serious matter for this particular industry. This agreement is political dynamite in areas in which there is a large number of dairy farmers. The Government learned that in the Dawson byelection. The Government lost in districts which it used to win by two or three votes to one because the farmers resented the agreement as an attack on their standard of living.

It is very easy for the honorable member for Mackellar (Mr. Wentworth) to suggest that perhaps the dairy farmer could go into grazing. A lot of them have done that but we must remember what this involves. In the final analysis, if the average dairy farmer wished to go into grazing he would need possibly 10 times as much land as he now has for dairying. The average dairy farm is not a place upon which to engage in grazing if one wishes to make any money out of the enterprise. We must remember also that the average dairy farm is improved to a much greater extent than is the average grazing property and, acre for acre, would be worth probably 10 times as much. Are we then to suggest seriously to dairy farmers that they should sell their land at a loss or that they should invest a larger amount of capital, if they can get it, to earn exactly the same return as they earned previously? Surely that is not suggested seriously.

The fact remains that to some degree this treaty must adversely affect the interests of the people concerned - the producers of cheese and of pig meat. No pig meat has yet been imported. Although the treaty has been agreed to on both sides of the Tasman, the Australian Department of Health has delayed the importation of pig meat because of a disease which is prevalent in the pig industry in New Zealand. It could be that repercussions might cause the Government to seize upon this opportunity to ensure that pig meat does not come into Australia. However, this could be considered by some people as a breach of agreement. The Government, therefore, is caught between the two sides of the question. During the recent Dawson by-election campaign I heard a dairy farmer, referring to our good friend, the Deputy Prime Minister - the right honorable gentleman probably heard it himself - say: “Now that pig iron Bob has departed from the scene we have pig meat Jack “. This became almost the battle cry of the dairy farmers in the district with disastrous results to the Government forces.

The honorable member for Mackellar also mentioned that the dairy farmer worked very hard for very little money.

That is an accurate statement of the conditions under which the dairy farmer struggles today to get a living. He has to fight against an increase in the amount of margarine that comes on the market in competition with his butter; he has to battle against the fact that the price of his product is increasing on the market, thus decreasing the amount that he sells; he has to fight against floods and, when he gets over that, he has to fight against droughts which leave the countryside dry and then he has to fight against bush fires. These are some of the factors which confront people in this industry. They have to work 365 days a year because no-one has yet succeeded in producing a cow which works only 40 hours a week. If you are in the dairy industry - I have been in it - you work all day every day and if an accident occurs or if illness befalls you, then you have to rely on neighbours to have your cows milked. Working a dairy farm is a continuous operation. Surely these people are entitled to What they get. Surely these people are entitled to some protection and consideration by those who govern the country.

It is easy to say that only £2 a year is involved, but if we import 1,000 tons of cheese into Australia we displace 1,000 tons of cheese produced in this country. This means that the amount of cheese exported has to be increased. Cheese that is exported brings a lower return than does cheese sold on the home market and, with the equalisation scheme which now operates, the producer’s income is reduced. The producers do not need any suggestion that they go into grazing to encourage them to leave the industry. Since the war, 1,500 dairy farmers have gone out of production in my area alone, and that is only one small portion of central Queensland. Tens of thousands of farmers have left the industry. People have left or are leaving because the work is too strenuous for them, or because the younger generation will not engage in the industry, or because it no longer pays them to stay in the industry. All that this Agreement can do is to cause still more people to leave the industry.

The Government says that it is putting several hundred people on the land in central Queensland under the brigalow scheme, but this will still leave us short. If 500 people are put on the land under the brigalow scheme and if we have already lost 1,500 dairy farmers, we will still be 1,000 people short on the land. Recently I travelled with a farmer over a 20-mile stretch of road in my electorate and on the way we counted, within sight of the road, 21 dairy farms which are no longer operating. The houses and the people have gone. The farmers have left the land, and we will not get them back on to it. Why should they go back unless it is made profitable for them to do so? They find they can get jobs in the cities, working only 40 hours a week, and that in the cities there are better facilities for educating their families. It is no longer a reasonable proposition for them to stay on the land. No longer is the net return per annum of dairy farmers greater than what they could obtain in the cities. They have to work twice as long for what they do get. There is no doubt that this Agreement will accelerate the drift from the country to the cities.

I am certain that if the Government were to propose something in the nature of a common market in this part of the world it would receive a great deal more support. We must keep in mind that the New Zealanders will be able to export certain items of primary produce to Australia, selling them here to their advantage, without in any way risking other markets which they may have. If they joined with us in an actual common market, .there would be common exports. But what do we find now? Under the present arrangements, they will be able to use the profits they make here to help them push us further out of the European market. It is well known to this Government that the Reserve Bank of New Zealand provides finance for the marketing organisations of the New Zealand primary producers at an interest rate of only 1 per cent, per annum. Such cheap finance is not available in this country. This alone means that the New Zealand primary producer is able to reach overseas markets at a lesser cost and to sell at a cheaper rate than his Australian counterpart is able to do. This gives him a tremendous advantage. Some of the cheap finance made available in New Zealand must percolate through to the primary producer himself. If that scheme is good in New Zealand, if the New Zealand economy can carry such a scheme, why is not a similar service extended to the primary producer in Australia by our Reserve Bank? We have many Government members here allegedly representing the primary producers, yet they will not extend to them an advantage which is given to farmers in New Zealand.

There can be very little doubt that the New Zealand primary producer enjoys an advantage when he markets his export products abroad. Now it is proposed to give him an added advantage which will help him push our produce off the European market and other markets. If the New Zealanders joined in a common market with us, presumably we would provide similar financial facilities here and the produce exported from both countries would go abroad under the same conditions. In other words, New Zealand would be in the same position with regard to continental Australia as Tasmania is. I think this is something which every Australian and probably every New Zealander would very much welcome.

The honorable member for Mackellar touched on this point to some extent. I am sure that he realises that what is proposed under this Agreement is a slightly different proposition. By this Agreement we are not entering into any arrangements for a common market area; we are entering into an agreement with New Zealand which makes Australia a free market, so far as tariffs are concerned, for certain items of New Zealand primary production. In return for this, apparently we are to have a free market in New Zealand for certain items of our secondary production. This, of course, will increase our exports. Without doubt, the proposal is aimed at assisting the New Zealand Government with its balance of payments position, but there will not be very much assistance in the final analysis if we balance our imports by exporting other types of goods of equivalent value.

The Minister for Trade and Industry stated on a previous occasion that we should consider the countertrade that will be generated and the additional employment that will be made available in Australia in the industries which manufacture the items concerned. Without doubt, those are factors which are worth considering, but it can be pointed out also that one of our greatest problems in connection with secondary industries is the degree’ of automation that is coming to them. I am very much afraid that the advantage we will gain from being able to export certain items to New Zealand will be completely overshadowed by the problem we will have to face as a result of the displacement of labour from secondary industries by automatic and semiautomatic processes.

So, for the moment, the question boils down to the effect which the Agreement is going to have on the primary industries in this country. Despite what the Government has had to say, despite the fact that it has pointed out that safeguards are included in the Agreement and that these safeguards can be invoked to protect any industry which is found to be unduly suffering as a result of the Agreement, I am afraid the Government has not succeeded in convincing the primary producers whose industries will be affected immediately by the importation of the articles concerned. We must not lose sight of the fact that this country still depends greatly upon what it produces from the land. If our primary producers are to be attacked here in their own market, and if what is proposed in the Agreement is to be part of the Government’s policy, have we any guarantee that this will stop at cheese, pig meats and processed vegetables - which are also included?

Has the Government taken the trouble to find out exactly what effect this Agreement will have in Tasmania, where large numbers of primary producers on large areas of land are engaged in producing vegetables for processing and sale on the mainland market? I doubt very much whether it has. Of course, if the Government is determined to enter into the Agreement, no doubt something has got to be sacrificed. But it is very little consolation to those who find that their industries have been selected for the sacrifice to know that in the opinion of the Government some concession must be granted to a sister Commonwealth country which is so near at hand geographically.

Although we fully sympathise with the position of our New Zealand relatives, I think the Government should give a great deal more attention to the effect which the Agreement is going to have on the dairying industry, which is one of the most precarious of all primary industries in this country at this particular time. It has been hit very hard by its normal marketing pro blems, it has been hit severely by the drought and it is losing at a greater rate than any other primary industry in the country the people who are necessary to maintain it. It is this industry which the Government has selected, at this time and in the existing circumstances, as its victim. The blow which is to be struck can have no effect other than to drive more men and their families out of the country districts into the cities. We are told from time to time that this is not the policy of the Government and that it believes in decentralisation and is trying to reverse the drift from the land to the cities, yet this treaty can have no effect other than to do the very thing which the Government claims it is trying to avoid. I feel that too little attention was given, in this instance, to the section of industry selected to be the victim of this Agreement.

Mr ARMSTRONG:
Riverina

.- The New Zealand-Australia Free Trade Agreement is between two countries with the closest racial and economic and political ties. They have small populations, and are adjacent to countries with large populations and a much lower standard of living. It is in Australia’s interests, both in the short run and the long run, to assist New Zealand in her trade arrangements. I should like to deal with a couple of the items to which the honorable member for Capricornia (Mr. Gray) referred. He mentioned the pig meats industry and also the dairy industry. I say most emphatically that if either of those industries believes itself to be in peril because of this agreement, that belief is based on fear and not on fact. The fact of the matter is that pig meat prices in Queensland dropped in September last, four months before this Agreement came into operation, and have since risen slightly. It would be very hazardous to suggest that this Agreement had anything to do with the price of pig meats. In fact since April 1965 no pig meat has entered Australia because of trichinosis. It is true that trichinosis, a glandular disease, does not affect pigs to a great extent, but is conveyed to human beings who consume the infected meat. This condition in relation to the Agreement is likely to last well into the foreseeable future.

The Agreement has nothing to do with any dairy products except cheese. Under the Agreement the tariff restriction is removed and a quantitative restriction replaces it. To my way of thinking, this arrangement is probably advantageous to the Australian dairy industry. Under the Agreement 400 tons of cheese will come into Australia in the first two years, 800 tons in the third and fourth years and 1,000 tons at the end of five years. Our population should increase by 500,000 a year. If our consumption of cheese per capita were 6.6 Jb., we would need to increase our population by only 370,000 a year which is less than the expected increase, in order to consume all the cheese. But if we exported the whole of the 1,000 tons of cheese at the present price it would mean only 1/1 0th of a cent per lb., of butter fat to the dairy men of Australia, which would represent $3 per annum to the dairy men in the north and 55 per annum to those in the south who receive at present $500 per annum and $1,000 per annum respectively in subsidy. This 1,000 tons would be less than 2 per cent, of our production. At the moment we consume 54 per cent, and export 46 per cent, of our cheese.

The honorable member for Capricornia said that New Zealand dairymen were at an advantage compared with their Australian counterparts by reason of cheap money supplied for marketing by the Government of New Zealand. The Government supplies this money at an interest rate of 1 per cent, only in certain circumstances. The Dairy Produce Marketing Board in New Zealand fixes the price each season at a figure as near as can be assessed to world parity. The dairyman in New Zealand is not subsidised. The subsidy of 8d. per lb. on butter fat is paid to the dairy companies and the advantage is given to the consumer. The dairyman receives the export price, but the consumer receives his. butter at 2s. sterling per lb. The interest rate of 1 per cent, which helps the industry is paid only when the price assessed falls below the export price and the industry requires the subsidy in that year. But when the assessed price rises above the export price the Government does not come into the matter at all. In any case, it subsidises the industry only during the currency of that financial year in order to help it over that period. It is, in fact an equalisation fund. The Dairy Produce Marketing Board of New Zealand at present has a credit of about £7 million sterling, so the arrangement is not an advantage to dairymen.

The honorable member for Capricornia is quite mistaken about the degree of benefit that he feels the New Zealand dairy industry enjoys at the expense of its Australian competitor. We export annually to New Zealand about £15,500,000 worth of primary products, including £5,800,000 worth of wheat, so that of £22 million worth of imports from New Zealand, such as we had in the last full financial year, 70 per cent, or 75 per cent, is actually represented by the primary products that we export to that country. It would be unreasonable to expect any country not to endeavour to achieve a better basis of trade for industries that are suffering hardship. In recent years we were exporting something like £18 million worth of goods a year to New Zealand and were buying some £22 million worth from it. It is quite right to suggest that no industry or part of an industry should be placed at a disadvantage, but the Opposition cannot have it both ways. The honorable member for Yarra (Dr. J. F. Cairns) said on 10th December last that this Agreement was nothing more than the squeak of a mouse, and did not mean anything. The Opposition both here and in New Zealand are against it. They cannot have it both ways.

Mr Gray:

– They are both right.

Mr ARMSTRONG:

– They obviously cannot both be right but anything which will improve and extend mutual trade is of benefit to all of us, as honorable members opposite know perfectly well.

Mr Gray:

– Why does the Government not give the dairy farmers a fair go?

Mr ARMSTRONG:

– They are not affected by this Agreement at all. The honorable member for Capricornia said that the safeguards written into the Agreement were not of any value at all, but each participant has the right to withdraw any item on giving 182 days’ notice of intention. It has also been said that there is not enough in this Agreement to be of any value, but 60 per cent, of the trade between the two countries comes under it and that percentage, by world standards, is accepted as a reasonable amount on which to establish a free trade agreement.

Mr Hayden:

– Does the honorable member realise that 182 days is approximately six months?

Mr ARMSTRONG:

– That may be so, but under the Agreement any item can be withdrawn. The Agreement contains a great many other protective clauses. Anti-dumping action can come into operation immediately. Emergency action can be taken if necessary. The whole operation of the Agreement is based on mutual trust between two countries which are endeavouring to enlarge the trade between them. It is true to say that if we could enlarge our trade with New Zealand, even if we only doubled our exports while New Zealand quadrupled hers, we would still be better off because we would be building up New Zealand’s volume of trade.

Mr Turnbull:

– We should not forget that these are Anzac countries.

Mr ARMSTRONG:

– That is perfectly true. We probably have a greater bond of race and blood with New Zealanders than with any other people on the face of the earth. It is quite wrong to suggest that either of the industries that have been singled out by the Opposition in this debate could in any way be detrimentally affected. The lowering of the tariff on lamb has been referred to. An endeavour was made on a couple of occasions to bring New Zealand lamb into Australia but as it had to be frozen, Australian producers enjoyed an advantage. The imported product could not compete in quality with local fresh lamb. This in itself is a quite adequate protection for our own industry. However I have no doubt that importations of lamb would be investigated in the proper way.

Mr Gray:

– The honorable member can bet his life that they would.

Mr ARMSTRONG:

– Of course they would. The records of the appropriate department over a number of years will certainly support that statement. I have mentioned frozen green vegetables. It is true that this is an item on which there could be some conflict of interest because vegetables from Tasmania and New Zealand become available in the same season, but surely this can be overcome, particularly when we are already importing large quan tities from other countries including United States of America.

Mr Gray:

– Whose fault is that? It is this Government’s fault - not ours.

Mr ARMSTRONG:

– It is not the

Government’s fault; it comes about because of the requirements of the market. The Agreement offers Australia an unrestricted market for its sugar, and wheat and an opportunity to increase its sale of hardwoods. It is based on a sound Australian economy.

Mr Gray:

– Not a sound primary production economy.

Mr ARMSTRONG:

– Yes, a primary production economy. I am quite confident that any disadvantage to the pig industry or the dairy industry would be negligible. The Agreement offers great possibilities for expanding trade with a country that we must help. As a Western nation in this area we cannot afford to allow New Zealand trade to be depleted in any way. Anything that we can do to expand New Zealand’s trade with us will be of mutual benefit. I repeat that this is a genuine attempt between two countries with common economic aims and racial ties to improve their trade relations. Nearly everything that I have studied of what has been said against the Agreement regarding dairy products and pig meats has been misleading and not founded on fact.

Mr HAYDEN:
Oxley

.- We have heard an interesting disquisition from the honorable member for Riverina (Mr. Armstrong). After the honorable member concluded, neither he nor anyone else in this place quite knew the point that he was trying to make or whether he was trying to defend the contentions of the dairying industry in Australia in relation to the alarm that its representatives have been expressing following upon the announcement of the New Zealand-Australia Free Trade Agreement. As I understand the Labour Party’s intention it is to express concern at, and to oppose to the fullest extent permitted by the forms of procedure of the House, those sections of the Agreement which are, by their nature, deleterious to the interests of Australian primary industry. We do this for very good reasons, some of which have been outlined by my colleague the honorable member for Capricornia (Mr. Gray). I shall be discussing some of these reasons in the course of this address to the House.

I feel that one point made by the honorable member for Capricornia was particularly appropriate: The Country Party section of the Government, merely by using the word “ Country “ in its designation, has been outstandingly successful in promoting itself in the electorate as representative of rural interests, But in fact the Country Party has done little to fight to establish or to entrench the interests of country people. As my colleague pointed out, a growing understanding of this can be read into the rebuff given to this Liberal Party and Country Party Government in the Dawson by-election, where the Country Party’s candidate was soundly defeated. We will see this rebuff carried further in the Maranoa electorate at the next Federal election. There, too, the Country Party candidate will be defeated by the Labour Party. An even more competent and effective job will be done in the seat of McPherson where the Liberals will cut off the head of the sitting Minister. It is interesting to note that the Liberals in Queensland are circulating an analysis of the voting trends -

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

– Order! I suggest that this has nothing to do with the New Zealand-Australia Free Trade Agreement.

Mr HAYDEN:

– But it has a lot to do with the future of the Country Party. All I shall say is that after the next Federal election the only Queensland electorate represented by the Country Party will be Fisher, and even that will be a shame. The dairy farmers in Queensland are the people with whom I am greatly concerned. I want to express the concern of these people at the introduction of the Free Trade Agreement and to voice their alarm at certain features of it.

I begin by pointing out that these people are concerned about whether they can rely on the word of the Minister for Trade and Industry (Mr. McEwen), who is the Deputy Prime Minister and who happens to be also the Leader of the Australian Country Party in the Federal Parliament. This man has stated publicly that the interests of primary industry in this country will be absolutely defended. The honorable member for Riverina mentioned that there would be 182 days in which arrangements could be made to extricate some items from the Agreement if a section of the economy was being adversely affected. I remind the honorable member that that is six months. From the time that the symptoms of malaise originally show until six months have elapsed is a fairly lengthy period and if there is to be any deterioration surely it will have set in well and truly. Yet this is the only defence that the honorable member for Riverina seemed to offer. The honorable member for Capricornia has reminded me that because the Agreement depends on a volume of trade, if we extract one item the whole, thing will have to be readjusted.

I have mentioned the suspicion with which primary producers in Queensland are now regarding the Country Party and particularly the great reservations which dairy farmers in Queensland have when the Minister for Trade and Industry - the Deputy Prime Minister and Leader of the Country Party - says that he will defend their interests. By chance I happen to have here a newspaper cutting from the “ Courier-Mail “, a Queensland morning paper, of 11th November 1958. I shall read some extracts. This is a report of statements made by the Minister for Trade and Industry during the election campaign of that year. They are very interesting. The report states -

The Deputy Prime Minister (Mr. McEwen) yesterday pledged the Federal Government to secure the dairying industry on a stable and profitable basis.

That was nine years ago. The Minister has forgotten about that promise. This, of course, relates to Queensland because he said this in Queensland. He also said, according to the report -

That solution may involve the provision of funds at reasonably low rates of interest to help the industry through its present difficulties. . . . My Government will not allow dairying to fail even in the difficult areas of northern Australia.

The Minister was speaking in support of the Country Party candidate for the Leichhardt electorate. Mr. McEwen said that he realised that dairy farmers in northern Australia - Queensland and northern New South Wales - faced difficulties not faced by the southern dairying areas of Australia where the cost of production was lower. The report continues -

Mr. McEwen said that in the difficult dairying areas of the north, towns had been built around the dairying industry and it had been the greatest factor in closer settlement.

The whole tenor of the Minister’s remarks is to stress the value of the dairying industry in Queensland, that he is there to look after the industry and that he will see that it is looked after. I wish to quote from analytical reports of the Bureau of Agricultural Economics which show rather convincingly that the dairying industry in Queensland has not been looked after but is indeed in a very serious situation which calls for drastic action by Federal and State Governments to introduce a policy of rehabilitation of the industry.

Mr. McEwen said that he was there to see that nothing harmed the industry. On 8th December of last year he held a meeting on the New Zealand-Australia Free Trade Agreement in Brisbane. He was told by Mr. C. J. S. Conroy of Toowoomba that a section of the dairying industry is being sacrificed in the interests of Australian manufacturers. Mr. Conroy said that Queensland’s cheese and pig meat industries would be hit hard by the admission to Australia of duty free New Zealand cheese and pig meats. Mr. J. V. Bermingham of Eastern Downs told Mr. McEwen that figures he had cited showed that Mr. McEwen had an inflated opinion of production per farm in Queensland and that the New Zealand pig meat threat’s psychological effect already was depressing Queensland pig meat prices. A newspaper report of the Brisbane meeting quoted Mr. McEwen as saying -

I’ll see that you don’t come to any harm.

Mr Bridges-Maxwell:

– What is the date of the newspaper report?

Mr HAYDEN:

– It is a report in the Brisbane “ Courier-Mail “ of 9th December last. The Deputy Prime Minister had a lot of other things to say. When the dairying industry in 1958 was alarmed about threats to its future, the Deputy Prime Minister said that he would see that the industry was rehabilitated. He said he was there to protect it. In 1965, when the industry was again expressing alarm, he said the same thing.

Mr Armstrong:

– Why is the value of dairying land in Queensland rising?

Mr HAYDEN:

– If the honorable member studies the reports of the Bureau of Agricultural Economics he will find that the value of dairying land in Queensland is the lowest in the Commonwealth.

I was dealing with the attitude of Mr. McEwen to the interests of primary producers. In this House on 23rd November last he said -

It has always been the policy of my Party that those who produce, own and sell a product are the best judges of the way in which their own property should be treated, lt is the function of my Party to see that the will of those who produce and own the product is carried into legislative and administrative effect.

