22nd Parliament · 2nd Session
The PRESIDENT (Senator the Hon. A. M. McMullin) took the chair at 11 a.m., and read prayers.
page 623
– My question, which is directed to the Minister representing the Minister for Primary Industry, relates to a statement that was made by Senator Bignor of the United States in a recent interview, in which he said that American farm surpluses were rapidly dwindling and that, with the increasing rate of population, . America would eventually reach the stage where she would have to import primary products from other countries. Australia and New Zealand would be in a favourable position to meet American demands if the Australian primary producer planned for development over the next few years. The Senator stated that there was a strong opinion in America that imports from Australia would be well received in that country. I therefore ask the Minister: First, has this statement been brought to his notice? Secondly, is the matter of supplying America with primary products at some future date being discussed? If not, will the Minister for Primary Industry investigate the prospective position and report at an early date to the Senate?
– I have not seen the statement by the American senator to which Senator Wardlaw has referred. I learn with a good deal of surprise that there is a possibility of America looking to overseas countries for primary products; but it is a matter which I am sure will be earnestly looked at by my colleagues, the Minister for Primary Industry and the Minister for Trade. 1 am not aware that any discussions are proceeding at the moment, but 1 shall certainly bring this matter to the attention of both my colleagues. I can assure the honorable senator that the matter will be fully investigated.
page 623
– I direct to the Minister representing the Minister for Primary Industry a question relating to the probable establishment of a wool industry fund. If the Minister has not already done so, will he consider giving the growers representation on the committee that will administer the fund by appointing to it representatives from accredited growers’ organizations?
– 1 shall bring the question to the attention of my colleague, the Minister for Primary Industry, and see that the honorable senator gets a reply.
page 623
– Has the Minister for National Development seen a press report to the effect that England has developed a package reactor that requires very little water for its operations? Does the Minister consider that nuclear energy will be used as a source of power to develop our outback mineral resources? In view of the high cost of transport from Tennant Creek and the rich copper deposits in the area, will he look into the power needs of Tennant Creek with a view to erecting a package reactor in the district?
– I prefer the honorable senator to place his question on the notice-paper. I think I could give him a little dissertation on the pros and cons of the matters that he raised in his question, but, in view of their importance, I think it would be more satisfactory if I sought from the Australian Atomic Energy Commission an authoritative expression of opinion upon the present position and the possibility of installing these small package reactors, which obviously would be of great benefit to outback Australia.
page 623
– My question is directed to the Minister for National Development, who is acting as Leader of the Government in the Senate. Has the Minister’s attention been directed to a statement which has been attributed to Dr. Coombs of the Commonwealth Bank and representatives of the trading banks to the effect that the trading banks may increase immediately the finance that is available for housing? Is it not a fact that the ceiling of the banks’ advances remains at 50 per cent, of their deposits and that the relaxation suggested will only provide for a variation of the type of advance? Is it not also a fact that, while the present ceiling remains, the banks are severely restricted in the provision of housing finance because of the demand for money in the more remunerative fields of finance, particularly avenues of hirepurchase finance in which some banks are interested? Will the Government give consideration to a relaxing of the freezing of bank funds to the extent of £50,000,000, the release of which, it is claimed, would not cause inflation because of the huge surplus of building materials and availability of an abundance of man-power?
– The way I read the press reports of the statement made by the Governor of the Commonwealth Bank is that it is a report of a discussion between the central bank board and the Governor of the central bank which indicates, in effect, to the trading banks that, within the limits of the available financial resources, a greater sum should be made available for housing. I read it not to mean that there should be an increase of the total advances, but that the central bank would like to see a greater proportion of the existing level of advances made available for housing. I was very pleased to note that statement. I would hope that the insurance companies and other lenders of money will note that the central bank would like to see more money diverted to housing. I should like all the banks and insurance companies to keep in mind the Government’s view that housing moneys are very efficiently distributed by building societies.
page 624
– I desire to address a question to the Acting Leader of the Government in the Senate. In the light of the announcement made yesterday of the great strides that the Commonwealth Scientific and Industrial Research Organization and the Department of Primary Industry are making in demonstrating the use of solar heating on country properties, and of the earlier announcement of the successful use of the Mansfield process for preventing evaporation from water dams and reservoirs, can a practical demonstration of the processes and the equipment necessary be staged? As a senator for South Australia, where water conservation and the use of solar heat present exciting possibilities, 1 ask the Minister to discuss with his colleagues the possibility of a mobile unit, with the equipment of both the solar heat apparatus and the Mansfield process. being established in South Australia for instruction and inspection purposes. Could such a unit be made ready for exhibition at the Royal Adelaide Show in September, and at country shows held in the spring at places such as Port Lincoln on the EyrePeninsula, at Jamestown and Clare in themiddle north, at Bordertown and Mr Gambier in the south-east, and in the upper Murray areas?
– The suggestion; that is made by the honorable senator isvery interesting. I have no doubt that if it were practicable to have a model or a prototype of a solar heating system on view, it would attract intense interest. I do not know whether it is practicable to do what the honorable senator suggests. I cannot see how it would be possible to demonstrate the Mansfield process, as suggested. All T can say is that I shall have a talk with my colleague, the Minister in charge of the C.S.I. R.O., and discuss with him the practicability of the honorable senator’s suggestion.
page 624
– I direct a question to the Minister representing the Minister for Immigration. I should like to preface the question by saying that recently I was appointed as a member of a deputation to wait on the Tasmanian Minister for Health, as a result of representations by new Australians that he consider the new developments in the mental health of immigrants from southern and eastern Europe and their ability to adapt themselves to their new environment in this country. I have studied a report made by the Commonwealth Immigration Advisory Council in 1955 on the general conduct of European immigrants. It was found that, generally speaking, there was no greater incidence of wrong-doing among European immigrants than there was among Australians. However, the Council’s investigations showed that a higher percentage of southern and eastern Europeans were involved than were Europeans from northern and western Europe. In view of the growing rate of mental sickness that is becoming evident among southern and eastern European immigrants, as shown in hospital records and mental institution statistics, will the Minister request the Commonwealth! Immigration
Advisory Council to institute an inquiry into the incidence of paranoia and schizophrenia among immigrants, with a view to making recommendations as to methods that could be used to give relief to many of those persons before they reach a stage of mental breakdown?
– The question is rather long and involved but most important, and should be referred to the Minister for Immigration. I ask the honorable senator to put it on the notice-paper.
page 625
– I address a question to the Minister representing the Minister in charge of the Commonwealth Scientific and Industrial Research Organization following the very interesting question that has been directed to the Minister by Senator Laught. Will the Minister consider making available to all local authorities in country areas the relevant and very important information relating to solar heating and the Mansfield process, as the local authority is normally the centre where the agricultural and pastoral people are assisted in such matters?
– I shall ask the Minister for External Affairs, who is in charge of the C.S.I. R.O., to consider the honorable senator’s suggestion. I believe the answer might well be that generally the C.S.I.R.O. issues a publication containing relevant information on important matters such as that referred to by the honorable senator. I will ask the Minister whether such a publication has already been issued, or whether it is practicable to issue one.
page 625
– Will the Minister for National Development state whether it is a fact that a few nights ago on the national broadcasting stations a number of American students from the Ohio University were interviewed during the session “ We are asking you “? Is it a fact that ten questions, previously unknown to the students and relating to Australia, were asked them? Is it a fact that they answered only one question correctly, and that that was the name of the city where the Olympic Games were held? Is it true also that they did not even know the name of the Australian Prime Minister, and that the name of Sir Percy Spender failed to ring a bell? Will the Minister arrange to have sent to the students, and to the Ohio University, information about Australia, and also about the identity of Sir Percy Spender and his work in the United States of America?
– I am sorry to say that I am unable to state whether or not the allegations of the honorable senator are correct as I did not hear the programme. I should think it only fair to add that, if what he has said is true, the group of students to whom he has referred had less knowledge than have our average American cousins.
page 625
– Will the Minister for National Development have a yarn with his colleagues with a view to giving consideration to the relaxation of the freezing of bank funds to the extent of £50,000,000 for housing? Such action, it is claimed., will not create any inflation in this country but will provide employment for large numbers of tradesmen in the building industry and absorb the huge surplus of building materials available.
– I am very much indebted to the honorable senator for his suggestion, but I hasten to assure him that it is not necessary and that the position he mentions is very closely watched by the Government and the Commonwealth Bank Board.
page 625
– Can the Minister for Shipping and Transport advise me which is the cheaper method of rail transport - trains drawn by coal-burning locomotives, or trains hauled by diesel locomotives? Has the Minister any figures showing the variation in cost per mile?
– Experience in Australia and abroad has proved quite conclusively that diesel-electric locomotives provide, in the vast majority of cases, the cheaper method of railway haulage. I have a wealth of figures on the matter. I think I can best answer the second part of Senator Scott’s question by informing him that if he likes to come to my office he can take any one of a dozen sets of figures for analysis.
page 626
– My question is directed to the Minister representing the Treasurer. Can he say whether the Treasurer was correctly reported in the press recently whena statement was attributed to him to the effect that there would be a surplus of about £100,000,000 at the end of this financial year? If he was correctly reported, will the Minister give consideration to making a special grant to States like Western Australia and Tasmania for the purpose of putting back to work those who have been rendered unemployed as the result of the shortage of government finances and the curtailment of housing and public works construction in those States?
– I do not know from what source the honorable senator has obtained his information.
– From the daily press.I told the Minister that.
– The Commonwealth Government, this year as in previous years, is providing loan moneys for the States by raising it by way of taxation. It is not a question of a surplus; it is a question of finding funds in order to keep the States’ works programmes in operation. As to the unemployment position, the information I have is that in the whole of Western Australia only some 1,700 people are receiving the unemployment benefit.
– That is too many.
– I know we can expect the honorable senator to prophesy doom, and claim that all things are at a stand-still, but we have to keep these things in perspective. The funds we are raising are going to the works programmes of the States. The position in Western Australia has lost nothing in the telling; the situation there is being grossly exaggerated by the honorable senator.
page 626
asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has furnished me with the following information: -
General repairs to the exterior of the Elizabethstreet Post Office including restoration of damaged and loose stonework to remove hazards and the cleaning of the stonework to maintain uniformity, is being undertaken at a cost of £19,675. A contract was let for this work on 20th February, 1957. It is expected that the project will be completed by the end of September, 1957.
page 626
asked the Minister representing the Minister acting for the Minister for Health, upon notice -
In regard to each State of the Commonwealth -
– The Minister acting for the Minister for Health has furnished the following reply: -
The Home Nursing Subsidy Act 1956 provides that the Minister may, in his discretion, grant a subsidy to an eligible organization in receipt of or to receive State assistance in respect of a home nursing service. The amount of the subsidy -
in the case of new eligible organizations, a subsidy at the rate of £400 per annum in respect of each nurse employed; provided that the amount so determined does not exceed the amount of State assistance received or to be received by the organization concerned. 2. (a) A subsidy has been approved for an existing organization in Queensland in respect of four additional nurses. There may be other eligible organizations who have employed additional home nurses but as yet have not applied for a subsidy.
Whilst the subsidy in the case of an existing organization for the purposes of calculation approximates the salary paid to each additional nurse employed, and in the case of a new organization half the salary of each nurse employed, it is paid towards the cost of running the home nursing organizations as a whole and may be used accordingly. It is not intended to alter the policy being followed in the method of calculating the amount of subsidy to be paid to eligible organizations applying for assistance.
page 627
asked the Minister representing the Minister for the Interior, upon notice -
– My colleague, the Minister for the Interior, has supplied the following answers: -
page 627
– On 10th April, 1957, Senator Scott asked the following question: -
My question is directed to the Minister representing the Postmaster-General. I understand that, following a question which I asked in the Senate a couple of weeks ago, the towns of Derby and
Broome will be connected by radio telephone to the Australian telephone service by the middle of next year. Can the Minister say whether the towns of Wyndham, Port Hedland and Onslow are also receiving consideration?
As promised when this matter was raised by the honorable senator on 10th April, I have made some inquiries of my colleague the Postmaster-General who has pointed out that on 19th March, 1956, he wrote personally to the honorable senator indicating that approval had been given for the installation of a radio-telephone system between Perth and Derby. As recorded in “ Hansard “ of 16th October, 1956, in reply to a further question by the honorable senator, I indicated on behalf of the PostmasterGeneral that the new service was expected to be completed within fifteen months. Unfortunately, due to delay in delivery of equipment the new service may not be ready until September of next year, and the honorable senator was informed of the revised completion date in reply to a. question asked on 20 th March, 1957. Moreover, the Postmaster-General has asked me to make it clear that the decision to provide this radio link was taken some considerable time before the matter was raised by the honorable senator, and in fact plans for the service were well in hand when the honorable members for Canning and Kalgoorlie sought information some twelve months or so ago.
Regarding the extension of the telephone service available at the other centres mentioned by the honorable senator, the position is that access to the Commonwealth trunk-line system from Port Hedland by means of either radio or landline is at present under consideration but as yet the most suitable method of providing this access has not been determined. Although the connexion of Wyndham to the telephone network is not practicable at this stage, action is being taken to reinforce the telegraph facilities between Derby and Wyndham during periods of line interruption by means of a radio-telegraph system, and this facility will ensure continuity of comunication between these centres. To connect Onslow to the trunk-telephone network would involve the erection of 1 85 miles of new metallic circuit between that centre and Carnarvon at an estimated cost of £80,000, and, although the benefits of extending the service to Onslow residents are readily acknowledged, in view of the many outstanding projects of equal or more pressing urgency awaiting completion, it is not possible to put the work in hand at this stage.
Summarized, the possibility of connecting Port Hedland, Wyndham and Onsolw to the telephone network is being investigated continuously in the light of modern techniques and developments, and the PostmasterGeneral has asked me to assure the honorable senator that the interests of the North-western area of Western Australia will be watched carefully.
page 628
– On 2nd May, Senator Seward asked whether an appointment to the position of Chief Executive Officer to the Export Payments Insurance Corporation had been made. The Minister for Trade has provided the following answer: -
No appointment has yet been made. Applications have been called for the position, but the final appointment will be made by the Acting Commissioner, probably soon after his return to Australia about the middle of June. The salary that will be paid will be a matter for negotiation, but within the range of £3,000 and £3,500.
page 628
Debate resumed from 2nd May (vide page 568), on motion by Senator Wood -
That the following paper be printed: -
Eleventh Report of the Standing Committee on Regulations and Ordinances, together with minutes of evidence.
– I secured the adjournment of the debate on this motion in order to study the contents of this important report, but I now find that my action has prevented the printing of the paper. I understand that there will be an opportunity to speak later on a motion for the adoption of the report, and, accordingly, I prefer to address my remarks to the subject-matter of the report when the motion for its adoption is under consideration.
