24th Parliament · 1st Session
The PRESIDENT (Senator the. Hon. Sir Alister McMullin) took the chair -at 11 a.m., and read prayers.
– I desire to ask the Minister representing the Minister for Immigration a question. Is it a fact that figures are now available which show the number of migrants coming to Australia as distinct from visiting overseas businessmen and Australians returning home from abroad? If so, is it a fact that these figures show that, last year, 95,407 people came to settle in Australia? Was the Government’s immigration plan based on an intake of 125,000 migrants in that period? If so, does this not mean that the intake was almost 30,000 fewer than the Government planned for? Can the Minister reconcile this with the statement made by Mr. Downer to the Australian Citizenship Convention that in the financial year 1960-61 we exceeded our annual target for the third year in succession, having brought in 138,500 people and thereby achieved an excess of 13,500 over our objective?
– Naturally enough, when the Minister made that statement he was working upon the only reliable statistics then available. As I said in the Senate yesterday, the Commonwealth Statistician had been testing, over the last four years, a new system in an endeavour to distinguish permanent arrivals and departures from visits overseas by business people and others. The statement made at the Australian Citizenship Convention was based upon the statistical method which the Commonwealth Statistician used until quite recently. A short time ago the Minister made a press statement to the effect that the new system, having been tested1, showed that the net immigration gain was far greater than had been indicated by the previous statistics. I quoted figures yesterday to show what the actual gain was. The gain was greater by, I think, 11,000 than the figure arrived at under the old system.
– My question is directed to the Minister for Health. Has his attention been directed to an item in yesterday’s “Daily Telegraph” referring to the restrictions placed upon the drug largactil? The statement referred to the drug as being available to pensioners and patients in mental hospitals. Can the Minister say whether largactil has been withdrawn from inpatients and outpatients of approved hospitals? Further, can he inform the Senate in precise terms of what patients are eligible to receive largactil as a pharmaceutical benefit?
– Knowing Senator Anderson’s great personal interest in hospitals, I can well understand his interest in this matter. I am happy to inform him that largactil may be obtained as a pharmaceutical benefit by pensioners who qualify under the means test for free pharmaceutical benefits. It can be obtained by inpatients and outpatients of approved hospitals, including mental hospitals, and by patients discharged from approved hospitals who need to continue the use of largactil for a psychiatric condition. These patients may obtain supplies of this drug as outpatients of an approved hospital. If they are living in a place remote from an approved hospital, a doctor may obtain from State directors of health approval to prescribe this drug as a pharmaceutical benefit.
– By way of preface to a question which I direct to the Minister representing the Treasurer, I refer to the answer which his colleague, the Minister for National Development, gave me on Tuesday last, wherein he detailed the splendid progress made last month in the negotiations relating to the Chowilla dam on the river Murray in South Australia. In the light of the highly successful dealings that the Government has had with the International Bank for Reconstruction and Development, despite the fierce opposition of the Australian Labour Party generally to any dealings at all with the bank, will the Minister discuss with his colleague, the Treasurer, the possibility of the bank’s being invited to make a loan to cover the cost, in part or whole, of the Chowilla dam?
– The question is one which opens up some very interesting possibilities. It would, of course, have to be considered in relation to the Government’s borrowing programme generally. As much as I can say at the moment is that I shall be pleased to direct the attention of my colleague, the Treasurer, to the question and ask him to give it consideration.
– Does the Minister in charge of the Commonwealth Scientific and Industrial Research Organization realize that horticulture is most important to the nation’s economy? Is he aware that the value of the horticultural industry in 1961 was £116,000,000? Is he also aware that there is a complete lack of any provision in our universities for the higher study of this important industry? Will the Government provide the necessary financial stimulus to ensure that a chair of horticulture is provided in our universities for this important study? Have federal education officials had any discussions with Professor Stoughton regarding the provision of higher academic studies in horticulture?
– I start under the slight disadvantage of not being entirely sure of what horticulture is. It clearly is part of agriculture, but only one part of the field that agriculture faculties cover, as they cover also animal husbandry and genetics, the culture of various grasses and cereals, and matters of that nature. That being so, I think there is ample evidence that the C.S.I.R.O. and the Government are fully aware of the importance of horticulture. If evidence is sought to be adduced, I need only point to the advantages which have accrued from the introduction of myxomatosis, and, to take one example, from the establishment of the Cunningham research station in horticulture, in Brisbane, to deal with the introduction of new grasses in southern Queensland. At a research station and farm which is to be established at Townsville in the immediate future, all kinds of tropical plants will be dealt with. In addition, research stations, which I shall not enumerate, for the purpose of improving grasses and horticulture generally, have been established throughout all the States of Australia. The opportunity for study in universities, as opposed to study in the C.S.I.R.O. or in State departments of agriculture, is financed, to some extent, from various funds such as the wool research fund and the beef fund. In other directions, it is financed from the very generous provision which the Government has made to universities, the university authorities being the bodies which allocate the funds between the various disciplines in the universities.
– I address a question to the Minister representing the Minister for Trade. In view of the statement made by Mr. Swartz regarding an overseas warehousing system, which is aimed at boosting the export of Australian manufactured goods, will the Government use every endeavour to adopt a similar system, such as provision of chilling facilities where they are deemed desirable, in order to boost the export from this country of beef and mutton, if it is considered that the proposition is a practical one? Is it not important that every effort should be made in this direction, in view of the surplus meat production in Australia, with the consequent decline in return to the primary producer? Has any investigation been made in the direction indicated?
– I did not see the statement by Mr. Swartz, to which Senator Lillico has referred. I am, of course, familiar with the investigations and negotiations that have been taking place regarding proposals to establish what I would call warehouses overseas in which to store Australian goods for sale. I assume that Senator Lillico has in mind that we should establish refrigeration or chilling facilities overseas so that our meat products would be readily available. I do not feel equipped to give an answer on that point. I should have thought that at most of the major meat markets there are refrigeration facilities, owned and conducted by the merchants concerned, which could be used for that purpose. However, I know that Senator Lillico has a wide knowledge of this topic and I may not be as well informed on it as I should be. I shall make inquiries of the Minister for Trade and let the honorable senator have further information. [3 May, $$2.1
– Is the Minister representing the Minister for Labour and National Service .aware that op two occasions recently a number of waterside workers at the port of Hobart were overcome by gas fumes given off by fork lift trucks being used in ships’ holds? Also, is the Minister aware that five waterside workers had to receive hospital treatment and that two of them had to remain in hospital for some time? Does he accept the established fact that fumes discharged by fork lift trucks constitute a danger and a menace to the health of waterside workers? Can he use his influence to have electrically-driven fork lift trucks used in ships’ holds in place of gas-driven fork lift trucks? Should waterside workers decide to cease work in ships’ holds where there is a high proportion of gas fumes, will the Minister use his good offices to prevent penalties from being imposed under the long service leave provisions of the Stevedoring Industry Act?
– I am not aware of the actual circumstances stated by the honorable senator. He has said that on two occasions various wharf labourers in Hobart have been affected by fumes from the engines of fork lift trucks. I should imagine that the effect of any fumes from fork lift trucks would depend on the area in which the trucks were used. It may well be that if they were used in confined spaces the level of danger from fumes would be higher than if they were used in open spaces. I should think that the effect of fumes from fork lift trucks would be the subject of an inquiry by a proper authority, with evidence given by doctors who may be involved in incidents at various places of employment. I am sure that if there were a genuine and proved danger from fumes, the Minister for Labour and National Service would take that aspect into consideration when dealing with any stoppage that may occur.
– Has the Minister representing the Minister for the Interior seen a letter published . recently in the “ Canberra Times “ and written by Mr. A. H. Harvey of Maclean, New South Wales, in which he states that after visiting the national capital he was left with the abiding impression of a rubbish dump within a stone’s throw of the French Embassy? Will the Minister inquire into this matter to see whether the rubbish dump may be removed, not only in the interests of Canberra citizens and visitors but also in the interests of international amity?
– I have not seen the letter to which the honorable senator has referred. This matter reminds me of an incident that took place during my school days. One day the teacher held up a sheet of white paper and asked the class what it could see. There was a little black spot in the centre of the sheet of paper and all the pupils said that they could see a black spot. We forgot to see all that was good on the white paper; we concentrated on the black spot. Anybody coming to Canberra and leaving with the impression that it is a rubbish dump has a warped outlook. I say quite bluntly and categorically that people who come to this city cannot help but leave it with the impression that it will be a national capital of which all Australians may be particularly proud. Having said that, I concede that there may be some justification for referring to the Minister this matter of the location of the rubbish dump. I will confer with the Minister about it.
– We have been talking a lot recently about the International Bank for Reconstruction and Development. My question to the Minister for National Development deals in part with the bank, but first I wish to refer to other matters. Is the Minister aware that nearly two-thirds of the queen city of Australia - Brisbane - in the queen State is unsewered? Is he aware that malodorous nightcarts meander around the suburbs collecting human waste - a procedure which is a distinct offence to the olfactory nerves of decent citizens? Is it not true that the offensive peregrinations of these obscene vehicles could be ended if money was forthcoming? Is not the whole disgusting business a smelly commentary on modern financial capitalism, which puts greater store on profits, no matter from what source, than on the true welfare of the people? Is the Minister aware that financial stringency in the queen city will be further accentuated because the suggested new penny will fit nicely into Brisbane’s parking meters? Does he not think that otherwise law-abiding citizens will be sorely tempted to secure 6d. worth of parking time for Id. and thus add to Brisbane’s financial worries? Are not most local authorities suffering from lack of money? Would it not be possible to arrange a loan from the International Bank to ease the burden on Australia’s local government authorities? If not, could a system - apart from communism - be devised whereby local authorities could use available local labour and materials to do the necessary work? Honorable senators opposite are interjecting, but there is some jolly good common sense in these questions. Unfortunately, common sense is not an attribute of many senators on the other side of the chamber who speak so foolishly and interject so stupidly. They are stupid fellows. Finally, will the Minister be so good as to investigate this deplorable situation with a view to lifting the heavy burden now resting on Brisbane’s Lord Mayor and City Council, and thus avoid the dangers threatening the health of the queen city and also help her in her valiant struggle to become pure and undenied?
– I do not know the actual statistics, but I know that substantial proportions of the capital cities of Australia - not only Brisbane - are unsewered. I regard that as a serious matter and a big problem. I cannot attempt to answer all the questions Senator Brown asked. I think I should give a short answer by saying that in this as in so many other directions the rate of growth in Australia has set up a demand for financial resources which exceeds the saving capacity of the Australian people. That is one of the reasons why the Government is borrowing overseas. The more financial resources we can bring into Australia to do this and other big works that need to be done, the sounder and quicker will be our rate of progress.