On 26th November last Mr. McEwen said in this House -

I am also a Cabinet Minister; and as such and as the Leader of my Party, as 1 have said before, when any great sector . of the Australian population makes a proposal to the Government in the interests of that sector of the population, i conceive it to be the duty of the Government to give consideration to that proposal.

How hollow those statements must sound to the dairy farmers who are complaining that they were never consulted about the Agreement in the first place. They say that the Agreement was rushed through this House quick smart, although they were then getting restive and wondering what was involved in the Agreement. Since the Agreement has been signed there has been no consultation with these people. This procedure is hardly consistent with the principles enunciated by the Minister for Trade and Industry in the past.

One step that could be taken by the Government would be to write into the Agreement right from the start a guarantee that there will be no butter exports. I would hope that there would not be, in view of the condition of butter production in this country and the problems of Australian dairy farmers compared with their counterparts in New Zealand. I cannot see any reason why the Government should not be prepared to write in a guarantee as a form of consolation for the concern which those in the dairying industry are feeling.

The importation of cheddar cheese from New Zealand cannot be understood as a matter of logic by Australian dairy farmers. They cannot understand why we should import cheese from New Zealand, because it will mean that we will have to export greater amounts of cheese as the imported cheese will displace Australian produced cheese on the Australian market. Our exported cheese will be sold at a lower price than would have been obtained for it had it been sold on the Australian market.

The honorable member for Capricornia has referred to a subject often raised with me by dairy farmers in my electorate; that is, the importance of pig meat production in Queensland to dairy farmers. Figures in the quarterly review of January 1966 of the Bureau of Agricultural Economics show that Queensland has a very high investment in pig meats. A table is set out showing the three year farm average for Australia by States. The average income for dairy farmers in Queensland from pig meats is $218. The next highest average is for New South Wales, which is only $65. It then falls quite steeply in the other States. It is clear why Queensland dairy farmers are concerned about the importation of pig meats. Three thousand tons of pig meat will be introduced into Australia under the Agreement. If these imports arrived in concentrated amounts and at concentrated points, it could be extremely disruptive to the pig raising industry in Australia. It is little wonder that Queensland dairy farmers are quite distressed that the Agreement has been negotiated.

A very serious problem exists in the dairying industry in Queensland. I have obtained statistics from the rural industries reports of the Commonwealth Statistician for the period 1962-63. These reports cover each State and all Australia. Since 1940-41 Queensland has had the lowest annual average milk production per dairy cow in the Commonwealth. That situation has been maintained consistently over this very long period and even before 1940-41 the situation in Queensland rarely improved. I asked the Minister for Trade and Industry when he was in the House earlier for permission to have a table showing the average annual milk production per dairy cow since 1940- 41 incorporated in “Hansard”. He said that it would be quite satisfactory. I now seek permission to have the table incorporated.

Mr DEPUTY SPEAKER:

– Is leave granted?

Mr Anthony:

– I do not have any information about the table.

Mr HAYDEN:

– The Minister said that it would be quite satisfactory.

Mr Anthony:

– I would like to check on that.

Mr HAYDEN:

– I wish now to refer to a report by a senior lecturer in agricultural economics. It has not been published and until I have his authority to quote his name I am not prepared to do so. He said, among other things, that from his analysis it appears that the economic outlook in Queensland for some dairy farmers is optimistic. On the other hand, many dairy farmers will continue on depressed incomes unless the Government and the industry jointly agree on a bold course of future action. I believe that the findings in the report which refer to Queensland should be incorporated in “Hansard”. The senior lecturer I am quoting states that for all farms in the survey he conducted, the average net income was £1,092. This was the surplus that the farm family had to live on.

Over the same period the basic wage for urban male workers averaged £738, but the actual earnings were £1,053. However, if taken on a labour unit basis, the average farm figure reduced to £780. On average, 1.3 units of family labour were employed. Further, the dairy farmer is much worse off than appears because he should be able to expect additional allowances for (a) the capital he has invested in the farm, (b) management skills and (c) risk associated with primary production. If a reasonableallowance for (a) is 5 per cent, and for (b) and (c) is li per cent, of total capital investment, this gives a net income requirement per labour unit of around £1,650. If these income figures are assumed to be reasonable, it follows that the average dairy farmer would need to produce about 9,000 lb. of butter a year.

It is concluded by the senior lecturer that farmers who cannot achieve an output of between 8,000 lb. and 10,000 lb. of “butter a year must continue to expect an income which is low relative to that earned by workers in other primary industries and in secondary industries. He calls for urgent action by the Government and makes some recommendations which I shall deal with, if

I have time. On the point of income the quarterly reviews of the Bureau of Agricultural Economics in October 1965 and January 1966 are relevant. If one goes through these reviews, one finds that Queensland dairy farmers are in the low income range. On the average, over the three-year period from 1961-62 to 1963-64, 72 per cent, of the all industry dairy farmers in Queensland received an income of less than £1,500 per year. The average income for the all industry dairy farmers in Queensland was £999. The only State’ where dairy farmers received lower incomes was Western

Australia, where the average was £863. The average for Australia was £1,198.

Mr DEPUTY SPEAKER:

– Order! Before the honorable member for Oxley proceeds any further, I wish to say that he asked for approval to incorporate in “ Hansard “ certain figures relating to the dairy industry. The Minister for the Interior (Mr. Anthony) has now examined the table and, with the approval of the House, it will be incorporated in “ Hansard “. It relates to the average annual milk production in gallons per dairy cow.

Mr HAYDEN:

– There is one other set of figures which I believe emphasises the very serious problems which face the Queensland dairy industry today. Of course, these matters in themselves are compelling reasons why the Government should institute a commission of inquiry in order to see what can be done to rehabilitate the dairy industry in Queensland. Page 1075 of the “ Year Book “ for 1965 refers to the average milk production per dairy cow for 1938-39, 1948-49 and 1958-59. It shows that for each of these periods Queensland had the lowest average milk production per dairy cow in Australia. The average for the three periods was 298 gallons in 1938-39, 267 gallons for 1948-49 and 267 gallons in 1958-59 - a decline. Every other State has had an increase in production over these periods. The Australian average production increased from 354 gallons in 1938-39 to 393 gallons in 1958-59.

What is the Federal Government going to do about this matter? The introduction of the New Zealand-Australia Free Trade Agreement is another example of the further whittling away of the welfare of the primary producers in the dairy industry. These people want some action. They do not want this constant pressure that is building up all the time and which is pushing farmers out of the industry at fairly heavy loss to themselves. It has been suggested in the report which I mentioned from the Senior Lecturer in Agricultural Economics that one method of raising output is by increasing the size of the farms. He said -

This could be done by finance being provided on favourable terms to farmers who wished to buy land from neighbours wanting to sell out.

Another point he made was -

Basically the major problem facing the industry in the future is that Government and the dairy industry itself must jointly agree on radical action to materially assist low output farms to raise production or help such farmers rehabilitate in other jobs.

This is what we want. We want some action. When an inquiry is undertaken, we want representatives of the dairying industry involved in the investigation. When the report is tabled in this House, we do not want it shelved as the 5500,000 report of the Vernon Committee has been shelved. We do not want any further waste like this. We cannot afford to have the dairy industry in Queensland continually going back on the skids. The whole problem of the dairy industry in that State is a very serious one. It is little wonder that the dairy industry in Queensland views this section of the New Zealand-Australia Free Trade Agreement with some alarm. It has had so many broken promises pushed upon it by the Government in the past that it now views this Agreement with a great deal of suspicion.

Mr BRIDGES-MAXWELL:
Robertson

– It is regrettable that the honorable member for Oxley (Mr. Hayden) spent so much of his time trying to cast suspicion on the Minister for Trade and Industry (Mr. McEwen) who negotiated the New ZealandAustralia Free Trade Agreement. The honorable member spent much of his time trying to point out that the Queensland dairy industry is in financial and economic difficulties, which is granted; but there is no relationship between the economic difficulties of the Queensland dairy industry and the Trade Agreement. He also went on to say, when he was denigrating me Minister, amongst other things that the Minister had not consulted the industry at all. The Minister for Trade and Industry, in a speech that he delivered to the State Council of the Queensland Dairymen’s Organisation - and the honorable member for Oxley quoted from a newspaper report of that speech - stated that he had consulted with the chairman of the Australian Dairy Produce Board. The honorable member for Oxley went on to say that the Minister did not consult afterwards with the industry. It was at the specific request of the State Council of the Queensland Dairymen’s Organisation that the Minister went to Brisbane on 8th December.

On the question as to how the Agreement will affect the dairymen in Queensland, the Minister in his speech on that day stated that the importation of the additional cheese, on present average prices, would cost the dairymen of Queensland 30s. in the first year of the Agreement. When the absolute limit of 1,000 tons per annum comes into effect after five years, on present average prices, the loss will be some £8 per year. On the other hand, these same Queensland dairy farmers are receiving an average of £245 in subsidy from the Government. I think that this is the answer to some of the points that were raised by the honorable member for Oxley and his colleague, the honorable member for Capricornia (Mr. Gray). I wonder how much of the distress and worry of the Queensland dairy farmers has not been caused by misinformation which was given by honorable members opposite in the middle of last year when discussing this subject and the subject of pig meats, which I shall deal wilh later on.

In my view, this is an historic Agreement. It follows a number of other trade agreements that have been negotiated by this Government and which have materially benefited this country in its development. It will provide for far closer ties between Australia and New Zealand. We have great traditional ties with New Zealand. We have, of course, the great Anzac tradition. We are involved with New Zealand in treaties such as the Security Treaty between Australia, New Zealand and the United States of America, the South East Asia Treaty Organisation and in the Commonwealth.

The objectives of the Agreement ire set out in Article 2, which states -

The objectives of the Member States in concluding this Agreement are -

to further the development of the Area and the use of the resources of the Area by promoting a sustained and mutually beneficial expansion of trade;

to ensure as far as possible that trade within the Area takes place under conditions of fair competition; and

to contribute to the harmonious develop ment and expansion of world trade and to the progressive removal of barriers thereto.

The objective contained in paragraph (a) is the important one because this part of the world is facing great pressures, both economically and from events in our north. There is great need for rapid development, not only of Australia but also of New Zealand. We need closer ties not only in the economic field, but in .the defence fields. The benefits that will flow from closer trade arrangements with New Zealand will assist in building the industrial complex, which is so essential from a defence point of view and from the national welfare point of view.

As I said before, I believe that this historic Trade Agreement is of great importance. It is one that will lead to greater understanding between these two peoples, as my friend, the honorable member for Mackellar (Mr. Wentworth) so clearly pointed out. We, as much as the people of New Zealand, need larger markets. This Agreement will bring great benefit to both nations. At present the trade between the two countries is in the vicinity of $200 million - $158 million for exports from Australia to New Zealand and approximately $40 million for imports into this country. The Agreement covers 60 per cent, of the total trade between the two countries. On the national or international level, it is of great importance that this trade be expanded and, as mentioned in the objectives to which I have referred, the Agreement will provide for the freer movement of trade throughout the world. This Agreement will give us easier access to the New Zealand markets for our goods. In return New Zealand goods will have easier access to our markets, subject to certain protections and limitations with which I intend to deal. The main objections that have been raised by honorable members opposite are related basically to cheese, pig meats and frozen or processed vegetables.

Before this Agreement, there was no limitation on Australian cheese imports from New Zealand except that there was a duty of 6d. per lb. Under this Agreement, for the first time in the history of the Australian dairy industry, there will be an upper limit - a quantitative limit - on cheese coming into Australia from New Zealand. What would have happened if Great Britain had entered the European Common Market and both Australia and New Zealand had lost all or a great part of their share of the British market? New Zealand could have put cheese on the Australian market, after paying the duty, until this Agreement was implemented. Now, whatever happens to Great Britain and the European CommonMarket, New Zealand is not able to export to Australia more than 1,000 tons of cheese. This protection was not sought by the industry but it is being provided and I foretell that it will be of great benefit in protecting the industry.

Last year Australia imported some 260 tons of cheese upon which duty was paid. Under the terms of the Agreement, in the first two years 400 tons of cheese will be allowed into Australia. In the third and fourth years 800 tons will be allowed in and then there will be the upper limit of 1,000 tons. As I said earlier, dairy farmers will have to export cheese in equivalent quantities and on present prices dairymen throughout Australia will be affected to the extent of £12,000 in the first year. I think that was the figure mentioned in a speech by the Minister for Trade and Industry or in an answer he gave to a question. The cost to the Australian dairy farmers will be £48,000 in the fifth and final years on present costs. But it has been pointed out that as the Australian population grows, the effect of this importation will be less.

The honorable member for Oxley referred to the Minister’s speech and said that the Minister had not consulted the dairy industry in Queensland. A very valid point came out of the discussions which the Minister had with the Queensland Dairymen’s Organisation on 8th December but it was not quoted by the newspaper to which the honorable member for Oxley referred. The Minister said that the answer to the dairymen’s problem in Queensland was to lift production. As one member of the Queensland Dairymen’s Organisation said to the Minister, the development of the new tropical legumes and pastures will have a tremendous effect on production. I think the words used by one member of the Organisation were that this development would lead to a breakthrough similar to that achieved in the southern States when grasses and clovers were developed. This is undoubtedly true. The Organisation asked the Minister on that occasion whether or not he would make representations to the Minister in charge of the Commonwealth Scientific and Industrial Research Organisation to step up research in Queensland and whether there could be greater financial assistance for that purpose. I am sure that the Minister has made those representations.

During the recent parliamentary recess, the Minister for Primary Industry (Mr. Adermann) announced to the Australian Agricultural Council that there would be a quadrupling of Commonwealth funds for agricultural extension services. Of course some of this money will go to Queensland in proportion to the grants to the other States. This will help the Queensland dairy farmer. It is not fair, nor is it honest, to say at this stage that the New ZealandAustralia Free Trade Agreement will put farmers off their properties, as I think the honorable member for Capricornia (Mr. Gray) said. I believe the Agreement will have a minimal effect. It will cost the dairy farmer in Queensland on the average about thirty shillings a year.

In 1963-64 some 2,600 tons of pig meats were imported from New Zealand. Since then, because of trichinosis, there has been a total embargo on the importation of pig meat into Australia from New Zealand. The fall in prices mentioned by honorable members opposite has followed, I believe, the normal fall in recent years. The graph for the last three or four years shows a normal dip in September. As my colleague the honorable member for Riverina (Mr. Armstrong) has said, prices have risen since and seem to be following the normal trend. If New Zealand controls trichinosis, 3,000 tons of pig meat from New Zealand will be allowed into Australia duty free under the Agreement, but such imports will be strictly supervised. This pork will go only to processors, as it has in the past, and not to butchers. These processors will be asked to ensure that they do not alter their buying pattern or lower the price on the home market. This undertaking has been accepted in the past by processors in Queensland and I think it is common in other agreements we have such as the meat agreements.

The Minister for Trade and Industry, in his speech on 8th December to the Queensland Dairymen’s Organisation, said that the same supervision would be undertaken if pig meat is imported from New Zealand. He added that it would be very much easier to supervise the comparatively few processors of pig meat than to supervise the very large number of people who purchase red meats. I believe that these guarantees will protect the pig meat producers of Queensland.

When figures for ham and bacon were taken out last in 1963-64, they revealed that a total of 43 tons of ham and bacon was imported from New Zealand in that year and consumption on the local market was 43,000 tons. It cannot be said, therefore, that the importation of 43 tons would disrupt the Australian market. Total production of pig meats in Australia is about 121,000 tons. Therefore, the 3,000 tons from New Zealand which would come to Australia under the terms of the Agreement would be negligible.

Above and beyond all these facts, the three industries that are primarily worried about this Agreement - the cheese industry, the pig meat industry and the vegetable industry - have great protection under it. The Minister for Trade and Industry, in answer to a question I asked in the House last August, said in relation to the pea and bean industries -

We took steps to consult with those people, both on the processing side and on the growing side of the Australian industry, who were able to give information. So that honorable members may see this matter in perspective, 1 point out that, under the existing arrangements with New Zealand, for I think seven or eight years there has been a sliding scale of duties and no duty is payable where the product is exported at a price above a certain level. In order to illustrate the degree of competition, I mention that 4,300,000 lb. of peas and beans were imported from New Zealand in the two years ended June 1964 and only £14,000 of duty has been paid on those peas and beans. There has been no disruption of the Australian industry in those circumstances.

I believe that this Agreement will not have any deleterious effect on this industry. I can assure the honorable member that if mere is any disruption, I will be the first to bring it to the notice of the House. That is specifically mentioned in the Agreement. The protection given to our industries is that consultations can take place. We have very close and friendly relations with New Zealand. If one of our industries is about to be directly affected - for instance, :f there will be unemployment or some financial loss - the machinery is in the Agreement to protect it. Consultations can occur immediately, and within 60 days there can be-

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That will be closing the stable door a bit late.

Mr BRIDGES-MAXWELL:

– -I do not think so. There can be immediate consultations. Statistics will be kept. The protection that is in the Agreement is that under Articles 8, 9 and 10 an industry has immediate recourse to the Government, which has the power to consult with the New Zealand Government. Australia and New Zealand are friendly countries. The purpose of this Agreement is not for our countries to harm each other. The purpose, as set out in the objectives, is to promote the economic and social development of the free trade area, and later of our Territories, as provided for in Article 13.

Although I respect the fears that have been expressed by the industries concerned, I believe that they have that protection and consequently that the Agreement will be of great national benefit. It will be of benefit to the growth of our economy and, more importantly, to the growth of the New Zealand economy, with its rather narrow stucture. It will allow a more rapid development of our population and of our nation. What is of even greater importance is that it will bring two countries closer together in this part of the Pacific area at a time when we need very close and friendly relations.

Mr HANSEN:
Wide Bay

.- I join with other honorable members in saying that there should be more friendly relationships and possibly agreements, not only on trade but also on other matters, between New Zealand and Australia. New Zealand is the only other country of European origin in the Pacific area. Our two countries have very much in common. It is to our mutual advantage to make agreements that will benefit the people of both countries. However, I am perturbed about this New Zealand-Australia Free Trade Agreement as it affects the dairy industry, particularly the cheese and pig meat sections of it. The honorable member for Robertson (Mr. Bridges-Maxwell) has just said that he cannot see what the dairy farmers in Queensland have to growl about because they are now receiving from the Government a subsidy of £245 a year. In fact, the dairy farmers in the southern States are in a much better position. They produce more and receive a larger subsidy than that. But I do not think that is the point at all.

Mr Bridges-Maxwell:

– My point was that this Free Trade Agreement will cost Queensland dairy farmers only 30s.

Mr HANSEN:

– It is acknowledged that the cost of production in Queensland is higher than in the other States. For that reason, I believe that particular measures should be taken to protect the Queensland dairy farmers. They feel that they have been sold out in respect of this Agreement.

In the first place, they believe that the industry was not consulted on it. 1 have received a letter from the Australian Dairy Industry Council, as I believe every honorable member has, putting forward its point of view and saying that it is not satisfied with the reply that it received from the Minister for Trade and Industry (Mr. McEwen) regarding precautions or safeguards for the industry, or with the statements that those precautions or safeguards can be reviewed if it is shown that they are not adequate. In Queensland last year 10,000 dairy farmers left the industry. I do not suppose we can blame this Agreement for that; but there are problems facing the industry. The position in the industry is getting worse. The dairy farmers believe that, bad as the position is at the moment, it will be worsened by allowing the importation of cheese and pig meat. The farmers whom I represent are concerned about imports of pig meat in particular. They have every reason to believe that the buyers for the various processors are holding back and refusing to pay higher prices for pigs over the scales because they believe that they will be able to import the cheaper carcass pig meat as soon as the ban on the importation of pig meat from New Zealand is lifted.

Mr Robinson:

– It was the honorable member who sold them that story.

Mr HANSEN:

– I did not sell them that story; they sold it to me. I am quite definite about this. I am putting their point of view. If the honorable member for Cowper would like to attend any meeting of the Queensland Dairymen’s Organisation or the Australian Primary Producers Union in my district, I would be pleased to have him speak to the farmers and put his point of view. If he can convince them, well and good. That will get them off my back. J cannot convince them that their fears are unfounded.

The position is that they believe that the processors - it is acknowledged that the processors will be the people who will import this carcass pig meat - are deliberately keeping prices down in the hope that shortly they will be able to import Queensland’s share of the 3,000 tons of pig meat that will be allowed in from New Zealand.

Mr McEwen:

– But there is an embargo on the importation of pig meat.

Mr HANSEN:

– As I said, they are waiting for the embargo to be lifted.

Mr McEwen:

– Does the honorable member say that they are refraining from buying pig meat, not knowing when the embargo will be lifted?

Mr HANSEN:

– The Minister knows that prices have been depressed. In regard to the processors, it is quite interesting to see that one of the largest chain stores operating in Australia has recently gone into the processing industry.

Mr Anthony:

– It has gone into the production side of the industry; so it is confident.

Mr HANSEN:

– For the people about whom I am speaking the production of pig meat is a sideline and a support for their income from dairying. It is a very important sideline. They are not satisfied with the guarantees that have been given up to the present. A report of a meeting held at Biggenden last week stated that a represent ative of the Queensland Dairymen’s Organisation - . . claimed that “ political effectiveness “ tactics employed by dairymen in the recent Dawson byelection had some bearing on the outcome of the election.

I know that this is a sore point. The report continued -

He said that it was the duty of the dairymen to produce high quality products and that it was the duty of politicians to see that dairymen were paid a decent return.

It is significant that the dairy industry has undergone certain processes and changed considerably in the last 25 years. It has gone from the days when most of the work was done manually. There has been a considerable amount of mechanisation of the industry. A certain amount of capital has been invested in it. Attention was paid to this matter by the Dairy Industry Committee of Inquiry which, in its report presented in 1960, made certain recommendations which have not been carried out. That Committee said -

The old business of hand milking has been superseded by machines. The sloppy milking yard and the draughty milking sheds are relics of the past. Modern, well planned, well fenced and properly drained yards hold cows awaiting their turn to enter milking sheds designed for the comfort of both man and beast. A tractor is now an essential on a dairy farm and the tools for harvesting - mower, side delivery rake, automatic hay baler, and so on - speed the gathering of fodder for storage in weatherproof hay sheds.