Question resolved in the affirmative.
page 628
Debate resumed from 10th April (vide page 436), on motion by Senator Spooner -
That the following paper be printed: -
National Library - Report of Inquiry Committee, 1956-57.
Question resolved in the affirmative.
page 628
Debate resumed from 8th May (vide page 591), on motion by Senator Paltridge -
That this Senate approves the Trade Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Commonwealth of Australia signed at Canberra on 26th February, 1957.
– When I spoke previously in the debate on the trade agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Commonwealth of Australia I pointed out, in the quarter of an hour then at my disposal, that the agreement did not in any way measure up to the statements made in relation to it by Ministers of the present Government, and that it fell short of what they expected to obtain as a result of their negotiations. I pointed out also that in a statement in the press attributed to the Prime Minister (Mr. Menzies) the right honorable gentleman had stated that he had been distinctly dissatisfied with the Ottawa Agreement and its effect on Australian trade. He said that the Ottawa Agreement had militated against Australia’s export trade, and had caused a deterioration of our overseas balances, and that, in fact, this country had been hamstrung by it and by other trade agreements entered into with the United Kingdom Government. Those agreements, he said, had operated to the advantage of the United Kingdom, but to the disadvantage of Australia. I went on to point out that, regardless of what any government might do in a matter of trade agreements, even such a loosely drawn agreement as the one now under consideration, no good result could come from a trade agreement unless the government was prepared to grapple with the ever-increasing freight rates, or would itself provide some other means whereby our products could be transported to the markets of the world at a minimum cost. The Government has done nothing to solve that problem. Indeed, it has refused to deal with the most important subject of rising freight charges. Incidental charges on goods exported have risen also, in some instances by over 100 per cent. It is natural to expect that Britain will choose the best and nearest markets geographically in order to get goods at the cheapest rates. She has done that.
Notwithstanding all the criticisms levelled against the Ottawa Agreement by supporters of the Government, as well as by Opposition senators, we find that under the new agreement Australia’s position has not been greatly improved. The Ottawa Agreement gave to Great Britain preferences in respect of about 80 per cent, of the goods exported to Australia, whilst Australia was given a preference equal to only about 40 per cent., because the preferences in Australia’s favour were granted on a money value basis. It will be seen, therefore, that the position which existed prior to the entering into of this new agreement has not been disturbed greatly. That is a bad state of affairs.
The agreement contains certain definitions. The definition of margin of preference reads - “ Margin of preference “ -
Goods that are not entitled to imperial preference are subject to a customs charge, but if they come from Australia the charge is subject to a percentage reduction. Paragraph (b) of the definition reads - (“ Margin of preference.”)
Thus, the absolute lowest rate is imposed by us on imports from the United Kingdom, and a real advantage is gained by the United Kingdom.
The document before us can scarcely be called an agreement. It is something that has resulted from discussions that took place, and which led to the Prime Minister’s statement. While the agreement - for convenience we shall call it an agreement - was being negotiated, the British Government entered into a free trade plan with six European continental countries - Germany, France, Italy, Belgium, Holland and Luxembourg - under which those countries could sell to one another more readily. If the goods covered by the pact with those continental countries removed entirely the duties on their goods entering Great Britain, it is obvious that Australia cannot get any preference over them under this agreement. That is made more obvious when we consider that they are much better situated geographically to serve the British market. Therefore, unless the Australian Government adopts a more imaginative approach to this subject, our trade with Great Britain will still further deteriorate, because Britain will draw its requirements from those European countries.
I offer the further criticism of this agreement that, should it not work satisfactorily, there is no provision for its determination. We can, of course, discuss matters with the United Kingdom Government, and our representations can be sympathetically treated, but there is nothing definite or positive about the agreement. According to the White Paper issued by the United Kingdom Government in connexion with the free trade plan with European countries, the aim of the pact is not only to have a common market plan and a customs union of those six countries, but also economic integration and central institutions such as a European commission as well as a court of justice and a common assembly. That pact has been negotiated with countries outside the British Commonwealth of Nations. The provision for a court of justice means that any of those nations which is at all dissatisfied can have a case thrashed out, and determined. The establishment of a common assembly means that if the pact workssatisfactorily there is provision for it to be improved, or should it not work satisfactorily, for objection to be made. This agreement between Australia and the United Kingdom does not contain any similar provisions. It is, indeed, a milk and’ water document.
Article 1 of the agreement provides -
The United Kingdom Government and the Australian Government re-affirm the principle of maintaining mutually advantageous tariff preferences and declare their resolve to facilitate and extend commercial relations between their respective countries.
They are not mutually advantageous, because, after all is said and done, Great Britain is breaking down her tariff walls whereas Australia, as a developing nation, has to impose tariffs to protect her industries. The benefit of the agreement will be no better than 40 per cent, in favour of Australia; and 80 per cent, in favour of Great Britain. Article 2 reads -
The United Kingdom undertake that Australian goods which at the date of this Agreement were free of duties (other than revenue duties) on importation into the United Kingdom shall continue to be free of such duties. This undertaking shall not apply to goods in which there is no active Australian trade interest.
We are back to the same position that the Government complained about when it told the people of Australia about our overseas trade balances.
Article 3 reads -
The United Kingdom Government undertakes to accord to the Australian goods listed in Schedule A margins of preference not lower than those specifiedin that Schedule.
In order to understand the effect of the -schedules that are attached to the agreement, a person would have to examine extensively our customs and tariff regulations. With the concurrence of honorable senators, I incorporate in “ Hansard “ a press reproduction of the schedules. It reads as follows: -
Under the new agreement the United Kingdom Government will maintain the existing guaranteed margins of preference on the Australian goods listed in Annex “ A “ below.
It will guarantee the existing margins of preference on the goods mentioned in Annex “ B “.
Australia will guarantee a minimum preference margin of 71/2 per cent, on goods from the United Kingdom listed in Annex “ C “.
page 630
Lead and zinc.
Butter, cheese.
Fresh or raw fruit: Apples from April 16 to August 15.
Pears, oranges, from April 1 to November 30.
Grapefruit, from April 1 to November 30.
Grapes (other than hot house), from February 1 to June 30.
Fruits preserved in syrup (except grapefruit and certain types of fruit salad).
Dried fruits, eggs in shell, condensed milk, whole sweetened condensed milk, whole not sweetened milk powder and other preserved milk (excluding condensed milk not sweetened).
Honey, leather, tallow, canned meat, wheat, flour, macaroni, dried peas, dressed poultry, casein, eucalyptus oil, meat extracts and essences, copra, lactose, sausage casings, wattle bark, asbestos, sugar light wines.
As regards heavy wines, the United Kingdom Government further undertakes that the existing preferential margin of 10s. a gallon on wine, of a strength exceeding 27 deg., shall not be reduced without the consent of the Government of Australia, except if the United Kingdom Government so desires, in the event of a reduction in the United Kingdom duty on wine of this strength or insofar as it may be necessary to make marginal changes in the duty, and that the margin of preference shall not in any event be reduced below 4s. a gallon without the consent of the Government of Australia.
page 630
Coconut oil, currants, egg powder, egg pulp (whole or yolks), jam, millet, oats, pineapple juice, rice, whole, further processed after husking; sorghums, tomato juice.
page 630
Viscose rayon tyre yarn, iron and steel hoop (defined and widths), aluminium and nickel, primary shapes of non-ferrous alloys, tinplate leaf and foil (except gold leaf), cream separators, agricultural, horticultural and viticultural machinery.
Steam engine indicators, revolution and speed counters, zinc refining retorts, &c.
Stitching, sewing and knitting machines.
Earth-moving, mining and metallurgical machinery, mowers (field), machines, machine tools, ball and roller bearings, metal working lathes, road making machines, cement making machines, stone crushing machines, cranes, conveyers, &c.
Tiles (inserted type, cemented), carbide, measuring and controlling instruments, sugar machinery, wood working machines, air and gas compressors and exhausters, portable hand tools, boot making machines, electrical cloth cutting machines, locomotives, tractor parts, steam and water turbines and parts.
Internal combustion engines, boilers and steam turbines, outdoor circuit breakers, other circuit breakers, switch units, lightning arrestors for power stations, voltage regulators, relays for power stations and other purposes, electrical control equipment, switches, fuses cut outs, relays, fuses, electrical regulating starting and controlling apparatus, dynamo electric machines, static transformers, covered cable and wire, electrical measuring and recording instruments, chain and chains of base metal, hand tools, dyestuffs, Portland cement, electrical porcelain ware, animal washes, weed and scrub killers, insecticides and disinfectants, ammonium sulphate, drugs and chemicals not elsewhere included in the tariff.
Various original equipment components for motor vehicles, fork lift trucks, plastic moulding materials, including pre-framed shapes, packings and packing materials, industrial blankets and felts, &c, metal cordage, cotton yarns, acetate rayon yarn, artificial yarns, sewing cottons (not household), lengths, vessels.
The margin of preference on lead, butter, cheese and apples will remain much the same. We are experiencing the greatest difficulty in marketing coco-nut oil, currants, egg powder and egg pulp and those commodities have been accorded a percentage preference. In other cases, there has been a return to the monetary preference which has been shown to react disadvantageously in times of inflation, from which, of course, we are now suffering severely and from which Great Britain is suffering to a certain degree. Annexure C shows that a whole range of items that we also are manufacturing will be accorded a minimum preference margin of 7i per cent. Every degree of preference that we give to Great Britain constitutes a real advantage to that country, so these cases must be watched closely.
Reference has been made to the advantages that have been obtained in relation to wheat; but members of the Australian Country party are not so voluble about the matter. They say, in effect, “ If we grow a hard wheat, which has a greater protein content, we will be able to sell our wheat at a better price “. That could be done whether or not the agreement existed. The effect on our marketing would be the same. What does the agreement provide? It contains a milk-and-water proposition in relation to wheat. Article 6 reads -
The United Kingdom Government, noting that the traditional share of Australian wheat in the United Kingdom market has declined in consequence of changes in world wheat marketing and the increase in the level of wheat production in the United Kingdom, will consider sympathetically any measures which may be found practicable from time to time, having due regard to their domestic policies and international obligations, to improve the opportunities for the sale of Australian wheat in the United Kingdom.
As an agreement, it means nothing. Because of competition from the Argentine, we now supply Great Britain with 12 per cent, of its wheat requirements, whereas formerly we supplied 24 per cent. If we complain about the situation, we will be told that regard is being had to Britain’s domestic policies. The same thing applies to the loss of other exports to Great Britain.
Paragraph 2. of Article 6 reads -
The United Kingdom Government and the Australian Government welcome arrangements for periodical discussions between the representatives of the United Kingdom flour millers and the Australian Wheat Board regarding sales of Australian wheat. They affirm that it is their desire and expectation that sales on commercial terms of Australian wheat and flour in the United Kingdom will amount to not less than 750,000 tons per annum of wheat, inclusive of the wheat equivalent of Australian flour imported into the United Kingdom each year.
The agreement contains no undertaking that that quantity of wheat will be imported by Great Britain. Tt merely expresses a pious hope. Paragraph 3 reads -
The two Governments agree that if in any year the quantity of Australian wheat and flour imported into the United Kingdom should fall short of 750,000 tons (wheat equivalent) or such smaller quantity as may be - offered by the Australian Wheat Board on commercial terms-
What is to be done? Will they do what is proposed to be done under the free trade plan of the European nations and refer it to an assembled body? Oh no, that will not be done! The article states - they will consult together at the request of either Government.
We will then be told that regard is being had to British domestic policies, and that, if we cannot place our wheat on the market at an economic price, it cannot be sold. The article continues -
In the event that such consultation is requested the two Governments will for this purpose establish an inter-governmental committee to meet in London to consider the reasons for the shortfall and possible solutions.
Why not guarantee it now? We will be fuddling and fumbling around, as the Government has already done for a considerable time, the result being that huge quantities of wheat await shipment from thi& country, whilst freight charges are rising all the time. Real confusion obtains.
– Yes. It reads -
The two Governments further agree that if such consultations should lead to an outcome satisfactory to both Governments either Government may call for a renegotiation of the terms of this Agreement.
At that stage, after everything has been messed up, they can ask for the agreement to be renegotiated. The two governments will have consultations, they will express sympathy to each other and will cry on each other’s shoulder. If that does not produce satisfactory results, an inter-governmental committee may be established to review the situation, and if that is not satisfactory - the agreement displays great expectation - we can negotiate a new agreement. If the parties to the agreement anticipated so much trouble, why did not they write definite terms into it?
Article 7 of the agreement reads -
The Australian Government undertake, except in respect of goods in which there is no active United Kingdom trade interest or on which no margin of preference was accorded at the date of this Agreement, to accord minimum margins of preference of -
That provision is of real advantage to Great Britain, but Australia can give effect to it only at the expense, to some degree, of the development of Australian industry in respect of many commodities, although not in respect of others.
So we find that we have here an agreement which does not change the position materially from the Australian point of view. We are prepared to extend preference to the United Kingdom. It is the desire of the Australian Labour party, and it is certainly my own desire, that an even flow of trade between British Commonwealth countries should be promoted. But if an agreement which, in its previous operation, worked so adversely to Australia, is rewritten, it should include some clauses which will ensure that it works with equity. If we suffer a disadvantage by importing goods from Great Britain, was we have done on occasions, Great Britain should guarantee to Australia that it will take from us exports at least of an equivalent value. If we failed to sell adequate quantities of wheat or some other commodity in Great Britain, because she would disadvantage herself by trading with us in those commodities, we should have opportunities of comparable trade in other commodities. If our trade with Great Britain falls out of balance, we should not be forced to rely on an agreement like this and refrain from negotiating agreements freely with other countries which, by their geographical location, present convenient markets to us. We should have an agreement to sell within the British Commonwealth of Nations, in free and proper bilateral trade, a certain quantity of our goods, which could be fixed at as low a figure as was considered safe, and beyond that we should develop our trade with those markets which are favorably situated to us from a geographical point of view. We have not done that. We have not expanded our trade with other countries to a proper extent. Great Britain, because of economic necessity, has no compunction about trading elsewhere. It is a manufacturing nation, which has to trade. We are willing and anxious to supply all the raw materials necessary to make Britain a strong trading nation, but we cannot continue to allow our trade to deteriorate by reserving this market for Britain, and restricting our trade with other countries where the trade balance is entirely in our favour.
A further aspect of the agreement must be reckoned with. I ask the Government to consider preparing a proper summary of our competitors who are subsidizing goods for import into the United Kingdom. They are making it impossible for us to sell goods on the English market at economic prices. The Government should consider doing something about that matter. Further, in relation to freights, the Government should give us some statement of what it is prepared to do to assist our exports to Great Britain. I should like the Government to give us, at some stage, an analysis of the White Paper issued by the United Kingdom Government on about 4th February, 1957, on the free trade plan which has been negotiated between that Government and various European governments, because it concerns various commodities in which we are vitally interested. If that free trade plan were agreed to, there would be good reason for an immediate move on the part of the Australian Government to negotiate a more satisfactory trade agreement with Great Britain. In any case, if the sympathy for our producers and exporters which is expressed in this agrement is to be given practical effect, the Government should move early to get something more positive, definite and real for Australia to base its economy, on.