I believe that the logical consequence of Senator Brown’s questions is support of the overseas borrowing transaction that his party is opposing at present in the Senate. This is one of our great problems. In my speech on the Loan (International Bank for Reconstruction and Development) Bill, I gave figures which show that although we are borrowing overseas as much as we can, the situation that Senator Brown has outlined remains, and important things that should be done are not done. I point out also that although we are borrowing overseas as much as we can, our overseas liability, relative to our population, is less than it was a decade ago.
– My question, which is directed to the Leader of the Government in the Senate, relates to the ten questions asked by Senator Brown. Is it a fact that a Labour City Council in Brisbane preferred a £1,000,000 city hall to sewering the suburbs of Brisbane?
– I am a great admirer of Brisbane. It has a very nice city hall. As to the council deciding between building a city hall and doing other public works, as a good Liberal I say that such a decision is the responsibility of the council itself.
– My question is addressed to the Minister representing the Minister for External Affairs. Is the Government aware that the long period during which there has been no United States Ambassador to Australia is the subject of much adverse comment in circles interested in our relations with a country whose associations with us are obviously very important? Has the Government any knowledge of when a United States Ambassador to Australia will be appointed? If it has not, will this matter be discussed with the Secretary of State, Mr. Dean Rusk, during his visit to Australia?
– I do not think the matter needs to be discussed with Mr. Dean Rusk during his visit; nor need it cause any undue comment. I think it is reasonably well-known that the last United States Ambassador to Australia, Mr. William Sebald, for personal reasons had to leave his post before the end of his term of appointment and accompany his wife back to America. It is not easy for a foreign service to replace immediately an ambassador who, for personal reasons, leaves his post out of what may be called the normal term. I may say that in private conversations which 1 have had with leading United States representatives here I have been informed - I believe it to be true - that the United States of America regards the post of ambassador to Australia as of such significance that it desires to make sure that one of its best officers is posted here. The fact that an ambassador leaves his post earlier than expected must lead to some delay in a new appointment. I believe that before very long an ambassador will be sent from the United States.
– My question to the Minister representing the PostmasterGeneral relates to the Postmaster-General’s statement concerning the establishment of new commercial television stations in Sydney, Melbourne, Brisbane, Adelaide and Perth. In the statement Mr. Davidson mentioned that Sydney will have channel 10, Melbourne channel 0, Brisbane channel 0, Adelaide channel 10, and Perth channel 9.- No modification to existing television sets will be necessary to receive transmissions on channel 0, but modification will be necessary in relation to channel 10. I do not know whether this aspect has been raised previously, but I should like to be informed of the likely cost that the necessary modification will involve. When the modification has been made will reception on the existing channels 2, 7 and 9 be as good as it now is?
– I suggest with great respect that Senator Hannaford has not understood completely the PostmasterGeneral’s statement. As I understand the position, some television receivers will require modification to receive channel 0 in Victoria but modification will not be necessary to receive channel 10 in Adelaide. I think that 13 standard channels have been built into some sets only and the limitations imposed in relation to the future needs of television in Victoria have obliged the Postmaster-General’s Department to choose channel 0 for that State. Senator Hannaford has sought information about the cost of the modification to receive transmissions on channel 0. Various amounts have been mentioned but the Postmaster-General has suggested that according to the circumstances the cost will range from £1 10s. to £7 10s. Reception on the sets which are modified to receive channel 0 will not be any different from reception on the present channels.
– I ask the
Minister representing the Minister for Repatriation whether he is aware that at an Anzac Day commemoration ceremony in Melbourne a person read, on the nation’s behalf, a requiem for those who died in the First World War, the first line of which is as follows: -
On this day above all days we recall those who served in war and who did not return to receive the grateful thanks of the nation.
That requiem was for those who did not return. I now ask the Minister whether he will assist those veterans who did return from the First World War by granting them free accommodation and treatment in repatriation medical establishments. If not, why not?
– I am sure of one thing and that is that the diggers who did return from the war would1 not appreciate the tear-jerking tactics indulged in by Senator Hendrickson in submitting his question.
– That is not true. I object to that statement. I was as good a soldier as you were.
– It is absolutely true.
– I ask for a withdrawal of the statement made by the Minister. It is a reflection on me and I object to it.
– What are you objecting to?
– The Minister said I had used tear-jerking tactics in asking this question. I attended the ceremony on behalf of the Leader of the Opposition.
– Sit down!
– I do not want you to tell me to sit down. My record is as good as yours. Do not forget that I lost a son in the last war. I am shedding no crocodile tears and I object to the Minister’s words; they are offensive to me.
– Order! I am not going to ask the Minister to withdraw.
Senator Hendrickson can make his explanation after the Minister has answered the question.
– I would not be bothered. It is your duty to make him withdraw.
– In answer to the question I say to the honorable senator who asked it that the diggers who returned from the last war adopt not only a sympathetic but also a practical and realistic attitude towards benefits under the Repatriation Act.
– I am not asking about that.
– From time to time they have expressed their appreciation of actions taken over a long period by this Government. The question submitted by the honorable senator is one on which discussions have frequently taken place between the Government and servicemen’s organizations. The servicemen’s organizations are well aware of the difficulties involved in granting requests and they continue to discuss matters with the Government on a realistic basis.
– My question is directed to the Minister representing the Minister for Shipping and Transport. Because of the tragic death and accident rates on the roads of Australia to-day, will the Minister say what action the Government can take to implement the recommendations of the report of the Senate Select Committee on Road Safety? Can the Minister obtain for me figures, from 1st May, 1961, to 1st May, 1962, showing, in separate age groups, the number of road deaths and injuries in each State, and also the causes of the accidents in each age group?
– I shall have to ask that I be given notice of some sections of the question, but by way of an interim reply I point out to the honorable senator that the control of traffic, and matters related thereto, are the function of the various State governments. It is true that through the Australian Transport Advisory Council the Commonwealth Government provides a mechanism by which the various State transport authorities can meet. The
Government goes further than . that inasmuch as it makes financial provision’ for activities connected with the reduction of road fatalities and of injuries incurred on the road.’ Beyond that, the responsibility for control of traffic is a State function. As to the other aspects of the question, I shall obtain the information from my colleague, the Minister for Shipping and Transport.
– My question is directed to the Minister representing the Treasurer. Consequent upon the contemplated alteration of the present penny and threepence, is it estimated that to alter telephone and all classes of slot machines will cost about £5,000,000? If this is not the correct amount, will the Minister obtain the proper calculated estimated cost of the alterations? Will the Government foot the bill for these alterations or is private enterprise expected to pay for such adjustments?
– Senator O’Flaherty has put his finger on one of the very real problems connected with the change-over to decimal currency, namely the adaptation of existing equipment and provision of new equipment to provide for the change-over. I do not recall what figure has been estimated as the probable cost of the change of equipment. I know that an estimate was included in the report of the decimal currency committee.
– The cost involved in the change-over to decimal currency will be much more. I am referring to the new penny and threepence.
– I am speaking in terms of decimal currency because, as the Treasurer has said, a decision involving a change to decimal currency is to be made. If that is done there will be no subsequent change. As to the reference to telephone boxes and the like, that is something that falls within the province of my colleague the Postmaster-General rather than of the Treasurer. I have noticed from time to time that adaptations have been made to coin receiving equipment of public telephones and I imagine it would not be an insuperable technical task to do that for the new coins. The question of who will bear the cost of the change of equipment or how it will be apportioned between private enterprise and the Government, possibly relates more to the change-over to decimal currency than to this first change-over to new coins. In any case it is a question which involves many policy considerations on which decisions have not yet been made.
– My question is addressed to the Minister for the Navy. Is the recently-commissioned H.M.A.S. “ Sydney “ now undergoing a shake-down cruise as a troop carrier? In view of an unfortunate misprint in a section of yesterday’s Sydney press in respect of the number of servicemen on board the ship, and in order to get the record right, will the Minister state how many men comprise the ship’s company? How many servicemen are now on the ship? What is the total number of servicemen H.M.A.S. “ Sydney “ would carry as a transport in time of emergency?
– Yes, the “ Sydney “ is at present undergoing a shake-down cruise. It is a cruise designed to give the Army experience in loading and of the problems which may arise from the stowage of vehicles, equipment and things of that kind. The ship is at present at sea. The ship’s complement is a little over 500 at the moment. A number of that complement are reservists who are doing their reserve training. Approximately 200 soldiers are on board but the “ Sydney “ has the ability to carry about 50 officers and 630 troops, and all their equipment, including bulldozers, trucks, guns, ammunition and things of that kind.
– I direct a question to the Leader of the Government in the Senate. Will the Prime Minister make provision in the 1962-63 Budget for inclusion in the National Health Act of benefits as a contribution to expenses incurred for dental and optical treatment provided by accredited dentists, registered dental mechanics and opticians?
– This is a question to which I cannot give an answer. All of these matters are considered at budget time.
– The honorable senator does well to take the opportunity to remind the Senate of just what has been done by this Government in respect of benefits for ex-servicemen, particularly in connexion with hospital treatment. It is a matter that gives considerable pleasure to all of us that Senator Sir Walter Cooper himself was responsible for so many of the reforms which were made to this piece of legislation. He points out that totally and permanently incapacitated ex-servicemen get free hospital treatment; that the 100 per cent, general pension rate men and widows and children of ex-servicemen who died from war-caused disabilities also get it; and that most recently this benefit has been extended to service pensioners. After looking back on what has been done by this Government in respect of hospital treatment for ex-servicemen, I think it is reasonable to say that looking forward from this point we may assume that the Government will continue to do everything that is practical and reasonable to provide benefits for men who have made such a contribution to this country.
– I direct to the Leader of the Government a question which is consequential upon the series of questions asked by Senator Brown and the Minister’s totally inadequate reply thereto. Having regard to the various phases of development mentioned by Senator Brown and other matters of national development, why is it necessary to borrow overseas except to obtain goods and services that cannot be obtained here? In cases where the necessary goods, services and” labour are available in this country, will the Minister say why it is not practicable and advisable to make money available through the Commonwealth Bank rather than to place this country further in pawn to overseas financial interests, to whom we shall have to pay 51 per cent, interest under the bill that is now before the Senate? Will the Minister give a brief and reasonable answer?
– The brief and reasonable answer is that if money were made available through the Commonwealth Bank without being backed by adequate material resources, we should have inflation. If Senator Sandford does not understand that, it would not make any difference if I spoke for another quarter of an hour. The whole foundation of fiduciary issues and central bank credits is inflationary. A country growing at Australia’s rate of development has to get resources to finance that development adequately.