It pointed out that no longer can dairy farmers be regarded as cow cockies. Now they are people who have made a study of the industry, who expect a reasonable return for the work they have done, and who look to the Government for assistance and protection when they are going through difficult times. The amount of cheese imported has been mentioned. It is said that the amount to be imported will be negligible - only 400 tons. Figures that I received from the Minister for Customs and Excise (Senator Anderson) late last year show that during the year 1964-65 some 290 tons of cheddar and epicure cheddar cheese were imported from New Zealand. On this an amount of 6d. per lb. in duty was paid. The quantity will be stepped up to allow some 400 tons to be imported in the first year, rising gradually over a period of five years to 1,000 tons.

The industry is a co-operative one, in the main. Every dairy farmer who is interested in cheese manufacture pays into an equalisation fund, so if we have coming into Australia 1,000 tons more than is being sent overseas, this will mean that the farmer’s contribution will be stepped up. Slocks of cheese held in the main cold stores in Australia have increased since 1960-61. They rose as high as 7,992 tons in 1962-63. We know that there was a very severe winter in Europe in 1961 which affected dairy production there. Australia was enabled to take advantage of the market that existed in Europe, and quite a lot of these stocks have been disposed of, but at present, on an average, 3,000 tons of Australian cheese is being held in cold stores. To that quantity we can add in the first year double the amount now coming from New Zealand. These imports will gradually work up to 1,000 tons. We can allow for a little increase in the consumption of cheese. The Australian Dairy Produce Board is doing quite a good job in the promotion of cheese and butter locally, as well as overseas. Perhaps this will lead to an increase in consumption. An increase in population may lead to an increase in local consumption, thus absorbing some of the stocks.

The statistical bulletin of the dairy industry for 1965 shows that with this increase in local consumption there has been a steady increase in the manufacture of cheese in Australia. One story is that an average consumption of 7 lb. of cheese by each Australian wil absorb the cheese coming from New Zealand. The effect of the increase in imports will be twofold. The Australian dairyman will have to contribute to the equalisation scheme to allow his additional surplus cheese to be sold on the overseas market, and at the same time he will have to face this competition from New Zealand cheese.

Briefly, the point that I want to make is this: I do not believe that the industry’s representations have been heeded. Certainly, they have not been heeded to the satisfaction of the industry by the Deputy Prime Minister, by his party - the Country Party - or by the Government. I understand that a report was presented recently to the Queensland Premier by a committee of inquiry into the Queensland dairy industry, but it has not yet been made public. Rumour has it that the report will not be very favorable to the Government, so it is most likely that its contents will not be made public until after the State election on 28 th May.

The Deputy Prime Minister acknowledges that the industry is in a parlous condition. I ask him to consult the producers more and to give them an assurance. It is not enough to tell them just to have confidence, to wait and see what happens; that if anything goes wrong, we can give 180 days’ notice that we wish to close the gate, and that in that way we can fix things up for them. It must be acknowledged that there are people on marginal farms, which will be becoming more marginal with the present weather conditions. In many instances capital is not available to them at reasonable rates of interest to enable them to engage in the large scale schemes of pasture improvement that are required. They can be assisted in the first place by having money made available to them over a long term at reasonable rates of interest for pasture improvement.

The actual returns of most of these people are not much better than the basic wage and in many cases they have capital outlays of £6,000 or £7,000. I was interested to hear the honorable member for Riverina (Mr. Armstrong) say that the price of dairy land in Queensland was going up. I believe that one of the reasons for this rise is that good dairy land is very hard to obtain in Queensland and it has always commanded a good price. But in the marginal areas, it is a different story altogether. I should like to know what the Government can do to assist these people. Let us compare the people who will be displaced in the industry with miners, waterside workers and others, who are no longer able to obtain a livelihood in the areas in which they have their homes and so are forced to shift. In the electorate of the honorable member for Capricornia (Mr. Gray) is the town of Ogmore, which for many years depended solely on coal mining. People who have homes there worth a couple of thousand pounds have had to walk out. There is no chance of shifting the homes. The owners have not been given any compensation or assistance to enable them to enter any other industry. What better treatment can the dairy farmers expect than that which has been handed out to miners, waterside workers and others?

Mr ROBINSON:
Cowper

.- 1 rise as one representing an electorate which is predominantly a dairying electorate and which produces a considerable content of the total pig meat production of this country. I want to say at the outset that I very strongly support the New Zealand-Australia Free Trade Agreement. I support it for a number of reasons which I want to outline to the House. This afternoon we have been given a lot of misleading information, which is without proper regard for all the facts relevant to this Agreement. The honorable member for Capricornia (Mr. Gray) set out very deliberately to distort the facts. The honorable member for Oxley (Mr. Hayden) avoided completely the real issues, and now the honorable member for Wide Bay (Mr. Hansen) has misquoted this matter from beginning to end.

First of all let us deal with the question of pig meats, which has been referred to by all of the speakers of the Opposition side. The Government, in its wisdom, has entered into a trade agreement with New Zealand which in fact is a revision of the trade agreement of 1933. The Agreement has provided for the pig industry unique safeguards for trading on the home market that were never previously provided, which no other government had ever thought of providing, and which are to the credit of the Minister for Trade and Industry (Mr. McEwen) who was the architect of this arrangement. It is a great pity that the members of the Opposition have seen fit to spread a story around the Commonwealth which is based on the evasion of the facts of the matter. They have lent themselves to certain commercial interests, the processors of pig meat. As has been mentioned by the honorable member for Wide Bay, rumour upon rumour has been circulated in efforts to justify a fall in the price of pig meat on the home market. The members of the Labour Party could quite well have assisted the farmers by telling the truth of this matter. If they had done so the slight fall in the price of pigs may have been avoided.

First and foremost let us be realistic about the arrangements with regard to pig meat. Prior to the re-arrangement of the agreement pig meat was coming into Australia subject to a slight duty. It was deemed desirable, because of the history of New Zealand’s entry into the Australian market, to find a new way of protecting the pig industry in Australia, and this was done by providing in the agreement for the licensing of all pig meat importations. This licensing arrangement incorporates a quantitative limitation on the importation of pig meat and provides that those who contract to import pig meat into Australia from New Zealand may do so only if they can show quite clearly that the importation of the quantities envisaged will not be injurious to the Australian pig producer. This provision, of course, is unique. It is something that was never attempted before. We have not yet seen the new scheme tried out because of the incidence of disease in New Zealand which has blocked importations from that country.

Let me say here and now that those who have knowledge of the pig industry realise that this new arrangement will do far more to protect the pig industry than anything that was possible under previous provisions covering trading arrangements between Australia and New Zealand. Anyone with the slightest knowledge of pig marketing knows full well that for a number of years the main problem that has faced pig producers in this country, and also in most other countries, has been the violent fluctuations in prices. Prices of pigs would rise sharply and a producer would decide that it was good business to increase his herd, first by increasing the numbers of his sows and ultimately, of course, his total production. When the overall production rose prices would fall and there would be a sharp decline in returns. Under the agreement which existed previously the processors found it useful to bring in small quantities at times which suited their book so that they could further reduce the prices offered to producers. Today we find that there has been a slight fall in prices brought about very largely by the rumours spread by the members of the Opposition. This kind of practice is understood by thinking producers in the pig industry but of course it is denied by members of the Australian Labour Party who have a responsibility to the producers and who have failed miserably to bear that responsibility.

They have shown that they have no interest, other than a political interest, in the welfare of the producers.

When we look at the situation as it concerns cheese we find a very similar pattern emerging. For a number of years cheese imported from New Zealand has been subject to a duty. The Government found it expedient in the new arrangement to remove the duty on certain lines of cheese and to fix a ceiling on the total amount that could be brought in.

Mr Hansen:

– Twice the previous amount.

Mr ROBINSON:

– The honorable member knows full well what the amount is. He is supposed to be one of his Party’s experts on primary industry and I should think he would have read the agreement. The provision covering cheese is also unique. The agreement provides explicitly that the ruling price for cheese imported from New Zealand will be agreed upon by the Australian Dairy Produce Board and its New Zealand counterpart. This is an improvement in trading arrangements and affords greater protection for the dairying industry than anything that was done previously in relation to cheese or any other kind of dairy produce. There is, of course, under the provisions of this agreement a total ban on the importation of butter. These provisions are well known, and yet the honorable member for Oxley stood up in this House a little earlier and referred to the threat to the dairying industry. What sheer rot! He knows very well that he was talking nothing but utter rot. Such statements as he made do no good for the primary producers of this country. It is a great tragedy that the members of the Opposition have chosen to talk in the way in which they have done since the announcement of the arrangements under the new trade agreement with New Zealand. Of course we can remember very clearly the attitude of the Australian Labour Party towards the trade agreement with Japan when it was first negotiated. It was very similar to the attitude it is adopting towards the agreement with New Zealand. Yet one of the most valuable contributions to the welfare of primary industries in this country has been made by the Japanese trade agreement. I venture to suggest that we have achieved more in the rewriting of this trade agree ment with New Zealand to further the interests of the Australian dairying industry than we have done with any other arrangements we have made for many years past.

It is a fundamental fact that Australia and New Zealand, which are producers, in the main, of primary products, must work together, and with the dairying industry in particular there is a very great need for sensible co-operation in marketing. So we have an agreement which provides not only a safe arrangement for a limited quantity of certain lines of New Zealand cheese to come here, but also an outlet for the sale in New Zealand of Australian cheese. The Australian Dairy Produce Board is currently taking action to offer Australian cheese to New Zealanders. This is a straightforward business deal. There are people in Australia who want to eat New Zealand cheese and we hope there are people in New Zealand who will want to eat Australian cheese. If you ask me why this is so I can only tell you that it is for the same reason that people have fancies for particular wines or cheeses or other commodities, and unless we provide for these varied tastes we will fail in our duty to the producers. The objective of the Australian Country Party, and particularly of its Leader, the Minister for Trade (Mr. McEwen) for very many years has been to ensure that primary producers receive the highest prices for their goods on reasonably assured markets, and this policy has been followed in the negotiation of the trade agreement with New Zealand.

There is a further important consideration. There is need for co-operation between Australia and New Zealand in selling butter on the world market, and the best way to ensure this co-operation is to see that good relationships are maintained between the two countries. What folly it is for Australia to be seeking markets for butter around the world by offering lower prices. We have a good market in Europe. We have opened markets in Peru and other obscure places. In recent times we have established markets in Japan and other countries. But what would be the result if there were not a good, sound, sensible relationship between Australia and New Zealand? We could go to a particular country and offer butter at a certain price, only to find the representatives of New Zealand going to that country a week later and undercutting us by a penny, two pence or three pence. Would that be good for the farmers of Australia? Of course it would not. Would it be good for the farmers of New Zealand? Of course it would not.

Having in mind the implications of trade negotiations around the world - the General Agreement on Tariffs and Trade, the Kennedy Round and the like - the Minister for Trade in this country was wise enough to make an arrangement with New Zealand which would be advantageous to us and to New Zealand and which would further the interests of primary production and the welfare of primary producers in the two sister countries. This ought to be hailed by every primary producer and every political party in this country. Yet we have seen the spectacle of the Opposition in this Parliament taking every opportunity to knock what is in fact the most sensible and progressive approach to trade that we have experienced for many years. The Opposition’s attitude is the sort of thing that is detrimental to development and progress.

We have heard the honorable member for Wide Bay this afternoon quote from the report of the Dairy Industry Committee of Inquiry, which undertook a very wide inquiry into the dairy industry some years ago and made recommendations to the Government. The honorable member failed to say that one of the recommendations proposed the gradual removal of the Commonwealth subsidy paid to the industry. He failed to tell the truth about the report. He quoted from it only recommendations proposing improvements in the treatment of the industry. He denies what was done for the industry by the Menzies Government. He denies that that Government saw to it that financial assistance was provided for the development of the industry and that the subsidy was retained at the present level despite the recommendation gradually to remove it. The honorable member forgets that a Labour Government in Queensland was very loath to grant the dairy farmers an increase in their returns and that it was instrumental in having enacted in Queensland an act known and described as the “ stand and deliver “ act. That action was taken when the Queensland dairy farmers refused to be blackmailed by the State

Labour Government. The honorable member forgets also that the McGirr Labour Government in New South Wales refused to permit a rise in the price of butter after the war at a time when the Menzies Government, as a result of the first practical inquiry into costs in the industry, recommended a substantial increase of something like ls. per lb. He fails to acknowledge that his Party has been guilty of these actions in the past. Yet he criticises the Government for having done something constructive and based on forward thinking - something designed to protect and help those engaged in dairying and pig raising throughout Australia.

Mr Failes:

– What about margarine?

Mr ROBINSON:

– My friend has just mentioned margarine. If we think of the sorry record of Labour in that regard, we recall a story that would disturb any dairy farmer. We recall the tremendous increase in the quota for margarine production that was permitted in Queensland and the large increase that was agreed to in New South Wales during the years when Labour was in office in those States. We think of the tremendous endeavours of members like-

Mr Anthony:

– The honorable member for Grayndler.

Mr ROBINSON:

– Yes, the honorable member for Grayndler (Mr. Daly). In this House, he has advocated the interests of the margarine producers for many years. All these are the things about which we must think when we turn our attention to matters affecting dairying and pig raising. We certainly cannot allow a situation such as would be brought about by the Labour Party, which chooses to be completely destructive in its approach to an industry that needs positive assistance and the support of a government that is prepared to seek throughout the world for substantial, profitable and reliable markets for dairy products.

The trading situation with respect to butter is of fundamental importance to the nation and of great importance to individual dairy farmers. But in this debate nothing has been said by honorable members opposite to the credit of the Minister for

Trade and Industry or of the present Government with respect to our trade in butter. Opposition members have also completely overlooked a number of other important matters, notably the prospects for the timber industry. For some reason, the honorable member for Capricornia, the honorable member for Oxley and the honorable member for Wide Bay deliberately avoided mentioning timber. I suppose they did not want to do so because something useful has been done in promoting the export of hardwoods from this country. I am sure that throughout Australia there is satisfaction at the fact that despite the difficulties that stood in the way a rearrangement of the 1933 agreement will now permit us to sell hardwoods to New Zealand and to enter into other arrangements for the advancement of trade and the disposal of the products of Australian soils and forests. These are useful developments and they should be commended by those who purport to be interested in the welfare of the rural areas of Australia.

When we deal with matters of this kind, we have to think not only of trade but also of long range planning for development. That is the fundamental factor in the consideration of the New Zealand-Australia Free Trade Agreement. It is the reason why greater safeguards than ever before have been provided to protect our primary industries. These are acceptable to New Zealand, a country that understands primary production and what must be done by governments if there are to be effective trading arrangements that will permit prudent trade. This Agreement provides in a very businesslike fashion for trade to be controlled, when there is need for control, without any impingement on the general principles of trade between two sister nations. This arrangement sets an example for us to consider if we are in future to face the dangers of the European Common Market. The arrangement entered into between Australia and New Zealand could well be adopted as a world pattern. When we think about what could happen in Europe if Britain’s entry into the Common Market were to become a reality, we must realise that the trading arrangement between Australia and New Zealand is a kind of arrangement that would perhaps safe guard particular areas and particular countries if that were to happen.

I think it would be well for honorable members to study more clearly, more fully and more carefully the implications and the details of the New Zealand-Australia Free Trade Agreement. If they do, they may understand more completely not only the value and meaning of this Agreement and the long range effects it could have on the immediate trade between the two countries that are party to it but also the value of adopting it as a pattern in the rearrangement of other trading agreements for the protection and advancement of particular industries and especially of primary producers, who, after all, must be our fundamental concern. I am proud to be able to support this agreement. I am proud to say that in my electorate I have been able to tell a story that demonstrates that it is sound and that it stands this Government in good stead. I believe that the Government’s action in entering into this agreement justifies the trust and support of us all for this progressive action.

Mr PETERS:
Scullin

.- Mr. Deputy Speaker, as an amendment to the motion that the House take note of the paper, I move -

That the following words be added to the motion: - “ but is of opinion that the Agreement will be detrimental to the interests of Australian primary producers “.

The Australian Labour Party intends to divide the House on this amendment. The honorable member for Cowper (Mr. Robinson) said that the admission of New Zealand pig meats, peas and cheese into this country in quantities greater than before would help to promote Australia’s primary industries. That proposition appears to me to be an absurdity. The honorable member seems to suggest that the importing of those commodities from New Zealand in moderate quantities to a certain extent promotes the pig meat, dairying and pea growing industries in this country and that therefore the wholesale importing of those commodities should immensely improve the conditions of Australian primary producers. That proposition is an utter absurdity.

What is the general principle or objective of this Government’s trade policies? Does the Government, by its trade policies, endeavour year by year to increase the balance of payment difficulties of this country? It might be said that it does not and that that is not the objective, but that is the result of this Government’s trading operations. Every year, with few exceptions, since 1949 there have been balance of payment deficits in our trade with other nations until now we have accumulated over £2,000 million worth of deficits. What should a government do when it is drawing up a trade policy, irrespective of with what nation the policy is concerned? It should endeavour to reduce the trade deficit. It should endeavour to export more or to import less. This Government’s policy should be designed to increase exports by increasing production or to reduce our reliance upon imports by creating import replacement industries within Australia.

Mr Giles:

– What about softwoods? Does the Government not do this with them?

Mr PETERS:

– We should certainly purchase from New Zealand softwoods and other forest products that are not produced within Australia. We should purchase from New Zealand goods that we are unable to produce.

Mr Giles:

– Do we not have to balance them?

Mr PETERS:

– That is the position. We do have to balance them. If necessary we should cease to secure such goods from other countries. This Government introduced a trade treaty with Japan. Members of the Australian Country Party now claim that that was one of the greatest achievements in Australia’s history. They say that that treaty assured for us the sale of our primary products overseas.

Mr Nixon:

– So it did.

Mr PETERS:

– It secured our market for primary products overseas by increasing the inflow of manufactured goods from Japan. In effect Country Party members said: “ So vital to our economy are our primary producing industries that we will allow greater competition from Japan with our secondary industries by reducing tariffs to allow the inflow of manufactured goods from Japan in order to secure and stabilise our Japanese market for primary industries”. Now, do honorable members opposite say: ‘ We are going to safeguard our primary industries by allowing manufactured goods to come from New Zealand “? No. New Zealand does not have manufactured goods so these members say: “ We are going to allow primary products to come to Australia in competition with our primary products in order that we can sell some manufactured goods to New Zealand.” In other words, we get from Japan manufactured goods that we can produce here and we send manufactured goods to New Zealand in order to destroy or restrict some of our primary industries. The process is an utter absurdity. The whole question of our overseas trade should be viewed as one big operation. We should say: “ We are going to balance our trading operations as far as possible. We are not going to be the dumping ground for goods from other countries.”

In days to come the accumulated deficit will have to be paid by generations of Australians not yet bom. What has this Government done? In a period of about 15 years it has created £2,000 million worth of trade deficits. In another 5 to 10 years it will create, not another £2,000 million worth of deficits but £4,000 million or £5,000 million worth of deficits. That is what Australia has to look forward to with the trading operations of the Minister for Trade and Industry (Mr. McEwen) and the honorable members who sit behind him. In effect the Minister says: “ We will increase our trading operations by having a trade agreement with New Zealand.” What is the object of this Agreement? Is it to diminish our balance of payments difficulties and to reduce the deficits that are building up annually? If that is the objective, what we should be doing is buying less from the United States of America, from the United Kingdom, and from all those countries that are buying from us smaller quantities than we are buying from them. Obviously this should be the Government’s attitude if it is to balance its trading operations.

Members opposite who have spoken have said that this Agreement is in the interests both of the people of Australia and of the people of New Zealand. I was recently in New Zealand. As a member of the Country Party said a short time ago, the Opposition in the New Zealand Parliament is strongly opposed to this trade treaty because it believes that the inflow of manufactured goods from Australia will restrict the operations of existing New Zealand manufacturers and will prevent the promotion and development of new secondary industries there. Of course, the position is that the New Zealand Opposition will soon be the New Zealand Government. The Opposition there is as sure to be the Government after the next election as the Wilson Government is sure to be returned in Great Britain. When the Opposition becomes the Government in New Zealand, what will happen to this Agreement? It will not permit the inflow of manufactured goods to New Zealand to destroy its industries or to prevent the promotion and development of new secondary industries. It will so modify this Agreement that its contents will not be as desirable as members opposite are trying to suggest. After all, a lot of humbug is talked in this House.

Mr Bridges-Maxwell:

– Hear, hear!

Mr PETERS:

– The honorable member exclaims: “ Hear, hear!” It is from his side of the House that the humbug comes in relation to trading operations. Australia’s trading operations should be such that we should be exporting more or importing less. This, of course, is not my statement alone - it is the statement of the Deputy Prime Minister. During the last recess the Deputy Prime Minister made a pronouncement outside this House, as he often does, in relation to the economy of this country. He said: “We must produce more. We depend upon our primary products overseas to meet our obligations.” That statement was made, as generally happens, after similar statements had been made by quite a number of other authorities in Australia including the authorities who sit on the Opposition benches. A similar statement has been made by Sir John Crawford, who was an experienced officer of the Department of Trade and Industry and is an expert on trading operations and economic issues generally. He was appointed to the Vernon Committee by the present Government and has been appointed to several other positions by the Government in recognition of his outstanding capacity. That gentleman has said that we must increase our rural production. The honorable member for Cowper says that the way to increase rural production is to import packaged peas from wherever you can get them, cheese, pig meats and other kinds of foodstuffs.

Mr Robinson:

– I did not say that at all.

Mr PETERS:

– The honorable member, who with his colleagues masquerades under the name of the Australian Country Party, pretends that he is serving the interests of the country man in this Parliament. He is no more serving the interests of the country man in this Parliament than he is serving the interests of the general community.

Mr Turnbull:

– The honorable member is serving the city.

Mr PETERS:

– Yes, I am serving the city. No man really serves the interests of the city dweller in this Parliament unless he simultaneously serves the interests of the country dwellers. By promoting the purchasing power of the vast numbers who live in city areas one promotes a home market - the best type of market - for the produce of the land. Those people who sit on the Country Party benches in this Parliament seek to divide this nation into country and urban sectors by pretending that there are special country interests to be protected; that the seller of peas has an interest in keeping poor the person who produces peas, and that the seller of meat has an interest in maintaining conditions in the metropolitan area that make it impossible for metropolitan dwellers to buy what the farmer produces. Country Party members say: “That being so, we who stand for the specialised interests of the country man are the people who serve Australia.” The interests of the city and of the country areas are interdependent. Everybody in Australia should realise that.