– When we are dealing with the trade relationship between Great Britain and Australia, there are at least four factors which come into our consideration. I should think that these four factors are the relationship which exists between Britain and Australia with regard to trade; that which exists between America and Australia; that which now exists, and may be strengthened in the future, between Great Britain and Europe; and lastly, the relationship between Australia and America regarding Asian markets. The last-mentioned relationship has a very great effect upon Australia, particularly if we consider America’s enormous surpluses of agricultural products.
Senator Cooke has made some reference to the European common marketing plan. 1 also shall touch upon that very briefly. 1 think it is safe to say that American surplus stocks of agricultural commodities are a problem, not only to America but also to the rest of the world. It is a problem that we must consider in relation to this agreement. I know it is quite easy to say that America is the nigger in the woodpile, but let us examine the problem from America’s point of view. Between 1952’ and 1954, America did not lower the prices of its agricultural products to competitive levels.
– That was an agreement with the Labour government, which your Government has upset.
– From 1952 to 1954 America did not lower its prices. The matter had nothing to do with any country except America. In those years the other primary producing countries were allowed to sell their produce, which they did. While they sold their produce, America accumulated surpluses. These surpluses are due also to another factor, namely, the great advances that have been made in production
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techniques throughout the world. Let us never forget that America’s abundant production from 1945 to 1950 avoided the famine that faced Europe after the war. Let us be fair about that. Production cannot be turned off and on like a tap. If the United States of America and other- countries had not produced these goods and had allowed the world to starve, Senator Cooke would have upbraided, them.
In addition, European production has recovered also. Senator Cooke must know that the fight of the European countries to make themselves less dependent on overseas supplies is having a mighty big effect on the markets of the world. However, the whole idea of the -United States is to move its surpluses into consumption to prevent any glut on the world’s markets. Perhaps that is not designed wholly and solely for the benefit of other countries, but is simply a matter of self-protection. When we talk about American surpluses and how they are to be distributed to the world, let us believe that, as a result of some of the methods that will be adopted, some of the countries with . whom we have had no. trade in the past will be our future customers.
If we study the world to-day, we are led to believe that there are two great divisions. On the one hand we have Russia, and on the other the United States. But a third great division is rising, and it might have more power than either Russia or the United States. I refer to the latent power that a United Europe will possess. If European unity is brought about - and it could well be - then we shall see another great force in the world.
We have only to look at events of last October and November when the Suez crisis arose to realize that fact. When those events happened, there was an immediate economic crisis. That very factor has accelerated the European unity, movement for a common marketing plan. The intervention of France and Great Britain in the Suez Canal crisis was a blow struck on behalf of Western Europe. We must not lose sight of that fact. Even the hostility that was shown to that action by the United States - and it was rather intense - only strengthened the purpose of mind of the European nations to become united. It gave them a feeling of solidarity and, flowing from that development, is this idea of a
European common marketing plan. It gives every promise of success, both in trade and finance.
However, some of Europe’s problems in arriving at a common marketing plan for Europe arise from the fact that some nations have overseas territories with agricultural potentialities. Under a common marketing scheme, the member nations, having first abolished national tariffs, set up a single common tariff schedule for all goods entering the market area. That is the proposal of the countries concerned, but agreement has not yet been reached.
An interesting fact - and Senator Cooke did not mention this - is that Great Britain has favoured the free trade idea because of her Commonwealth ties and her system of preferential duties. What does that mean? Under the free trade plan, national tariffs are abolished, but each member nation receives the right to set up individual tariffs for imports from non-member nations. This fact compelled Australia to get the best possible trade agreement with Great Britain. The very fact that Great Britain realized the importance of Australia and any agreement she makes with Australia, has forced her - if I may put it that way - to tell the European nations that she has commitments to Australia and the other British Commonwealth nations. That relationship is the dominating factor that will guide Great Britain in agreeing to a common marketing plan that might be evolved in Europe.
The other great factor that will have a marked influence is the desire of France, which she has held since World War I., to build up her Moroccan and North African empire. France has had a long-range plan for a European-African community. France herself is potentially the richest agricultural country in Europe. Perhaps she is not as highly mechanized as are other countries, but France has enormous potentialities to produce the agricultural products that we grow. If she develops her African empire, the competition that we might have to face in the future is obvious.
If the common marketing plan for Europe means anything, and if it should include Tunisia, Morocco, Algeria and Libya, it is logical to expect that European capital and technique will be attracted to
Africa. If that should happen, there will be an enormous increase in agricultural production there. Those products will become available, not only to France, but also to the rest of Europe.
As I have said earlier, Europe wants to become less dependent on outside food supplies in case of war. France, Germany, Italy and the Benelux countries are vitally interested in the common marketing plan. Since Mr. Macmillan became Prime Minister of the United Kingdom, his Administration has developed closer economic ties with Europe. His visit to Dr. Adenauer of West Germany was most significant. It was the first visit paid to Germany by a British Prime Minister since 1938. Mr”. Duncan Sandys, the British Minister of Defence, might be described as the most dynamic disciple of European unity. He was born and bred a European. He speaks French and German fluently and has a great influence in the British Cabinet and on the Continent. He is in favour of a common marketing plan for Europe because it links very favorably with his defence plan.
It is a plain fact that, because of Great Britain’s economic difficulties, she must live closer and closer to her European friends. This European unity, and the movement closer together in a European federation is no idle dream. Those concerned hope to end what might be termed the civil wars that have occurred in Europe since 1914. One of the factors that will perhaps bring about unity in Europe is the common marketing plan. One of the things which we have to worry about, and which has been giving us a great deal of concern is whether this union under a common marketing plan may have a tendency to cause unemployment and perhaps reduce the prices of our goods. However, under our general set-up to-day I think that can be avoided. We should not worry on that score to any extent provided we meet, discuss our problems and arrive at some agreement.
I was interested in some of the remarks of Senator Cooke and other Opposition senators. I think it is fair to say that during this debate they advocated governmenttogovernment selling. That is, and has been, their policy. They also made certain remarks about what they did in the past. They lost sight of one important factor, namely, that the buyer of the goods has privileges. Just as the seller has certain privileges, so also has the buyer. I should like to remind Senator Cooke and other honorable senators opposite of some of the wheat sales the Labour party made when it was in office. I suppose they well remember the Scully wheat plan under which the Labour Government sold Australian wheat, for a period of five years, for 5s. 3d. a bushel - approximately 50 per cent, of its value. The Labour Government used the taxpayers’ money to pay to wheat-growers the difference between the price obtained from New Zealand through bad selling and the Australian price. Labour took £20,000,000 of the taxpayers’ money to pay to the producers.
– Only under pressure!
– Certainly under pressure! Labour had no concern for the wheat-grower, and was quite prepared to give New Zealand £20,000,000 in one hit.
– Of the wheatgrowers’ money!
– Yes, of the wheatgrowers’ money. That is socialism in practice. Do not put your hand in your own pocket, contribute the other fellow’s money! [ am very interested in these matters. I -well remember what was said in this chamber when honorable senators opposite tried to justify the sale, but even their attempts t justification showed that their consciences had been pricked. They had to admit that the great “ I Am’s “ were wrong.
Another interesting factor emerges regarding the selling of our goods. We heard last night of the wonderful things Labour did during the war in respect of defence. I well remember at that time that Labour -supporters said in this chamber, “We do not want to send our soldiers overseas. The only thing we should do in this country is to grow food and sell it to our allies. We are a great food-producing nation and our fundamental job is to grow food and sell it to our allies”. That is all right. The Labour Government sold it to our allies under lend-lease. But to what effect? Honorable senators opposite know as well as I do - and Senator Courtice who has been interjecting and who was in the Ministry knows - that the then Government -sold our goods for at least £200,000,000 less than the market rates. That was Labour’s idea of selling. When honorable senators opposite speak of governmenttogovernment selling they are thinking of the other fellow’s produce and his labour. They do not mind at what price they sell the fruits of his labour and they do not mind how impoverished he may become.
– Cut that out.
– The facts prove what I am saying. Why did the then government sell Australian wheat to New Zealand at 5s. 3d. a bushel? Why did it sell to America under lend-lease at less than the cost of production while at the same time it was paying through the nose for American goods? However, that one is one of the little sidelights.
When honorable senators opposite criticize matters like this agreement, it is sometimes good for them to remember some of the things the Labour Government did. I think that the plain fact is - and Senator Kennelly admitted it - that when we are selling our goods, whether it be to Great Britain or any other country, business is business. We are dealing with hard-headed businessmen. We need to get the best deal and at the same time we have to supply the best of goods. So, in these trade relations, provided we produce the goods and they are up to quality - and I can see no earthly reason why Australia cannot compete with the rest of the world not only regarding quality, but also regarding price - then I believe that this agreement is the very best we can get at the present time. I approve of it.
There is only one other thing I wish to say about this agreement and it bears on a remark that Senator Kennelly made. He said he visualized, in the near future, that perhaps we would have to subsidize Australia’s primary industries if we wish to sell our primary products overseas. He went a little further than that. He said that we would have to subsidize Australian manufactures so that we could sell them overseas. I think it is fair to say that he advocated we should subsidize our manufactured goods so that we could sell them overseas. Immediately afterwards, he chastised General Motors Holden’s Limited for charging more for their cars in Australia than they did overseas. If that was not the principle he was advocating, I wish to be corrected. Mr. Deputy President, I have pleasure in supporting the agreement that has been made between the two Governments.
– Senator Mattner has been such a funny fellow that I do not know just what he has been, trying to say. I do not think he touched on the trade agreement at all, other than to apologize for the Government’s having brought it into this chamber. All the other statements he made had no relation to this trade agreement, or even the commodities mentioned in it. If an honorable senator on this side had made statements such as Senator Mattner made to-day, he would have been told he was a biased fanatic. Every honorable senator opposite would have told him what a fanatical person he was for dealing with subjects such as have been dealt with by Senator Mattner this morning.
I am concerned with the trade agreement itself. Since 1952 or 1953, a tremendous amount of thunder and lightning propaganda has been issued by the Government. Ministers and all their supporters have said what a terrible bungle the Labour party made when it accepted the Ottawa Agreement and what a tremendous bungle it made when it agreed to the General Agreement on Tariffs and Trade. They thundered all over the world trying to make themselves believe they were going to do something to improve the situation. At the same time, they were trying to prove that the policies of Labour governments were wrong and that we had been selling Australia to somebody else. While he was dealing with the trade agreement, Senator Mattner apologized for the Government’s having brought it down. He pointed out that a better agreement could not be obtained because certain countries of Europe have arranged a free trade area. He says that that is the reason why we could not do better in this agreement. He made an apology for it, and the Minister did exactly the same thing.
Of course, there are some good things in this agreement. I should not like anybody to think that 1 believe that the whole of the agreement is wrong. It is part and parcel of the agreement that was signed by the Labour Government at Ottawa, and also it embodies some of the things that
Labour agreed to in the General Agreement on Tariffs and Trade. So that there must be some good things in it. Indeed, the Minister himself agrees that there are some good things in it. Let us look at the statements that he has made. He said -
This new agreement was signed in Canberra on 26th February. As I shall explain, it preserves security in the United Kingdom market for a number of important primary industries.
It does not make a new arrangement for the security of our primary products. It preserves the arrangements made for the security of certain primary products. The Minister went on to say that it secured a significant new arrangement for wheat exports. Under the International Wheat Agreement, we sold much more wheat to Great Britain than is provided for in this new agreement. Yet the Minister says that a significant new arrangement for wheat exports has been made! lt is a beautiful new arrangement! It reduces the quantity of wheat that we may sell to Great Britain to about two-thirds of the quantity that we formerly sold. It is significant, right enough. There is no question about that!
The agreement also provides that if we sell to the United Kingdom less than the stipulated 750,000 tons of wheat annually, at a commercial value - the commercial value being assessed by the United Kingdom Government, not by the Australian Government, or by the people who produce the wheat - there may be a conference with the Minister in the United Kingdom. So we shall see again more propaganda thunder and lightning going on in this country while the Minister and his staff “ nick off “ to England to have a conference with the British Board of Trade, because Australia contends that the commercial value assessed will not permit it to sell in the United Kingdom the quantity of wheat mentioned in this agreement. The significant point is that if there is any difference of opinion, if Australia insists that the commercial value assessed is wrong and, consequently, that we have been unable to export to the United Kingdom 750,000 tons of wheat in any one year, there is provision for the revision of the whole agreement - not only that part, but the whole of the agreement. In order to get one thing, we must sacrifice something else. That is the sort of thing that has been agreed, as the Minister himself tells us in his statement, yet he asks us to be happy and contented with the agreement.
Senator Hannaford, during his speech on this subject, read a portion of the Minister’s statement referring to the percentage of protection that we enjoy in Great Britain. Referring to butter, the Minister said -
For example, in 1932 the margin of 15s. per cwt. on butter was equivalent to about IS per cent, ad valorem, but at 19S6 prices the same margin was equivalent to about 4i per cent.
He mentioned other things, but he did not tell us what the margin of preference is to-day. It is still equivalent to about 4i per cent., compared with 15 per cent, when the original agreement was made. He did not tell us that, because he knows that inflation in this country has caused that fall. There is no other reason for it. The Minister said also -
We approached these new negotiations in 1956, therefore, with a knowledge that it was futile to ask the United Kingdom to increase our preferences.
Just before that, he said -
We had tried in 19S2 at the Commonwealth Prime Ministers’ Conference to get support for a restoration of the value of these preferences which were expressed in pre-war money terms. We gained little support.
That is the Minister’s statement - not mine. Then he said -
At the Review Conference of the G.A.T.T. in 1954 we tried to get the rules relaxed to a degree that would have enabled the United Kingdom to restore the value of preferences to us. We failed.
Then he went on to say that it was no use his going over there and asking for a restoration of the value of the preferences for Australian products imported into Great Britain, because the British Board of Trade held the whip hand.