– I direct to the Minister for Health a question in relation to the extreme shortage of practising qualified dentists in Australia. Is the Minister aware that large numbers of graduate dentists are leaving Australia from year to year to practise overseas? Will he supply me with the numbers of qualified practitioners who, in the last ten years, have left to practise overseas, and also the total number of graduate dentists who have qualified in that period? Finally, will he in due course make a considered statement as to why we are losing so many of our qualified dentists, who are trained at great expense in Australia and then immediately leave to practise in other countries?
– It is a matter for some concern to Australia that too many of her qualified dentists are leaving for overseas fields. There is a variety of reasons which I have not time to enumerate at this stage. I shall seek the statistics that the honorable senator has asked for and I shall also make available to him a considered statement on the reasons for the exodus of these skilled men. ‘ ‘
– I preface a question, which I direct to the Leader of the Government, by thanking him for the expedition he showed in furnishing yesterday a reply to a question which involved a great deal of work. I have had on the noticepaper for seven weeks a question directed to the Minister representing the Minister for Immigration which, if the department desired to answer it, could be answered within five minutes. May I take it, therefore, that the delay has been caused by the desire of the authorities to camouflage the figures of suggested immigration arrivals, thereby, no doubt, saving them not only a lot of work but also a lot of headaches? I ask the Leader of the Government this question because seemingly, at least in this instance, he is a man of action, and I desire him to inject a similar amount of energy into his colleague.
– When the Senate rose, many questions were on the noticepaper, so I asked the Secretary of the Prime Minister’s Department to expedite the answers. He has done so, with the result that at present only 29 questions are on the notice-paper, which is as low a level as we have had for a long while. From time to time there is some difficulty in answering particular questions. Does the honorable senator refer to question No. 3?
– Yes, it is No. 3, of 14th March.
– I shall see whether I can obtain an answer to the question and whether it is possible to include in it an explanation of the delay. Generally, it is found that there is a reasonable explanation for the time that is taken to answer questions on notice.
– I direct a question to the Minister for Health. Is it a fact that compulsory mass chest X-rays, in search of unsuspected cases of tuberculosis, were conducted in the Australian Capital Territory from 12th March to 19th April of this year? As all residents over the age of eighteen years were required to attend for screening, can the Minister inform the Senate of the total number of persons who attended at the units between the dates mentioned? What was the result of the survey, and how many suspected cases of tuberculosis did it reveal? What action is to be taken to seek out persons who failed to attend for X-ray? Is the Minister aware, relative to the question of enforcement, that insofar as New South Wales is concerned, although millions of pounds of Commonwealth money has been supplied to New South Wales under the Tuberculosis Agreement, and although compulsory chest X-ray screenings are an implicit condition of the agreement, nothing is done by the Government of New South Wales to check on people who fail to attend the mass chest X-ray surveys?
– It is true that a mass chest X-ray survey was conducted in the Australian Capital Territory recently. It was a compulsory survey and some 32,000 people presented themselves for examination. That number represents 90 per cent, of the adult population of the Territory, and the percentage may be as high as 95 per cent, when the records are checked finally. The mass X-ray revealed 21 cases of tuberculosis and 21 cases of suspected tuberculosis. In addition, it revealed seven cases of lung tumour, including five cases of suspected lung cancer: My department is at present seeking from those who did not attend their reasons for non-attendance. When the replies have been collated and considered, action will be taken to see that people who should have presented themselves but did not do so also are examined. My department is discussing this aspect of the problem with the New South Wales Government, and I am confident that in the foreseeable future every effort will be made by that Government, and also by other governments of States where there is legislation making it compulsory to attend for these X-ray examinations, to secure 100 per cent, attendance by the people for examination.
– My question is addressed to the Minister representing the Minister for Primary Industry. In view of the callous disregard of the welfare of country citizens by the Government, as evidenced by the large number of industries which have been allowed to close without any effort being made to prevent them from doing so, will the Minister give an undertaking that the flax mill at Myrtleford will not be allowed to close without a thorough investigation? My question is prompted by the following considerations: - The significance of flax fibre to this country in the event of supplies being limited from overseas by hostilities; the fact that unemployment would be further increased by the closure of the mill, and the enthusiasm of the growers to grow flax if the price is right. Could a bounty on a tonnage basis be granted for a period to ensure a profitable return to the growers?
– The first part of the honorable senator’s question relates to decentralization, a principle which we all support. The honorable senator knows, as every member of this chamber knows, that in the main, decentralization is the prerogative and responsibility of State governments. I think it would be as well for him to place the remainder of his question on the notice-paper so that I can obtain for him a factual statement from the Minister for Primary Industry.
– My question, which is addressed to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, refers to the grant made by the Ford Foundation of America of nearly £250,000 to the C.S.I.R.O. for the purpose of erecting a radio-heliographic apparatus near Parkes, in New South Wales. Is this the largest single gift ever made to the C.S.I.R.O.? Does the Minister consider that the number and quantum of gifts made generally to the C.S.I.R.O. is in phase with the benefits which primary and secondary industries and scientific enterprises in Australia receive from the work of that organization? Does the Minister envisage any way in which the claims of the C.S.I.R.O. to wider financial support from non-governmental sources could be brought to the notice of Australians?
– I am not sure, but I rather think that the gift from the Ford
Foundation is the largest single gift that has been made to the C.S.I.R.O. In regard to the general question raised by the honorable senator, I do not believe that gifts and subventions for various aspects of research conducted by the C.S.I.R.O. are as large, or even comparable with, the benefits which flow to industry from that research: We lack in this country, unfortunately, organizations such as the Rockefeller Foundation and the Ford Foundation. There are in Australia individual industries which give to the C.S.I.R.O. sums of money for particular research connected with the industries concerned, but they are comparatively small sums, such as £20,000, £30,000 and £40,000. I think that the leaders of the big industries in Australia should be brought together to see whether they could form a council or foundation to which the industries concerned could pay large sums of money for the purpose of financing the C.S.I.R.O. to undertake specific research connected with a particular industry or group of industries. I would hope to be able to have discussions on the matter with the chairman of the C.S.I.R.O. Australian industry might regard such a body as something that would be beneficial both to the nation and to itself.
– Will the Minister representing the Minister for Labour and National Service obtain, for the information of honorable senators, figures showing the estimated loss of production for the year 1961 occasioned by the vast army of unemployed?
– I shall bring that question to the notice of the Minister for Labour and National Service. I point out that the people who register for employment are spread over wide areas. A vast number of industries and a vast number of places are involved. People register for employment for varying lengths of time. Incidentally, all the people registered for employment should not be regarded as unemployed. It is clear that the amount of work involved in trying to arrive at an estimate - and that is all that could be reached - would be prodigous. However, I shall bring the honorable senator’s question to the attention of my colleague.
– Can the Minister representing, the Treasurer indicate to the Senate, the action that the. Treasurer intends to take .in respect of the very grave allegations made recently by Mr. Peters in another place regarding a high public servant and an unnamed member of this Parliament?
– I think the Treasurer has made it quite plain to Mr. Peters, to the House of Representatives and, through the press, to the people of this country that the obligation to take this matter further rests with Mr. Peters. Mr. Peters took an opportunity afforded to him by his membership of this Parliament to cast an aspersion that could be applied to any member of the Liberal Party or of the Australian Country Party who sits in this Parliament. In addition, Mr. Peters’ question involved the integrity of the Treasurer, the Commissioner of Taxation and the commissioner’s staff. I think everybody will be familiar with the action taken by Mr. Peters when he was asked directly to name the person to whom he was referring. He refused, taking refuge in a story that he was referring only to a report or a rumour. The degree of responsibility that one may attach to Mr. Peters, the Labour member for Scullin, from this time forward can be assessed in relation to his conduct in this matter.
– I ask a question of the Minister for Health. In view of the fact that the annual conference of the Australian Dental Association is to be held in Perth next week, will the Minister express a view on the general standard of dental health in Australia? Will he agree with me, and with authorities on the subject - I do not claim to be an authority - that the general level of dental health of the Australian population is one of the worst in the world and that the level of dental health of Australian children is in fact the worst in the world? If the Minister does not care to express a view on this matter, .will he -indicate just how bad he assesses the general- dental health of the population to be?
– I arn not competent to express an intelligent opinion on the matters raised by Senator Vincent. This subject is of very great interest to everybody in Australia. If the honorable senator will place his question on the notice-paper I will obtain for him an authoritative statement from the officers of my department.
asked the Minister representing the Postmaster-General, upon notice -
– The PostmasterGeneral has supplied the following information: -
asked the Minister representing the Minister for Immigration, upon notice -
If so (a) is this the first occasion on which such a document has been issued to the staff,
– The Ministernow supplies the following information: -
Motion (by Senator Spooner) agreed to -
That Government business take precedence of general business after 8 p.m. this sitting.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Wade) read a first time.
.- I move-
That the bill be now read a second time.
The basic purpose of this bill is to obtain the approval of the Parliament to an agreement made between the Commonwealth and Queensland Governments to regulate the production and marketing of sugar within the Commonwealth for a period of six years from 1st September, 1961.
When the 1956-61 Sugar Agreement ex pired on 31st August, 1961, the two Governments agreed by an exchange of letters to extend it in its existing form until 31st May, 1962, in order to allow time for consideration of the report of the Sugar
Enquiry Committee which was then investigating the sugar industry and its financial relationship with the manufactured fruits industry. For administrative reasons, therefore, it is desirable to give retrospective effect to the new agreement from 1st September, 1961, in order to cover the period not at present covered by legislation. It was also decided to extend it for three months longer than the five years period which has been the normal duration of these agreements. This brings the timing back into line with the traditional expiry date of 31st August. The agreement will, therefore, operate until 31st August, 1967. The agreement, which appears as a schedule to the bill, is another in the long series of broadly similar agreements which extend over a period of nearly 40 years. Its terms are much the same as those contained in the present agreement. Such changes as have been effected have been made for the sake of clarity and simplicity in operation.
As honorable senators know, sugar is a protected industry in almost every sugarproducing country in the world. World sugar production amounts to about 52,000,000 tons annually, but of this quantity only about 12 per cent, is traded on the so-called free market. The remainder is covered by various protective and preferential trading arrangements. In the case of Australia, nearly one-third of our production and well over 50 per cent, of our exports have to compete on this “ free “ market, so our sugar industry is exposed to world market forces far more than most other producing countries. To most people the words “ protected industry “ carry with them the idea of a permanently inflated home consumption price, but this is not true in the case of sugar. Because of the sugar agreements there have been long periods when the domestic consumer has been able to purchase sugar at a cheaper price than would have been the case had Australia been purchasing sugar on the world market. The sugar agreements, therefore, are not one-sided arrangements by any means.