As I have said before, the people of Australia should realise that we must produce an increasing quantity of primary products and send those products to other countries, and must not destroy our primary producers. The people of this nation must not take up the absurd attitude that this Government has adopted and say that, in order to promote the sale of primary products, we must permit opposition to our secondary industries by importing secondary products from Japan, mainland China, Czechoslovakia and other places, and that then, in order to promote our secondary industries, we should allow competition on the home market by importing cheese, peas and pig meats. The honorable member for Cowper said that we should not allow competition with our butler. The treaty that we are debating, of which the Minister for Trade and Industry (Mr. McEwen) was the designer, permits the importation of the first three commodities that I have just mentioned. At present New Zealand has an over production of 70,000 tons of butter. Why not help New Zealand with her butter? Why help her with pig meats, peas and cheese but not with butter? We are prepared to help her with the first three. Why should we not help her with all four?

Our friend, the honorable member for Cowper, says that we have helped the pig meat industry, our cheese production and the growing of peas in this country by implementing this Agreement with New Zealand. Let me quote the honorable member’s exact words. He said: “The manner in which these goods are imported into Australia has helped the development of these industries within Australia.” If that is so, why not let butter come in? Why not allow in 70,000 tons of butter to promote the interests of the dairy industry in the same way as we are promoting ‘the secondary industries of this country? In promoting this Agreement with New Zealand, the Minister for Trade and Industry, who has failed Australia for 15 years and has been responsible for a greater accumulation of trading deficit than any other person who has administered a similar portfolio in this or any other country, has failed us once again.

Mr DEPUTY SPEAKER:

– ls the amendment seconded?

Mr Allan Fraser:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

– I second the amendment. The purpose of the Australian Labour Party in submitting this amendment is to divide the House on this issue. The House will be rising in a few minutes for dinner. I hope that a vote will be taken before then, because tonight it is proposed to debate another topic. The cases for and against the New Zealand-Australia Free Trade Agreement have been argued and the facts are now before the electorate. The most important service that I can render to the great dairying electorate that I represent is to ensure that every member of this House is called upon to record his vote upon the matter. Therefore, I hope that there will be no delay and that the House will be enabled to vote on this issue before we rise for dinner.

It will be very interesting indeed to see how members of the Australian Country Party vote on the amendment. The amendment contains these words -

  1. . the Agreement is detrimental to the interests of the Australian primary producers.

The reasons for this statement have been put clearly, not only in this place this afternoon, but also by leaders of the dairy industry throughout Australia. If the members of the Country Party vote against the amendment and against the interests of the Australian primary producers, they will be voting against the wishes of the dairy industry of Australia.

Mr Robinson:

– Rot. You know it is.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I do not know how many members of the Country Party will care to show themselves to be false shepherds as has the honorable member for Cowper. The speech delivered by the honorable member was a piece of special pleading and of deception of his own constituents, whose interests he ought to be representing in this Parliament. I believe that the vote on this amendment will demonstrate once again that the Country Party is simply a carbon copy of the Liberal Party and that, when the chips are down, members of the Country Party are prepared to allow themselves to be dragged by their tails by the Liberal Party to vote against the interests of the country people whom they are supposed to represent.

I was very glad to notice a few days ago a report that, after a lapse of 20 years, the Country Party is again to contest the seat of Eden-Monaro. On the last occasion on which the Country Party contested EdenMonaro its candidates lost their deposits. The more candidates in an election the better. The wider the choice for the electorate the more are the interests of democracy served. I conclude my remarks by saying that I want to see a demonstration for the benefit of the dairy farmers of EdenMonaro that a Country Party candidate for the seat would be bound, just as much as members of the Country Party in this

House are bound, to follow the dictates of the Liberal Party whenever called upon to do so and to vote solidly with it on all issues on which the Liberal Party finally calls the tune and which involve the sacrifice of the interests of Australian primary producers.

Mr McEWEN:
Minister for Trade and Industry · Murray · CP

– The essence of the amendment is that the Labour Party requests the Parliament to express the view that the New Zealand-Australia Free Trade Agreement will be detrimental to the interests of Australian primary producers. Such a request would come better from a party that had exhibited some interest in the wellbeing of Australian primary producers. It would come better from a party which had displayed some statesmanship on an issue touching relations between Australia and New Zealand as vitally as does this Agreement. It is sad that an agreement between Australia and New Zealand cannot be debated by the Australian Parliament except in an atmosphere of recrimination produced by the alternative government. As for the wellbeing of Australian primary producers, the honorable member for Cowper (Mr. Robinson) made it crystal clear, as it has been made clear many times before, that this Agreement will give them a measure of protection that they have never had before.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– This is gross deception.

Mr McEWEN:

– Well, the honorable member for Eden-Monaro is an expert in deception; I am not. Hitherto there has been no formal obstacle to bringing butter into Australia from New Zealand other than a duty of 6d. per lb. Now, for the first time in our history, the Australian dairying industry has an agreement negotiated on the basis that butter will not be brought into the country in competition with Australian butter. This is the first and greatest protection our dairying industry has. Until now it has been possible to bring unlimited quantities of cheese into this country from New Zealand. Under the Agreement imports of cheddar cheese will be limited to 1,000 tons a year from New Zealand. This will be the measure of competition facing an industry in this country that produces 60,000 tons of cheese a year. Duty free imports of pig meat are limited under the Agreement to 3,000 tons a year. The industry in Australia supplies consumers with 120,000 tons a year. The Agreement limits imports of cheddar cheese to 1,000 tons a year and imports of pig meat to 3,000 tons a year. This is real protection - protection of a kind that has never existeed before.

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Protection against what?

Mr McEWEN:

– It is protection of the Australian dairying industry, if the honorable member is too dumb to understand. He claimed a few minutes ago that he represented a great dairying electorate. He does not understand what the dairy farmers need to protect them. Here is an agreement that assures Australian primary producers that their exports to New Zealand will be maintained at at least the level which they have been enjoying up to date. Our sugar exports to New Zealand will be worth S4 million a year. Would the honorable member for Wide Bay (Mr. Hansen) claim that it is against the interests of Australian primary producers that we should have an assured market in New Zealand for $4 million worth of sugar a year? Is it against the interests of Australian primary producers that we should have the contractual right to sell, as we have been selling, $9 million worth of wheat a year to our nearest neighbour? What is protection of Australian primary industries? When the Australian Labour Party was last in office it protected the Australian dairyman by giving him a price for his butter based on a return to the man milking 50 cows of the basic wage plus 25s. a week margin for skill and a return of 3i per cent, on his capital investment - for a working week of 56 hours. The Labour Parly has one standard for industrial producers and a different standard for primary producers, even to the extent of the working week. When Labour was in power with a majority in both Houses, its working week for the primary producer was 56 hours. Now members of the Opposition have the gall to come into this Parliament and talk about the wellbeing of Australian primary producers. They claim to represent the working people, if only the working people would vote for them. Many workers are engaged in the manufacturing industry, which each year sells $134 million worth of manufactured goods to our sister Dominion. We want to make provision for these things in an agreement; but who opposes it? It is opposed by the people who claim to be the spokesmen for the work force in Australian manufacturing industries.

This is their pattern, ff they can score a cheap point anywhere, they will have a go at it, no matter what the consequence for Australian manufacturing industry, the Australian work force or Australia’s reputation. What happened when the Government sought to improve Australia’s relations with Japan and our economic wellbeing by entering into an agreement with that country? Every member of the Labour Party in both Houses voted against the Japanese Trade Agreement. Most of them spoke against it. Today they speak about the wellbeing of Australian primary industries, but they tried by every device to block the Agreement with Japan - an Agreement which has turned Japan into the largest market for Australia’s wool; an Agreement which has converted Japan from a country which never bought Australian sugar to the biggest market for our sugar. Members of the Labour Party tried to prevent these things from taking place because they thought they could chisel a few cheap votes in an election. They were willing to give Australia the reputation of hating the Japanese and of refusing to trade with them - all these things for a few votes. They would have denied the Australian wool industry the incalculable benefits that it has gained from the Agreement with Japan. They would have denied the Queensland sugar industry the right to sell to Japan more than 500,000 tons of sugar a year. Prior to the Agreement we did not’ make any sales of sugar to Japan. The Labour Party tried to block the Agreement with Japan. Thank God it did not have enough voles to succeed.

There was a sale of tobacco at Mareeba the other day. When Labour was last in office, the total value of Mareeba tobacco sold under Labour’s laws amounted to about £350,000 or £395,000-1 do not remember which. Under this Government’s laws, in the year before last Mareeba sales brought £8,250,000. Who really is concer ned for the wellbeing of the Australian primary producer?

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Oh, let us have a vote.

Mr McEWEN:

– I know that the honorable member doss not like this. He said that he did not intend to spaak in the debate. He spoke for 10 minutes in an effort to block me, but he did not succeed. When we had a trade agreement with Britain assuring us a market in that country for 750,000 tons of wheat and flour a year, who quibbled over the agreement and opposed it? It was the Labour Party. Does Labour care for the interests of Australian primary producers? If the primary producers ever have to depend on even the recognition by Labour of their needs, God help them. I can say that I am delighted to have had a responsibility for this Agreement and to have sponsored it in the Parliament. This Agreement will stand. It will better the relationship, economic and political, between Australia and New Zealand just as the Japanese Trade Agreement bettered the relationship, economic and political, between the peoples and Governments of Australia and Japan. We are a stronger and wealthier country because of the Agreement. Much has been said lately about northern development. What is northern development?

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Let us have a vote.

Mr McEWEN:

– Yes; ‘the honorable member would like to shut me up. What is northern development? The expansion of the sugar industry was made possible only by the Japanese Trade Agreement. The development of the tremendous contracts for coal was made possible only by the Japanese Trade Agreement. The immense contracts for the sale of iron ore found in the north were made possible only by the Japanese Trade Agreement. The assured sale of all tha copper from the Mount Morgan mine for the life of the mine was made possible only by the Japanese Trade Agreement. The Agreement has also enabled us to sell bauxite and alumina to Japan. This is the kind of development of the north that Labour has used its voice and its vote to try to obstruct and to block in this Parliament. Labour ought to be ashamed of its conduct on this and on earlier occasions.

Question put -

That the words proposed to be added (Mr. Peters’ amendment) be added.

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

AYES: 47

NOES: 66

Majority 19

AYES

NOES

Question so resolved in the negative.

Original question resolved in the affirmative.

Sitting suspended from 6.4 to 8 p.m.

page 238

GOVERNMENT POLICY

Ministerial Statement

Debate resumed from 8th March (vide page 35), on motion by Mr. Harold Holt -

That the House take note of the fallowing paper -

Statement of Policy by New Government - Ministerial Statement, 8th Mar.h 1966.

Suspension of Standing Orders

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

That so much of the Standing Orders bc suspended as would prevent the Leader of the Capos’ tion (Mr. Calwell) making his speech without limitation of time.

Motion agreed to.

Mr CALWELL:
Leader of the Opposition · Melbourne

– Mr. Speaker, I move the following amendment to the motion by the Prime Minister (Mr. Harold Holt) that the paper be noted -

That all words after “That” be omitted with a view to inserting the following words in place thereof - “ this House records -

its most emphatic opposition to the despatch of conscripted youths for service in Vietnam and the increased military commitment in that country, and

its disapproval and grave concern at the

Government’s failure -

to maintain the purchasing power of the Australian community;

to retain an adequate and proper

Australian share in the ownership and development of our national resources, particularly in Northern Australia;

to alleviate the effects of the drought and take steps to rehabilitate rural industries and conserve water resources;

to make adequate provision for housing and associated community facilities, and

to submit to referendum the two

Bills to alter the Constitution in respect of Aborigines and the Parliament which were passed last year and, in connection with the latter Bill, to disclose the related distribution proposals “.

The Prime Minister’s first important speech to this House, Mr. Speaker, delivered last week on the state of the economy, was based on the curious idea that he now leads a new Government that has a completely new policy, different from that of its predecessor. The Prime Minister tried, quite vainly, of course, to suggest that his Government has discovered some new ideas and a new programme to deal with Australia’s problems and to plan Australia’s future. These are his own words -

We are a new Government and, inevitably, much occupied not only with the very many important and pressing matters arising at home and abroad, but with other matters which beset a new Government.

This attempt to have us believe what is so obviously a myth will deceive no one. How can the Prime Minister call his Government a new government when all that has happened since Sir Robert Menzies retired and another Minister died is that two appointments have been made to fill the vacancies so created? The Prime Minister would dearly like to create the impression that a new and better era for Australia has been made possible by the retirement of Sir Robert Menzies. This is most uncomplimentary to the former Prime Minister and is opposed to the facts. As the Opposition sees it. the Holt Government is just the same old firm the Austraiian people have had to suffer under for the past 16 years. It is certainly the old firm under new management, but the new management is less certain and less efficient than the one that preceded it. There has been no replacement for the former Prime Minister in the Holt Government because there is no one available with his qualities of leadership and his great ability to take his place.

The amendment that I have moved states as its first criticism, in the most positive way, Labour’s opposition to the Government’s unwarranted and unjustifiable decision to send young conscripts to Vietnam and to treble Australia’s commitment in that war zone. Labour is opposed to this unnecessary and unwinnable war. I take leave to read a few extracts from the speech which I delivered in this House on 4th May last year after the announcement by the former Government that one battalion of Australian troops would be sent to Vietnam. The first extract is -

The over-riding issue which this Parliament has to deal with at all times is the nation’s security. AH our words, all our policies, all our actions, must be judged ultimately by this one crucial test: What best promotes our national security, what best guarantees our national survival? It is this test which the Labour Party has applied to the Government’s decision.

The second extract from my speech reads -

On behalf of all my colleagues of Her Majesty’s Opposition, I say that we oppose the Government’s decision to send 800 men to fight in Vietnam, and oppose it firmly and completely.

On the 15th March 1966, we are still as firmly and completely opposed to Australian participation in the war in Vietnam as we were a year ago, and tonight we register our strongest and unrelenting opposition to the Government’s decision to increase our commitment, which, by the way, was 1,250 and not 800 in May 1965, to 4,500 today. May I quote one more extract from my speech of last year - .

The Government takes the grotesquely oversimplified position that this is a straight forward case of aggression from North Vietnam against an independent South Vietnam. In the Government’s view, too, such internal subversion as there may be in South Vietnam, is directed and operated from the North; that is to say, the Communist insurgents - the Vietcong - are merely the agents of the North, recruited in the North, trained in the North, instructed in the North, supported from the North and infiltrated from the North.

According to this theory put forward by the former Prime Minister, Sir Robert Menzies, everything falls into place as it does with the present Prime Minister, and so the whole operation becomes as I said then and as I repeat now, in the words of Sir Robert Menzies, “ part of a thrust by Communist China between the Indian and* the Pacific Oceans.” This, to us, is just so much arrant nonsense. The war in South Vietnam is a cruel unwinnable, civil war. aided and abetted, of course, by the North Vietnamese Government, but neither created nor principally maintained by it. The present Prime Minister now says that China is directing this terrible, unwinnable war from Hanoi. What evidence does the Government possess of the presence of Chinese troops in Vietnam? The United States makes no such allegation, and no country other than Australia has ever made such a charge. In fact, the debate on Vietnam policy in the United States is conducted primarily on the grounds that Chinese intervention is a future danger, but not a present threat. While the Prime Minister says one thing, the Minister for External Affairs (Mr. Hasluck) said precisely the opposite on 30th January last, and what he said agrees with American opinion. The Minister said: -

At the present time we in Australia have no immediate threat. There may be a long term threat, but no immediate threat that our sovereign independence will be overthrown.

The clash between two senior Ministers on this issue is like the clash between the Prime Minister and the Deputy Prime Minister (Mr. McEwen) on the effect of overseas investment.

Let me return to Vietnam. In a decade of resistance to France, Ho Chi Minh wanted the assistance of no foreign troops. He is a Communist. He is also a nationalist and, , if you like, a realist, and he knows and has always known that, once Chinese troops enter Vietnam, his days of independent choice are over and the independence of Vietnam is finished. Our Government - the Menzies Government which was the predecessor of the Holt Government - by its encouragement of the French in a decade of futile endeavour to maintain IndoChina as a French colony, shares responsibility for a policy which caused the IndoChinese independence movement to pass under Communist control. That fact is unchallengeable; its truth is incontrovertible.

The West backed Bao Dai and abandoned him. The West backed Ngo Dinh Diem and abandoned him. The West allowed Ngo Dinh Diem and his two brothers to be murdered. The West has no standards and apparently no scruples. The Americans have already supported eight so-called governments in Vietnam, and all of them have been military dictatorships, and all have been tyrannical and oppressive.

Mr Buchanan:

– Fancy Labour saying that.

Mr CALWELL:

– Labour always tells the truth. Has there been one Government in South Vietnam that was popularly elected? Every one has been a dictatorship. There is no democracy in North Vietnam or South Vietnam but the attitude of this Government is that it is supporting a popularly elected government. It says that it has nothing closer to its heart than to see peace restored in Vietnam and the withdrawal of all troops. It may say that on occasions but every action it takes means the opposite. Our view on the question of intervention in Vietnam is that we should aim to convert an intervention into a United Nations action to pacify the country, to neutralise it, and to ensure that its people have freedom of choice. Nineteen years of intervention by Communist and anti-Communist powers from 1947 to 1966 has created a battle ground, but it has created nothing that gives any hope of a new life in Vietnam. United Nations action would ensure peace and a better life for the Vietnamese people, and would end all great power rivalries. In this country we never seem to think how much the Vietnamese people are being used in great power rivalries.

Australia’s present Government is primarily concerned, unfortunately, not about peace, but about the way the events in South East Asia can be used to influence political thinking in Australia. Accusing China of hostile intentions helps build a war atmosphere in Australia, while trading with China produces votes for Government supporters in rural areas. The concern in both cases is simply to obtain votes for the Government and not to deal with the realities of life in Vietnam. On the one hand the Government says in effect that we are at war with China and, on the other hand, by its trade with China in rutile sands, it ensures that China has the most vital element for its war economy. Rutiles are the source of titanium, and titanium super hardens steel. Titanium is absolutely essential for aircraft and rocket engines, and so the Government is playing a major part in Chinese development of atomic bomb delivery systems. Let honorable members opposite deny that if they can. I know that recently, because of our attitude as an Opposition, the Government has cancelled any more sales of rutile sands to China. But the Government still proclaims that it forbids the export of strategic materials to Mainland China.

The Government must stop this crude propaganda about Vietnam. If the issues are as simple as the present Prime Minister makes out, why does not the United States go all out and bomb Vietnam? If we are already at war with China, as the Prime Minister alleges, and which he gives as the reason for expanding Australian intervention in Vietnam, what is the aim of his Government in relation to China? Perhaps it is the defeat of China? If we are ai war with China, and if we want to defeat China, why is this country not now on a war footing? Why does :he Government say that the lives o;” :he 4,500 servicemen, including

I, 500 conscripts, who will be sent to Vietnam are expendable, while the rest of the community can enjoy itself to the full? And that is lbc policy of this Co’ernment. To our disgrace the only people in Australia today *ho ure concerned about what happen.; in Vietnam are the relatives of those serving in that country. They are the only people who have any feeling in the matter whatever.

Mr Killen:

– What rot.

Mr CALWELL:

– Let the representative.; of reaction slate their opposition when the time comes. There are only two or three who would deny the truth of that assertion.

We have always been an anticonscriptionist Party and we are proud of it. When we cease to be that, we cease to be an Austraiian Labour Party. We have agreed to the imposition of conscription only once in our history, and that was in World War

  1. But on that occasion, the Party agreed to send conscripts no further north than tha equator. The benighted Holt Government is prepared to send them to Vietnam and anywhere else if by so doing it can curry favour with international capitalism. The only thing that matters to this materialistically minded Government is trade. Indeed, the whole trade policy of the Government strengthens, and is intended to strengthen, China. The Prime Minister admitted all this last Friday night, inferentially, at least, at the University of Melbourne. He was much more frank and revealing with his handpicked youthful audience that night than he was in the House of Representatives three nights earlier. He may have been driven to it, of course, because of heckling and because he felt uncomfortable before the young people whom he proposed to conscript. He made three very interesting, but fallacious observations to his mesmerised audience. The first was “ that many people were unaware of the contemporary history of Asia, particularly in relation to Malaysia, Korea, and Taiwan “. His view was that these and other areas were now threatened by Chinese expansion and where this threat existed, it had to be resisted. Australia must, accord ing to this type of logic, agree to send conscripts to he’p Vietnam, Korea, Taiwan, Malaysia, India and Tibet. The second observation nude by the Prime Minister was tha; by the sale of wheat, wool and iv.el&l;. -. China, we are developing support for Australia, and thereby helping to defend this country. This observation was not included in last Tuesday’s speech, but it was made in :hs Melbourne University in answer to an interjection.

Incidentally, our sales to Communist China have been of the order of millions of tons of wheat and millions of bales of wool. Let me give a few details to show “ how the jingle of the guinea helps the hurt that honour feels “, because all of these exports are most important in the context of Chinese military power. Between July I960 and January 1966, Australia sold 1 1.2 million tons of wheat valued at $566 million to Mainland China. Between July 1963 and January 1966 Australia sold 2.7 million tons of wheat valued at $141 million to Soviet Russia. In the matter of wool, in the 6 years ended June 1965, Australia sold 180 million lb. valued at SI 30 million to Communist China and 255 million lb. valued at Si 58 million to Soviet Russia. These sales included wool tops. In the same period Australia sold to Communist China 88,000 tons of metals which included bars, plate, sheet, etc., which were valued at $9 million. Russia in that time purchased 10.000 tons of metals valued at SI million. These figures were supplied to me today by Sir Alan Westerman, Secretary of the Department of Trade and Industry.