We have got some concessions. There is no doubt about that. There is one concession in respect of imports from countries other than Great Britain. I think Article 9 of the agreement provides that by-law entry, free of duty, for foreign goods may be permitted provided similar goods are not available from United Kingdom sources. Previously, before advantage could be taken of by-law entry, the British Board of Trade had to agree that the goods concerned were not available in Great Britain. I admit that this is a concession, but I do not want to see the Government taking advantage of it to import goods from America when we can get them more cheaply from European countries. Furthermore, the concession does not deal only with preferences or rates; it deals with items. It will obviate the delays that have been occurring over the years due to the necessity to negotiate with the Board of Trade. We would tell the board that certain things were wanted in Australia and would ask whether they were obtainable in England. The board then made an inquiry and, probably, told us that some of the goods we wanted were available in the United Kingdom, but that it did not know from where we could get the remainder. That procedure caused delays, which will be obviated in the future. That is a good concession, but it does not touch the value of the preference that is given to Australian goods imported into Great Britain. There are other similar, small concessions which will be of advantage to us. The Minister said that our representatives did not begin the negotiations in the belief that Australia would obtain the restoration of higher preferences for Australian goods, and that our object was to hold what preferences we had and to improve our trade position by other means, particularly with respect to wheat. What has been done in connexion with wheat? Great Britain simply notes the wheat production position in Australia and agrees to do her best to make it possible for us to export to the United Kingdom 750,000 tons, provided we can land it there at a commercial price. And that is what the Minister calls an agreement on wheat! There is not much to be gained from that at all. England will buy wheat only if she wants it, and then she will buy it from Australia only if she cannot get it anywhere else.
The old idea that we must produce the commodities Great Britain requires and send them over there first has gone by the board with the economic changes that have taken place in other parts of the world. The position now is that we market our goods wherever we can and that unless we are able to compete on those markets at what is called a commercial price, we have no hope of selling wheat or anything else. Senator Mattner has referred to America. I am not worried about what America intends to do in connexion with wheat or anything else; I am concerned with getting our wheat away to overseas markets. Even if we gave some of it away it would be much better than allowing it to rot or to be eaten by weevils.
That brings me to Senator Mattner’s suggestion that the Labour party is not concerned with seeing that the producer gets’ a fair price. He stated that during the war period we sold wheat cheaply to New Zealand. That is so. We had millions upon millions of bushels of wheat here. We were unable to ship any of it with the exception of quantities that Great Britain arranged to take in her own ships. We ourselves had no ships which could be used for the transport of wheat. At that time, our neighbour and ally in the war, New Zealand, was in trouble, so we gave her wheat at a cheap price and made the people of Australia pay the primary producer the full price for his product. There was nothing wrong with that arrangement, and it did enable us to prevent some of our wheat from rotting away, malting, and so on, in the stacks.
The position is somewhat similar to-day. We now have millions and millions of bushels of wheat stacked in many parts of Australia. Probably the harvest will not be as good this year as it was last year and, therefore, we may be able to sell some of our stocks. But despite the great claims made about this trade agreement with Great Britain, we still have a quantity of wheat to sell to other countries. Is it not possible that we may be able to enter into a trade agreement with the masses in Asian and near-Asian countries for the sale of some of it? Apparently that is not to be done, because the Government says, in effect, “We will not have anything to do with them, they are ‘ Commos ‘ “. Honorable senators on the Government side never think that there may be people over there whom we can feed and clothe, whom we can help to overcome their difficulties, while at the same time clearing our stocks at the commercial price that will be demanded by the Board of Trade in Great Britain. If we are to believe Senator Mattner, we cannot have anything to do with Great Britain because she is going to produce what she needs, and what she cannot produce she will get from France, and what she cannot get from France she will get from South Africa, or from America, which is only 2,000 miles away. The honorable senator says we may as well shut up shop and not produce any more wheat for export.” But I believe that there are some people in Australia who are more optimis tic than Senator Mattner, that there are some who believe it is possible to produce wheat in excess of our requirements and distribute the surplus to people in many parts of the world who require food.
Making a comparison of the preference percentages given under the Ottawa Agreement and those we are to have under a new agreement, the Minister stated -
The Ottawa Agreement prevented us from narrowing these preferences. We badly wanted room to manoeuvre in the tariff field in trade negotiations, so we sought to get some freedom in the new agreement to lower the Australian tariff rates on foreign goods where those tariffs were higher than needed for the protection of our home industries.
By Article 7 of the agreement, we are to enjoy ad valorem preferences ranging from 7* per cent, to 10 per cent., but the significant feature is that the Government proposes to reduce the tariff on goods imported from foreign countries, other than Great Britain; in other words, it proposes to flood this country with goods that could compete with British goods, because the peculiar economic position of the countries from which they come enables them to be produced much more cheaply. I know nothing about the quality of these goods; they may be of inferior quality; I am dealing only with the question of importing them in competition with goods from Great Britain. I am concerned only with our 7i per cent, preference and the proposed alteration of the tariff preferment, which means overriding what the Tariff Board has done. Honorable senators on the Government side have said that they do not believe in the making of arrangements, that they believe in protection so long as this protection is brought about as the result of a decision of the Parliament itself. I point out that the Tariff Board was set up for the purpose of ascertaining and recommending the preferences necessary for the protection of Australian goods. I point out also that the Tariff Board makes its report to the Parliament and that the Parliament usually acts upon the recommendations contained in that report, although occasionally it does depart from them. I admit that the Government has a perfect right to do these things, but now it intends to reduce the tariff on goods imported from countries other than Great Britain, irrespective of the effect of those importations upon our industries and irrespective of the recommendations of the Tariff Board.
Sitting suspended from 12.45 to 2.15 p.m.
– Before the sitting was suspended for the luncheon adjournment I had reached the stage where, in dealing with Article 7, 1 was pointing out that it had the effect of allowing the Government to reduce the tariff on certain items imported into this country, other than British goods, and that in consequence the economy of this country was being affected. 1 now pass on to point out that in recent times there have been tremendous increases of freights, and that the cost of shipping goods between Australia and Great Britain has risen considerably. Altogether, there have been several such increases, but even since the negotiations for this agreement began they have amounted to at least 14 per cent. About the time that the negotiations started, freights rose by Ti per cent. That means that during the period of the negotiations freights have risen by at least 2 1 per cent. Under this agreement the Government makes provision to reduce tariffs while still retaining the 7i per cent, preference to Great Britain. That reduction may in some measure compensate exporters for the increased freights, but it will not make any difference to the people of Australia because the increased freights will offset the tariff reductions on imported goods. In other words, the reduction of the tariff that will take place will be about the equivalent of the 14 per cent, increase in freights on the carriage of goods between the two countries. I understand that provision is already being made to reduce tariffs, and probably an amending bill will be introduced. What we are doing is merely to provide in the agreement a means of getting over the difficulty caused by the shipping companies when i hey increased freights. The Government is forced to take that action because it could do nothing about the freights themselves. In order to get over the difficulty, it will be giving some concession to other countries as well, but that will not make any difference to Australia in relation to the goods imported from Great Britain. The only people who will get any benefit will be the overseas shipping companies. That is the kind of thing that the agreement will accomplish and, in my opinion, it is about the only thing that the Government could do.
Supporters of the Government are fighting like Kilkenny cats about these things. That is due largely to the pressure being, exerted on them by all sorts of people. In addition to the tariff itself, all sorts of other charges are superimposed. There is, for instance, a licensing restriction system in operation. I could criticize that system, but at the moment I merely say that it is assisting the distribution cartels in Australia tobecome so firmly established that no one elsewill be able to import goods under a reduced tariff. The position is that, in the first, place, the shipping companies get increased profits, and then the cartels, mainly thosecontrolled by British firms, although American business people are trying to butt in, will reap the benefit of all the work, that has been done in trying to get out of” a difficulty that the Government itself brought about.
Every supporter of the Government, both in this chamber and in another place, isapologizing for the agreement. We all knowthat “once an agreement has been entered into, there is no opportunity to alter it in any way; we must accept it as a whole or reject it as a whole. The general consensusof opinion is that the agreement is not asgood as it might be. Supporters of theGovernment have found it difficult to find! satisfactory reasons to explain why theagreement is not better than it is. Opponentsof the Labour party have indulged in someextraordinary propaganda directed against, the Ottawa Agreement, and the General! Agreement on Tariffs and Trade, and particularly against the Labour party’s fiscal policy, but to-day the same people are offering apologies for having brought before the Parliament an agreement which containsexactly similar provisions to those contained in agreements for which Labour governments were responsible, and which they undertook to review with a view to altering: them. The Minister told us that the new agreement will retain the same right of dutyfree entry of goods into the United Kingdom: as under the Ottawa Agreement. He went on to say that all the tariff preferences that were bound to us under the old agreement had been re-bound in the new one. Hethen set out to explain how in Gatt are attempt was made to alter the then existing arrangement, but that it was unsuccessful and so the old arrangement still remained. The Minister also pointed out that there have been some additional renewals of commitments, and some alterations, particularly in respect of butter and other primary produce which previously were on a percentage basis, but are now expressed in terms of money value, or so much per hundredweight. That does not alter the fact that the value of the preference has dropped from 15 per cent, under the Ottawa Agreement to 4i per cent, under the present agreement. The old rate of 15 per cent, has not been restored. The Minister went to some trouble to explain the statement.
Several other items have been included in the schedule. Pineapple and tomato juice have been included. Why should those items be selected? Australia manufactures a wide variety of fruit juices as distinct from fruit pulp. Perhaps the Minister will be able to explain why the item “ fruit juices “ was not included instead of the separate items of pineapple juice and tomato juice. In the case of these items, the preference is in terms of shillings and pence instead of being on the old percentage basis.
I have tried to point out that this agreement contains exactly the same provisions as were contained in the Ottawa Agreement and in Gatt. The only difference is that the percentage margin of preference that was granted by the Ottawa Agreement and, in some cases, in Gatt, has been reduced with the result that we have been placed in a worse position than we were in formerly. I know that the friends of the Government will again apologize and tell me why that has happened; but they overlook the inflationary trend in Australia which the Government has sought only quite recently to halt by measures that affect only the working people.
The Senate cannot alter the agreement. We can throw it out, if necessary; but, because it contains most of the benefits that were obtained by a Labour government and which this Government has retained, I do not think we ought to throw it out. For that reason, I do not oppose it. The criticisms 1 have made have related only to the operation of certain sections of the agreement and the manner in which they will affect the Australian economy. I leave the matter there.
– I rise to support the trade agreement that has been entered into between the Government of Great Britain and Northern Ireland on the one hand and the Government of the Commonwealth of Australia on the other hand. Before I proceed, I should like to refer to the contentions of Senator O’Flaherty, with which I totally disagree. All Opposition speakers, including Senator O’Flaherty and the Deputy Leader of the Opposition (Senator Kennelly), have stated how difficult it was for Australia to come to any arrangement with Great Britain when the Ottawa Agreement was entered into. That agreement was made in 1932 - 25 _ years ago. At that time, the agreement was fairly sound; but, because of changes in the Australian economy, its provisions relating to Australian primary products have almost been nullified.
Let me also say to Senator O’Flaherty that the difficulties of the present Government have been increased because of the General Agreement on Tariffs and Trade, to which a Labour government subscribed in 1947. Prior to that time, members of the present Commonwealth Government, when in Opposition, had offered their criticisms, but until they assumed office they did not know the magnitude of the difficulties involved. Only then did they realize the full force of the difficulties that confronted Australia.
The honorable senator also referred to the New Zealand wheat agreement. I do not know whether the wheat was sold or whether it was given away, but the contract price at that time was 5s. 3d. a bushel, and the average price of wheat to the Australian wheat-grower was 8s. a bushel. The deal with New Zeaalnd was made without the knowledge of the Parliament or the wheat industry. As the honorable senator said, the difference was later made up to the grower, but only after great pressure had been brought to bear on the Parliament.
Senator O’Flaherty also criticized the freight rates that obtain between Australia and Great Britain, and blamed the cartels or pressure companies. Rises in freight rates have not been the result of the activities of pressure companies. One of the great causes of the increase of freight rates is the wages and conditions under which Australian seamen, .wharf labourers, and others who handle cargoes, work. Since 1947, there has been a rise in overseas freight rates of only 48 per cent, or, in round figures, 50 per cent. Increases in other directions have been tremendous. For example, shearers’ allowances have risen by 215 per cent., stations hands wages by 179 per cent., and railway freights by 203 per cent.
I have before me information which shows the rise in freight rates on the Australian coast. Since 1947, the Western Australian Government shipping line has been forced to increase its freight rates from Fremantle to Broome by 72.7 per cent, and from Fremantle to Darwin by 63 per cent. The cost of shipping a ton of cargo from Fremantle to Darwin, which is a distance of approximately 1,800 miles, is now greater than the cost of shipping a similar quantity from Brisbane to Hamburg, a distance of 13,490 miles. The establishment of a government-owned overseas shipping line, as has been suggested by the Opposition, would be a step in the wrong direction. If coolie labour were used, there would be a howl from one end of the country to the other. If Australian conditions were observed, there would be an immediate rise of 50 per cent, in freight rates. So we can rule out that suggestion.
Senator O’Flaherty also stated that, when the Government presented this agreement to the Parliament, it offered an apology. I disagree with that statement. The Government did say that the agreement was not all that Australia desired, but it was all that we could get in the circumstances. Cheap food is vital to England, and I should say that, when she had an agreement that gave her cheaper food, it was essential that she should retain it in some way or other.
I congratulate the Minister for Trade (Mr. McEwen) and the Attorney-General (Senator O’sullivan) for the part they played in bringing about this new agreement. I congratulate*, too, the trade staffs of the Department of Primary Industry and the Department of Trade. I also congratulate She Minister for Trade upon the appointment of trade commissioners to various countries and the trade publicity that he has instigated in an effort to sell our goods overseas. The establishment of the Export Payments Insurance Corporation was a step in the right direction which will have a good effect upon overseas trade.
The Ottawa Agreement was reached in 1932, 25 years ago. It was supplemented in 1947 by the General Agreement on Tariffs and Trade, which had a term of seven years. The agreement which we are now considering has the advantage of being for a term of five years, with the proviso that either party may, on six months’ notice, raise any aspect for discussion. That is a very strong feature of this agreement, which is important to Australia’s changing economy.
The first objective for which our negotiators strove at the various conferences was to maintain the Empire preference which was established by the Ottawa Agreement. I am very glad indeed that they preserved that aspect and fought for improvements in other directions. The agreement retains all the good features of previous agreements with the United Kingdom, particularly of the fifteen years’ meat agreement, and forms a new basis on which the Australian economy can be built. The Government would be wanting in its duty if it did not warn both primary and secondary industry that the future economy of Australia, its imports and exports, will be based upon this agreement. Great Britain valued very highly the Ottawa Agreement, which it was loath to alter, because that agreement enabled Great Britain to obtain food at a satisfactory price.
The negotiations that preceded the .making of the agreement were long and difficult, and the agreement is an outstanding achievement by the negotiators. Wide practical knowledge on the ministerial level, and a very high degree of technical skill and great experience in the negotiators were required. There was a very fine combination of Minister and officials. There is now new scope for expansion of our exports and we will be able to revise our cost structure. I hope that primary and secondary industries will take advantage of the new agreement to improve the presentation and quality of their products and produce them more efficiently. Unless that is done, wc shall not be in a position to take advantage of the best features of this agreement.