Of equal importance to price is the assurance of supplies. Past agreements have ensured, and this one will continue to ensure, that no matter how attractive the overseas price might be, Australian demand must be met first and at the prices fixed by the agreement. I am sure every one will agree that to have guaranteed supplies at stable prices is a very desirable position to be in with any basic commodity, and that they will also agree that this position can only be achieved when the industry producing the commodity has a guarantee of long-term stability. This is what the sugar agreements of the past have provided, and what the agreement which the Senate is asked to approve in this bill will continue to provide.
In point of fact, the agreements have achieved far more than this. They have made possible the settlement and development of our tropical east coast to an extent that no other commodity could have done. When an industry is protected, however, the Government has a duty to the consumers, both to the housewife and to the industries which use sugar, to see that the industry is efficient and does not cloak excessive costs behind this protective barrier.
In pursuance of this, the Government in 1960 appointed a committee of three, under the chairmanship of Sir Mortimer McCarthy, the former Chairman of the Tariff Board, to investigate the industry. The preceding full-scale inquiry into the sugar industry was in 1952. It will be seen from the extracts from the committee’s report which were released last month that the committee found there was no inefficiency in any section of the industry and that there was constant striving for even greater efficiency.
The committee’s report cannot be published in full because, although the inquiry was essentially a public inquiry, and public hearings were held in every State, the committee was also commissioned to accept information in confidence, and it did accept information from the sugar industry on that basis. The main body of the report which the committee submitted to the Government contains frequent and extensive reference to this confidential material, and publication of the full report would not be possible without betraying the trust placed in the committee. This Government is all in favour of open investigations and reports, but under certain circumstances frankness and full publication, as I think every one will appreciate, do nothing but provide undesirable advantages to competitors.
As I said earlier, over 50 per cent, of our sugar exports have to compete on the world market and I am sure honorable senators will agree that it would be foolish, especially at this difficult period when for every buyer there are many sellers, for us to publish an authoritative report on the workings of our industry and its cost structure which could be used by competitors to our disadvantage. In the circumstances the Government has decided to publish only the summary of conclusions and the recommendations from the report submitted by the Sugar Enquiry Committee.
The Government has already announced that it is not prepared to accept the recommendation of a majority of the committee that the formula for determining the domestic price should be amended. The present formula, which has been supported by the Menzies Government ever since it took office, and also by preceding governments, is designed to return to growers and millers the average cost of production in respect of a quantity of sugar which is, by and large, the aggregate of domestic consumption and export quotas under international sugar agreements plus a margin to allow for a bad season - that is, “ mill peaks “. This term is not to be misconstrued as meaning all that the mills can produce; it represents the quantity which the Queensland Government guarantees to acquire or, in the case of New South Wales mills, purchase in any year. Sometimes, and this year is a case in point, the Queensland Government decides it will take more than mill peaks but when it does, this sugar is taken at “ producer’s risk “ and does not enter into the domestic price formula.
Our exports exceed domestic consumption and this has been the case for some considerable time. The suggestion made by the majority of the committee was that the quantity of exports taken into account in determining the domestic price should only be equal to the quantity consumed at home. They further suggested that this formula should be written into the agreement and immediately applied, and that the domestic price of sugar be reduced by one half-penny per lb.
The Government has not accepted this recommendation because it seemed wrong in principle to throw overboard the mill peaks formula which has been at the core of all the previous agreements. All the controls on production imposed by the Queensland Government are based on the concept of mill peaks, and the industry has been brought up to its present stage of development because of the assurances inherent in the agreements that domestic price would be based on such a quantity.
The majority recommendation on the price of sugar was qualified in a very important way. The report says with reference to that recommendation -
The Committee’s conclusions regarding the domestic price of sugar are based on a continuance of conditions that have existed in the past.
The committee then directs attention to some clouds which it indicated were then appearing on the sugar-marketing horizon. The committee’s report was completed in August, 1961, when the free market price was about £28 sterling per ton, and at that time the biggest cloud - the suspension of quotas under the International Sugar Agreement - had not appeared. This has thrown the whole free sugar market into confusion. The price has since dropped as low as £19 15s. sterling per ton, and, although at the moment it has recovered to about £24 sterling, there seems little prospect of a sustained recovery from these very low prices for some time at least.
Apart from other considerations, it would clearly have been difficult to justify the introduction of a new concept into the domestic market price formula at a time when the prospects for export prices are anything but bright. The Government, therefore, decided to retain the existing formula for determining the domestic price, and the prices in the new agreement are the same as in the existing agreement. The wholesale price of refined sugar for domestic use will remain at £90 5s. 2d. per ton which, with the customary sellers’ margin, permits sugar to be retailed at lid. per lb. in all State capital cities. The price of the grade of sugar used by manufacturers will also be unchanged.
This agreement is probably one of the most important between the Commonwealth and a State, because although if is called the sugar agreement and is between the Commonwealth and the State of Queensland, its ramifications, through the system of domestic and export sugar rebates, extend far beyond the sugar industry and Queensland. They affect every grower and processor of canning fruits and every exporter of goods containing sugar.
The new agreement provides that the sugar rebate system will continue in substantially the same form as at present. The rate of domestic rebate remains at £5 per ton of sugar used in products made from Australian fruit for which a reasonable price has been paid. The method of calculating the export sugar rebates is also basically the same as in the present agreement. Such changes as have been made in relation to the rebates, have been dictated by the experience gained in administering the rebate arrangements. The domestic rebate system is designed to stabilize the canning fruit growing industry and, despite the apparent smallness of the incentive provided to induce processors to pay for fruit the minimum prices which are declared each year by the Fruit Industry Sugar Concession Committee, it has worked effectively, as growers of canning fruits well know.
The committee, which was appointed to investigate the sugar industry, was also commissioned to investigate the financial relationship between that industry and the canning fruits industry. In its report the committee said that it could see no fundamental reason why the stabilizing factor for the canning fruits industry should be provided through the domestic rebate system, and it recommended that future policy should be directed towards reducing the rebate, and restricting its field of operation, with the ultimate object of removing the rebate arrangement from the sugar agreements. Despite any weaknesses there may be in the system, it works very well indeed and the Government can see no reason for changing it, especially at this time when the future of the export markets for processed fruit is also far from assured.
The agreement provides that the State of Queensland shall, on behalf of the sugar industry, continue to contribute £264,000 annually to the Fruit Industry Sugar Concession Committee for the payment of domestic rebate. Only in a technical sense is this paid by the sugar industry, because it is included in that industry’s cost structure and, in the final analysis, it will be paid by the consumers of sugar in the domestic price. This is also the position in the case of the export rebates.
I am sure most honorable senators will be familiar with the export rebate system and what it is designed to achieve. Under the new agreement exporters of both fruit products and other products will continue to receive rebates on the sugar content of goods sold overseas, and will suffer no disability by reason of the fact that the sugar used in the goods was not purchased at the world price. The Commonwealth, for its part, will continue to prohibit the importation of sugar and sugar products, except in special circumstances which are specified in the agreement. The benefits conferred by this agreement on the industries directly affected by its terms and conditions are, in my opinion, absolutely essential for their continued well-being and for the well-being of Australia generally. I commend the bill to honorable senators.
Debate (on motion by Senator Benn) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henty) read a first time.
.- I move -
That the bill be now read a second time.
I mentioned when tabling the report of the Tariff Board on nitrogenous fertilizers on 4th April that the Government had adopted the board’s recommendation for a bounty on sulphate of ammonia. The bill now before the Senate is designed to put this proposal into effect. In line with the board’s recommendation, the bounty will be paid to Australian producers of sulphate of ammonia at the rate of £2 per ton on domestic sales of sulphate of ammonia for use in Australia as a fertilizer. The bounty is to operate for three years as from 1st April, 1962, and an annual limitation on payment of £225,000 is prescribed. The cost of the measure is estimated at about £200,000 a year, based on present Australian production of around 100,000 tons annually.
The board concluded on the evidence before it that a profit limitation is unnecessary in this case. Nevertheless, an unforeseen material change during the course of the bounty might conceivably result in the producers receiving a higher rate of profit than is at present expected. The Government has decided, therefore, that the proposed legislation should contain the 10 per cent, profit limitation provision usual in other bounty legislation.
Sulphate of ammonia is the only synthetic nitrogenous fertilizer produced in Australia at present. The Tariff Board found that the continued production of sulphate of ammonia is desirable because it gives employment to 400 people and it uses industrial byproducts which otherwise would be wasted. Capital used in the industry is about £3,000,000. Except for a small quantity used in industry, the Australian output of sulphate of ammonia is sold to primary producers, either as a straight fertilizer or in fertilizer mixtures.
The Government believes that the proposed bounty will offset the industry’s competitive disability in relation to imported sulphate of ammonia and will have a beneficial effect on the price to primary producers. It expects that the price of sulphate of ammonia will fall to somewhere near the 1960-61 level. The question of further assistance to the industry will be examined by the Tariff Board before the bounty expires. 1 commend the bill to honorable senators.
Debate (on motion by Senator Mckenna) adjourned.
Debate resumed from 2nd May (vide page 1089), on motion by Senator Paltridge -
That the bill be now read a second time.
– in reply - Prior to the adjournment of the Senate last night I referred to the remarks of the Leader of the Opposition (Senator McKenna) on the measure now being considered and indicated how he. supported the Labour Party policy in relation to overseas borrowing. I pointed out that the Labour Party is and has been opposed for many years to the use in Australia of capital borrowed overseas. I then went on to state briefly that that policy, when considered in conformity with general socialist policy, must lead inevitably to the introduction in Australia by a Labour Government of either forced loans or capital levies. That contention is indisputable.
– It is not.
– If it is not, I should be pleased if Senator O’Byrne, who knows little about this matter, would explain on a future occasion how he would raise loans in Australia at a rate of interest which he would not consider to be catastrophic having regard to the fact that the rate of interest paid on overseas loans is not more than the usual commercial or going rate applicable at the time, and is regarded by him as catastrophic.
I want to refer particularly to some of the comments made by Senator Willessee who had the distinction of leading for the Opposition in this, debate and whose thoughts were echoed and re-echoed by honorable senators opposite as the debate proceeded. Senator Willesee sought to establish the fact, first, that the International Bank was not set up for the purpose of making loans to countries like Australia. He went on from that point to assert that Australia’s acceptance of loans from the International Bank was, as he described it, an immoral act. He said that the debates at the time of the acceptance by Australia of membership of the International Bank show clearly that the bank was established, not for the purpose of lending to its members, including Australia, but for the purpose of lending to countries which were underdeveloped. I was interested in this because I recall, as no doubt he does, the internal strife in the Labour Party prior to the Chifley Government’s decision that Australia should become a member of both the International Monetary Fund ‘and the International Bank. I was surprised at the implication that ran through the honorable senator’s speech that Mr. Chifley himself subscribed then to the belief that loans from this bank should not be sought by Australia.