The third observation the Prime Minister made was that the Vietnam war is of greater interest to Australia than it is to the United States. This is not so. It is completely false. The United States went into Vietnam before Australia did and any attempt to prove that Australia should conscript its youth to serve anywhere outside Australia because American conscripts are serving in Vietnam and Europe is ludicrous. We do know this: If the United States pulled out of Vietnam tomorrow we would have to go, too. The fact that America conscripts its youth for overseas service is its business and not ours. The American forces cannot and will not be defeated on the battlefields of South Vietnam, but there is a large and growing body of influential opinion in the United

States and elsewhere that the United States cannot win there either.

In an endeavour to force a victorious conclusion to the allied campaign, the Americans may feel they have to escalate the war. Indeed, they have been obliged almost from the beginning of their involvement in this unwinnable war to commit more and more men of all arms of their services. And victory still eludes them. It is as far off as ever. How far can the United States go in increasing the size and variety of her forces? She has a quarter of a million men locked in conflict with no foreseeable satisfactory result. Would a force of one million Americans overwhelm the North Vietnamese and the Vietcong? No American statesman or leading military figure has said so.

At the moment there are more than a million United States and South Vietnamese troops seeking the elusive enemy and registering only small local successes but no major triumphs. There must be a limit imposed by considerations of manpower and materials on the decisive role America can play in the Vietnam war, and there must come a time when America will have to decide how far she can escalate the war in her desire for an early victory and without risking a direct conflict with China.

The Prime Minister used these words in his statement: “The search for peace will go on, but a long period of fighting is the prospect which we face.” It is plain that in the beginning America thought she could win this war relatively easily. It is equally clear that she wants peace and has made determined efforts to persuade Hanoi to agree to a cease-fire arrangement and come to the conference table. Her cessation of bombing of North Vietnam for a period is evidence of her earnestness to finish this dreadful conflict in the only way it can be ended. That is by a peace conference of all the nations involved and those, too, that are concerned with peace in South East Asia.

We think the United States should not have resumed the bombing of North Vietnam because, apart from all the tragedy of destruction, the more that country is destroyed the more the cause of Chinese Communism is served. There is much evidence that United States policy is directed to avoiding war with China and this determination governs how far the bombing of North Vietnam will increase and which targets will be attacked or not attacked. How to contain China without fighting her and still win in Vietnam is America’s great and seemingly insoluble problem. At least 29 United States senators are not satisfied with the way the war is progressing and with the way the Johnson Administration is conducting it.

The Opposition rejects the Government’s interpretation of events in South Vietnam. I challenge the Government to take a referendum on this question and agree to abide by the result. If it will not do this, I promise the Prime Minister that the Opposition will fight the next general election, whenever it comes, on this major issue. We will fight it in the Kooyong by-election. We stand up for our beliefs. In Kooyong, the citadel of capitalism, the blue ribbon seat of Liberalism, the home of the silvertails, we will make this the issue. We w:!l win the by-election if the people of Kooyong are as sensible as the people of Dawson were a few weeks ago.

There are other issues on which we will seek to defeat this effete, useless, reactionary new Government. We will never support the use of conscripts in overseas wars for the defence of any part of Asia. We will not accept any moral responsibily whatsoever in this matter.

Now I turn to the state of the economy, in other words, to what is happening on the domestic front of Australia. The situation in this field of Australian affairs is very serious but I have only time to deal with a number of the problems associated with that situation. The ever increasing amount of overseas investment in Australian industry and its natural resources, and the ever growing degree of overseas control of those industries and resources, have long since passed the stage of a national scandal. Several of my colleagues who have made a deep study of this question will take part in this debate and state again, as they have so often stated before, our objections to the people of Australia becoming a nation of economic slaves to American, British and Japanese capitalism. Japanese imperialism failed to conquer this country between 1941 and 1945 but Japanese capitalism is doing very well for Japan in Australia in 1966.

The figures released two days ago by the Minister for Trade and Industry indicate the menace which overseas control of our industries poses for our national wellbeing. This menace is now so great that this Government must, as the next Labour Government will, legislate for a substantial proportion of all foreign companies operating being owned by Australian citizens. One can only be astonished at the complacency of the Government in the face of the current economic situation. The official publication, the “ Quarterly Review of Agricultural Economics “ issued in January this year contains an article dealing with the Australian farm situation 1965/66. It states: -

The gross value of rural production is estimated at $3,039 million. This is $357 million or approximately 10% lower than that in 1964/65.

And, whereas the Government has been referring to the need of a 6% to 7% increase in the volume of exports per annum if our economy is to grow, we are told further on to expect - a drop of 6% in the volume of exports of rural origin in 1965/66.

We applaud the hope the Government has of increasing the volume of exports by 6 per cent, annually, but even discounting the effects of the drought, the Government must accept some responsibility for the fact that the volume of exports will not increase but will drop by 6 per cent, this year. The Review also states -

The value of exports of rural origin could be reduced by as much as 10 per cent, as a result of the smaller volume of exports and lower average export prices for sugar, wool and wheat.

The fall could approximate in value $150 million. In addition to these unfavorable circumstances, the Review points out - lt is expected that the increases in prices paid for farm requisites in 1965-66 will be slightly greater than the 3.5 per cent, experienced last year.

The cumulative result - and again I quota from the Review - is that -

The large fall in the gross value of rural production, together with the small increase in total farm costs, is expected to reduce farm income by nearly 30 per cent, to $927 million.

I repeat that -

  1. . to reduce farm income by nearly 30 per cent, to $927 million.

This would be the lowest farm income figure in eight years. Let the Government answer for that if it can.

Dr Gibbs:

– Why does not the honorable member read other journals?

Mr CALWELL:

– I read every journal that comes my way. I wish the learned doctor would read something relevant to the Australian situation and be able to make a worthwhile contribution to the debate occasionally. The greatest impact of this rural adversity will be felt in New South Wales and Queensland. Let us hear from some of the representatives of New South Wales and Queensland on the matter of farm incomes during the course of this debate. However, the decline in the rate of Australia’s economic growth is not confined to the rural sector. The monthly bulletin of the Australia and New Zealand Bank Ltd. “ Business Indicators “, for February 1 966 whilst conceding that -

The nation is still fully employed and incomes are high in general . . . warns that -

There is a danger that slowing down may turn into an actual contraction unless some stimulating factors arise.

The soft spots to which this journal points are housing, motor vehicle sales, easing of demand for labour, and slowing of investment spending. In relation to housing, the bulletin points this out - and it is covered in our amendment -

The January statistics show no response to the stimulus provided by the Reserve Bank’s request to savings banks to make further funds available for housing, which suggested a weakness in real demand for housing.

The Opposition agrees that there is a weakness in real demand but it is more than a suggestion of weakness; it is an inevitable result of the chain of circumstances of soaring land prices, rising building costs and high interest rates. These have combined to force out of the market the lower income families who most need houses. The decline in motor vehicle sales arises also from a combination of factors. It is not that there is any change in the nature of the community but there has been a change in its real purchasing power. Because prices of other things have risen, particularly foodstuffs, tobacco and liquor, there is less left over for other things and, in addition, the easing of the demand for labour also tightens the total of family pay packets - less overtime, less two job households.

The mess-up in the decimal changeover will further aggravate the situation because the impact of price cribbing is greatest on those least able to afford it - average income families and pensioners. As the A.N.Z. Bank bulletin points out, the fall in the demand for motor vehicles has been catastrophic. It states -

While last June registrations represented an annual rate of 450,000 the January 1966 figures represented an annual rate of only’ 350,000.

Whilst some satisfaction may be drawn from the fact that at the end of January only 1.7% of Australia’s work force was registered as unemployed and February figures bring it down to 1.4%, it is not much consolation for those who are without work. That the figure is as high as it is is indicative of continuing bungling in the economy.

Mr Buchanan:

– It is better than 5 per cent.

Mr CALWELL:

– Of course it is better than 5 per cent. And it is better than the 30 per cent, of unemployment that existed in this country while the Lyons Government was in power. The A.N.Z. Bank bulletin notes: -

Analysis of males registered at the end of January by class of employment shows more in each class than a year earlier, both in absolute numbers and in proportion to the total, the largest proportionate increases being in the skilled labour classes.

We are all surely entitled to ask why, in a community that is short of skilled labour, the largest proportionate increase in registered male unemployed should be in the skilled labour class. A further significant feature continued also into the February figures released only yesterday is that nearly half of those registered are people under the age of 21 years. Again, I ask: Does this leave room for complacency?

With all these clouds on the economic horizon is there any wonder that there is a slowing in investment? Because, after all, it is rising real demand that is the spur to investment and, looking at the economy as a whole, real demand is not rising but falling. The situation has been aggravated by the measures taken by the Government in its last Budget when it increased taxation by $160 million with the major impact falling on the incomes of the majority of households. The Labour Party said then that the measures were wrong. It says that the greatest stimulus that could be given to the community now would be to reverse that situation and to increase the real purchasing power of the majority of people by reducing indirect taxes and by increasing social service benefits. Our basic economic troubles are due to the slow rate of growth of the national product. No economist, nor anybody concerned with banking would disagree with that. Employers budget for an annual profit increase of 4 per cent, and the trade union movement demands, but sever gets, a real annual gain of the same percentage.

To summarise our indictment of the economic policies of the Government, we claim that instead of steady growth and adequate purchasing power in the hands of the people, we have inflation and rising costs, an increase of from 50 cents to a dollar a week in the cost of living because of the wrongs done during the currency conversion, dwindling overseas balances, the effects of the drought - about which little or nothing has been done or is being done - salary and wage injustice and continuing neglect of those on fixed incomes. Let the Prime Minister tell the House the truth about the state of the economy. There is lack of confidence everywhere. Every stock exchange is dull and some firms have dismissed a quarter of their employees. I can give the names of half a dozen leading Melbourne stockbrokers who have told me that. The Treasurer (Mr. McMahon) nods assent.

Dr Forbes:

– The Leader of the Opposition is getting desperate.

Mr CALWELL:

– Oh, no. The Treasurer only occasionally appears to be asleep. I woke him up with that observation and he agreed with what I said. I am not worried about what the backbenchers of this Government think. They are all lucky to be here, anyhow. Will any member on the Government side of the House deny that index prices continue to fall, as business continues to stagnate? Will they deny that Government expenditure continues to rise more quickly than does revenue? Imports have exceeded exports over the past 15 months. Does any Government member deny that? Our overseas trade balance is slipping. Does any Government supporter deny that? There is neither plan nor priorities in the use of our national income. Can anybody deny that? I would have wished to be able to deal adequately with the plight of young couples who are married and who find that their burdens in the payment of interest and the repayment of loans are assuming lifelong proportions. I would have liked to have had time to deal with the degrading conditions of pensioners living in shacks and substandard accommodation everywhere in Australia, but again time does not permit. My colleagues will deal with this problem and with our war on poverty. When I look at the well fed people on the other side of the House I realise that they do not know what poverty means. They have never experienced the lack of a meal on one day of their model existences. They are all well fed. All their pockets are well lined. They are all well-heeled and all yelling like a paddock full of galahs.

The amendment which I have moved but which the people who represent predatory wealth in this Parliament do not like is sufficiently comprehensive to cover everything of moment that is happening in regard to Australia today and in regard to Australia’s future. I conclude with an appeal to the Parliament - to members on the Government side, if they will - to vote with us on our amendment because of the justice of our claims and the truth of our propositions. I assert with complete certitude that the policy declarations contained in the Government’s statement are either inadequate to the needs of the nation or are so opposed to its best interests that the House is bound to reject them. Australia’s very survival demands this course.

Mr SPEAKER:

– Is the amendment seconded.

Mr Whitlam:

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

Mr FAIRHALL:
Minister for Defence · Paterson · LP

.- The Leader of the Opposition (Mr. Calwell) was rather too reserved in his self-styled indictment of the Government. He said he would have liked to take more time to deal with certain matters, but the House has been good enough to accord the honorable gentleman unlimited time. I am perfectly certain that we on this side of the House would have been delighted to have him pursue those matters in detail, because the further he goes the more confused does he become - to match, of course, the confusion existing elsewhere in his Party. But we are delighted with his broad brush approach to these problems and we are grateful for his statement of the Opposition’s views because, after all, the Opposition is the alternative government of this country. The people who will have to vote and who will want to judge, before the end of this year, as between one and the other of the alternative governments will need to look carefully at what the Australian Labour Party offers. We are not dismayed by the Opposition’s rejection of our views on what is happening in South East Asia or of our involvement in it, because, reject our views as you may, Sir, the situation will not go away. It is ours to Solve. Therefore, we on this side welcome the challenge which the honorable gentleman has put down tonight to bring this matter forward as an issue, first at Kooyong, if you wish, and later at a general election. We will be delighted to see the Labour Party once again tilt at a windmill. The only problem that arises is as to whether the honorable gentleman or his deputy will survive to lead the tattered array on that occasion.

The Leader of the Opposition hardly dealt with the question of our involvement in Vietnam in terms of whether we should be there and of whether there should be an increase in our commitment. But he said a good deal about the war in Vietnam being an unwinnable war. I seem to remember that some years ago he had something of this kind to say about what was going on when our troops, with United Kingdom troops, cleaned out the Communists from Malaya. We would have been in a more unhappy situation in Malaya and South East Asia today had our troops not been successful by dint of skill, sacrifice and patience on that occasion. One presumes that if the Labour Party had been in office on that occasion we would have withdrawn our troops and urged the United Kingdom to do the same. I invite the people of this country to consider how different would have been the position in South East Asia today if that had been done. The honorable gentleman talks about the war in Vietnam being a cruel and unwinnable civil war. I will come to the last part of that statement in a moment, but the fact is on record that this war is being won at this moment. The whole of the wet season offensive of the Vietcong failed almost completely. Of course, honorable gentlemen opposite want this war to be settled overnight. They might as well settle down, because it is an article of faith of the Communists, to whom we are opposed, that their cause is best served by a protracted war.

The honorable gentleman goes further and suggests that if we are serious about this war, why does not the United States bomb North Vietnam? I only remind the House of the words of President Johnson who has pointed out that the Americans are not in Vietnam to gain anything but the freedom from Communist oppression of the South Vietnamese, their right to selfdetermination and the chance to develop a viable democracy in that country. He added that there, is no instant democracy. President Johnson has pointed out that the U.S. is prepared to do no more, and certainly no less, than is necessary to bring the Vietcong or the North Vietnamese to the conference table under conditions which offer some possibility of a reasonable solution.

The Leader of the Opposition tonight has contributed vastly to a good deal of the confusion which exists in this and other countries about the nature of the Vietnamese war. One is bound to say that the confusion in the public mind, both here and in the United States, is a more powerful asset to the Communists than any weapon they have in the field. I was rather intrigued to notice that in this morning’s newspaper there was a despatch from Hanoi which compliments these good people who are contributing to this kind of confusion in the public mind. Our friends in North Vietnam and Hanoi have said -

In the course of a protest against more Australian troops being sent to South Vietnam -

Why would not North Vietnam complain about that7- the Communist newsagency congratulated the Australian people for their attitude.

It should be said loudly and clearly that these views emanate, not from the Australian people as such, but from the noisy minority, from the amateur sign painters, from the card burners and from the demonstrators who are led on partly by intellectuals and pardy encouraged by the kind of offering which the Leader of the Opposition has put to the House tonight.

Mr Bryant:

– What about the gallup polls?

Mr FAIRHALL:

– I do not know about the gallup polls, but I have seen a few gallup polls taken among the young people who are slated to go into national service in this country and perhaps go to Vietnam. Almost universally they have understood. They have had a rauch more mature appreciation of the issues in Vietnam and of the fact that it is their world that is being threatened in South East Asia and their world which must be saved. It is only the- quaking elders on the other side of the House who run for cover every time Walter Lippmann writes a new column or every time Wayne Morse, United States senator, puts up a beef in the American House.

Mr Devine:

– Did he know that Australian troops were there?

Mr FAIRHALL:

– I guess he did. The honorable member is confusing him with Senator Fulbright. I notice that the Leader of the Opposition said in the first place that the United States is right in its belief but is wrong if she thinks she can ever win. Then he went on to the next paragraph and said that the American forces cannot and will not be defeated in the battlefields of South Vietnam. Sir, this is right. The United States has under its control preponderant military power and it is a matter of absolute self-restraint in the interest of world peace that she does not apply this preponderant military power.

One ought to look carefully at the kind of threat which exists in South East Asia. The Geneva Accords - there is not time to go into detail on this - separated the Communist North from the non-Communist South, but almost immediately there was subversion on the widest possible scale in South Vietnam, instituted without any doubt at all from North Vietnam. Indeed, it ought to be made perfectly clear that in 1960 Ho Chi Minh said that the great function of the Communist Party was to promote the revolution in the North and liberate the South. Liberate the South from what?

Liberate South Vietnam from its aim to produce a democratic state free of Communist intrusion. Communist infiltration and Communist power. This is the view of the North Vietnamese and explains in clear terms why it was that immediately after the partition there was Communist infiltration into the South. The war that is going on in South Vietnam is not a war between two nations for national aims. It is not a civil war, unless, of course, one is gullible enough to misunderstand the true nature of the thing. It is in fact an ideological war, and the fact that there are South Vietnamese on both sides of this struggle merely indicates that it is an ideological war. That does not make it, by any stretch of imagination, a civil war. It may well be that the war will not stop at the boundaries of South Vietnam, assuming that the Communists were to be successful, although I do not believe they possibly can be.

The Leader of the Opposition has asked what evidence there is of Chinese troops. There is no need for the Chinese to have Chinese troops in South Vietnam to be masterminding the kind of thing that is going on there because there is not the slightest doubt that the North Vietnamese are puppets of the Chinese and that the whole conduct of the war, down to the last jot and tittle of it, comes out of the philosophy of Mao Tse-tung. It is there for anybody to read, if he is interested enough. It is pretty clear, if one looks at the authority, that what is happening in South Vietnam today is perhaps only the first round of an attack by the Chinese Communists in an effort to dominate the world, and it may be an open ended struggle. Twice in our lifetime Australia has been involved in war - in Europe and in Asia - for the preservation of our own national interests, although these may not have been immediately threatened. In both these cases we were warned of what the situation was likely to be. Hitler wrote his “ Mein Kampf “ and we decided to disregard it. There were Japanese documents of a similar kind. We chose to disregard them. Now Australia, as well as the Western world, is on notice that once again this kind of threat is abroad.

A quite precise document has been written setting out the Communist Chinese aims and the Western world and Australia in particular will be the authors of their own fate if they refuse to take any notice of it. Some Opposition members interject and appear to disagree with that statement. I remind them that post-war Asia has thrown up Mao Tse-tung who is a Communist and a skilled military tactician. More recently a document appeared in general public written by a man who, after all, is rather an authoritative speaker on behalf of the Chinese Communists - one Lin Piao. This gentleman is the vice chairman of the Central Committee of the Communist Party of China. He is the Vice Premier of the Ministry of National Defence and, therefore, what he says must be taken wilh a good deal of authority. Set out in this document is the whole handbook of Chinese military strategy and, with it all, an outline of the Chinese aims to gain control of the world. He talks about Asia, Africa and Latin America. It is, rather strange that these things are working out in the daily paper because one can read in any daily paper in any part of the world where Communist inspired subversion and Communist inspired revolution is breaking out. Where? In Asia, Africa and Latin America.

More recently we had the development in South America of a Three Continent Solidarity group, all designed to set up a secretariat for the promotion of revolution throughout the world - revolution in its turn to be taken over by Chinese Communist power. It is very interesting to see that when Ghana had a revolution, the first thing uncovered was a whole nest of Chinese and Russian Communists. They were indoctrinating Ghanians and attempting to use them as a means of provoking the same kind of upheaval in Africa as has happened in South East Asia. Here is the working out in Africa, in Asia and in Latin America of the whole of this Chinese Communist philosophy. In a situation like this with South East Asia threatened and wilh the world threatened with the expansion of Communist power, the United States of America cannot stand aside. We ought to consider ourselves particularly fortunate that the United States has not only decided to underwrite the peace of the world but also has the power to do precisely that.

The Leader of the Opposition has talked about it being clear that America wants peace and has made determined efforts to persuade Hanoi to come to the conference table. This is a fact. We all look back to the Christmas period when the United States made a most outstanding effort to promote peace. It brought a response from almost every country in the world and from the United Nations Organisation. The one place from which it produced no response was Hanoi. Hanoi resorted to quite impossible terms. They were not terms for negotiation, but terms which demanded complete surrender and the withdrawal of the United States forces from South Vietnam. ‘I his would have left the Communists with a free field in that unhappy country, with quite inevitable results.

The honorable gentleman spoke of the need for a conference to end this unwinnable war. It is not an unwinnable war, either in military or political terms, but there are grave dangers in a peace conference. We have seen peace conferences so often in the past where a compromise has been decided upon, leaving the Communists in control. That has happened with half of Korea and half of Vietnam. Wherever a conference reaches a compromise solution, the Communists are left in a position of increasing strength, ready to move on again.

The honorable gentleman also wishes to know how to contain China without fighting her and still win. This is a matter of extraordinary patience, and the United States Government is using exactly that kind of patience. In this kind of situation we have a great interest ourselves in South Vietnam. South Vietnam is a protocol State in the South East Asia Treaty Organisation and therefore it is a State to which we have some obligations.

On two occasions when the security of this country has been threatened, we have put forward a total effort, but the nature o. the war in South Vietnam at this stage does not call for a total effort. The effort we are making at the present moment is a reasonable contribution in that kind of war. The stakes are just as high as ever they were but the unfortunate fact is that so few people in this country feel themselves to be personally involved in what is happening in

South Vietnam that there has not developed a true national appreciation of the issues involved. Therefore the exaggerated references which we hear falling so often from the lips of honorable members opposite and of demonstrators are given a good deal of support. The Vietcong and the Communists are happy to have such views published in our daily papers. They are encouraged in their efforts to subvert our people.

It is interesting to ask the question: Who in this community turned on the “ Hate America Week “ we had a little while ago? It was rather strange that this organised campaign erupted suddenly and spontaneously not only in this country and in the United States but throughout the Western world. If we think that the forces affiliated with and sympathetic to Communism are not in action in this country, we delude ourselves completely.