Our position to-day in the production of wool is very favorable. In addition to an increased production this year of 6 per cent., the price has increased by 33i per cent., and these two factors will be of very great value in improving our overseas balances. The return from wool will increase by about £150,000,000. I read in a newspaper recently that our trade position has improved by £250,000,000 in the last twelve months, which is a considerable alteration in our financial position. This result has been brought about only by the exercise of very great skill in the management of Australian finances, and we were able to take advantage of the very favorable position in which wool production places Australia. The diversification of farming activities will result in the increased returns being spread over a greater number of primary producers. The small farmer produces about 50 per cent, of Australia’s wool clip, so he will gain a substantial benefit from the increase in price. It seems that wool will still comprise from 45 per cent, to 50 per cent, of our exports, lt is a most important product in our economy and it is on the up-grade. There are 30,000,000 acres of pasture in Australia and the Commonwealth Scientific and Industrial Research Organization assures us that ‘this may rise to 300,000,000 acres. The potential of primary production is, therefore, high.
Wheat is our second great export, and the return from its sale represents up to 15 per cent, of the total value. The position of this commodity is not quite so favorable. Dry seasons are affecting the areas sown. The area under wheat this year, I understand, is down by about 8,000,000 acres, which is a reduction of 25 per cent, on the acreage last year. The present area under wheat is only about half the acreage in our peak year, which, I think, was 1937. Wheat and wool combined account for about 60 per cent, of our exports. It is important that the wheat interests should try to improve the quality of their product.
This matter has been discussed in the Senate on a previous occasion, when it was contended that the grading of Australian wheat would be very difficult indeed, because great variations in soil, climate and rainfall preclude our producing a highgrade wheat over the whole of Australia’s wheat-growing areas. Instead of producing f.a.q. wheat, we should produce b.a.q., or better average quality, wheat. This would be a step in the right direction. This year, an inquiry from Japan related mainly to hard wheat, which comprises about 11 per cent, of our production. 1 do not know that any hard wheat will be available for sale to Japan, but we should take note of overseas requirements and try to improve our quality, if it is possible. Australia is particularly fortunate in that we have a low cost of production. I understand that we can produce wheat in this country 3s. a bushel cheaper than it is produced in America. We can take advantage of uptodate methods of production. We have a good rainfall and many other advantages for wheat production. With the production of wheat of a little higher quality, we could compete in any market in the world.
The balance of our products - butter, meat, dairy products, fruit, sugar and metals - cover up to 85 per cent, of our exports, and I believe that we can hold our own with most of them. The market for our butter overseas is not particularly buoyant just now, but the market for dairy products generally is perfectly sound. This Government has just concluded a new five-years agreement with the dairy interests which will guarantee prosperity for the dairying industry for a further five years.
Our meat exports are slightly below those of last year, but a new fifteen-years agreement is operating and has been of great help to meat producers. It is notable also that Great Britain has agreed to an increase of 50 per cent, in the meat that we can export to places outside Great ‘Britain. That will bring the total quantity of meat in that category to 15,000 tons a year. I hope that improved management and efficiency in the production of these commodities will lead to an improvement In the quality of the goods and lower costs of production.
Senator O’Flaherty referred to freight, and I also have mentioned that matter. I hope that freight charges will* not be increased, but I believe that probably they will rise. The gesture of the Minister for Trade in easing tariffs on 1,000 import items to the extent of percentages ranging from 7i per cent, to 12i per cent, is not only a gesture to the trade” delegation which is going overseas, but will also help tremendously when we are trying to effect sales to and agreements with overseas companies. lt is vital that quality and quantity should go hand in hand with a reduction of costs in both primary and secondary industries. Secondary industries depend heavily upon our primary industry exports. The policy of secondary industries of trying to reduce costs and lower prices in Australia is a step in the right direction. The cost situation is of paramount importance to Australia in both primary and secondary industries, and 1 hope that the Government will take full heed of the situation and endeavour to improve it.
An important factor in the Australian economy is the use of invested capital to the fullest possible extent. One criticism of overseas investors is that we go to great lengths to get capital invested in Australia, but as soon as we get it here, we put restrictions on its use. We should do something about that. Until we in Australia have a proper regard for the job in hand, and can induce the people to produce with an eye to the national interest, we will not get much further ahead. I support the motion that is before the Senate.
.- I have a few observations to make about the new trade agreement between Australia and the United Kingdom which actually takes the place of the Ottawa Agreement that was signed in 1932. I have always felt that the Ottawa Agreement was weighted very heavily against Australia, and I can see nothing in this new agreement that alters that imbalance. It does not contribute anything to a mutual, reciprocal agreement on a brotherly basis. The Minister for Trade (Mr. McEwen) has said that the agreement will restore the balance in reciprocal preferences. My belief is that the imbalance in reciprocal preferences which was introduced with the Ottawa Agreement has been merely perpetuated with one or two isolated exceptions.
It has been said that the new treaty with our greatest trading partner is a solemn contribution to stability in our international trade. During the past three or four years, this Government has known some of the difficulties of trying to maintain some stability in our overseas trade balance. Very unpopular measures, in the form of import restrictions, with periodical changes in those controls, have emphasized the great change that has taken place in the economic rela tions between the United Kingdom and Australia since 1950. Seven years ago we had a regular favorable trade balance each year of £500,000,000 to £800,000,000. During World War II., trade agreements ensured that our side of the ledger was always in credit
The Ottawa Agreement - the forerunner of this new arrangement - was born at a time of great economic stress. A great economic depression had hit the world. In the course of the ordinary economic cycle, the people had previously been riding a boom after World War I. From 1925 to 1927 there was a period of great prosperity and boom, and the succeeding bust was a great shock to those engaged in trade throughout the world. As a unit of what was then the British Empire, we found it in our interests - just as did the United Kingdom also - to make trade arrangements such as the Ottawa Agreement so that at least some remnants of our trade could be maintained on a sentimental level. In one respect, the Ottawa Agreement was a sentimental agreement.
The only information 1 was able to gather from Senator Mattner’s speech was his statement that we are dealing with hard-headed people in the United Kingdom. He can say that repeatedly and I will still agree with him. Speaking of the Ottawa Agreement, and the new agreement that is now under discussion, the Minister for Trade has stated repeatedly that many reasonable propositions that were put up to the hard-headed United Kingdom negotiators were refused. Senator Wardlaw approached this matter objectively, but he was not able to show many advantages that will be derived from this agreement because, like the curate’s egg, it is good only in parts, and they are very small parts.
Senator Wardlaw said that cheap food was vital to the United Kingdom. I agree entirely, but cheap food is also vital to the Australian people. This agreement will do nothing to alter the present state of affairs under which the Australian consumers are subsidizing our basic primary products on the United Kingdom market. It is increasing our cost structure. The mere fact that such a discrepancy exists between the prices of eggs, butter and other commodities on the English and Australian markets, as the result of a virtual subsidy being paid by the
Australian consumers, affects the base on which our cost of living index is established. Those costs are taken into our general cost structure and decrease our capacity to compete on the world’s markets. We have had to impose drastic import restrictions in order to keep some measure of balance in our trade relations with the United Kingdom. Nothing has been done to alleviate that position and a very unfavorable agreement made with the United Kingdom at a time when the pressure was strong on us to protect our very small share of world trade has been perpetuated.
One of the bad features that have developed has been a disappearance of effective preference for Australian goods oh the United Kingdom market. It is only in the recent past that the matter of Id. a bushel difference between Australian and Argentine wheat was sufficient to sway the hard-headed British negotiators, to whom Senator Mattner referred, to decide in favour of Argentine wheat in preference to the Australian product. There does not seem to be reciprocity between the two parties to this agreement. Honorable senators will remember that Australia made a tremendously important move in the early 1930’s when it gave Great Britain an advantage over other countries, by acceding to the clamour for the depreciation of the Australian currency by a substantial variation of the exchange rate. We had tied up our markets mainly with the United Kingdom and at the same time pur currency was more or less deflated. This gave the United Kingdom traders a tremendous advantage. Apart from slight variations, that exchange rate in favour of the United Kingdom still obtains. These one-sided preferences, as far as I can see, have been perpetuated in this agreement, giving Great Britain the advantage of selling an increased quantity of goods in Australia and placing Australia at the disadvantage of selling a decreased quantity of goods in Great Britain. Great Britain also has the advantage of a favorable exchange rate. Any attempt on the part of Government senators to convince the Opposition, and the people of this country, that there have been any overall gains from his agreement is ridiculous. I believe that sentiment, which is admirable between members of the British Commonwealth, should be . reciprocal. I should like to read a passage from the speech delivered by the Minister for Shipping and Transport (Senator Paltridge). He said -
Our first objective was to preserve the great principle of mutual preference established and confirmed at Ottawa. This principle’ has been expressly re-affirmed in the new agreement in Article I.
In hundreds of cases, the preference has become more and more one-sided. The preference we extend to British goods has been maintained or increased, and, British preference extended to our goods has been the subject of the particular whim of those people who are dealing with our goods in Great Britain. The Minister continued -
In particular, the Government wanted to retain the protection for our exports which the existing preferences and rights of duty free entry gave us in the United Kingdom market. We had tried in 19S2 at the Commonwealth Prime Minister’s conference to get support for a restoration of the value of these preferences which were expressed in pre-war money terms. We gained little support.
The whole point is that the set of values were weighted in favour of the United Kingdom. As Senator Mattner said, the British are hard-headed businessmen. They saw we were on the begging end in 1932, when the economic blizzard had hit us probably harder than it had hit- other countries. About 300,000 of our 6,500,000 people were unemployed and walking the roads. The price for super fine wool was 9d. per lb. and 3s. 9d. and 4s. a bushel for wheat was sought after by our farmers.
– It was ls. 9d. a bushel.
– That is right. I think ls. 9d. was the prevailing price for wheat at one time. Honorable senators have to see the position in the right perspective when governments enter into these so-called reciprocal agreements, and the United Kingdom preferences are worked out in percentages and those of Australia in money values. The Minister said that in some cases the value of our preference has been reduced to as little as 4i per cent. His words were -
In 1932 the margin of 15s. per cwt. on butter was equivalent to about 15 per cent, ad valorem, but at 1956 prices the same margin was equivalent to about 4i per cent.
That was a real, old hire-purchase or thimble-and-pea trick. I am not certain but I think it was about the time that agreement was sighed that the exchange rate was altered.
I think that Australia went off the gold standard about September, 1931. At any rate at the time of the signing of the Ottawa Agreement uncertainty existed. That, in itself, had a tremendous impact on money values on our side, but did not affect the United Kingdom because its values were worked out on a percentage basis. That situation should have been one of the first things to be stabilized in the remaking of this agreement.
If we were to exclude wool, which plays such a big part in our economy, from the agreement, the rest of the agreement, as far as it relates to our markets, would leave us living on a shoe string. I suppose it could be said that the uncertainties and the tensions throughout the world have had a big influence in bringing about the high prices that have been obtained. Prices were high in 1951, and then they slumped a little. They have now gone up to very remunerative levels. As I have said, international tension has probably had a big effect on the prices that other countries are prepared to pay for our wool.
There are now added uses for our wool. It was once thought that synthetic fibres would make inroads into wool, but it is now quite on the cards that the combination of synthetic of fibres with wool will increase the demand for wool to unheard-of proportions. For instance, suits made half from wool and half from synthetic fibre, and weighing only 2i lb., are now available to people living in tropical or sub-tropical countries such as China, India, Pakistan and Ceylon. A cotton suit weighs 3i lb. What a great field for wool is being opened up! This is not due to the Ottawa Agreement or any other agreement. Wool just happens to be, by the grace of God, a fibre that can be produced efficiently in our climatic conditions. It enables us to enjoy the high level of prosperity that we enjoy to-day.
In passing, I should like to remind the Senate that after 1932, when the Ottawa Agreement was signed, there was a period of international depression and international difficulty, during which we had difficulty in obtaining markets for our goods. Then the war scare started in 1938. So we gained only six years of advantage, if there were any advantages to be gained from the Ottawa Agreement. But after that it was a one-sided agreement, because after the
Munich crisis we sent nearly all of our wool to the United Kingdom. Of course, we were dealing with a hard-headed people at the trade level, but we had an obligation to assist the war effort. Our wool was disposed of through the Joint Organization, and eventually a substantial sum was distributed amongst our wool-growers as their share of the profits of the Joint Organization’s sales. The United Kingdom Government got a magnificent rake-off from what was, to all intents and purposes, a part of Australia’s war effort. That arrangement continued throughout the war years and until 1951, when we had a credit balance in the United Kingdom of from £600,000,000 to £700,000,000. So only for about ten years, at the most, have we had any advantage at all from the Ottawa Agreement. We have been the generous nation under the agreement.
I do not want what I shall say now to be construed as a general criticism of the British people. I can make my point in this way: Let us assume that a boy grows up on a farm. He is a good boy and he learns to do everything connected with the farm as well as his father can do it. If, when he reaches the age of seventeen or eighteen years, he is still getting only 10s. or 12s. a week, as he was when he was younger, the father must give him more money. If he does not, the boy will leave, but that would disadvantage both the father and the son, because their mutual interests would be divided. The same applies to Australia and the United Kingdom. We are developing our nationhood. We have been as generous as possible to the United Kingdom throughout her years of adversity, yet she drives a very hard bargain with us at the trade level. She has inflicted these somewhat harsh terms on us and has refused to compromise when our Minister has tried to negotiate. On many occasions when we have put forward reasonable propositions they have been rejected by the United Kingdom negotiators.
The United Kingdom should realize that the days of the Empire are over; and that the days of the British Commonwealth of Nations lie ahead. England has been called the shopkeeper of Europe. Until recently, she has had her dominions and her colonies - her Empire - from which to draw the basic raw commodities for manufacture into goods for sale to other countries. But those days are slipping into the past. In my opinion, unless the United Kingdom recognizes the great future that lies ahead of Australia and is prepared to encourage her artisans, craftsmen and people with know-how to pick up their industries holusbolus and transfer them to the New World, she will find that, no matter how many trade agreements or other agreements she makes, her position in the world will deteriorate year by year. A one-sided agreement such as this is, figuratively, only a piece of Elastoplast put over a sore. As the sore spreads, it will come out from under the sides.
Government senators have done their best to cover up for the Minister, who had a most difficult task to perform. He was bound to pay regard to sentiment, strategy and self-protection. I believe that he did the best he could, and probably he spoke, at times, with his tongue in his cheek. Possibly, he would have preferred Australia to get into the stream of international trade. He would have preferred to say, “ All right, the time has come when we shall have to make our own set of agreements where it pleases us to do so. We have nearly 10,000,000 people. We are going to turn where it suits us and get in on this trade business in a big way “. Possibly, from a short-term point of view, we would have gained something from that, but it is questionable whether, in the long term, we shall really gain anything from this agreement. An apologetic attitude has been adopted by the Minister and his supporters, because they have been unable to point to any real advantages that will accrue to us, except in relation to tomato juice and pineapple juice. Generally speaking, we expected much more generous treatment from the United Kingdom negotiators. I was never in favour of the Ottawa Agreement, because I thought that it was weighted against us, but I am even less favorably disposed towards the new agreement.