– He said that; he did not imply it.
– I suggest that the honorable senator’s recollection is at fault. Mr. Chifley did not say that. I was most surprised to hear that remark attributed to Mr. Chifley by Senator Willesee. As much as we on this side of the chamber disagreed with some of the policies of the late Mr. Chifley, I am sure all of us acknowledge that throughout his public career, in matters of finance, he was too wily and too wise a man to commit himself to a statement of that sort.
During a debate on a measure relative to Australia’s joining both the International Monetary Fund and the International Bank, at a time when there was considerable strife within the Labour Party, Mr. Chifley said after dealing with the bank and its purpose -
It is unlikely that Australia would require to borrow from the bank.
Mr. Chifley did not at any time say that Australia should not, or would not, borrow from the bank. In point of fact, although there was as much disagreement within the Labour Party about the International Monetary Fund as there was about the World Bank, shortly after Australia became a member of the fund Mr. Chifley himself resorted to a loan from the fund. It was a decision that was regarded as wise by members on this side of the Senate.
– I referred to that.
– You did indeed. I return to Senator Wilesee’s claim that Mr. Chifley said that Australia should not borrow from the bank. Mr. Chifley did not say that because he had it well in mind that developments might occur that would require the support of outside funds. The fact that Australia has availed itself of funds from the World Bank is simply the natural outcome of a continuing process of development which has required increasing amounts of finance to sustain it. This finance has not always been readily available within
Australia because of the many other calls made upon our internal loan resources. So much for the proposition that Australia was not to borrow from the bank, or that the Labour Government of the day thought that it should not borrow from the bank.
In the same speech by Mr. Chifley in 1947 he said that the articles of the International Monetary Fund and of the International Bank had been under close examination for a period of three years. It will be recalled that Australia was not an original member of either of these organizations. It is acknowledged therefore that the articles of association had been under examination for three years before Australia entered these organizations. What do the articles say? Article 1 states -
The purposes of the Bank are: (i) to assist the reconstruction and development of territories of members by facilitating investment of capital for productive purposes-
So it goes on. Paragraph (iii) of Article 1 refers to the promotion of - the long-range planned growth of international trade and the maintenance of equilibrium of balances of payments by encouraging international investment for the development of the productive resources of members . . .
Again, paragraph (v) provides that the bank shall -
– It is a co-operative movement.
– It is obvious from start to finish that this organization is, as Senator Wright says, a co-operative movement. Its central purpose is to assist its members. Australia became a member of the bank on that understanding. It is absurd for any one to suggest now that the Labour Government of the day had no knowledge of the type of organization it was joining. The articles make it plain - and it would have been plain to the government of the day after a study lasting over three years - that the central purpose of the organization was to provide assistance for the members.
I suggest that the argument submitted by Senator Willesee falls completely to the ground. If I were asked to account for the remarks made by Mr. Chifley I would say that as well as being a wise and wily financier Mr. Chifley was also a very successful practicising politician. He was very much aware at that time of a divided party sitting behind him, and he no doubt sought to mollify some of his supporters who had expressed hostility towards the action of the Government in joining the International Monetary Fund and the International Bank.
Senator Willesee went on to say that the International Bank had failed in its purpose, and that one of the consequences of that failure had been the establishment of the International Development Association. What Senator Willesee apparently completely fails to realize is that it was the success of the International Bank as a bank that made possible the establishment of the International Development Association. For fifteen years the bank has pursued a course of steady progress which culminated last year in the developments of first significance which are referred to in the report of the bank. The fact is that the bank is now selling strips of its loans to institutional investors the world round, and the sale of those strips of investments to institutional lenders has set the hallmark of its acceptability and has given it not only the resources but also the public confidence that has made it possible to branch out in this further extension of its activities by forming a cooperative of members, very largely identical with those of the bank, for the purpose of giving aid on non-conventional terms to undeveloped countries. The point is that had the bank failed as a bank the International Development Association would never have been possible.
I want to refer, if I may, quite briefly, to the other financial body to which Senator Willesee referred, that is, the International Finance Corporation. I was amused, for a reason that I shall mention in a minute, that Senator Willesee should take the most striking address delivered by Mr. Robert Garner on the occasion of his retirement from the chairmanship of this body. In referring to it, Senator Willesee said that Garner had pointed out that money was not everything. The honorable senator proceeded from that point to try to establish his case that we in Australia, having certain resources, both natural and manufactured, and labour, should proceed with this development without the aid of capital borrowed from overseas. What Garner was saying in his address, as one might very well expect him to say, was that money was not everything, without the properly harnessed resources of labour and material, brought together in the most effective and efficient way to get the best value for the investment. That was Garner’s central point in the magnificent address that he gave. I am amused to have it quoted to me by one who adheres to at least some socialist policy, because it is my belief that . this address should be made compulsory reading for every one who believes in any aspect at all of socialism. Let me read what Garner said in another part of his address.
– He is a Marxist.
– If he is a Marxist, he is the most unconventional Marxist to whom I have ever listened. He said -
I have some definite ideas as to the means of getting greater productivity, which is the essence of modern economic life, and providing for wide distribution of its benefits, which is both economically and politically imperative in free societies.
Obviously there is need for governments to provide the basic facilities and services. To do this in adequate measure will strain their human and financial resources. It seems sensible, therefore, to give the greatest scope to private initiative and capital in all fields which are not necessarily in the public sector.
This, I think, will be particularly interesting to senators who sit opposite. He wen. on -
There is convincing proof that this is the most assured method of getting development. The most productive economies which have brought the highest standards of living to the most people have been those which have permitted private initiative to control the widest range of activity. This system has worked in the United States, which began as a wilderness; it has worked in Europe and Japan, with the long-established societies.
Over the past fourteen years I have visited some SO countries, most of them in earlier stages of development. The most substantial progress I have observed has come from the private sector, where it has been provided with basic facilities and a political and administrative climate in which it could exercise its talents.
Sitting suspended from 12.45 to 2.15 p.m.
– There are only one or two further points to which I want to refer before concluding my remarks at the second-reading stage of this measure. The first relates to the assertion which has been made quite frequently during the debate that the loan that is being raised from the International Bank is not for use in the Snowy Mountains scheme but for the more general purpose of adding to Australia’s overseas reserves. I think the answer to that argument will emerge when we reach the committee stage. The terms of the agreement in the first schedule to the bill make it perfectly clear that advances of the loan are to be made against the performance of work by the Snowy Mountains Authority. Of course, it is inescapably and inevitably true that the raising of this loan will have the effect of adding to Australia’s overseas reserves. It could not do otherwise; but this particular loan is being raised, I repeat, for the purposes of the Snowy Mountains scheme. To that extent, it will release, for general development or for other purposes, moneys which might otherwise be required for that project. The agreement attached to the bill makes the position perfectly clear.
The only other criticism to which I propose to refer is that which has arisen from the fact that the bank charges 1 per cent. commission in respect of its loans. All I can say about that criticism is that it is a little belated, because provision for the commission charge is included in the articles of the bank which, in turn, were embodied in a bill introduced by the Labour government and passed through the Parliament about fourteen years ago. So, it is a little late to complain about the commission that is now charged by the bank.
– Was there a complaint here about that?
– Yes, there was. It emerged particularly during Senator Willesee’s speech, and I think other honorable senators opposite also referred to the matter.
– Yes. Senator Dittmer raised it, too.
– That is true. I assert that this measure is another manifestation, if that were necessary, of the faith which this Government has in the future of our great Commonwealth.
We do not take fright at borrowing money for developmental purposes. Looking down history, and looking around the world to-day, we see that what we are doing in this respect is merely repeating the history of development throughout the world. It is a repetition of what is being done in many other countries to-day. To baulk at a fair rate of interest, to throw up our hands in despair, to say that borrowing overseas will cripple us in future and sell us into bondage, is in our view nothing but an expression of the deepest defeatism. We believe that money that is properly invested in this country, as in any other country, is the seed wheat of development, of progress and of expansion. It is our job, as a government, to see to it, as Mr. Garner has pointed out in his address, that we get the maximum return from the money that is invested and that we properly use our resources and our man-power so that we achieve the optimum result.
– That is where the management of the Snowy Mountains Authority comes in.
– Indeed it is. This is a fitting point for me to pay my tribute to the work of the commissioner of the authority and to all those who have been associated with the work of this great project. We have the utmost faith that the investment of the capital that is being borrowed from overseas will be productive of the greatest possible progress. In years to come, when we look on a completed Snowy Mountains project which even now is making a valuable contribution to our development, we shall have cause to say that the step we are now taking was a wise and a forward-looking one.
Question put -
That the bill be now read a second time.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . . . 9
Question so resolved in the affirmative.
Bill read a second time.
Clauses 1 to 3 agreed to.
Clause 4 (Loan Agreement and Loan Regulations).
. -I assume that there is no objection to discussing the schedules to the bill. The First Schedule is referred to in clause 4. The schedule covers a wide field and deals with matters that could well have been the subject of a lengthy explanation by the Minister for Civil Aviation (Senator Paltridge). Section 2.01 of Article II of the First Schedule reads -
The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to one hundred million dollars ($100,000,000).
We elicited very little information about this matter during the debate on the second reading. I cannot see that it is essential to spend very much of this 100,000,000 dollars loan outside Australia. Can the Minister give any information as to the type of currencies in which the loan will be taken? After all, the Snowy Mountains Hydroelectric Authority should have some idea of the type of currencies that will be needed.
– The completion of the Snowy Mountains project will require the purchase of some equipment overseas. Such equipment may run to such things as electrical equipment, earth-moving equipment and general machinery. I understand that an estimate of the total cost of overseas purchases required for the completion of this project runs as high as 30,000,000 dollars. The purpose of the clause is to provide that, where necessary for the purchase of equip ment overseas, currency of the appropriate country may be drawn against the loan.
.- Article II. of the First Schedule provides for the loan to be taken up in various currencies. Has the Minister for Civil Aviation (Senator Paltridge) any information as to the break-up of the loan into various currencies? Can the Minister give any information as to the currencies in which the loan is to be repaid if the Commonwealth decides to draw the loan in currencies other than dollars? If the Commonwealth decides to draw one portion of the loan in sterling and another portion in German Deutsche Marks is the loan to be repaid in those currencies or in dollars? Section 2.07 of Article II. of the First Schedule reads -
The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement.
That schedule relates only to dollar repayment.