Time does not give me an opportunity to reply to all of the charges made by the Leader of the Opposition, but other members on this side of the chamber will put up the kind of defence that the honorable gentleman’s charges deserve. At present we have 1,500 good Australian troops engaged in South Vietnam. They have been successful and have given a magnificent account of themselves.

Mr Devine:

– Are they happy?

Mr FAIRHALL:

– They are not unhappy because they understand very well why they are in Vietnam. They have the added satisfaction of making a magnificent contribution to the future security of this country. I wish that the honorable member who has interjected would make the full contribution that is within his capacity. The Leader of the Opposition has pointed out how we need a great preponderance of manpower over the enemy in the war in Vietnam. As the need comes for the United States to escalate its support in Vietnam, are we to sit by and allow the drafted men of the United States forces to preserve this situation for us?

If there is any decency about this country’s acceptance of obligations under treaties, if treaties are to mean anything and if we are to have any status in the eyes of Asians in future, we are obliged to make our contribution. So w.e have come to the point where the Government has decided that we will increase our contribution in Vietnam. Our contribution will rise to about 4,500 people. They will be under Australian command and will be identified and identifiable as a completely Australian unit. Their fighting efficiency will no doubt be enhanced because of this situation. If my honorable friend’s complaint is that our forces are to include a component of what he is pleased to call conscripts - “ conscripts “ is to be made a dirty word and we can be sure that it is used for precisely that purpose - may I tell him that I have spoken to a good number of our men in Vietnam? They understand very well the need in Vietnam. It is only the quaking elders who, as I have said, are concerned about this type of situation. I do not have any doubt that the young men who are going into our Services will give a magnificent account of themselves. They will come out of the forces as better men; they will come out satisfied that they have made their contribution to their own future.

In a gathering such as this, noise sometimes passes for debate and more heat than light is expended, but as the honorable gentleman said in the challenge he presented to us the issue will be tested at the Kooyong by-election and at the next general election. We will see then whether the people of this country will agree that at a time when insufficient men were volunteering for service the only course open to the Government was to return to this method of bringing in those whose interests have to be preserved. I am perfectly certain that the people of this country will give resounding approval to the Government’s policy and the Government’s action.

Dr PATTERSON:
Dawson

.- A major portion of the statement of the Prime Minister (Mr. Harold Holt) was concerned with the development of this country and the Government’s justification of its policies on development. It is on those fields that I intend to concentrate. The Government’s approach to development is somewhat analogous to the treatment of a sick draughthorse which occasionally, in an emergency, is given some sort of needle to revitalise it so that it can live another day. In the end it dies and this what is happening to the economies of many areas of Australia today. They are dying. If this country wishes to grow with a high standard of living and a high level of employment and to provide a consistently good pay packet for Australian families, it must have a solid base on which to grow. However, the vulnerability of the Government’s economic base has been shaken. Clearly it is very susceptible to the forces of drought and other conditions which have plagued this country in the last two years. I refer principally to the adverse seasons.

I believe that drought and the shortcomings of rural finance have exposed classic examples of the Government’s negative approach to development. The Prime Minister has said that the Commonwealth and its agencies have from the start viewed the drought as a national problem. 1 assume that the starting point referred to was last year, because at that time the current drought reached its height. Because of the drought the Government’s approach to development can be clearly seen. It employs wait and see tactics. The Government’s policy is to wait until an emergency comes and then to attempt to do something about it.

I listened with amazement to the Prime Minister say that the drought has demonstrated a need for greater investment in rural areas, particularly to guard against a recurrence of drought from which we have had the good fortune to be relatively free for a long period. I do not know in what circles the Prime Minister moves, but apparently they are confined to some parts of southern Australia. Had the Prime Minister been with me over the past 10 or 15 years in some northern areas - in the channel country, the areas of the Maranoa, the Burdekin and Fitzroy Rivers, the Gulf country, the Northern Territory and the Kimberleys - he would have seen some of the effects of the worst droughts we have had. It seems that the drought problem is not a concern of the Government in the area north of Brisbane. 1 admit that in some areas there is not much that we can do to save pastures and crops, particularly in the arid areas. It is here that the great value of credit and long term finance will be clearly demonstrated. But the higher rainfall areas of Australia are the areas with the greatest potential for increased development. This Government must stand condemned in the eyes of the Australian people for its policy or lack of policy on water conservation in this country. We have in the northern rivers in New South Wales, and in the Burnett, Fitzroy, Burdekin and Pioneer River areas in Queensland, some of the best water and land resources in Australia, but these areas are starving for the want of a constructive policy on development with respect to water.

I was very interested to hear the Minister for National Development (Mr. Fairbairn) say that the Government has recognised forestry as a national responsibility. Apparently the criterion adopted is that because imported timber costs us $200 million a year, forestry is now a national responsibility. If forestry can become a national responsibility, surely water conservation can also become a national responsibility because the losses caused in this country in the three major droughts in the post war years, that is, 1944, 1945 and 1946, the drought in 1951 and 1952, and the current drought, will be far in excess of the total bill for timber imports into this country for many years to come. Therefore, I cannot too strongly urge this Government to act immediately and establish a national conservation authority to develop the water resources in those areas which have tremendous potential and where the losses are growing to such staggering proportions today.

This all adds up to the question: How do we do this? We have on our doorstep the Snowy Mountains Authority. I think that the treatment of that Authority is one of the most scandalous things that this Government has done while it has been in office. All that the Authority wants is a positive answer as to whether it is going to be kept on as an Authority or whether it is to be deliberately disintegrated. I am afraid that if this Government adopts its present policy, it is going to be deliberate disintegration. It amazes me, and it amazes everyone to whom I have spoken, that we cannot utilise the skills of the Snowy Mountains Authority. The Authority consists of three major divisions. They are the investigational section, the design section and the construction section. These sections could be phased into work on major water conservation projects, in co-operation with the States, in the various areas of northern Australia in particular because these are the areas which have been most neglected in the past.

Queensland has 200,000 acres of irrigated land compared with 2i million acres in the whole of Australia. Of that 2i million acres, 2.2 million are in New South Wales and Victoria: yet Queensland is potentially the richest State in the Commonwealth in terms of land and water resources. In conjunction with a national conservation authority I am of the opinion that we should do something about fodder conservation on a major scale. These vulnerable areas in northern New South Wales and Queensland have the ability to grow fodder in the good seasons, and they could grow it in all seasons if they had water. Storage of fodder would be of tremendous significance to primary producers in western Queensland and western New South Wales. If we could grow fodder continuously throughout the year and stockpile it strategically in these areas, I believe that we would make a tremendous contribution towards preventing losses of valuable breeders, ewes and other livestock in the areas concerned.

On the question of water conservation, I turn to the Ord River scheme. Here again, I believe, we have an arrogant display of power on the part of the Government. We will see the day when the Ord River scheme goes ahead. If this Government does not make a positive statement on the Ord River scheme before long, then I warn the Government that in Western Australia at the end of this year it may have a repetition of the result in the Dawson by-election.

The question of long term finance amazes me. I almost read my own words in some of the statements which were made by the Prime Minister (Mr. Harold Holt). I put forward a proposal to the Government two years ago. Practically the same proposal has been put forward on this occasion. But when I put forward the proposal, the Treasury experts informed me, almost with ridicule, that there is no such thing as a shortage of credit in this country. I quoted case after case but the Government believed the Treasury experts and did not believe the people who had been working in rural areas, particularly outback areas, where everybody knew that there was a serious shortage of credit. Now the Government has done a somersault and long term farm loan funds are to be available. 1 shall explain why I say the Government has panicked. The Prime Minister said -

In addition, the trading banks will, we hope, be lending from the new funds. . .

Then he said that he hoped to be able to make arrangements “ for the Treasurer and myself to discuss these matters with the Reserve Bank and the trading banks “. What sort of a Government is it that only hopes to be able to make these arrangements? How can the supporters of the Australian Country Party sit here while this type of “ hoping “ language is being used in the House? Is it that the trading banks will dominate this Government? What will happen if the trading banks say that they will not agree to the proposal? No details were given as to the rate of interest to be charged on the loans. Because of the Government’s neglect of these areas, my advice to it is to give the producers a zero rate of interest in the developing period until they get on their feet and then they will commence to pay back, and they will happily pay back, the principal and interest on the money borrowed.

Now I come to the familiar statement - it has been made so often now that one begins to be weary of it - that 52,000 million has been spent on northern Australia by private and public enterprise. Reference is always made to what is spent by private and public enterprise. There is never any attempt made to split up the amount to And out what the Government is doing in the development of northern Australia. We find that over the last 15 years SI 00 million has been spent in the north. The sum of $60 million has been spent in the form of loans, of which $24 million was given to Western Australia as a grant and $16 million was given to Queensland as a grant. The magnificent sum of $40 million has been given to Western Australia and Queensland in the form of grants over the last 15 years. That is the figure about which the Government ought to be speaking, not the figure of $2,000 million. If the Government is proud of its record in this respect we must face the future with some dismay. lt is a very strange thing that when one analyses the development measures in the north, one finds them highly correlated with electoral pressures. With the exception of the amount provided for the Mount Isa railway and the amount of £1.6 million for the development of Weipa, which was the amount provided for northern development in the last Budget, every other project in northern Australia has been associated with some electoral reverse or some crisis in an electorate. The Government was only too happy to give the original grant of S5 million to commence the diversion dam on the Ord River scheme, but now the Government has different views on the major dam.

After the 1961 election we had a rash of promises in respect of beef roads, the brigalow country, coal ports, extra finance for the Ord River scheme and so on. We should be thankful for small mercies. The Government went ahead and financed those proposals. After the 1963 election we received nothing for northern development until the last Budget in which £1.6 million was provided for the development of Weipa. It is a strange thing that the decision to invest $50 million in the economy today in the form of long term loans has come in with such rapidity. I have no doubt that the result of the Dawson by-election had something to do with that matter. 1 had a clash last week with the Premier of Queensland regarding the brigalow country. I maintained that although I support the scheme going ahead at this stage with Area 3 of the brigalow is wrong and that the most urgent priority in Queensland today is water conservation. For example, in the Bundaberg area in the last two years $30 million was lost for want of water. At the present time we need to put money into these areas in order to conserve water. The brigalow scheme will keep. If we go ?head with the crash programme on the brigalow scheme today, all we will do is accentuate the shortage of store cattle and breeders which are already at a tremendous price in Queensland. Let us solve the priority problem first. The highest priority in Queensland is water. The Snowy Mountains Authority, in conjunction with the Queensland authorities, could commence work immediately on dams on the Burnett River, the Kolan River, the Camia Gorge at Monto, the Pioneer River and some of the more favorable Fitzroy River sites. All of these areas are established. All of them are crying out for water.

The Government has made quite a play on beef roads. I ask the Minister for National Development: Where is the comprehensive report on beef roads which was completed last year by his Department and which was promised last year to this Parliament? Where is the Loder Committee’s report on transport costs which was described by the former Prime Minister as one of the most important reports to be released? The Loder Committee was set up two years ago. Its report was finished six months ago and still we have not seen it. I ask the Minister whether the people of Australia and members of this Parliament will have the privilege of reading these reports before the substance of them is completely out of date?

Regarding the question of sugar, I noted in the Press today that the Minister for Trade and Industry in a talk to the sugar producers in Queensland told them that he had received a savage kick in the stomach - they are his words, not mine - from the Dawson byelection. That does not surprise me. It does not surprise anybody who has worked in the Dawson electorate or anybody who was in that area during the election campaign. The fact of the matter is that the Government is out of touch with what is happening in some of these areas. The Deputy Prime Minister (Mr. McEwen), when he delivered his policy speech, made no mention whatever of the drought despite the fact that people in certain areas along the Pioneer River, only 15 miles from where he was, were or had been on their knees and in a desperate ‘financial position for want of water. He made no mention of water conservation or of what could be done or of what the Government might do in the future. There was no mention then of rural finance. That came after the result of the Dawson by-election was known. There was no mention of what might be done in the cane industry regarding a stable income for growers. In fact, the Australian Country Party ridiculed the Australian Labour Party and myself for putting forward the suggestion that the sugar industry needed a stabilisation scheme desperately. I hope that the Deputy Prime Minister read of the decision four days ago of the Queensland Cane Growers

Council in which it endorsed completly a plan for stabilisation.

I want to refer to the New ZealandAustralia Free Trade Agreement. How could a responsible government put forward an Agreement like this to a drought stricken area in which the average individual income is well under $1,000 a year, according to the Bureau of Agricultural Economics, when these people were and still are in desperate financial straits? The Government is rubbing it in by allowing additional imports into Australia. It is simple economics that if a greater supply of a commodity is introduced its price must be reduced. Is it any wonder that the dairy farmers have reacted to the Government’s proposals in the same way as the cane growers?

Another contributing factor to the Government’s defeat in Dawson was the treatment accorded by the Country Party to the former honorable member for Dawson, Mr. Shaw. It is not something to be proud of. It sickened me to hear some of the laudatory comments made by members of the Country Party during the election campaign. This is not a very pleasant subject. Mr. Shaw was a very disillusioned man. He was not consulted by this Government on sugar. He was not the voice of the sugar industry as has been stated here time and time again. If honorable members opposite do not like this statement, they should ask his relatives.

Again with regard to the Dawson electorate I want to refer to television. There is no television in the Mackay area. It will be the last place in Australia in terms of a concentrated viewing public to get television. Also, Mackay is the only port in Australia which has not a road to its hinterland. All these points add up to one thing: The Government was so far out of touch with what was happening in Dawson - with the problems of the farmers, with the problems of the people of Mackay, Biloela, Monto, Gin Gin, Proserpine and other areas - that it lost the Dawson byelection.

The Government’s record over the last 16 years in the fields of co-ordinated and positive development is unquestionably deplorable. If there is one field of development in which this Government will stand condemned in the eyes of the Australian people it is its failure to initiate a national conservation authority. I cannot stress this too much. If the Government continues to ignore water conservation and continues its deliberate policy of disintegration of the Snowy Mountains Authority it will do so at its own risk and will have to take the consequences at the next election.

Mr PETTITT:
Hume

.- The first thing I must refute is the statement by the previous speaker, the honorable member for Dawson (Dr. Patterson) with reference to the former honorable member for Dawson who was a leading world authority on sugar matters and who spoke in an informed way in this House on many occasions on matters pertaining to the sugar industry. Too often we find a man with academic knowledge only standing up to speak in this House as an expert on rural affairs. Mr. Shaw, not many months before he died, told the story in this House of what this Government has done in the north.

Mr. Shaw told of the tremendous development talcing place and of the tremendous amount of money that is being spent in that atea. The present member for Dawson said that he would tell us how we could develop the north. He said he would tell us where we could get the money. He did not do so. He is like many economists who have these flights of fancy which have no foundation in fact. Too many of us who have made our way in the world the hard way and who have reached where we are today because of our own efforts would have been in the bankruptcy court if we had listened to the economists. I think today of many young men who have gone into the northern area now afflicted by drought and who have developed properties on the advice of Government agronomists and economists. Today many of them are in the greatest difficulty, not because the advice they were given was not sound but because, very often, they did not have knowledge of the local conditions they would have to face. But, mainly they are in trouble because they struck a two year drought which was unheard of in that area.

The honorable member for Dawson said many things with which I agree. He also said many things that we have been saying on this side of the House for years. Obviously he is already uncomfortable on the Opposition side of the House. I felt that this would be so long before he stood as a can didate for the Dawson by-election. One of my friends said to the honorable member for Dawson: “ How can you reconcile yourself with the views put forward by a socialist party? “ The honorable member will not be able to attain the things he seeks to attain from the Opposition side of the House because honorable members opposite have no sympathy for those ideas. It was not very long ago that the Deputy Leader of the Opposition (Mr. Whitlam), when speaking in Sydney said that far too much money was being spent in country areas. He said that the people of Australia were suburban dwellers and that that was where the money ought to be spent first. He said that far too much money was being spent in country areas. That indicates the overall policy of the Opposition. Today we see this Government passing legislation which is in the interests of the people who created the wealth of this country. We heard in the speech of the Prime Minister (Mr. Harold Holt) what he proposed to do to provide rural finance. This is something for which the Australian Country Party claims a great deal of credit. What our drought committee did in introducing deputations to the former Prime Minister and the present Prime Minister, who was then the Treasurer, is well known. Practically everything that our committee proposed has now been accepted by the present Prime Minister. I pay him a tribute for seeing the necessity for developing our rural industries. I also pay a tribute to our own Country Party Ministers who fought hard for many months in order to get our policy on rural finance adopted.

I do not think many people in this House or outside it realise what the proposal for rural finance really means to this country. Our rural industries are still responsible for earning the great bulk - about 88 per cent. - of our export income. That includes a small amount earned by the export of minerals; but it is earned principally by our rural industries. The very lifeblood of this country is our export earnings from rural production. It is absolutely vital to the future development of the country that these industries be supported and given the ability to develop and expand, wherever they are.

The first need is water. This is one point on which I agree with the honorable member for Dawson. Water is perhaps the most vital commodity in Australia. This Government has done a great deal and is doing a great deal more to exploit our water resources and to expand the conservation and reticulation of water. Very much remains to be done. We are a nation of only 11 million people trying to develop a vast continent. There just is not enough money or manpower to do everything. Without water it is futile to try to develop a vast continent such as Australia.

Although much has been done and is being done in this field, the honorable member for Dawson gave no credit to the Government for its tremendous efforts. He advocated the spending of many millions of dollars on northern Australia. But he did not tell us from where he would get the money. Does he intend to increase taxation greatly, or would he reduce the present expenditures on other items, such as defence, social services, telephones, the development of country areas in the south or the reticulation of water in the south? These things are desperately needed in our southern areas where we have lost the great bulk of our stock. It is not in the far north but in the more developed areas that we have lost vast numbers of the stock that are our main export earners. This is where we have to spend the money.

The Prime Minister’s present proposal for the provision of rural finance will enable the individual, who is always the most effective in national development, to provide for drought himself. I have always maintained that it is very much better to give a man a taxation concession than to give him a subsidy. Subsidies tend to encourage the inefficient man, the man who does not try to help himself. But taxation concessions encourage the man who has the ability, the drive and the knowhow to go ahead and make his own provision to counter the effects of drought. The proposal is to inject quite a lot of money into the community and we have to be very careful about how this is done, lt would be very easy to force stock prices up to uneconomic levels. That is something that has to be worked out.

Anybody who has had anything to do with the development of a property knows that the provision of long term finance is absolutely imperative. Under former banking arrangements, primary producers were expected to repay their loans within a very limited number of years. My experience, and the experience of many other people who have developed properties, is that a person developing a property needs an increasing amount of money. As he sows down the land he needs fencing, water supplies which are the most costly item of all, fodder and plant to enable him to store continent. There just is not enough money he must be retaining his surplus stock. So, unless he has long term finance the venture becomes futile. But the ultimate result pays handsomely.

A particularly pleasing feature for rural producers is the indication that these long term rural loans will be available through our own trading banks. Many primary producers, land owners and other people have had long associations with the private banks. Some families have banked with the same institution for three or four generations. They do not want to be forced to go to a government bank for finance, as has been the case so often in the past. We believe that the present proposal is a major breakthrough. The Prime Minister has told us that under his proposal provision will be made for us to obtain this finance through our own private trading banks.

This new type of finance will not interfere in any way with the present overdraft arrangements which are so necessary for producers who need carry on, short term finance while they are waiting for the proceeds of the sale of their produce. That finance is necessary and has always been available. It is the long term finance that will mean so much to this country. It will allow many men who are keen to go out and develop properties to do something worthwhile and practical. Another feature of the Prime Minister’s proposal is the suggested setting up of a rural loans insurance corporation along the lines, I take it, of the Housing Loans Insurance Corporation.

I do not need to tell honorable members how difficult it is today to get a start on the land. I started almost from scratch. In those days it was a good deal easier than it is today, although it may not have been as easy then as it was in my father’s day, when a man with a good reputation and knowhow could get a cheque book and go ahead. It is becoming more and more difficult to get a start. A great amount of finance or financial backing is necessary before any young man can set himself up as a primary producer. Thousands of young men in Australia - not only the sons of farmers and graziers, but also the sons of professional men and young men who have gone through our agricultural colleges - are breaking their necks to get a start on the land and are finding it almost impossible to do so. I believe that this scheme of insuring bank loans to progressive young men with ability, drive, knowhow and all the other requisites except sufficient finance, will have a tremendous effect in increasing our production and our export income. I do not think anything would have a greater effect on development than enabling young men to go out and take up land that needs to be developed and so to increase the prosperity of the whole community.

The Prime Minister’s proposal also indicates acceptance of an obvious fact that we have been pressing for many years, namely that a great deal more capital is necessary for the development of land today because of the increase in scientific knowledge and the research that has been done by the Commonwealth Scientific and Industrial Research Organisation and other institutions. We know that we can increase our production, that we can grow more pastures, that we can conserve fodder and can provide adequate water supplies but far too often we just have not the wherewithal to do these things. That applies particularly to the young and vigorous man. The provision of long term finance will allow such a man to help himself and so help the whole community.

Now I turn to drought. This subject is referred to only briefly in the plan put forward by the present Prima Minister because the former Prime Minister had already made it very clear to the States, particularly New South Wales and Queensland which are suffering the ravages of drought, that the Federal Government was prepared to back those States in any expenditure that they made on drought relief.

Mr England:

– To back them unconditionally.

Mr PETTITT:

– Yes, unconditionally, with unlimited assistance for the people who, unfortunately, through no fault of their own, are suffering the ravages of drought. This assistance will go on. It will not be affected by the special long term finance. This money is available now and is doing a tremendous job. I agree that this provision was much too slow in coming into operation but, unfortunately, governments move slowly. Unfortunately, the State Governments were slow in getting off the mark after the former Prime Minister gave the undertaking, and it had to be reiterated by him over and over again before we got the States to move and do something worth while, but they are doing it today and a tremendous job is being done.

I believe that it is utterly ridiculous in this day and age that we should accept as a fact that we must lose vast numbers of breeding stock in any drought, at least in New South Wales. This is not necessary and should not have to be accepted at all. If there is one lesson that we must learn from this drought it is that we can do something to save the stock. Very often it does not pay an individual to save his stock, although he feeds to the limit of the value of the stock, to the limit of his resources, or to the limit of his borrowing ability. But the nation suffers very, very seriously not only from the loss of the stock but also from the loss of the progeny - the natural increase - and the income that it would produce over a number of years.