Question resolved in the affirmative.
page 646
Debate resumed from 8th May (vide page 622), on motion by Senator O’sullivan -
That the following paper be printed: -
Australian Defence - Statement by the Prime Minister in the House of Representatives, 4th April, 1957.
– I shall preface my remarks by making some reference to the criticism that has been expressed by the Opposition in relation to defence. I think, sir, that 1 could summarize the Opposition’s criticism of the Prime Minister’s remarks by saying that the Labour party feels that the scale of effort bears no relation to the size of the Defence Vote. I think that would be a fair summary of the Opposition’s criticism, and I wish to say one or two things about that now. In the first place, I suggest that to argue the question logically, we must have regard to the state of Australia’s defence forces in 1949. I think I am correct in saying that hardly ever before in the history of Australia were our armed services in such a deplorable state. Let us compare the position of the three armed services then with the present situation.
Taking the Army first, I think it would be correct to say - I challenge the Opposition to prove that I am wrong in this - that there was not one section of any Army unit which was properly battle-trained and equipped to take the field at a moment’s notice. What is the position to-day? We have a fully equipped and battle-trained unit in Malaya which, in fact, has been in operations for several years. We have a fully-equipped and battle-trained brigade group, a not inconsiderable number of fully trained men, who could be put into the firing line within a month, and, in the reserves, we have the best part of three militia divisions partly trained. All that has been achieved in the short space of six or seven years, and, as everybody knows, we have also conducted an arduous campaign in Korea, again with a fully equipped and battle-trained series of fighting units.
I come now to the Air Force. In 1949, we had seven squadrons in the Air Force. Five of them were Mustang squadrons. They were obsolete in 1945, but we still had them in 1949! We also had two obsolete Lincoln bomber squadrons in that year. We did not have one modern aeroplane operationally serviceable in the Royal Australian Air Force in 1949. It looks very nice on paper to see we had seven squadrons but they were not seven effective squadrons; they were paper squadrons.
What is the position to-day? We have eight fully operational squadrons complete with modern aircraft. We have one squadron of Meteors, two squadrons of Sabres, one Neptune maritime reconnaissance squadron and two squadrons of Canberra light bombers, plus two transport squadrons. It is a modern air force that can take the air at a moment’s notice. It is fully equipped with proper ancillary maintenance units. That is where we have gone in the six or seven years during which we have had the responsibility of organizing the defence of this country in the air.
Now let us look at the Navy. Last night, the Leader of the Opposition (Senator McKenna) made some play on the fact that the Labour Government had brought out an aircraft carrier. That is true. It did. But it is also true that the Labour Government did not pay for it; this Government had to find the money to pay for it. Senator McKenna also overlooked the fact that this aircraft carrier was discovered to be obsolete shortly afterwards. It could not take a jet aeroplane on its decks. It had to be scrapped, and is now being used as a training carrier. It is no great feat for a government to buy an obsolete ship and then claim in this chamber that it has done a fair job by the Navy.
Apart from that particular vessel, not one other ship in the Royal Australian Navycould be regarded as modern in 1949. None of them was properly equipped for modern warfare at that time. What is the position now? We have an aircraft carrier which, judged by any standards, is modern. We have three Daring class destroyers. They are in fact cruisers. One is now commissioned and the other two will be commissioned very shortly. We have three Q class, very highly effective anti-submarine destroyers. We have five ocean-going minesweepers. All these ships have been obtained since 1949. We have acquired one fast 20,000-ton fleet tanker, and we have five squadrons of modern aircraft for our modern carrier. They are Sea Venoms and Gannets. In addition to that, we have four modern anti-submarine frigates under construction. I mention these things because the whole gist of Labour’s attack on the defence policy of this Government is to the effect that we have done nothing while Labour did a great deal towards the defence of Australia when it was in office.
One of the reasons why we have spent £1,200,000,000 and not something less on defence is that in 1949’ our fighting services were in such a deplorable condition that the Menzies-Fadden Administration had virtually to start from scratch and build them up. If our friends in Opposition complain that the amount expended seems a bit high, it is no fault of ours. You cannot start to build up three armed services from nothing and not expect to pay the bill.
– According to the honorable senator, it seems that we must start every ten years from nothing. There was nothing in 1939 and he says there was nothing in 1949.
– I might say to Senator Kennelly that you do not start every ten years; you never stop. Modern armaments become obsolescent very rapidly. In this technological age, we cannot afford to pause one minute in research, development and experiment for the improvement of equipment. I suggest that for five years after 1945 the Chifley Government did nothing towards improving our defence services with the inevitable result that in 1949 we had three obsolete fighting services. To use a common expression, they could not “ fight their way out of a paper bag “.
– They could not do better to-day, could they, even after all this expenditure?
– That is not what our allies thought about our men in Korea. I remind Senator Kennelly that the reports about our fighting units in Korea did suggest that they were some of the best in the world. Perhaps my friend has forgotten that we had a war in Korea not long after the present Government came into office. Although the Opposition is entitled to criticize our defence policy, it is on thin ice when it endeavours to show that its efforts were comparable with the present Government’s fine achievements.
I turn now to make some observations in relation to the Prime Minister’s speech. The defence of this continent can only be formulated against the background of certain fundamental questions such as the following: Who are Australia’s potential enemies; where and when are we likely to be called upon to fight them; and, perhaps most important of all, who, in those circumstances, will be our friends? Having established who our friends are likely to be, a further question is: What kind of support can wc expect from them? Until those questions are answered no nation, and Australia is no exception, can formulate a defence policy or make decisions relating to the composition, structure, size and nature of its defence services, or their cost. The Prime Minister had those fundamental questions in his mind when he made his speech. He told us that we must be prepared for iwo kinds of war - a total war, with which we are familiar, and a limited war, with which also we are well acquainted. He added that the possibility of a total war was not so great as it had been in recent years, but he warned us - and I entirely agree with his analysis of the situation - that limited wars were quite possible in the near future, and probably for some time to come. He went on to say that, having regard to the factors that I have mentioned, his Government had decided on certain important things. He told us that it was taking action to maintain and keep up to date our armed forces, particularly in regard to aircraft and other weapons. He then made what was to some a rather revolutionary statement when he said that Australia would, to some degree, standardize its equipment with that of the United States, particularly in the direction of providing improved weapons, aircraft, artillery and other equipment. Most of the answers to the questions that I have postulated are known. We know who our potential enemies are, or at least, we know most of them. We know, too, who our friends will be, and we have a fairly accurate idea of where and when we may be required to fight. Against the background of that hypothesis, I propose to discuss certain aspects of our defence organization, and then to say something about the factors that affect our general strategy in defence.
The first aspect of our organization to which I wish to refer is compulsory military training. Our Defence Act still provides that only persons who volunteer to serve overseas may serve outside Australia. That is an antiquated idea in our defence legislation, and the Government must certainly look at it again very shortly. The idea of a voluntary force to serve overseas is popular with the Opposition and also with many people throughout Australia. We must reconsider it before we forget what happened in World War II., when we had two Australian armies fighting side by side to defend this country. There were some fine fighting men who were not allowed to volunteer and because of that they earned the unfortunate appellation of “ choco “ for the whole of the war. We should not forget how those “ chocos “ fell in defence of Rabaul alongside their brothers in the Australian Imperial Force. The time has come when we must consider whether in another war, either a total war or a limited war, a defence service can be planned on the basis of a volunteer army for overseas service and a compulsory army at home.
– We cannot have a volunteer army while we accept conscripts from other countries to fight for us.
– That is so. The position is becoming more acute as our armed services are more technically trained. How can we plan for any war unless we know where our technicians are to be found, and where they can serve best? That can be ascertained only by adopting a completely compulsory service organization. After all, we accept the proposition that compulsory service is desirable for national service trainees. There is no logical reason why we should not adopt the same principle as that which operates in every other democracy. I suggest that, before another war breaks out, the Government should review the Defence Act, and plan systematically for the defence of this country, and so be ready to meet any emergency that might arise. It is true that old traditions which support the volunteer army principle still reside among us. I have met numbers of people who believe in it, but I believe that that tradition must give way to the reality of modern technological warfare. We can still preserve the volunteer element within the framework of compulsory service. There will be many hazardous duties to be undertaken by men of courage and spirit who will be prepared to volunteer for them within that compulsory framework. We shall need commandos, and men trained as specialized jungle fighters, paratroopers, and so on. Those activities will give scope for volunteers within the framework of the compulsory organization. From the national point of view, I do not think there is any real merit in preserving the volunteer system any longer, and, therefore, I urge the
Government to give consideration to this aspect of the Defence Act before it is too late. 1 desire now to refer to another aspect of the personnel of our fighting services, and to mention particularly appointments to the position of Chief of the Air Staff. We have adopted the practice of retiring the officer holding that position after three years. Air Marshal Sir John McCauley has just retired, and Air Marshal F. R. W. Scherger has taken his place. Air Marshal Sir John McCauley retired at the very zenith of his effective mental powers, and Air Marshal Scherger will retire in three years’ time while still a comparatively young man. If we look at it from the economist’s viewpoint, it has cost the nation a large amount of money to train him. How much more will it cost this country when it loses the services of Air Marshal Scherger so early in his career? I think that the term of service of our Chiefs-of-Staff is far too short. If. the Government wishes to retain that principle, surely it should adopt the. British system and rotate the appointment rather than have a man retire after he has completed his period of service as a chiefofstaff. In that way, we would retain the services of these brilliant men and not throw them out, as it were, at the peak of their careers and force them to endeavour to find a position on some board of directors.
I leave the subject of organization and now refer to the question of equipment. We have been told that, in order to standardize our weapons, to a point, with those of America, the Army is to use the Belgian FN rifle and the United States 105-mm. field gun. The Air Force is to have the Lockheed F104 interceptor fighter and the CI 30 transport aircraft, again in order to standardize our equipment, to a point, with that of America. I do not think any one can object to that policy, and I shall not weary the Senate at this stage with arguments either for or against it except to refer to one important aspect - the manufacture of American aircraft in Australia.
The Government has announced that it proposes to manufacture the Starfighter in Australia. The manufacture of aircraft in Australia is a highly contentious matter: for twenty years, to my knowledge, it has been argued both in and out of the service. There are arguments for and against the local manufacture of service aircraft. It is said, on the one hand, that there is a great deal of merit in the argument that, unless we manufacture our aircraft locally, we will suffer in time of war because we will not be guaranteed regular supplies of aeroplanes from America or Britain, as the case may be. Of course, that situation arose during World War II. At times, we were desperately short of American aircraft, to the great detriment of the morale of some of our fighting men. That is a very substantial argument in favour of the manufacture of at least some types of aircraft in this country.
However, there are arguments against the proposition, and I shall mention them very briefly. The first is this: In Australia, with its comparatively small resources and its comparatively few highly skilled technicians, by the time our manufacturing industry tooled up and produced a modern aeroplane such as the F104, it could be obsolete. Our experience has shown that to be possible. During World War II. the Beaufort aeroplane was obsolete by the time Australia had produced it.
Experience furnishes another reason against the local manufacture of such aircraft. The manufacturer not only has to complete the job quickly but also must be thinking about what will take the place of the aircraft he is manufacturing. In fact, he must have the know-how and resources to enable him to develop its successor. That requires a considerable amount of research and technological information and highly trained, skilled aeronautical engineers. I suggest that, even if Australia does produce the Starfighter interceptor aircraft, it has not the know-how to proceed with the research and development that is necessary for the production of its successor, and that is just as important as is the manufacture of the existing unit. There are probably other reasons that I have not the time to mention both for and against the manufacture of fighter aeroplanes in Australia.
To sum up the situation, I should say that the Government would be ill advised to proceed with the manufacture of this aircraft unless certain things come to pass. First, I think that we should not build it with our own technicians; I do not think we have enough of them. We should invite the Lockheed company to come here, and perhaps invite the investment of some of its capital as well to enable it to do the work, with our assistance of course. In that way, we might be able to build the F104 aeroplane before it becomes obsolete. I am certain that we will not be able to produce it before it becomes obsolete if we build it ourselves.
The other suggestion I have to offer regarding the local manufacture of such aircraft is that, in view of our restrictive requirements, we could try to persuade some of our friendly neighbours to purchase some from us. If they did so, we would be able to produce them more economically. I am thinking of such nations as New Zealand. Thailand, the Philippines, and the Malayan Federation, all of which have or will have air forces. If we could persuade those countries to standardize on that particular aircraft, and if we could make it for them and for the American forces in the western Pacific, we could establish an industry that would be self-supporting and which could produce an economically costed aeroplane before it became obsolete. I suggest that, subject to what I have said, it would be unwise for us to attempt to manufacture such a highly complicated unit in Australia.
Having said that, I wish to make some remarks about the factors that affect Australia’s defence strategy, policy and planning. The Prime Minister (Mr. Menzies) has referred to the two kinds of warfare that might occur - the global war and the limited war. As I have already indicated, he has informed us that the possibility of a global war is more remote than it has been heretofore. Of course, he could have added that the only reason why we have not had a total war on our hands on half a dozen occasions during the last six years has been that we have convinced our enemies - I refer to Russia and China - that a global war would not pay. I honestly believe that that is the reason why there has not been a global war. They have been convinced that a global war would not pay because of the superiority of our friends. Britain and America, in nuclear weapons. I feel that Russia has been forced to alter her overall strategy for that reason and that, consequently, a series of limited wars has been started, some of which will no: end during this Government’s period of office. Such wars are always breaking out. Three have occurred in Eastern Asia in the last six years. There has been one in Korea, one in Indo-China, and there is still sporadic fighting in Malaya. I do not think that we have got to the real cause of these limited wars. I do not think that we have been able to satisfy Russia and China that limited wars will not pay. That is the problem that this Government and every other democratic Government will have to face in the near future.
I wish to make some further reference to this problem of limited war, because quite obviously it is something that affects us in Australia directly and will affect us for many years to come. The Prime Minister dealt with limited wars at great length in his speech. He referred to the type of limited war that we may expect in Australia. Let me quote very briefly from page 572 of the “ Hansard “ report for the current sessional period, whereon the Prime Minister’s views on limited wars are set out. He said -
If a “ limited “ war broke out in South-East Asia and did not at once develop into a “ global “ war, it would, in all probability, affect those countries in South-East Asia whose safety and independence are significant and perhaps vital for us. For example, any recrudescence of Communist aggression in South Viet Nam, in Laos or Cambodia, in Thailand or Malaya, would at once affect the safety and defence of Australia.
He concluded with this important observation -
We cannot stand alone; and therefore we stand in good company in Seato, in Anzus, and in Anzam.