– I would like to offer some comments on this matter of currencies. Section 2.03 of Article II. of the First Schedule reads -
Except as the Borrower and the Bank shall otherwise agree, the Borrower shall be entitled, subject to the provisions of the Loan Agreement, to withdraw from the Loan Account in dollars and such other currencies (other than the currency of the Borrower) as shall from time to time be agreed between the Borrower and the Bank, amounts …
Have the types of currencies yet been agreed upon? If not, what happens if agreement cannot be reached? I realize that the arbitration provision states that in the event of disagreement on any matter, arbitration is to take place with two arbitrators and an umpire. That would be a rather cumbersome and costly procedure. Are the currencies determined at this stage or will they be determined from time to time only as drawings are made? Why is Australian currency particulary excluded? On looking at the bank’s statement of funds I realize that the bank holds only a few hundred thousand pounds of Australian money. Is it primarily because the bank lacks Australian funds at the moment, or not?
On the question of repayment, I notice that section 3.03 of the loan regulations deals with the question raised by Senator Vincent. It says -
The principal of the Loan shall be repayable in the several currencies withdrawn from the Loan Account and the amount repayable in each currency shall be the amount withdrawn in that currency.
In section 3.04 there is a similar provision requiring the payment of interest to be made in the currency in which the principal to which it relates was drawn. Section 3.05 deals with the currency in which the commitment charge is payable.
The Commonwealth, of course, under this agreement might show a loss or a profit according to the fluctuation of currencies between the time of borrowing and the time of repayment. I do not expect the Minister to usurp the role of a prophet and say what will happen; but section 3.07 deals with the valuation of currencies and says -
Whenever it shall be necessary for the purposes of the Loan Agreement to determine the value of one currency in terms of another, such value shall be as reasonably determined by the Bank.
I ask: Does that not leave us very much in the hands of the bank? This is not a matter that can be resolved by arbitration; it is a matter for the sole determination of the bank. I shall refer to section 2.03 at a later stage, but not in this context. As the matter of currencies was raised, I thought I would put those questions to the Minister.
– The question of the currencies that will be required has not yet been determined. It will be determined as the work proceeds, in the light of requirements and also, I imagine, in the light of the best deal that can be effected. Let us assume, for example, that some heavy equipment is required for the project. It may well be necessary to call international tenders for that equipment. The agreement as it is drawn leaves the position open so that the drawing can be made in a currency appropriate to the particular purchase. The agreement provides that repayment shall be made in the currency that is borrowed. For example, if dollars are used for a purchase for portion of the work, then dollars shall be repaid.
asked about the ability to borrow in the currency of the borrower. This is an overseas loan, and in the event of expenditure being required to be made in Australia, the drawing will be made in dollars, and by agreement between the borrower and the bank, converted to Australian currency as required. I am afraid that I have forgotten the other points raised by Senator McKenna.
– I will pick them up when we are considering the agreement, if necessary.
Clause agreed to.
Clause 5 agreed to.
Clause 6 (Application of loan moneys).
– Sub-clause (1.) of this clause provides -
Amounts borrowed under the Loan Agreement shall be paid into the Loan Fund.
That, of course, is the long-established Loan Fund constituted under the Audit Act. Sub-clause (2.) provides as follows: -
The Treasurer shall, from time to time, out of the Loan Fund, make advances to the Snowy Mountains Hydro-electric Authority … of amounts equivalent in the whole to the amounts paid into the Loan Fund . . .
That refers to payments into the Loan Fund from the amounts borrowed. Under the next sub-clause, the Loan Fund is appropriated accordingly for that purpose. Under section 2.03 of the agreement the bank contracts to advance amounts equivalent to 50 per cent. of such amounts as shall have been expended after 30th June, 1961, on the project. In other words, we can receive as a loan, only 50 per cent. of what we already have expended. Twice a year we will receive payments of these loan moneys. I am concerned about this matter, having regard to the provisions of section 5.01 (a) which says -
The Borrower shall make the proceeds of the Loan or their equivalent available to the Authority upon terms satisfactory to the Bank.
I also refer to section 3.01 which reads -
The Borrower shall cause the proceeds of the Loan to be applied in accordance with the provisions of the Loan Agreement exclusively to expenditures on the Project after June 30, 1961.
Taking those matters together, the first instalment will be in respect of amounts that have been paid by Australia before we receive anything. So, at the end of the contract we will reach the position where, the work having been completed and the money spent, Australia will draw from the bank an amount representing half of the previous year’s expenditure. Under the clause that we are considering, the money must be paid to the authority. How does that comply with the provision that the proceeds of the loan are to be applied exclusively to expenditures on the project? It is quite obvious that the last amount that will be received will be received after the project is concluded, and on being paid to the authority pursuant to the provisions of this clause it will be used by the authority for purposes not connected at all with the specific project, but for other work.
I ask that question with this in mind: The slightest default by the borrower gives the bank the authority to make the whole amount immediately due and repayable. Therefore, I believe great care should be exercised to ensure that there are no traps for us in these provisions. That leads me to ask a question that I believe is quite relevant and pertinent. If the final instalment is to be received from the bank after the expenditure has been incurred by Australia, and that instalment is to represent only one-half of the expenditure that has been incurred, when it is paid to the authority, under this clause, the authority will not be able to use it on the project because the particular project will have been completed. It will be applied to this general purpose - the next stage of the project. Is there any danger that that will be construed as a default under the agreement as drawn? Have I made myself clear to the Minister?
– Yes. I think the answer to the worry of the Leader of the Opposition (Senator McKenna) is that the work having been done and paid for from advances made by the Government - as the honorable senator observed these drawings are made retrospectively and, incidentally, quarterly, against the previous quarter’s work performed - the loan raised by the authority from the Commonwealth will be recouped by the drawing received from the bank. Let me read the explanatory note which probably states the position better than I have. It is in these terms -
Sub-clause 1 provides for the drawings from the bank to be paid into the Loan Fund. Subclause 3 appropriates the Loan Fund to the extent necessary for the Treasurer to advance sums equivalent to the drawings to the Snowy Mountains Hydro-electric Authority under section 25 (2.) of the Snowy Mountains Hydro-electric Power Act. Sub-clause 2 provides that sums equivalent to the amounts borrowed are to be advanced to the authority from the Loan Fund rather than the amounts actually borrowed because the basis of the loan is that the bank will make advances as the authority incurs expenditure, that is, retrospectively. Thus, what the Commonwealth has to do is to make sums equivalent to the amounts borrowed from the bank available to the authority to meet subsequent expenditures.
The Snowy Mountains Hydro-electric Act which is referred to in sub-clause 2 approved the agreement between the Commonwealth, New South Wales and Victoria relating to the Snowy Mountains scheme. Sub-section 2 of section 25 of the act authorizes the Treasurer of the Commonwealth to make advances to the authority out of the moneys appropriated by the Parliament for the purposes of the act. Hitherto advances to the authority which amounted to £181,000,000 have been appropriated by the Parliament from Consolidated Revenue. Sub-clause 2 ensures that amounts equivalent to the whole of the moneys borrowed by the Commonwealth from the bank shall be advanced to the authority as required by section 5.01. (a) of the agreement which reads -
The borrower shall make the proceeds of the’ loan or their equivalent available to the authority upon terms satisfactory to the bank..
An understanding is being confirmed with the bank that advances made to the authority out of moneys appropriated from the Loan Fund will carry the same terms and conditions as to interest and to repayment as advances for moneys appropriated from the Consolidated Revenue Fund. Briefly, these are that the advances carry the long-term bond rate of interest applicable to the Commonwealth loan issued before the advance was made, and are repayable over 70 years from the time when the assets in which the moneys are invested become revenue-producing.
Clause agreed to.
Clause 7 (Payment of interest and other charges).
– On my perusal of the agreement I note at least two points. One is the commitment charge which is referred to in section 2.04 on page 4 of the agreement. It is stated thus -
The borrower shall pay to the bank a commitment charge at the rate of three-fourths of one per cent. (i of 1 per cent.) per annum on the principal amount of the loan not so withdrawn from time to time.
Has any calculation been made of what that will cost from now until the work is completed? On the face of it, relating it to 100,000,000 dollars, it would represent 750,000 dollars per annum. The amount will diminish as amounts are withdrawn under the commitment charge. I take it that in the estimates which have been made, there has been some calculation of what would be involved in that commitment. I realize that an accurate determination . will depend upon the quantum of the amount that is withdrawn from time to time.
– I take it that it would be directly related to the terms of contracts of work done, performance and payment thereof.
– I should think it would relate entirely to only one matter - the size of the drawings from the bank because this particular charge operates only on amounts uncommitted or undrawn. Therefore, the only factor is, how much has been drawn. We pay interest on the balance. I should like to have an estimate of what the Government believes will be the cost over the period of construction. This is a real charge and it could be as high as the maximum of 750,000 dollars per annum.
– Surely the amount to be withdrawn would relate to the quantum of work done, the rate at which it is done and the nature of the contracts entered into.
– There is a necessary relation of 50 per cent. It is not a matter so much of the work done - I would not agree with that proposition - as of the money expended. It has no relation to the physical work. If the honorable senator will look at section 2.03 on the bottom of page 3 he will see that it is 50 per cent, of such amounts as shall have been expended. That has no relation to the work done. Much more work may have been done than money expended. It is based upon money in fact expended.
– But within the context of the 50 per cent, there must be a relation to the work performed under the various contracts.
– I do not agree. It is stated in express terms as 50 per cent, of the money expended regardless of the work done. The work done may be a great deal more than the money expended.
– Surely the. authority will not pay for work that has not been done.
– I suggest there is some indefinable relationship of which we cannot make an accurate assessment.
– I take it that there1 are schedules of work performed and that the Government and the authority would have some idea of how. the payments will be drawn and what the uncommitted amount of the loan will be for the next three or four years for the purpose of calculation of the capital cost, because this commitment charge will be a debit against the capital expenditure. Being part of the cost of development, I am sure that some calculation has been made. I should like to know how much’ in all is contemplated as being the amount for the three- or fouryear period.
I should like to deal now with the matter of the 50 per cent, reimbursement of the amount Australia has expended. Looking at this from a borrower’s viewpoint, the advance seems to be a very poor one. A 50 per cent, advance is an exceedingly tight advance, the type of advance one would expect to find on a very poor security. Having regard to the fact that our national credit is pledged, that there is already in this one project, apart from all our other national assets, an asset upon which we have spent already £200,000,000, I ask the Minister: Who fixed the 50 per cent.? Did Australia ask for more? If Australia is regarded as a good security why can we not obtain the full amount of the proposed expenditure? Who fixed the 50 per cent.? Was that the amount we asked for?