I believe that there should be proper planning. Here again, I feel that this is a national problem. The retention of, perhaps, one-third of our wheat crop at the point of production until the next crop is in sight would do more than anything else to make sure that we never suffer these losses again. Wheat is an excellent food for both sheep and cattle. The Commonwealth Scientific and Industrial Research Organisation has proved in tests that wheat will save sheep and cattle. There is no doubt that it is a better food for sheep but it will save cattle in a difficult situation. I believe that, in the national interest, we must save stock. It is much better, certainly, if we can help the individual so that he is in a position to do so. We should give tax concessions to encourage the enterprising man to protect his own stock in his own interests. The retention of a portion of the wheat crop would not only help us to save our stock but also would give us something in kitty to supply our customers in a vear when we did not have such a big wheat crop. If we are not able to supply the overseas customers that we have for our wheat we shall lose those markets. If we had a stockpile, it would be there as a drought reserve and it would be there to meet our customers’ requirements. It could be stored cheaply, it could be moved cheaply, and it could be cashed when the drought broke.

We hear many people - mostly ignorant and uninformed people - talking about the improvidence of farmers. It costs a tremendous amount of money to preserve large quantities of fodder - grain or hay - and provide storage for it. Very few farmers can afford this, particularly in the safer areas of high value land. Very few farmers can afford to leave fodder standing in a shed in a corner for, perhaps, five, six or seven years, waiting for a drought. The hay deteriorates. The grain is standing there, not earning all that it might earn. If we stockpiled wheat to be made available as fodder, if we gave some tax concessions and, perhaps, allowed farmers to invest with the Government certain sums in good years, to be tax free if they used the money for drought feeding, we would be encouraging enterprising men and preventing tremendous losses.

At the present moment we have a drought on our hands. Many millions of sheep and hundreds of thousands of cattle have been lost, and we have to do something about getting people back into production. It is not an easy task; it is one that we have to handle very carefully. We can do a tremendous lot of damage if we make finance available ad lib, but we must ensure that the deserving and progressive man has assistance to get back into production. Right along the line, no primary producer who is worth his salt is asking for charity. He never has done so. Some people do that, but those who are worth their salt - the great majority - do not. They want time. That is all that they ask for. They want long term finance. I believe that the average primary producer is not looking for excessively low interest rates. He wants to pay reasonable interest. The term is much more important than the interest that is payable.

Now that we are in this position, with this very worthwhile proposal that has been made by the Prime Minister, now that we have the experience of the drought behind us and now that we have the opportunity to make this country develop, to make it move, let us all put our shoulders to the wheel. I am sure that we will then prove that this move by this new Government - it is a new Government - will do much to create employment and prosperity and ensure the future of this country.

Mr POLLARD:
Lalor

.- Mr. Deputy Speaker, I support the amendment moved by the Leader of the Opposition (Mr. Calwell), and I commence by saying a few words in respect of the Government’s statement insofar as it relates to drought relief and farm finance. It appears that the honorable member for Hume (Mr. Pettitt) is well satisfied with the Government’s proposals. I point out to you, Sir, and to the House that on 26th August the then Prime Minister, Sir Robert Menzies, made a statement indicating what the Government was prepared to do for people who were suffering the ill effects of the disastrous drought. Immediately he made his statement, I criticised it. I said that the proposal was inadequate and was not sufficiently well formulated to deal with the problem confronting this nation. I suggest, in view of the proposals made in the statement by the new Prime Minister (Mr. Harold Holt) last week, that apparently something was lacking in the proposals that were made away back in August.

When I read these proposals, I find that in the current situation the unfortunate sufferer from drought, who is at his wits end to obtain further finance, is offered absolutely nothing. He is not interested in long term finance for the future. He is interested - I think that if you, Mr. Deputy Speaker, were not in the Chair you would agree with me - in some cash now. That is where this Government falls down absolutely. Some 20 years ago the Government of the day was aware that the drought stricken wheat and other cereal growers and dairymen of this nation were in dire distress. It did not fiddle about with long term loan proposals. It indicated in statements that I made in this House, which I have now in front of me, that in regard to cereal growers in New South Wales, where the drought was most intense, it would go 50-50 with the State Government in paying so much per acre to every wheat farmer who was drought stricken, and that this would be not a loan but a straight out grant, not repayable. The same situation arose in regard to the drought stricken dairymen on the south coast of New South Wales. An increase was made in the butterfat payments to those in certain districts. That was immediate cash in the pockets of those unfortunate people.

I may say, incidentally, that since the Prime Minister made his statement on drought and farm finance practically every newspaper I have picked up has been severely critical of the Government’s proposals. The impact of the drought has been most severe in the pastoral areas where the sheep and cattle are raised. The farmers in those areas are the ones who have been most seriously affected. Few of them have the wherewithal to cover restocking operations. Many of them have hardly sufficient means to purchase necessary supplies from the local stores. They are in a bad way indeed. Is it beyond the capacity of the experts who advise this Government and the State Governments to devise some scheme for making relief payments readily available to these unfortunate farmers?

If a man has lost 3,000 or 4,000 sheep out of an original flock of 5,000 it is surely not unreasonable to suggest that he should be granted immediately a relief payment based on so much per head of sheep lost. A man in such a position would obviously have used his last stiver to buy fodder for his stock. A pastoralist who lost 400 cattle out of a herd of 500 would be in a similar position. Obviously such a man should be given a cash payment in respect of every beast lost. This would achieve something directly and immediately. But what do we find instead? We hear longwinded statements about short term or long term loans in the future. We hear suggestions that the Government will amend the legislation covering the Commonwealth Development Bank, and this merely indicates that the original provisions covering the Development Bank were wholely inadequate to cater for the needs of the primary producers. We hear all sorts of talk about amending the Act to provide for a rural finance section. Why was this not provided for in 1960 when the legislation was originally drafted?

When I study the legislation covering the Development Bank I find that the institution is circumscribed in its operations. It may lend money to primary producers but only if those primary producers cannot obtain their normal requirements at existing banking institutions. Apart from this no risks are taken; normal interest rates are charged. When is comes to assisting the farmer with plant and equipment it is obvious that the Development Bank, which we were told was set up to assist primary industries, is nothing more or less than a glorified hire purchase institution. A farmer may get hire purchase finance at the Development Bank and perhaps more cheaply than at any other lending institution in Australia - certainly more cheaply than it can be obtained from the fringe institutions of the private trading banks. But he will pay 4i per cent, flat for that finance - or that is what he would have paid three years ago; probably the rate would be Sit per cent, flat now, which is the equivalent of a reducible rate of 10 per cent, or 11 per cent. What sort of rural finance institution is it that charges interest rates of that order? The whole show ought to be reformed, but even if such a reformation is proceeded with something should be done to provide immediate relief.

All this talk about conferences with the private trading banks and about those banks engaging in short term loan transactions is so much tarradiddle. What the private banks are really afraid of is that the Reserve Bank may obtain sufficient funds to enable it to lend money at a reasonable rate of interest, an “ assistance “ rate of interest, of 1 per cent, or 2 per cent, over a long period of years. What they are also afraid of is that money will not be made available to the vast pastoral firms like Elder Smith and Company Limited. I find on reading through that firm’s balance sheet that it has loans outstanding to the extent of £43 million. Elder Smith and Co. gets its funds, of course, from the banking institutions. It is, in effect, a banking institution. It obtains money from some bank - possibly the Commonwealth Bank or the Reserve Bank - against the security of the farmers, and then makes advances, but it takes a neat rakeoff on such transactions, naturally, of 1 per cent, or so.

When we hear all this talk about the Government consulting the private trading banks we are led to the conclusion that the Government is creating a situation in which the private trading banks will be the main gainers.

Now there is another very important matter about which 1 want to make a few comments. I understand from a wireless broadcast this evening that there has been an oil strike off the coast of Victoria. At least that is the rumour. There have been three very successful gas strikes off the Victorian coast and naturally the Premier of Victoria has busied himself and, quite rightly, has deployed his experts at home and abroad with the object of ascertaining how best to cope with this great natural resource that has been discovered off the Gippsland coast. But we find that ne Premier returns from consultations with American oil interests and American financiers and tells the people of the State, through the columns of the Press, that he is, in effect, in difficulty. After consulting various people abroad he has estimated that Victoria will have to find $160 million within the next three years in order to exploit these gas resources. He asks how we are going to get this kind of money through the Australian Loan Council and other government sources.

This is a problem that we will have to investigate. I say in this Parliament tonight that if the Commonwealth Government does not, of its own volition or at the request of the Victorian Premier, take steps to ensure that the exploitation of these natural resources is properly controlled by some joint Commonwealth-State instrumentality it will be the scandal of the age. It is within the capacity of th,e Commonwealth, working in co-operation with the State of Victoria, to raise the necessary finance quite easily. All that is needed in the first instance is labour, and the labour is Australian labour. Some specialised machinery, which could probably be obtained from overseas at not very great expense, would undoubtedly be required, and this might involve the expenditure of some overseas reserves in dollars, Swiss francs or sterling. Perhaps we would need the specialised knowledge of some scientific experts. But then we should establish some great Commonwealth-State instrumentality on the lines of the Snowy Mountains Hydro-electric Authority or perhaps the State Electricity Commission so that the riches of this Commonwealth will be exploited for the benefit of the people of Australia.

I appreciate that Esso Standard Oil (Aust.) Ltd., a subsidiary of a United States firm, and the Broken Hill Proprietary Co. Ltd., an Australian firm, have discovered these riches and they are entitled to adequate compensation. But I hope that no State or Commonwealth Government will tolerate for one moment the exploitation of these riches by any private company whether it is completely Australian or has associations abroad. Hang it all, 40 years ago a Liberal Government in Victoria denied to private interests permission to exploit the rich brown coa! deposits in that State. The members of that Government were really Liberals, advanced Liberals compared with the members of this Government. This Government has shown no interest whatsoever in the gas strike off the coast of Gippsland.

Let me make this further comment: This discovery could mean within a reasonably short period of years the almost complete termination of activities connected with the exploitation of the Morwell brown coal deposits.

Mr Nixon:

– No chance.

Mr POLLARD:

– I said it could. The honorable member will have his chance to speak later. It might mean the even earlier elimination of the Lurgi gas plant. In any case the people of the Latrobe Valley in Victoria are greatly concerned about the situation. I see daylight. If the Commonwealth Government, in conjunction with the Victorian Government, takes hold of the situation, the Latrobe Valley and Morwell could have one of the largest petrochemical works in Australia. I understand that the Gippsland gas is saturated with other elements of the kinds that the oil companies today use in the making of plastics and in particular of fertilisers such as sulphate of ammonia and nitrate of ammonia. One can visualise a large concern in Victorian undertaking that kind of production.

I was in Italy in 1961, Mr. Deputy Speaker, with my colleague, the honorable member for Melbourne Ports (Mr. Crean). It was our pleasure on that occasion to visit the headquarters of a concern known as Ente Nazionale Idrocarburi, which is commonly known as E.N.I. This great organisation was established by the Parliament of Italy in 1953 and charged with the duty of taking control of the whole of the gas resources of the Po Valley, which are very great. It was vested with the authority to supply Italy with all its oil whether refined from resources obtained at home or from resources obtained abroad. This enterprise went to work with zest. It manufactured all the drilling equipment required for its purposes and built all the tankers needed to ship refined oil to other countries and to bring crude oil from other paris of the world. It negotiated concessions with the Sheikhs of the various kingdoms in the Middle East and from the owners of oil lands in Africa, Egypt, Tunisia and elsewhere. This organisation drilled extensively all over Italy and was successful in striking oil in the southern part of the country and in Sicily, ft’ has gone extensively into the production of petrochemicals and supplies Italian farmers with sulphate of ammonia and other complex fertilisers that are required.

I have with me a volume that is a revelation of some of the great works of this enterprise in the interests of the Italian people. It has broken the back of the foreign oil monopoly in Italy. It has even gone so far as to build a pipeline from the Gulf of Genoa to Stuttgart through which it pumps oil from Italy to Germany. It has negotiated foreign contracts of many kinds. For example, it has constructed a pipeline for the conveyance of oil from Calcutta to New Delhi, a distance of 1,000 kilometres. This Italian undertaking is enterprising in many ways. It runs its own colleges and schools and provides full recreational facilities for its employees. This magnificent publication is available to anybody who wishes to see it. The portrayal of the work undertaken by E.N.I, is excellent. This enterprise has made the greatest single contribution to Italy’s industrial development since the disastrous war of 1939-45.

  1. suggest that if the Australian Government is interested in development of this kind it ought to examine this great Italian undertaking. It should send its technical experts and also a delegation of members of this Parliament to see what can be done.

The honorable member for Evans (Dr. Mackay) has some knowledge of these matters. The great mass of the people of Australia, however, have no knowledge of this Italian organisation. We ought to be informed about it. I know that the chairman of the Victorian Gas and Fuel Corporation has been abroad as the officer of a conservative government, but if he were to inform the people of Victoria tomorrow of the details of the success of E.N.I, in Italy or of any other socialised or semi-socialised instrumentality anywhere in the world, he would probably be told to shut his mouth just as the honorable member for Dawson (Dr. Patterson) was told when he revealed to the people of Australia lack of enterprise on the part of a government.

It may be said that this Government is confronted by constitutional difficulties, and that may be correct, Mr. Deputy Speaker, but constitutional difficulties can be overcome. Powers can be referred to the Commonwealth by State Parliaments and earnest endeavours to amend the constitution can be made. Above all, let no Premier and let no Prime Minister ever say to the people of Australia: “ It is beyond our financial resources.” Hang it all, we were told when the Mount Isa railway was to be improved that dollars had to be obtained, and the former Prime Minister asked the International Bank for $US32 million to build the Mount Isa railway. What was the content of the railway? It comprised all Australian labour, all Australian sleepers and all Australian rails. The only dollar content in actual physical fact was some huge earth moving equipment. Do honorable members know why the Government wanted a loan, why it did not get a loan and why its application was turned down? The Government was told it could borrow the money here and it did. It wanted to borrow dollars so that it could lodge $US32 million in the Commonwealth Bank of Australia and when Australian importers - big emporiums and like institutions - wanted to import luxury goods they could say to the Government: “ We want SUS1 million for imports” and could get it. That indicates the type of financial mind this Government has. Let there be no evasion of this great issue. We could have the greatest industrial enterprises and all the developments that follow the utilisation of natural gas for household and other purposes, together with petrochemicals, owned, controlled and developed solely for the nation and for the people of Australia, and this ought to be so.

Mr HUGHES:
Parkes

.- In his speech tonight the Leader of the Opposition (Mr. Calwell) devoted a substantial part of his remarks to the Government’s policy and the American Government’s policy in relation to the critical situation in South East Asia. I propose to discuss that subject matter. I say at the outset that those in this country who have hitherto been disposed to regard the Opposition as - a credible alternative government will have cause for alarm and for grave misgivings, because the Leader of the Opposition tonight - and I say this regretfully, but it has to be said - descended to the bottom of the bucket of political indecency when he characterised, as he did in unqualified terms, the attitude of the West, meaning thereby the attitude of the United States Government and presumably this Government, in relation to South East Asia as being without standards and apparently without scruples.

Mr Peters:

– The honorable member looks young enough to me to be in Vietnam.

Mr HUGHES:

-And the honorable member looks old enough to be as inane as he is. It is the declared and considered attitude of the Leader of the Opposition and what is supposedly the alternative government in the Commonwealth that the policy of the West in relation to South East Asia is without standards and without scruples. It is very interesting to make some comparisons at this stage, and the first comparison I should like to make in this context is with what the Leader of the Opposition said as a member of the front bench of the Opposition only a year ago, as recently as 19th February last year. What was said tonight was not what the front bench of the Opposition said 13 months ago, because we all know - and if we have forgotten we should be reminded - that in February last year the Opposition front bench, including presumably the Leader of the Opposition, said that the American statement of its objectives in South Vietnam deserved the sympathetic understanding of this country. I read from the formal statement put out bv the Parliamentary Executive of the Opposition. It was a statement made at the time the Americans explained why it was that they were about to undertake limited bombing of North Vietnam. The statement read as follows -

In its statement to the Security Council on February 7th, reporting the air strikes against military installations in the south of North Vietnam, America insisted thai ils object in South Vietnam, whilst resisting aggression, is to achieve a peaceful settlement maintained by the presence of international peacekeeping machinery and that it would not allow the situation to be changed by terror and violence.

This statement–

These words should be well noted - of American purposes is unexceptionable and the case for the American action of recent day-, as based on the aim of shortening the war and achieving a negotiated settlement, which would establish and maintain the rights of the South Vietnamese people, deserves sympathetic Australian understanding.

That is what the Leader of the Opposition said a year ago. But tonight he has told the House and the nation that the policy of the United States and of this Government in South Vietnam is without standard and apparently without scruple.

What is the explanation for this change? I shall endeavour to show the House what is the explanation for this fundamental change in the attitude of the Opposition. This assumes - of course, this is always a matter of doubt - that the Leader of the Opposition reflects the attitude of a significant section of the Opposition. The explanation for this fundamental change in Opposition policy is that early in March the Leader of the Opposition was told by the left wing dominated Federal Executive of the Australian Labour Party that he had to make a speech characterising American policy as being cynical and saying that the resumption of the bombing of selected or limited targets in North Vietnam was indicative of the hollowness and insincerity, as the Executive would put it, of the American so called peace offensive. In the speech he has made tonight, the Leader of the Opposition has demonstrated the depths of his servitude - his slavery - to the left wing dominated extra-parliamentary Executive of his Party. There is nothing else to explain this change. What has happened in South Vietnam in the last year?

Mr Curtin:

– You tell us.

Mr HUGHES:

– I shall. I shall have some pleasure in doing so. because the honorable member is in need of education. In the last year the situation militarily has changed from one in which the war was in clanger of being lost to one in which it is no longer being lost but in which it is fair to expect that the tide will turn towards victory. I challenge anyone on the Opposition side to controvert that statement, despite all the defeatist, demoralising claptrap that we heard tonight from the Leader of the Opposition when he described this war as being unwinnable. The Leader of the Opposition is the personification of despair - of political no-hope. He is the echo of the left wing dominated Federal Executive which people in his Party, like my honorable friend from Grayndler, is ashamed of.

Mr Daly:

– Ha!

Mr HUGHES:

– That was a hollow laugh. The honorable member is ashamed of the Executive.

Mr Freeth:

– He is not game to say so.

Mr HUGHES:

– It is a pity he is not game to say so. When the Leader of the Opposition goes so far as to say that our policy and that of the Americans in South Vietnam are without standard and without scruple, what he says is in contrast to some words that were uttered as recently as 19th July last by his Labour friend - I assume he is a friend - the Right Honorable Harold Wilson, the Prime Minister of Great Britain. The Prime Minister of Great Britain has never taken the view that American policy in Vietnam is without standard or without scruple as has been suggested to the House tonight by the Leader of the Opposition. 1 wonder whether the Leader of the Opposition has ever read the words I am about to quote. If he has not, it is a pity. They might have been instructive to him. He might have gained more value from them than he has gained from the dictates of his shabby, left wing extra-parliamentary Executive. This is what Mr. Wilson said -

The American position, which we support, is this -

Mark those words, Mr. Deputy Speaker. This is the Labour Prime Minister of the

United Kingdom speaking, not the so called leader of this rag-tag and bob-tail Opposition which is so divided and disunited. Mr. Wilson said -

The American position, which we support, is this - that when conditions have been created in which the people of South Vietnam can determine their own future free from external interference, the United States will be ready and eager to withdraw her forces from South Vietnam.

That has always been the United States attitude. It is a great pity that the Leader of the Opposition did not read Mr. Wilson’s words. Mr. Wilson said further -

That is what they have said and we support them.

The Labour Government in England supports the American position. The Leader of the Opposition in Australia - if you can call it an opposition - says that the Americans are without standards and without scruple. These are disgraceful words to come from anyone who claims to represent any significant body of public opinion in Australia. Those words tonight by the Leader of the Opposition demonstrate how unrepresentative of Australian opinion the Opposition is and how an ti- American are some of its members. Some of them, deep in their hearts, are not really anti-American, but they behave as they do because of their deep bias and because the Federal Executive of the Australian Labour Party cracks the whip over them.

Mr Killen:

– Are those the witless people?

Mr HUGHES:

– I am referring to the people characterised by the Deputy Leader of the Opposition (Mr. Whitlam) as the witless 12. After hearing the Leader of the Opposition tonight I submit that we now have the politically witless 13.

Mr Curtin:

– Now the honorable member is getting nasty.

Mr HUGHES:

– The honorable member for Kingsford-Smith may think so. I enjoy being nasty in this context. I intend to be nasty because nasty things must sometimes be said.

I turn now to the dreary and pessimistic statement by the Leader of the Opposition that the war in South Vietnam is unwinable. I say unequivocally that the events of the last 12 months have served to demonstrate the contrary. Nobody looking at the position fairly could say otherwise or do other than agree with what I have just put. But I do not have to rely on statements by leaders of the Government which I support in this House. We can go to independent eye witness accounts for a view of how the war in South Vietnam is progressing. I propose to read what a gentleman named Michael Wall has said about the war. He has been in South Vietnam since early in January. He writes for the “Manchester Guardian “ - a journal which has never been noted, as far as I am aware, for its right wing tendencies. If anything, its tendencies are slightly in the other direction. Nevertheless, it is a very reputable and reliable journal. Writing in the “ Manchester Guardian” of 10th March 1966 Michael Wall stated -

If Ho Chi Minh and General Giap believe the Americans can be defeated in the field as the French were, they are disastrously mistaken. American military morale is high and will remain so, for no soldier serves more than 12 months in the theatre. American potential strength is overwhelmingly superior and will prevail even if the present policy of not escalating the war continues and the bombing of the North is kept to its present ineffective level. Vietcong methods are beginning to alienate the countryside, and there is a fair chance that with American backing the efforts at a social revolution in South Vietnam may make a mark.