Nobody can quarrel with that analysis of the situation. We have in Seato, Anzus, and Anzam, very fine defence organizations for collective security to prevent any overt act on the part of Communists from Asia.
But I want to take this story of limited war a stage further. I suggest to the Senate that there is another kind of limited war that will not involve Seato or Anzus. We have just had one in Suez, and there is a possibility, I think, of our having a series of these limited wars, wherein we will find that the United States might not assist us and even perhaps some of the units of our own British Commonwealth might not only not assist us but might also openly oppose us. A few years ago, of course, I would have been probably scoffed at for suggesting that organizations like Seato and Anzus did not cover all the possibilities of limited war for Australia. But, as I say, we have already had one in the last twelve months in Suez, and I believe that was as much our war as Britain’s war, although none of our troops fought in it. Would anybody be so dogmatic as to suggest that it cannot recur in Suez? There is also a number of other danger spots in the world that affect us vitally - 1 shall refer to them in a moment - where we could have what would be regarded as quite a substantial limited war in which the United States and some of the members of our own British Commonwealth would not assist us but would possibly oppose us.
It is not very long ago, let me remind the Senate, that Spain made an attempt to claim Gibraltar from the British. We can all remember it. It was passed off, of course, but the matter has not ended there, because the British have taken a licking from a third-rate dictator named Nasser, and if he can beat Britain it is quite obvious to me, and elementary to this discussion, that some other minor power will attempt to have a go. Three or four years ago I would have discounted entirely any suggestion about the security of such places as Gibraltar, but in view of the calamity of Suez it cannot be discounted now. Coming nearer to Australia than Gibraltar, at the other end of the Mediterranean another minor power, Greece, quite obviously has its eyes on Cyprus. It is perfectly obvious that as soon as Greece thinks it is strong enough to force the hand of Britain it will have a go at Cyprus. I can come still nearer to Australia to produce an example. Just recently we had a little trouble in Aden. The Saudi-Arabians thought that as the British had had a good hammering in Suez they could get away with a grab at Aden. It did not come off.
– You mean Yemen?
– Yes. I cannot distinguish between the Yemeni and the Saudi-Arabians. I do not think that anybody would be so dogmatic as to say that that little affair is over for all time. I can come still nearer to home. Would anybody say that a South-East Asian power has not its eyes on New Guinea? That is one matter which we will have to look at very shortly, because already the writing is on the wall. Already the United Nations has had before it a resolution to the effect that the Australian administration in New Guinea lacks something. The pattern is perfectly obvious. T have given five places, from Suez to New Guinea, where the situation could provoke a limited war in which the United States would not participate, and neither would some of our other friends.
We therefore have to ask ourselves who our friends are and what sort of defence planning we should undertake, having regard to the second class of limited war which I have mentioned. I might digress at this stage to look at the factors which have affected the defence planning of this country during the last 50 years. For the first 25 years of that time, of course, we left it all to Britain, which meant that our defence planning was child-like in its simplicity. Then came World War II., when we felt that we needed some form of collective defence organization and planning outside British spheres of interest, and Australia, very properly, took the lead in the establishment not only of Anzus, but also of Seato, and our Government deserves great credit in that respect. Now a second class of limited war has arisen since Suez, and our Government again must take the initiative and do some thinking about a form of defence planning that is necessary solely because we have not thought before of this class of limited war and the danger of it. I do not think that I need stress that factor in the Senate, because we are all very much aware of it,
What can we do about this class of limited war that does not involve the intervention of the United States of America or the operation of such pacts as Seato? The answer is simple, but the end is perhaps difficult to accomplish. We must have a closely knit defence union within the British Commonwealth. These are our possessions that are being grabbed by petty dictators. Cyprus belongs to Britain. Gibraltar belongs to Britain. New Guinea belongs to Australia. If we are prepared to stand on that proposition and fight for them, we might get somewhere, but if we continue with this loosely knit defence policy within the British Commonwealth, which obliges a unit of it to fight only when it feels inclined to do so, we will have our Commonwealth whittled away progressively until none of it left. There is no obligation, for example, on the part of Canada to come to the support of Australia if New Guinea is attacked and I suggest, in all humility, that there should be. After all, 100 years ago we had an organization called the British Empire, and its solidarity did not rest only upon the attitude of the units of the Empire to the Crown. It did not rest only on sentiment. It was based on something far more realistic than sentiment. It was based upon the knowledge that the British Navy would keep secure every integral part of the Empire. Security was the basis of solidarity of the British Empire.
That factor has now disappeared. In fact, I think it would be quite fair to say that the only nations which would stick together in all circumstances in the British Commonwealth of Nations now would be Great Britain, Australia and New Zealand. That is a very saddening thought, but I do not think that everything is lost by any means. I think we can do something about the re-establishment of the British Commonwealth by a closer defensive union. It would require in the first place, I suggest, a British Commonwealth defence council. It would require constant co-operation and consultation between the units of all nations that were prepared to accept the situation that when one was attacked, all would fight.
I am perfectly aware, of course, that my argument is open to the objection that there are some units of the British Commonwealth of Nations which will not support such a proposition, and would not be parties to a strong and vigorous defensive union. I am aware of that, and I could name them. It is useless to beat about the bush. We have India, a nation which would not fight for us, but would expect us to fight for her if she were in trouble. To the Indians, who are my friends, I say that if they are not prepared to accept the proposition that the British Commonwealth must be defended by every unit if any one is in danger, it is proper for India to get out of the Commonwealth. That is fair enough. The Indians cannot have it both ways. That applies also to some of the other units which, at the moment, could not be relied upon to help us in all circumstances.
– It would leave a very small circle.
– My friend might be right, but there is some unity even in a small circle, and some strength, if we could show the rest of the world that we would fight if our tail were twisted. Other units have just been or are about to be born into this Commonwealth of Nations. I refer to Ghana, Malaya, the West Indies Federation and the Federation of Rhodesia. There are four new nations either just born or about to be born which could be brought in. We could persuade them that our security is their security, and that we will be behind them, come what may.
I suggest that that has been the principle of British security for the last 300 years. Why should we change it now? It is as simple as that, in my opinion, but I do say that this nation of ours has some responsibility in this respect. We are an elder brother in this family now, and we have at our head a statesman who is second to none in the world. In view of those circumstances, and the coming conference of British Prime Ministers in London, our own Prime Minister (Mr. Menzies) could well put this view to the British Commonwealth of Nations. He should tell them that the security of the Commonwealth is so serious now that we must have some understanding about defence.
Of course, as I have said, there must be consultation, and some body must be set up, such as a defence council, to co-ordinate the defence planning of such an organization. After all, we had such co-ordination during World War II. when the Empire air training scheme was introduced. That scheme could be modified and improved to include the three armed services and made to operate just as easily as it operated during the last war in respect of one service. Defensive measures could be co-ordinated quite simply as they were during World War II. I suggest to the Government that some consideration be given to this matter of Commonwealth defence because I believe it is just as important as other aspects of the defence of Australia that were mentioned by the Prime Minister.
In the few minutes remaining to me, perhaps I might make some reference to an aspect of some strategical factors which must affect our defence planning in the future. I refer to the security of the Indian Ocean and its trade routes. The Indian Ocean, of course, is no longer a British lake. Great Britain does not control it, and we are on the extreme outer edge of it in a strategically dangerous situation. I feel that the Government might give some thought to that factor in planning the future defensive operations of the nation.
The defence of the west coast of Australia from Cape Leeuwin to Darwin must be reconsidered in the light of what has happened over the past five years. We cannot rely any longer upon either Ceylon, India or South Africa to assist in preserving the sea lanes of the Indian Ocean. There is an obligation upon Australia to accept some greater responsibility in that respect. I do not pose as a master strategist, but I believe that we should establish a major base for all three armed services on the west coast of Western Australia.
– The safest place for a base is on the southern coast of South Australia in the Gulf.
– It might be a safe place but the site is not strategically sound. We need a base somewhere near where the services will operate, and South Australia is an awful long way away. There is a thirdrate road between South Australia and Western Australia, and if we had to defend the west coast of Australia from South Australia, I would hate to be the commanderinchief of the armed services.
I suggest sincerely that a major base must be established on our west coast. Some development has taken place at Perth. The naval base at Cockburn Sound must come. There must be a base for a strategic bomber reserve on the west coast at Geraldton or some point north. Finally, there must be a heavily defended base at Cocos Island. That is the only part of Australia that could control and command the sea routes of the Indian Ocean.
Those aspects of the defence of Australia have now become important from a national point of view. I am not speaking as a Western Australian in this debate because I do not believe that the actual security of Western Australia is affected at all. I am referring only to the importance of maintaining our lines of communication with Europe, and surely the proper bases for that purpose should lie on the west coast of Western Australia.
.- 1 have listened to this debate with great interest and I regret that Senator Vincent, who has just resumed his seat, spoilt an interesting speech by his opening remarks. Nobody can help the defence of Australia by going back to 1949 and comparing circumstances then and now, for not only Australia, but every country that had been involved in World War II., was sick of war. If they had not been tired of war, Germany would not be divided as it is to-day. I remember, after World War II. discussing with a person who held a responsible position in Australia, the reasons why we had more or less left in Europe a cancer that could cause great trouble to the world because, irrespective of the side upon which the Germans fought in World War II. and what we might have thought of their warlike attitude, it was obvious that we could never get peace while Germany was divided. The answer I got at the time was that the world was sick of war and there was no hope then of getting Germany into the United Nations. Senator Vincent told the Senate how many troops we had in 1949 compared with the number we have to-day. He compared the Navy as it is to-day with what it was then, and he made the same comparison regarding Air Force squadrons. I think he should realize that the nation was engaged in war from 1939 to 1945 and afterwards had to rehabilitate those who took part in that war. It was he or another honorable senator who said that, taken on a population basis, no country in the world exerted such a war effort as did Australia.
I believe that this question, as far as possible, should be discussed above party politics. Honorable senators on both sides should be at liberty to criticize the inactivity of a government in the defence of this nation, irrespective of its political colour: I suppose we are in a worse position than most people to defend a country. We have just over 10,000,000 people and we have an area of 3,000,000 square miles and a coastline of 12,210 miles. From a practical point of view, it requires a mighty effort. In the event of a conflict, we could strike trouble on the eastern seaboard, in the north or in the west. The only portion that looks safe is the southern portion because we would not expect trouble from the Antarctic at the moment, although science may alter the comparative immunity from attack from that quarter.
We are in a great predicament because of these conditions, and we have to ask ourselves several questions. First, is the nation worth defending? To that question we would not find a voice prepared to reply “ No “. The next question is: What is the best method of defending the country? It is true, as has been said in the debate, that we have spent about £1,200,000,000 on defence since this Government assumed office. Irrespective of the comparison made by Senator Vincent, I do not agree that any of us can be over happy with the present position. Reference has been made to the fact that the former Secretary of the Department of Defence some little time ago said that we could not mobilize any force in the event of war. To be quite candid I think some of the responsibility for that situation must rest on him as well as on Ministers. He cannot escape from his responsibility by pushing the blame on to Ministers, whoever they may be. It is true that he has to carry out instructions that Ministers give him but I believe that as the head of the department he has some responsibility in respect of the advice that he tenders and in the manner in which he keeps the Ministers up to date with developments. I am not saying that to absolve the Ministers in any way.
We cannot show much for the expenditure of the £1,200,000,000 on defence. Over the last four or five years we have had two or three defence plans. The statement made by the Prime Minister last month announced a new plan. Almost before the ink had dried on the manuscript of his speech, he announced that another committee would visit the United States of America in order to discuss defence matters. One can very well imagine that this visit will produce another plan for the defence of this country. That is quite likely, because I do not think that any one will contend that any plan that has been submitted by the Government to date solves all our defence problems.
The late Speaker of the House of Repre-; sentatives, Mr. Archie Cameron, crisply summed up the situation when one of his colleagues from South Australia suggested that a base be built somewhere along the southern Australian coast. Mr. Cameron said, “ Well, I would hate to be the commanding officer who would have to get troops to somewhere else “. One of the first essentials in our defence planning ought to be the construction of roads and railways to enable us to deploy our forces where we want them. I am referring particularly to the armed sections of our defence forces. I understand that during the last war it took more than a week to shift troops from Victoria to Western Australia at a time of an invasion scare along the west coast. A large amount of money has been spent. I recognize that some of that money was expended on wages, and on the purchase of rations for the few men we have. A great amount was expended in other directions. When we give effect to a defence plan, let first things come first. Why do we not build the east-west road? Why do we not standardize railway gauges? Let us build the Kalgoorlie to Perth section now. The effect will be felt in the civil work of the nation, and the work will be of immense value if we have to shift troops from Perth to the eastern States or from the east to the west.
– Would you take that out of the defence vote?
– Yes, 1 would. The Government cannot show much for its expenditure of £1,200,000,000 on defence up to date. Government supporters have been talking about a certain rifle, and 1 shall have something to say about that matter later. I understand that it will not come into production until 1959 at the earliest. I am told now that the seals have only just arrived. We must be honest and candid about this matter. Honorable senators on the other side have been speaking about this rifle for the last two years at least. I have read with dismay about the deterioration of the north-south road. In addition to the money needed to restore that road to good condition, I would favour taking from the defence vote the money needed to complete the north-south railway. If there were trouble in the north, how could we get troops there from the large centres of population in the south? I am hopeful, like every one else, that trouble in the north is not imminent. I do not mind the Prime Minister (Mr. Menzies) being a bad judge of the position. If I remember correctly, he once told us that war would occur within a certain period of time.
– He did not do so.
– Yes, he did, but I suppose that he is as pleased as I am that he was wrong. Are we commencing at the bottom in building our defences, or are we commencing at the half-way mark? As matters stand, we could not shift our troops quickly to the places where they would be of the most use to the nation. I say that a proportion of the huge defence vote should be spent on east-west and northsouth communications, so that we shall be able to move our troops to the north or to wherever they are needed.
Senator Vincent has referred to the number of air squadrons that are in existence and to the number of up-to-date aircraft that we have. I do not know whether he would like to go to north Australia. I should think that any one who had his eyes glued to Asia would not be happy about the aircraft and the number of personnel of the Royal Australian Air Force stationed in the Darwin area. I admit that I myself would not like to live up there continuously, but I believe that members of the services should serve wherever they are liable to be needed.
– Do you mean inside Australia?
– I shall be happy to discuss that aspect of the matter later. Let us consider the Eastern position as it is at the moment. Many people tend to look towards Asia and say “ They are coming “. In election campaigns, I sometimes feel that they are almost at my front door, but fortunately we do not have elections every week.
– You will probably soon have one in Queensland.
– We will attend to Queensland, as we will attend to Tasmania in due time.
– Is that a threat?