A further matter arises out of the same clause. It is a most interesting provision. We are to get 50 per cent, of the amounts we have expended since June, 1961 -
Provided that total withdrawals shall not exceed at any time the equivalent of the amounts spent on the project after June 30, 1961, in the territories of countries which are members of the Bank and Switzerland for goods produced in (including services supplied from) such territories.
On my first reading of that I gained the impression that all we had to do was spend the money overseas, but on my second reading I realized that the money has to be spent in the territory of one of the members of the bank. Why does the bank insist that the money be spent only within the territories of members of the bank? Apparently, if we were to spend the money in the territory of a country that was not a member of the bank, we would not be entitled to our 50 per cent, loan under this agreement. It is a very tight provision. One can understand it from the viewpoint of protecting the interest of members and of keeping the members within a close corporation, but if we were to spend the money in a country overseas that did not happen to be a member of the bank, then, under this clause, the bank would be entitled to rule that we would not get the 50 per cent. loan.. Is that provision something the bank insisted upon or is it something that we asked for?
– I shall answer the last question first while it is fresh in my mind. The stipulation as to the expenditure of money with members of the bank arises from a provision of the bank’s articles. The single exception is that money can be spent in Switzerland. No fewer than 70 countries are members of the bank. The only countries that are not members are Communist and Communistcontrolled countries. So, firstly, this stipulation arises, from an article of the bank, and the reason for that article lies in the facts that I have just mentioned.
I confirm, of course, the view of the Leader of the Opposition that, Australia being a member country, the money may be spent in Australia. In regard to the commitment charge, it is a fact that work schedules are provided for works to be done according to a timetable. As the Leader of the Opposition acknowledges it is not possible to give an accurate assessment of the commitment charge, but an estimate of the cost of this charge over the period of operation is 2,000,000 dollars. I point out that this commitment charge of & per cent, is levied on the outstanding funds. While we are paying i per cent, interest on the undrawn balance we are not paying the full 5) per cent, interest rate which we would have to pay if this were a straight-out loan arranged on a government-to-government basis, or arranged by this Government from a private source in another country, or for that matter in Australia. The com mitment charge lets us out of paying the full 5i per cent, while the balance remains undrawn.
– It would be also an encouragement to complete the work as quickly as possible.
– Yes. There is sufficient flexibility in the agreement to permit earlier drawings if required.
– The Minister overlooked the point 1 raised on section 2.03. 1 made some comment upon the fact that we were restricted to 50 per cent. We are dealing with clause 7 and I ask for a definition of “ interest and other charges “ in that clause. I have referred to the commitment charge in section 2.03. The only other such charges that I can recognize, on a perusal of the document, are the premiums that are required to be paid in the event of pre-payment. These range from i per cent, to 5i per cent. However, there is in section 6.04 what is termed a service charge. The heading is “ Interest on Bonds; Service Charge “. It is rather an interesting provision whereby Australia, under the terms of this loan, can be compelled to enter into bonds which the bank may then sell elsewhere. The bank is entitled, under this section, to have the bonds made out at a lower rate of interest than that payable by Australia.
The service charge represents the difference between the interest rate on the loan and the interest rate on such bonds. That obviously is an arrangement made to suit the bank’s convenience. I refer to it only because of the interest I have in the procedure and to complete the record of items that might fit the description of “interest and other charges “. Therefore, the things that might fall under that heading are the commitment charge, the pre-payment premium and this rather extraordinary service charge. I ask the Minister whether there are any other charges under the loan agreement that might fit into the term “ interest and other charges”?
.- The figure of 50 per cent, to which Senator McKenna referred is explained by the fact that a loan of this nature, made by the bank conforms as a rule to an amount which is 50 per cent, of the total expenditure on the project. I understand there are exceptions to that rule, but it is customary that loans made by the bank for purposes such as this run to 50 per cent, of the expenditure. That is the basis on which this loan was negotiated and settled.
– Did we ask for more?
– No, we negotiated this loan on the basis of 50 per cent.
– Without asking for more?
– “ Or such other percentage as shall from time to time be agreed upon”. The percentage may be altered?
– It is customary for the figure to be 50 per cent.
– Or such other amount as shall be agreed upon?
– No. It is usual in the bank for loans of this type to run to 50 per cent. I have already said that there are exceptions, but the custom is that they should be 50 per cent. That was the basis on which this loan was negotiated. I think that the Leader of the Opposition has covered all the other charges referred to, namely the interest rate, the commitment charge, prepayment charge - should it- apply at any time - and the service charge on bonds. Only those four could possibly apply, so far as I am advised at the moment. I take the opportunity of indicating that this service charge in relation to bonds has particular relevance to the development within the bank to which the report makes specific reference this year, that is, the sale of strips of their loans to private investors.
Clause agreed to.
Clauses 8 and 9 agreed to.
Clause 10 (National Debt Sinking Fund Act not to apply).
.- I take it that the application of the National Debt Sinking Fund Act is being negatived to prevent the Government from being obliged to pay 10s. per £100 over a 50-year term into the fund. There are no commitments to the National Debt Sinking Fund in respect of this borrow- ing, and the principal is to be repaid, not out of that fund, but out of revenue by the taxpayers?
– That is right.
– If the application of that act were not negatived, the Government would have to pay into the fund 10s. per cent, per annum off the principal.
Clause agreed to.
– I have no comment to make on Article 1. I refer to Section 2.06 of Article II, which provides -
Interest and other charges shall be payable semi-annually on March IS and September IS in each year.
The agreement is dated 23rd January, 1962. On the basis of that provision, at least a commitment charge should have been paid in March. Was there a pro rata payment of the commitment charge in March?
– No, the first payment is not due until after the effective date of the agreement, which will be the date when the legislative act is completed.
– I think that the effective date is defined as being a specified number of days from the date of ratification.
– I think it is 60 days.
– It is not necessary, from a strictly legal viewpoint, for the matter to be ratified by the Parliament. These agreements may be entered into by executive act, but the agreement does not specifically provide for ratification by the Parliament.
– The honorable senator raises an interesting point. He is quite right. It is not strictly necessary for the agreement to be ratified by the Parliament, but the bank expresses a preference that it should be ratified by the Parliament - a preference, incidentally, which is shared by the Government.
– I might say that that course is welcomed by the Opposition. I have no other comments to make on Article II. We have commented on Article III and on Article IV. Section 5.01 of Article V provides -
Why should the bank be concerned with what we do with the money? Why does it want to arrogate to itself the right to dictate the terms upon which the borrowed money shall be made available to our authority? It will be noted that the power to specify terms is put entirely in the hands of the bank and out of Australia’s hands. Why should it concern the bank whether or not we charge interest when making the moneys available? It seems to me to be none of the bank’s business. I am rather surprised that the Government accepted an agreement containing such a provision. This bank has the whole credit of Australia pledged in this matter. Surely it is a matter between us and our authority whether we charge interest and what the rate of interest should be. Why should the bank be concerned?
– It refers to the proceeds of the loan.
– It is the Commonwealth of Australia that is borrowing. The bank wants to tell us the terms upon which we are to pass over the proceeds to one of our authorities. I do not think that that is a proper term for Australia to have accepted.
– I do not hold the same view as is held by the Leader of the Opposition (Senator McKenna). The bank, being the type of organization that it is, with the membership that it has and the responsibility that it holds towards its member States, must, even if no more than in a formal way, satisfy itself that the application of these funds is being made in a wise and prudent way. No one in the bank or in Australia, I am sure, would for a single moment think that this Australian Government would be imprudent with the proceeds of this loan or would not apply them meticulously correctly in a way that would gain, consistent with the public interest, the most satisfactory financial result. But the bank does business with a number of other countries and, without criticizing any one of them, I put it as a general proposition that this is a requirement which any lender might reasonably ask of any borrower. I put it on that basis. It is no more than reasonable that any lender should require what this article requires, namely a cooperation between the parties to the loan which permits of the bank being assured, even if only on the request of one of its other member countries, that the loan is being properly applied and the money properly spent.
– The Minister was quite correct when he stated that he and I do not see eye to eye on this matter. We can only agree to differ. My viewpoint is backed by what I find in the remainder of article V. Paragraph (c) of section 5.01 of the agreement provides that we have to furnish to the bank the plans, specifications and construction schedules for projects, and any material modifications subsequently made in such detail as the bank shall request. That is not the end of it. If honorable senators look at the remaining paragraphs of that section, they will see that we will be obliged to maintain records, not only of the particular project but also of the rest of the Murray development, adequate to show the expenditure of the proceeds of the loan. As one continues to read paragraph (d) one finds that it will be necessary to compile e a mass of information; otherwise we shall commit a breach of the agreement.
Let me refer to section 5.02. Paragraph (a) provides that the borrower and the bank shall co-operate fully to assure that the purposes of the loan will be accomplished, and that to that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the loan. The section goes on to state -
On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower and the international balance of payments position of the Borrower.
What an extraordinary thing! For a paltry 100,000,000 dollars, this country is to accept the obligation to keep the bank advised and to give it such information as it wants with respect to the financial and economic conditions in the territories of the borrower. When I say that it is a paltry amount, I mean that it is certainly not large if one looks at it in relation to Australia’s trade and international status. It is a relatively insignificant amount. Fancy the Government of this country accepting such an obligation because of this relatively small borrowing!
The term “ territories “ is defined in paragraph (b) of section 1.02 of article I., as follows: -
Wherever reference is made in this Agreement or in the Loan Regulations to the “ territories “ of the Borrower such term means the States and Territories of the Borrower.
So, we assume that the information that is to be furnished shall include information with respect to financial and economic conditions in the territories of the Commonwealth. Because of the Commonwealth borrowing from the bank, we are offering to give it the financial position of the States and to go into the whole question of our international balance of payments. That might be a usual clause in an agreement of this ‘kind with some impoverished country, a country with no great status and not very much credit, but why should our Australian Government acquiesce in the inclusion of a clause of that type? Was no protest made about its unreasonableness?
I invite the Minister to keep in mind the fact that for a breach of any of the conditions, the bank is entitled to suspend the loan arrangements and, in certain circumstances, to cancel them and to recall the amount. It is all very well to say that this is a usual and a formal agreement; but personally, as an Australian, I resent that kind of thing. I think it is a completely unreasonable requirement on the part of the bank, and I believe that the Australian Government should never have accepted it.
On the same theme, I turn to section 5.03. Again, this might be a fairly usual provision, but let us consider the embarrassing nature of its scope. It reads -
It is the mutual intention of the Borrower and the Bank that no other external public debt shall enjoy any priority over the Loan by way of a lien on public assets.
Certain things are excluded. For instance, Qantas Empire Airways Limited and TransAustralia Airlines are excluded by the pro visos. The section states, towards ‘ tHe end-
However, this Section shall not apply to: (i) any lien created on any property at the time of purchase thereof solely as security for the payment of the purchase price of such property.