It is a pity that the Leader of the Opposition did not search a little further in his quest for source material. It is a pity that he simply bowed to the bidding - to the cracking of the whip - of the extraparliamentary body of 12 witless men, socalled by the Deputy Leader of the Opposition, who told the honorable member for Melbourne what to say and when to say it. The parliamentary business of this nation will be much better conducted when the Leader of the Opposition, whoever he may be, is in a position to speak without outside dictation by people whose outlook is inimical to the proper interests of this country. I do not charge- the Leader of the Opposition with anything in the nature of wrong motives, but I do say that in his servitude he has created a position that would lead many people to wonder whether his speech tonight on the Vietnam situation had been written by Mr. Chamberlain or by Ho Chi Minh himself. It is a great pity that the Opposition here does not have a Leader who is prepared to show a little independence. That the Federal Executive told the

Leader of the Opposition to make a speech charging the United States and the Australian Governments - the West - with lack of standards and lack of scruples is perfectly well demonstrated, because we know that the Deputy Leader of the Opposition in his recent agonies referred specifically in a statement to the fact that the Leader had been told to make an anti-American speech. We heard it tonight.

I say unequivocally that I wholeheartedly support the decision of the Government to increase our military commitment in South Vietnam. I applaud, and I think anybody with a sense of responsibility will applaud, the decision of the Government to make its proposed generous contribution to the capital of the Asian Development Bank. Now that we have seen a substantial improvement in the military situation in the tragically war torn country of South Vietnam, I hope that the Government, as well as increasing our specific military commitment, will turn its attention soon and urgently to stepping up the scale of our economic and technical assistance to South Vietnam. I think it is a truism that military means are not the solution to the problems of South Vietnam. What military means will do for our cause is to prevent a military solution being imposed upon us from outside by North Vietnam and China. Military means are an essential part of the job, but, now that we are witnessing what I regard, T am sure pot over optimistically, as a substantial improvement in the conditions of the country, I hope that the Government will see its way clear to stepping up the scale of our economic commitments to South Vietnam. I think it is important that this should be done. While we know that we see twin solutions to this country’s problems - military assistance and economic and social assistance - we must make it appear beyond any doubt to our Asian friends that it is the fact that we see the position in this way.

Let me remind the House that we are spending about .6 per cent, of our gross national product annually on economic and technical assistance to Asian countries. But while the scale of our economic and technical aid to South Vietnam and to other Asian countries is commendably high. I believe that it could well be higher. This is not something that can be accomplished overnight. I do not think it is reasonable to suppose that, with the difficulties that are to be found in some parts of our economy today, we can say that we will overnight increase our economic and technical aid so that it becomes 1 per cent, of our gross national product. This would be an unreasonable approach. These things cannot be done quickly. But I do believe that now we are increasing our military commitment to South Vietnam we should hand in hand with this action plan to phase up gradually our civil aid. This is, I believe, of incalculable importance to the solution of the problems of South Vietnam which we wish to see free of its present oppression and in which we wish to see created conditions of peace with economic and social justice, ft is of vital importance, I believe, that we do these things because we must make it appear to Asian nations as is the fa;t that we see that the solution of the problem has these multiform aspects.

Mfr. CURTIN (Kingsford-Smith) [10.26]. - Economic growth in the Commonwealth must depend on good management and wise administration. Australia is vitally concerned to ensure that financial and technical resources are .used effectively for economic development. Our direct responsibility, of course, is to ensure that this economic growth occurs within our own borders and in Papua and New Guinea. However, the crucial impact of economic development and the effectiveness with which resources are allocated are apparent in all countries. The Australian Labour Party takes the view that, in the interests of the Australian economy and the Australian people generally, greater emphasis must be placed on the public sector, especially when we realise that the necessary finance can be channelled through a firmly established Commonwealth government banking institution. When we analyse the resources of our national wealth we are forced to take into consideration our enormous mineral potential which forms the basis of our great steel industry which the Labour Party believes must be nationalised in the best interests of the nation generally. The nationalisation of our steel industry will conserve our national wealth and we will process our steel in the same v/ay and sell the finished article to anyone interested.

We believe that an Australian shipbuilding industry must be established and that an immediate start should be made on the construction of a Commonwealth overseas shipping line to carry our exports to all parts of the globe. This makes the basis of firm economic growth. As an Australian, it is hard for me to believe that the Australian continent, completely surrounded by water as it is, and which boasts great rivers and wonderful harbours, does not possess an overseas shipping line. It is one of the very few countries in the world in this unhappy position. Why has this great nation to stagger along paying an annual shipping freight bill of between £400 million and £450 million? This money has to be paid in sterling. The situation is preposterous to say the least. Under present conditions, Australia is totally at the mercy of an avaricious overseas shipping monopoly which has a powerful grip on our economy. This grip must be broken.

Again, thinking in terms of defence, I believe it is most essential that a shipbuilding industry be set up. This would enable Australia to construct its own naval vessels necessary for the defence of this great continent. We were able to obtain the necessary experience in building ships in World War II when we were unable to depend on the mother country as it had its hands full at that critical period. However, the Australian technicians rose to the occasion. Australia is no longer a primary producing country. Its secondary industries are growing apace. Australia is facing a great period of economic development. Few nations are in need of nationally controlled maritime transport as Australia is because, first, we are an island continent. Secondly, as a major agricultural, pastoral, processed food, mineral and metal producer with a relatively small population, we must export a much higher percentage of basic output than the vast majority of other countries. Thirdly, our major primary industries rely on overseas markets. Fourthly, our major secondary industries rely on overseas sources of raw materials and on heavy capital equipment. Fifthly, our secondary industries are much further from their main sources of raw materials and capital equipment than are those of other countries which compete with us for manufactured markets. Sixthly, shipping is a most vital activity with wide implications for the Australian economy. Without certain imported raw materials, basic Australian industries would grind to a halt. Without a continuing volume of exports the national economy would bc in chaos.

In 1962-63 our overseas trade accounted for £2,300 million, or more than 26 per cent, of our national turnover of goods and services. Although small in population Australia is among the 10 great trading nations, yet it has no merchant marine to carry its overseas trade. In the year 1961- 62 only .6 per cent., or one ton in every 155 tons of goods entering Australia, and only 1.5 per cent, of goods shipped from Australia, were carried in vessels registered in Australia. With no overseas merchant marine we are unique among the world trading nations. This deficiency puts the Australian economy largely at the mercy of the overseas shipowners, and makes us the laughing stock of the world.

Freights raid by the Australian buyer on imports approximated £160 million last year. Freights paid to overseas shipowners on our imports are the greatest single charge in the “ invisibles “ account in our balance of payments - well ahead of the aggregate outgoing of dividends, interest, royalties and travel and migrant remittances. Freights on our exports are paid by the overseas buyer but represent a very real, if indirect, charge on the Australian economy. Because our major exports are sold in competitive markets, the freights charged represent a deduction from the export returns of Australian producers. On the best statistics available it has been reliably estimated that the total freight charged by overseas shipowners in 1962- 63 to carry our exports and imports was £430 million. Of this amount approximately £80 million was spent in Australia. The net cost to the Australian community of the freight rates charged by overseas shipowners was therefore approximately £350 million. With a nationally owned overseas shipping line a substantial part of this £350 million annual net cost would remain within the Australian economy and be available for further development.

A Government committee of inquiry in 1955 calculated that 32.5 per cent, of total voyage earnings in the Australia-United

Kingdom trade went to profit. Assuming the same profit rate on all our overseas trade, it means that approximately £140 million annually is extracted from our trade by overseas shipowners as clear profit. With a nationally-owned overseas shipping line a substantial part of this £140 million would be available to the Australian nation - originally for ship acquisition and later for freight reduction.

When the overseas shipowners finally persuaded the Bruce-Page anti-Labour Government to sell the thriving Australian Commonwealth Line of Steamers to them in the late 1920’s, they did their best to ensure that their stranglehold on our overseas trade would not again be successfully challenged by Australian enterprise. They secured from the Commonwealth Government an amendment of the Australian Industries Preservation Act to give them an exemption from its anti-monopoly provisions. This is set out in section 7C. This remarkable provision s’ill exists and gives the overseas snipping COnbines, bound tightly together in their conference type organisations, virtually a legal monopoly of the carriage of our overseas trade. This astonishing privileged position has not only freed them from serious competition in this field but has also enabled them to take over a large slice of our interstate cargo, sea trade and virtually all of our inter-sea passenger trade. It is estimated that not less than 80 per cent, of the entire shipping and stevedoring activity on the Australian coast is directly or indirectly owned or controlled by the overseas shipping monopoly.

It was during the period of the William Morris Hughes Labour Government in 1915, when notable sales of Australian primary products were made abroad, that the question of transport arose and the overseas shipping conference first showed its teeth in its anxiety to hold Australia to ransom, despite the fact that World War I was raging. However, the Hughes Labour Government stood its ground and accepted the challenge. What a pity this Government has not accepted the challenge. The Hughes Government purchased a fleet of vessels to convey our products to their overseas destination. This fleet of steamers came to be known as the Australian Commonwealth Line. It did meritorious service for the Australian nation until it was sabotaged by the then paid stooges of the overseas shipping conference and became the victim of a scandalous transaction by the Liberal Government under the leadership of Stanley Melbourne Bruce when a phoney sale of the line was made. Now, 50 years later, it is still doubtful whether the arranged price was ever paid to the Australian Treasury by the overseas shipping conference. However, that is another story.

Now we come to another interesting point. The present Minister for Trade and Industry (Mr. McEwen) is also the Leader of the Country Party in this House. That Party supposedly represents the great body of country people, most of whom are primary producers. In view of the fact that so many of the Party’s supporters are innocent victims of the vast exploitation being carried out by the overseas shipping conference, can the Minister tell me whether they are in favour of the creation of the Commonwealth overseas shipping line?

Mr Turnbull:

– Why not raise that matter at question time?

Mr. CURTIN__ A Commonwealth overseas shipping line would relieve the general body of producers, which the honorable member for Mallee and his Party represent, or claim to represent, of the crushing burden of exorbitant freight charges. Now is the time for the Minister to make up his mind and declare himself and his Party. Can he tell me also the source of the sinister influence which allows this irresponsible body called the overseas shipping conference to decide what, where and when ships will be available, and at what price, to carry our exports and our imports to and from all quarters of the globe? Is it not time Australia woke up to the present systematic robbery of its people by a bunch of overseas financial crooks? Naturally, the people of Australia must become suspicious of a government which allows such a state of affairs to continue year after year. We must not forget that this Government has been in power since 1949, and this vicious racket is still operating.

Shipowners have a notoriously predatory reputation. Their complete lack of patriotism is shown by their frequent resort to flags of convenience in callous disregard of any national interest. Their total con tempt for the interests of another nation - Australia in this case - is not surprising. They refused point blank to make their books or accounts available to the Australian Government Committee of Inquiry in 1955. Their actual profits remain a close secret. Sufficient is known, however, to enable that Committee so say of the Australian-United Kingdom-Continent trade -

Shipowners engaged in this trade, viewed as a group, have had in effect, a monopoly of the trade, and the conditions are conducive to basing the freight rates on what a traffic will bear.

It is evident that there has not been a strong organisation of shippers to negotiate with the shipowners and they have not had available any facts as to the profits made in this trade but only general facts relating to movements in costs.

On the limited material available, the Committee was able to estimate the profits of that trade, measured as a percentage of the original cost of a vessel, as 36 per cent, in 1950-51, 38 per cent, in 1952-53, and 31 per cent, in 1954-55. The Committee found, for example, that while the South African Government was able to bind the shipowners to a rate of profit of 5 per cent, of the replacement value of their vessels, the same shipowners’ monopoly position in Australia enabled them to charge us freight rates which gave them a profit rate over four times higher - 21.9 per cent, of replacement value of vessels.

As further indications of how the overseas shipowners hold the Australian economy and its workers and producers to ransom, I point out that although the productivity of waterside workers in Australia rose - I emphasise “ rose “ - by 73 per cent, between 1955 and 1962, thus reducing labour costs per ton handled, despite wage increases of 25 per cent., the freight rates on Australian products increased by amounts varying from 35 per cent, for hides, skins and wool to 65 per cent, for cheese and 70 per cent, for beef. The freight rates from South Africa to Singapore, a distance of 5,960 miles, are generally from 20 per cent, to 50 per cent, lower than those from Sydney to Singapore, a distance of 4,632 miles. Why is this so? The conference lines carry steel from England to Indonesia and Malaysia cheaper than they do from Newcastle to those places. Again, Scottish and Danish potatoes can be landed in Ceylon and Singapore cheaper than can Australian potatoes because of this freight discrimination. What a racket it is. Further, a promising demand for Australian apples in Indonesia in 1963 could not be met because the conference lines chose not to make ships available. Again, as soon as a thriving meat trade to America was built up in 1963, the overseas shipowners raised freights to the United States by from 10 per cent, to 124- per cent.

British shipowners usually give preference to British trade against that of rivals, but when General Motors-Holden’s Pty. Ltd. burst into the New Zealand market, which was previously a preserve of British automobile firms, the “Daily Telegraph” described how British shipowners moved to protect the British automobile market. On 1st July 1956, the British shipping ring increased its freights for the transport of cars from Adelaide to New Zealand by 16.6 per cent. Still General Motors-Holden’s Pty. Ltd., with the Australian made car, looks like making a hole in the British car market in New Zealand.

On 6th August there came a notification that freight rates across the Tasman were going to be still higher - another 28.57 per cent, from Adelaide and 42.8 per cent, from Melbourne. General Motors-Holden’s Pty. Ltd. then sent a trial shipment of Holden cars to Singapore. In December 1956, the “ Daily Telegraph “ described the reaction of the British shipowners. It stated -

On November 1st the freight rates on cars to Singapore went up 32.5 per cent, from Fremantle and 24.8 per cent, from Brisbane, Sydney, Melbourne and Adelaide . . . Where Australia had been a potentially dangerous competitor in the Singapore and Malayan oar market, its competitive capacity was now reduced.

The British led shipping conference sometimes uses its freights in a manner that makes a mockery of the Commonwealth fiscal powers and of export drives. No export drive can in fact be certain of substantial success until there is a national shipping line. The Sydney “ Daily Telegraph “ reported from Canberra on 14th December 1956 that an official examination of shipping freights showed that outward freights had increased more with countries in which Australia has potential markets for its manufactured products, including cars, than the inward freight rates from the same countries. The Canberra correspondent of the “ Daily Telegraph “ stated-

The increases in outward freights from New Zealand, Ceylon, India and Hong Kong, all possible markets for Australian products, have been greater than the inward rates.

I would like to point out that an organisation called the Ludwig company will use Australia in the future. This is the same firm of Ludwig whose representative met the Australian marine unions early this year and failed to convince them to agree to the use of dump barges for this contract. The Australian National Line wanted to submit a tender for the contract but the Government informed the line that the Constitution barred the A.N.L. from trading interstate. Look at the link up. We have bauxite deposits controlled by overseas monopolies and refineries owned by overseas monopolies. Our Prime Minister said recently -

Mr SPEAKER (Hon Sir John McLeay:
BOOTHBY, SOUTH AUSTRALIA

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

Debate (on motion by Mr. Fox) adjourned.

House adjourned at 10.46 p.m.

page 267

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated-

Sugar. (Question No. 1476.)

Mr Coutts:
GRIFFITH, QUEENSLAND

s asked the Minister for Trade and Industry, upon notice -

  1. What quantity of sugar was sold on the home market during 1964-65 and what was the price per ton?
  2. What quantity of sugar was exported to Canada, Japan, the United Kingdom and the United States of America respectively, during 1964-65 and what was the price per ton received for sales to each of these countries?
Mr McEwen:
CP

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

  1. The wholesale price of sugar per ton in major Australian cities is $180-52 for 1A grade refined sugar, with related prices for other grades. The net return to mills from sales of raw sugar on the home market from the 1964-65 season averaged $1-20.75 per ton on sales of 628,567 tons of raw sugar. -2. The following table shows the quantities of sugar exported by Australia in 1964-65 to Canada, Japan, the United Kingdom and the United States of. America and the average return received from sales to each of these countries. The average return has been calculated from the f.o.b. value of exports for 1964-65 published by the Commonwealth Statistician.

Food Shortage in India. (Question No. 1528.)

Mr Hayden:

n asked the Prime Minister, upon notice -

  1. Is India presently suffering a severe drought which is causing food shortages and hence widespread starvation of the population?
  2. Has the Australian Government received any request from the Indian Government for gifts of food to help that country in this serious situation; if so, can he give the details of the request and state what action his Government intends to take to help India in response to the request?
  3. If no request has been received, will the Government take the initiative by approaching the Indian Government and offer to send gifts of food to that country during this present period of privation?
Mr Harold Holt:
LP

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

  1. A severe drought in India has caused food shortages which have been complicated by distribution problems.
  2. We have received a request from the Indian Government for assistance and steps have been taken to meet this request. The Minister for External Affairs announced on 17th February that the Government had offered India $8 million in food aid. The gift will be predominantly in the form of wheat and will also include some milk powder and other products.
  3. See answer to 2.

Australian Army: Earth Moving Equipment. (Question No. 1534.)

Mr Webb:

b asked the Minister representing the Minister for Supply, upon notice -

  1. Did the Department place an overseas order for $1,000,000 worth of earth moving equipment for the Army when machines were available from local manufacturers?
  2. If so, why?
  3. Did the local manufacturers tender at a price lower than that for the overseas machines with Customs duty added?
  4. Is it the practice to add duty to overseas prices when comparing tenders when an Australian manufacturer is concerned?
Mr Fairhall:
LP

– The Minister for Supply has supplied the following information -

  1. The Department placed an order to the value of $844,000 for earth moving scrapers having an imported content of 85 per cent. Suitable machines were not available from local manufacturers.
  2. The tender specification expressed the need for a machine that was a standard commercial product, but nevertheless it contained critical performance requirements to meet the flexible operational role required by the Army. Neither tender fully met the specification, but the successful tender came close to doing so whereas the local manufacturer (with an imported content of 24 per cent.) failed by a significant margin. The successful tender was able to do this and yet still fulfil the general requirement of being a standard commercial product.
  3. Yes, but in this case the technical considerations referred to were decisive.
  4. In comparing tenders where local and imported goods are in competition, the applicable duty is always added to the tender for the imparted article - thus Australian industry is afforded the protection to which it is entitled under the Tariff.

Botany Bay. (Question No. 1571.)

Mr Reynolds:
BARTON, NEW SOUTH WALES

s asked the Minister representing the Minister for Works, upon notice -

  1. Has the Minister stated on several occasions during the last seven months that the Commonwealth would not consider expenditure of moneys on remedial work along Botany Bay foreshores unless liability for the damage was established?
  2. Did the Minister say that the Government would await the provision of a report from the Wallingford Hydraulic Research Station before making any decision on the matter?
  3. Did the Minister, on the 8th March, 1966, indicate that the Government, without acceptance of liability or responsibility, would contribute to the cost of certain urgent work required along the foreshores?
  4. What are the precise details of the work to be carried out or subsidised by the Commonwealth as a result of this decision, and what is the total cost involved?
  5. Is it a fact that this decision was made prior to any consideration of the Wallingford report?
  6. if so, why did the Commonwealth resist making its contribution some months earlier when such action could have prevented much of the extensive damage that has been caused to public and private property since the first representations were made to the Government?
  7. What are the main findings and recommendations of the Wallingford report?
  8. What responsibility and liability does the Commonwealth propose to accept arising out of this report?
Mr Freeth:
LP

– The Minister for Works has supplied the following information -

  1. The Minister has stated that if damage to the foreshores of Botany Bay could, without question, be shown to be due to the dredging carried out by the Commonwealth in order to construct the new Mascot Runway then the Commonwealth would take appropriate measures to alleviate the situation.
  2. The Minister has stated that the Maritime Services Board of New South Wales approached the Wallingford Hydraulic Research Station in England in order to obtain a report on the matter. This report was asked for by, and was provided to, the Maritime Services Board.
  3. On the 8th March 1966, the Minister announced that certain urgent work on a portion of the foreshores of Botany Bay would be paid for by the Commonwealth.
  4. The work to be paid for by the Commonwealth consists of work which the Rockdale Municipal Council considers necessary to prevent possible damage to the promenade near Brighton Baths. This work was estimated by the Council to cost $5,000 and is now being carried out bv the Council, and the Commonwealth will reimburse the Council the $5,000 required. Further work will be carried out by the Works Department, assuming the permission of the Maritime Services Board, at Cook Park in order to prevent possible future damage by erosion. The cost of this work can only be estimated but it is thought it will be in the vicinity of $10,000.
  5. This decision was made prior to the full consideration of the Wallingford Report and to the discussions between the Council, the Maritime Services Board, and the Commonwealth, which the Commonwealth has suggested.
  6. The Commonwealth acted in advance of these discussions, and without assuming or admitting any legal liability to do so, in order to prevent serious damage which might have occurred and which the Commonwealth decided to prevent whether or not it had a legal liability to do so.
  7. The Wallingford Report is the property of the Maritime Services Board of New South Wales which is the body with the right to make it public.
  8. Pending full discussion and agreement between the various bodies concerned the honorable member must know that it is impossible to answer this question.

Communism. (Question No. 1526.)

Mr Daly:

y asked the Minister for Defence, upon notice -

  1. Does his reply to my question 1346 (“Hansard”, pages 3730-1) indicate that at the time when certain members of the Communist Party made application for employment in Commonwealth defence establishments, the Commonwealth was aware of the fact that those seeking employment were known members of the Communist Parly?
  2. If so, does this mean that the fact that a person is a known member of the Communist Party does not, of itself, disqualify the person from employment in a Commonwealth defence establishment?
  3. Is it also the view of the Government that a known member of the Communist Party is not a security risk and can be permitted to have access to classified information?
Mr Fairhall:
LP

– The answers to the honorable member’s questions are as follows - 1 and 2. The fact that a person is a known member of the Communist Party of Australia does not disqualify him from making application for employment in a Commonwealth defence establishment; but a person who is known to be a member of the Communist Party of Australia is not selected for employment in a Commonwealth defence establishment if that employment involves access to classified information.

  1. No.

Cite as: Australia, House of Representatives, Debates, 15 March 1966, viewed 22 October 2017, <http://historichansard.net/hofreps/1966/19660315_reps_25_hor50/>.

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