– Not at all. Do not misconstrue my words. If this party says “ Go “, there is no hesitation; we go. What has been the trouble in regard to Asia? Over the years, every large nation of the world has gone into Asia for only one reason - to get its pound of flesh. We wondered during the war period why some of the Asian nations sided with the Japanese in their southward march. We regretted that they did so. The newspapers, of course, under bold headlines, printed statements saying how bad those people were, but those self-same newspapers had supported the exploitation of the Asian peoples over the years. One of the considerations that we should have in mind when we are speaking of the defence of this country is that we must do what we can to improve the standards of the peoples of Asia. I believe that one of the most important factors in the safety of this country - one might say in the defence of the country - is the money and assistance that we provide under the Colombo plan.
When some one said to me on one occasion that the Chinese were coming here, I replied that it was a long way for them to come in sampans, and it was certainly too far for them to swim. As China is not a maritime nation, how would it get its troops here. In 1939, Japan was one of the leading naval powers. I believe that, after ten years of peace, China will become a mighty nation. She must do so. Foi the first time in history, I suppose, the people of China are really united. I disagree with the philosophy of communism, but let us face the facts. All this pointing of the finger at China and other Eastern countries does not help to promote friendly relations. We have a hurdle to negotiate - it is no small hurdle - in that our White Australia policy is not understood in those countries. I have never believed that the reason for it was that we thought that because we happened to be born white and they happened to be born yellow, we were better than they were. We adopted that policy because we wished to maintain, and to improve, our conditions. One of our first jobs should be to try to establish friendly relations with the East.
I cannot see that anything is to be gained by objecting to China’s becoming a member of the United Nations, especially when it is remembered that we have been and are trading with China. In saying that, I am not suggesting that we agree with the system under which China is governed. We disagree with it; but no one has the right to say to any people how they ought to be governed. That is the prerogative of the Chinese themselves.
Although I have yet to learn of a better system of government than ours, it is not for us to tell the Chinese how they should be governed. We can explain our system to them but we should not go to the extent of denying China the right to take part in discussions on world affairs simply because we do not agree with her system of government. Such a policy would be illogical. This Government does not instruct its delegate to the United Nations that he must attempt to deprive Russia of her right there. Why, but for an incident that took place a couple of years ago, the banner with the hammer-and-sickle emblem would be flying over a building in this capital city. No one was worried when it was flying here. It did not change our opinions on how we ought to be governed, yet honorable senators on the Government side cry, “ They are coming! They are coming! “ The logical step is to show these people that we wish to be friendly. It will not help us to do otherwise. To do otherwise would only make us look narrow in the eyes of the world. I sincerely hope that wiser counsels will prevail in connexion with the admission of China to the United Nations.
A great deal has been said about what Australia ought to do in association with the United States on the matter of defence. I have explained why I do not think we are in a position to defend ourselves. I have mentioned our lack of numbers, our huge area and the great length of our coastline. For those reasons, I feel that we must link up in the Pacific with the United States, but that does not mean that we must swallow her foreign policy. Much and all as I disagree with what Great Britain and France did in Egypt, I should like to be satisfied in my own mind that the United States disagreed with those actions for the same reasons as I do. My reason for disagreeing is that I do not favour a return to the old gunboat diplomacy, but it is my firm belief that oil might have played some part in influencing the attitude of nations towards that incident.
Consider the last two major wars. If any country lost more in them than did Great Britain, I should like to know which it was. After all, it is easy to come in towards the end of a war - almost at the time, so to speak, when the sun has ripened the cherries and they have been picked. That is why Britain is hardly a secondclass power after those two wars, and that does not make me feel pleased. I repeat that if any nation got a raw deal, it was Britain, and the result is that she is now a second-class power. That being so, we cannot look to her, as we did prior to 1914, for help. We could not do so during the last war. We all know that our troops in the Middle East were virtually instructed to go to Burma, but the government of the day said, “ No, come home “, and it is just as well that they came home. We can give Britain away when it comes to seeking practical help in another war. I regret having to say so.
One can hardly visualize such trouble between Britain and the United States as would lead to war. I could not believe that would happen. But when one reads of the struggle in the world for oil, one learns that strange things do happen. I admit that from the standpoint of our own safety, we have to look to the United States for aid. Even so, must our arms and equipment, whether they be used in the air or by ground troops, be the same as those used by the United States? Cannot we manufacture them in this country? Must we ask such companies as the Lockheed people to establish factories here and build fighters for us?” Let us keep private profit out of the manufacture of arms for war as much as we can. The many books that have been written on. the subject mention the tremendous profits, made by private manufacturers of these armaments. Why, history shows that at one stage at Gallipoli the armies of both sides were firing shells that were made by one firm. I suggest that those who aremanufacturing implements of war, whether they be arms or fighter planes, are in it only for profit. Let us ask the United States todo for us what we were, I suggest, foolish enough to do for them when we sold the Commonwealth Scientific and Industrial Research Organization patent to them. Let. us ask Americans to sell us some of their patents, even though science can bring about great changes in the instruments of war overnight. We thank the United States for what it did in the last war, and, as we know full well that we can only look to that nation for help if war should overtake usagain, I realize that we have to tie up with her to some extent. That brings me to the question of the type of rifle that is to be used. I read in the newspapers, either early this week or late last week, that the rifle that has been talked about for twoyears is to be superseded. We have only just received the seal, or what might be called the blue-print, of the new rifle, but. the rifle itself will not be available to usuntil 1959. Now we are told, in May, 1957, that the rifle we propose to manufacture here is already out of date. We may even get over that. The rifle that, at the moment, is up to date in the United Statesof America, and the rifle that we may, if we are fortunate, have available in .1959, may get us out of trouble.
– By that time we will be back to bows and arrows.
– The honorable senator who has interjected may know more of this subject than 1 do, and so 1 shall leave that matter to him. At least we have an obligation to do all the good we can. We, on this side, honestly believe that, during the six years that the present Government has had the opportunity to produce the goods, very little has been achieved. “Now the Government has decided to discontinue national service training.
– The decision is to reduce national service training.
– We may just as well abolish it altogether as reduce it in the way contemplated. The proposal to select trainees by ballot is a strange one, and it may or may not be successful. I should like to know whether the ballots are to be controlled by the courts. My main opposition to national service training is that, administratively, it hurts the best of our lads. Not sufficient attention has been paid to the young men learning trades or attending night school. I have come up against this problem in a personal way; a young man of my acquaintance lost two years of night school study because of national service training. In taking steps to secure the number of trainees that the Government has in mind, whether by ballot or otherwise, it should at least exclude those young fellows who are learning trades or attending night schools. If they were excluded, there would be some inducement for young men to acquire more skill; and skilled men are required by Australia. I think that every one will admit that more skilled tradesmen are needed. We should not do anything to injure the young fellow who is trying to improve his knowledge by attending a night school. Even if such young men are not called up, there will be no great difficulty in getting the required number of trainees. If the young fellows who are learning trades, or studying at night, knew that their studies would not be interrupted by national service training, there would be an added incentive for them to do their best. If the Government is not prepared to go that far, I suggest that it should agree that in such cases national service training should he postponed until their trade training, or school studies, have been completed. I urge that their studies should not be inter rupted. I do not think that national military service has done much good from a defence point of view, but I agree that it did a lot of good to young fellows who needed a little discipline. Unfortunately, many of our young men need it. National service was wasteful in that the country gained little of military value from it. I do not know how much it cost in terms of money, but it must have been a large sum. Seeing that the system was of little value from a military or defence point of view, and that the proposed system of choosing trainees by ballots has, to say the least, its interesting features, I think that the system could well be scrapped altogether.
I believe that there should be a close alliance between Australia and the United States. At the present time there is that close alliance, and I hope it will continue. I realize that in some respects the United States is not on all fours with Australia in respect of pacts made with other countries, and that it believes that there must be aggression before it acts. In such a matter each country must judge for itself. There is danger that we may commit ourselves to engage in a war, but not necessarily against an aggressor. In some of the pacts which nations with territory bordering on the Pacific Ocean have signed, such as the Anzus and the Seato pacts, there are some qualifications, but, if those treaties are designed solely to stop aggression, I believe that they will serve a useful purpose. If we are entitled to call on other signatories to a pact to come to our aid in the event of Australia being attacked, we must agree that they are entitled to their share of protection that we can offer should they be attacked.
In considering our attitude towards Asian countries we must decide that they are entitled to our help when they seek to govern themselves as they think fit. In various Asian countries there are strong nationalist movements. I know that Communist influences are seeking to obtain control in those countries, but if we do what we can to improve their standards of living, and show a friendly attitude towards them by such means as an enlargement of the Colombo plan, we shall not be in such danger as some people think.
Much has been said during this debate about the kind of war that we may envisage in the future. The Prime Minister has told us that he does not believe that there will be a global war. In the war of 1914-18 mustard gas and other poisonous gases were used. Since then another major war has been fought, but, fortunately, no participant in it used poisonous gas. We can only hope that what stopped them from using such deadly means of destruction was their fear of its consequences, and that a similar fear will stop them from using the latest scientific developments in war techniques.
Some nation must commence the ban on atomic tests. The Western Powers have said, “We will stop atomic tests if Russia does “, and doubtless they would. But that is only half way towards banning them. With the world torn as it is, surely no one expects that we will be able to get both sides to agree to the banning of tests after a certain date. It would not hurt this country one iota if it were to say that, in the area over which it has control, there shall be no atomic exercises. Just as politicians disagree with one another, so scientists now disagree with one another. Some of them paint extremely gloomy pictures of the effects of radiation. I do not believe that we will ever have a global war in which atomic bombs will be used, because to use them would mean the end of civilization as we know it. Would we lose anything if we said that we would not permit atomic tests in the area over which we have, control? I do not think we would.
Let us spend more money on civil defence. We might all be bad judges, but I do not think any man in this chamber would say that the atom bomb and the hydrogen bomb would be used in any future war.
– Civil defence is needed in ordinary wars.
– I repeat that we all might be wrong. If the Government proposes to continue spending such huge amounts of money, I hope it will spend a lot on the provision of roads and railways. I do not think any query would be raised if that were done over a period of years. It would help us, not only from a defence viewpoint, but also from a developmental viewpoint. To get back to my point, I emphasize that the amount of money that has been expended on civil defence is infinitesimal when it is compared with the huge amount that has been spent overall.
I shall attempt to finish on this note: 1 do not wish to remind the Government about how many men it has in control of the various services. Even though there are six service Ministers, it was left to the Prime Minister to make a statement on defence. I admit that he is very capable, but when almost one-third of the Ministry of 21 members are service Ministers, surely the Prime Minister should not have to deliver such a statement.
No one can be pleased with the state of our defences, in spite of the money that has been expended in the last six or seven years. We have no defence roads, no uniform railway system, and very few air-fields and kindred installations. As I have said, we have not even a modern infantry rifle. We must wait until some time in 1959 to acquire modern rifles; I hope it will be early in the year.
– It will be in May.
– That is exactly two years from now. Let us hope that we will not be troubled before May, 1959. I should hate to discover between now and 1959 that we did not have as many rifles as we had in 1939, and to think that, as happened in 1940 and 1941, it would be necessary to train men with broomsticks or parts of rifles.
I do not disagree with the proposition that we should have an up-to-date army unit. By all means, let it be up-to-datel The facts seem to boil down to our having 4,000 men who will be ready to jump off at a moment’s notice. I do not think any of us are foolish enough to believe that in the days to come there will be any formal declarations of war and that we shall have at least two or three days’ grace. We will be engaged in war right from the jump. If we have a force of 4,000 men, and we must all shudder when we realize how small it is-
– We still have a navy.
– I could enlarge on that matter. I do not approve of the present constitution of the Navy. Let me deal with this army unit of 4.000 men. Let us equip it with modern weapons, even though - and I agree with Senator Vincent on this point - we must spend dollars to get them.
– I must be wrong!
– I admit that the honorable senator is not often right, but I cannot be blamed for that. Senator Kendall referred, by way of interjection, to the Navy. I do not wish to commence again, but let me pose this question: Have we a submarine in our fleet?
– Why do we want a submarine?
– I do not know. When some of the people who are high in the world’s councils write about defence, their pens shudder when they refer to the fact that Russia has more undersea craft than has any other nation.
– What would we do with a fleet of submarines?
– We cannot protect our length of coastline with what we have, can we? The press recently featured the presence in the Pacific Ocean of Russian submarines. Let us have a navy that is modern, however small it is.
– That is what we are doing.
– The Government is doing that? It has had six or seven years to do so.
– A navy does not use submarines to chase submarines.
– I am not saying it does; but, if we are to have a navy, let us have a modern navy. Let us have some units that are modern. Even Senator Kendall who served in the Navy during the last war cannot be altogether pleased with the position in which we find ourselves to-day. I do not know how much longer we shall have to wait, but let us hope that we shall be safe until such time as this Government, or any government in the years to come, has given us an efficient defence service. If the force be small, let it be good. If that is done, Government supporters will be able to feel satisfied that they have done a good job. I hope that at least some of the money voted for defence will be spent on something that is worth while. I hope that it will be spent, for instance, on linking together the various parts of our country in a more satisfactory way. If, after the Government has expended £1,200,000,000 on defence, Government supporters could say that we could move our troops by roads and railways that linked the States satisfactorily, they would be able to claim that a worth-while contribution to defence had been made. But they cannot do it. I hope that something will be done to bring into being that state of affairs, and that we shall have a transport system which will not only be useful if war comes, but may also be useful for the peaceful development of this nation.
Senator MARRIOTT (Tasmania) [4.571 - It is symptomatic of the Opposition’s lack of power to think along lines of national security and defence that we have been forced to listen to a rambling speech, full of arrant nonsense. It is a pity that it came from the Deputy Leader of the Opposition (Senator Kennelly). I shall be as charitable as I can and say that the speech will be remembered only for its lack of constructive thought. The honorable senator was probably thinking of the defence of the Bukowski line, north of the Queensland border, or of trying to have himself elected as a member of a delegation to Peking, because quite a lot of his speech, especially when he got off defence and went on to foreign affairs and Communist China, seemed to be directed to making his alley good in Peking. I can picture him in a Chinese restaurant over the week-end learning how to use chop-sticks.
Those of us on this side of the chamber are familiar with the Opposition’s criticism of the Government on the matter of defence, but it could be expected that in the National Parliament the criticism would be tinged with a little helpful, constructive thought. However, we have not had that, except in very minor respects, in the long debate on this important matter. I believe that the defence debate in the Senate should be one of the most important debates of the year, and I should think that the Government was failing in its duty if the officers of the various defence departments did not study the debate to see if they could get from it some helpful suggestions for improving the defences of the country. 1 hope later on to make a few suggestions, not won by experience, but by thought, reading, and listening to those who know something about defence. With thai promise, I ask for leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Senate adjourned at 5 p.m.
Cite as: Australia, Senate, Debates, 9 May 1957, viewed 22 October 2017, <http://historichansard.net/senate/1957/19570509_senate_22_s10/>.