I realize that Qantas and T.A.A. may have to purchase aircraft overseas and may be required to enter into hire purchase agreements, bills of sale, or something of the kind, and that if this clause were unconditional, it could embarrass those bodies. The section continues -
The Reserve Bank of Australia is brought within the provisions of the section. It states that the section shall not apply to -
Therefore, if the Reserve Bank incurs an indebtedness to run for more than one year, it must have a particular clause in its loan agreement, or in its arrangements, providing that the lien of the International Bank is to have priority. That is perhaps a matter of machinery for the International Bank, but in the circumstances, our Government should have protested at being asked to join in clauses of that kind. I think they are unreasonable, having regard to the status of Australia and the. small amount being borrowed, and that they could prove, in circumstances in which the bank wanted to enforce them, to be very embarrassing.
– I wish to make some observations on the remarks of the Leader of the Opposition (Senator McKenna) against the background of the policies that are expressed in the 1960 report of the World Bank, which I think are relevant. I propose to refer to one or two of the major operational policies of the bank which are referred to at pages 34 and 35 of chapter 5. I shall omit references to the charter, which was canvassed by Senator Paltridge earlier in the debate. The report states -
Even apart from this provision of the charter, it would be implicit in the concept of the bank as a continuing institution designed to operate on a sound business basis and with funds borrowed on the private market, that it should make loans only where there are reasonable prospects of repayment.
I think we must start from there in discussing article V. of the first schedule of this bill. That proposition is elaborated in the report of the bank in the following passage: -
For example, the bank must accept the risk of another world war if it is to achieve the purposes envisaged in its articles of agreement. Similarly, the bank has to accept the risk of the occurrence of a world-wide depression of the type experienced in the 1930’s. In fact, for the long term the bank adopts for operational purposes that production, income and trade in the world as a whole will continue to expand, but the bank’s acceptance of risks of this type, affecting the credit-worthiness of its borrowers -
I emphasize this expression - generally does not relieve it of the obligation to make an objective economic appraisal of the amount of external debt which each prospective borrowing country can reasonably expect to service and to keep its loans within the limits so determined.
That is banking policy. There is nothing unusual about it. It is not only banking policy at the international level; it is also banking policy at the domestic level.
I do not think we can get around the objections that Senator McKenna has been raising by refusing to accept such a policy as the basis of a discussion. I ask Senator McKenna to place himself in the position of the banker with that policy operating in connexion with loans. Surely Senator McKenna will agree that he has seen far more rigid and onerous covenants inserted in agreements by private banks operating at the domestic level. I do not think any bank would impose less onerous provisions. Senator McKenna is aware that when you go to your banker and claim that the covenants are a little harsh, the banker will tell you that the covenants must apply to every one of the bank’s clients. The bank manager will tell you that although you are not expected to default in your obligations, nevertheless the covenant must be sufficiently wide to cater for all of the bank’s clients. If Senator McKenna thinks that the covenants are onerous, let him not be alarmed, because they are only inserted for the purpose of enforcing what we feel should be the policy of a banker in relation to a person who is prepared to conform to the provisions of the loan in spirit as well as in the letter.
– Should that apply also to governments?
– The question is not whether it should apply to governments. The plain fact is that it does. This happens to be part of the charter of the bank. It is the expressed policy of the bank, of which we are a member. We have agreed to those provisions in the bank’s policy. If we did not like those provisions we should have tried to alter them. If we did not want the loan on these terms and conditions we should not have asked for it. But, in view of the provisions of its charter, the bank is obliged to apply these covenants. If you do not want the loan you do not have to sign the agreement. The bank’s policy obliges it to insert what may at first sight seem to be difficult conditions but which on more careful analysis are seen to be expressions of the bank’s right to investigate the bona fides of a client where the bank is of the opinion that that client cannot carry out the terms and conditions of the contract. I am sure that both Senator McKenna and I could draft far more onerous conditions that would still comply with the bank’s charter and with the policy expressed by the bank. Bearing in mind the bank’s policy, I do not think the particular covenants are onerous.
– They are humiliating.
– That begs the question, I suggest. Anybody who signs a mortgage may claim to be humiliated. I submit that Senator McKenna’s sensibilities are unnecessarily upset about this matter. Anybody who borrows money is likely to be humiliated by the contents of the bank mortgage. These provisions are laid down only to be applied if a country defaults. I ask Senator McKenna to place himself in the position of legal adviser to the bank. How could he possibly comply with the bank’s policy in relation to borrowing if he did not resort to onerous covenants of the type set out in this agreement? I pose that question to Senator McKenna as a person of considerable legal experience. How could he honestly advise a bank not to have onerous covenants of this nature in an agreement, having regard to the expressed policies of the bank?
– 1 found Senator Vincent’s remarks about the state of mind of the bank as regards its activities interesting but not particularly helpful. No matter what the bank announces with regard to its state of mind, what matters when you sign an agreement of this nature is not what is in the bank’s mind but what is in the document. It is not reasonable to compare the ordinary role of banker and overdraft seeker in a private capacity with the government of a nation like Australia, seeking a loan for the purpose of financing one of its authorities. I would be inclined to resent the terms laid down in the covenants if they applied merely to the authority, but they apply to the Commonwealth of Australia. I resent being compelled to accept conditions which require us to let the bank dictate the terms on which we pass on our borrowings to the authority. I object to being required to give the bank all details of the section of the project that will be financed with this loan. I object to undertaking not to grant any lien ahead of the bank. Above all I object to giving to the bank information concerning State finances, the finances of our Territories, Australia’s finances and details of our balanceofpayments position as often as the bank wants them and in as much detail as the bank wants them.
– Every nation that has obtained a loan from the bank has signed an identical document to this.
– I confess that I have read only the documents that relate to Australia. I am completely indifferent to what other countries like to sign. I can imagine many countries that are in precarious circumstances. They might be happy to sign a document like this without question. But this requirement is not in keeping with the dignity of a country like Australia.
I ask the Minister: Was any attempt made by the Commonwealth to have these provisions deleted, pointing out their unreasonableness and their insulting nature so far as the Commonwealth of Australia is concerned?
– Senator McKenna was accurate when he said that in this matter the best that we can do is to agree to disagree. I concur in that view, although there are one or two things I want to say about it. This loan is required to finance a section of the Snowy Mountains scheme. It seems no more than natural to me that the lender would want to be kept informed as to the progress of the work. To my mind, it is not onerous that either the Snowy Mountains Authority or, for that matter, the Commonwealth should be asked to make available to the bank details of the progress of the work and the nature of the problems with which we are being confronted as we go along. Nor does it seem to me to impose any humiliation on Australia to say that we might be asked from time to time to comment on the state of the Australian economy.
– That is in every Treasury “Information Bulletin.”
– Virtually, we would be making available no more information than that which is already made available freely. The fact that this is a requirement of the bank does not give rise in me to any feeling of humiliation.
The Leader of the Opposition (Senator McKenna) referred to the fact that in certain circumstances of default - I cannot imagine for one minute why we should be even speaking about default - the bank could take certain action to cancel and recall the loan. I should like to examine that as a practical proposition having regard to the nature of the bank and the position of Australia in relation to the bank. Australia is a member of the bank. In fact, it is a shareholder in the bank. Our Treasurer is a governor of the bank. The bank exists to assist countries such as ours with loans such as this. It is true that the bank has the power to, and could in certain circumstances take, call-up action. But, having regard to the relationship that exists, what is the practical possibility of that happening?
I refer in somewhat guarded terms to another aspect of this matter which I believe is important. The bank makes loans to many other countries. I am completely satisfied that every loan the bank makes is a loan that will fulfil its purpose, or as my friend, Senator Vincent, has said, a loan that will produce in the end a profitable result. Being sure, as I am, that that is the fact, as a representative of a country that contributes funds for the bank to lend to other countries, I must say that I derive some satisfaction from knowing that the bank, the bank in which my country is a shareholder, takes what might be regarded as normal action to ensure that the moneys advanced by it are not misused or misapplied in any sense.
.- Article VI., which deals with remedies of the bank, follows logically from what we have been talking about under the preceding article. The events specified in section 6.01 and 6.02 are repeated in the rules of the bank which are attached to and form part of the agreement. I invite the Minister to look at section 5.02 of those rules. Under the heading “ Suspension by the Bank “ it reads -
If any of the following events shall have happened and be continuing, the Bank may by notice to the Borrower suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account.
Paragraph (c) reads -
A default shall have occurred in the performance of any other covenant or agreement on the part of the Borrower under the Loan Agreement or the Bonds.
That includes any kind of default. Such a default could be in not providing all the detailed information that is required about State finances in terms of the agreement. Paragraph (h) says -
Any other event specified in the Loan Agreement for the purposes of this Section shall have occurred.
That section gives a long list of events that will entitle the bank to suspend the right of the Borrower to make withdrawals from the loan account.
Under Article VI. of the Loan Agreement, section 6.01 says that in circumstances in which a default arises and in certain cases continues for 30 days, and in other cases for 60 days, the bank can call up the whole loan and make it due and payable immediately. The whole agreement and everything else then falls to the ground. Then section 6.02 specifies additional events that may cause the cancellation and calling-up of the loan. It specifies four items. I refer to the fourth, paragraph (d), which reads -
There shall have been a failure to perform any obligation due under the Snowy Mountains Agreement and such failure to perform shall not have been consented to by the bank nor have been remedied within a period of 60 days from the date upon which such performance was due and shall threaten materially to impair the carrying out of the Project or the ability of the Borrower to perform any of its other obligations under the Loan Agreement.
The term “ Snowy Mountains Agreement “ is defined in the preamble to this Loan Agreement. It means -
That is, Australia - of the first part, the State of New South Wales of the second part and the State of Victoria of the third part . . .
There are three . parties to the Snowy Mountains Agreement. There could be a failure to perform an obligation under that agreement on the part of Victoria or New South Wales. That failure would entitle the lender, the International Bank, to take action to suspend or cancel this arrangement.
That brings me to the point raised by Senator Spooner last Tuesday night. If the International Bank heard and believed Senator Spooner’s statement about the default of Nt./ South Wales under the Snowy Mountains Agreement in respect of the erection of the Blowering dam, that would entitle the bank immediately to cancel this Loan Agreement after giving either 30 or 60 days’ notice. What prospect would there be of building the Blowering dam in 30 or 60 days? 1 am merely showing the extent to which these clauses can be stretched. A default under this agreement might not be made by the Commonwealth, which is actually the borrower. There might be a default by a State government; something over which we have no control. Senator Spooner said that New South Wales was in default under the Snowy Mountains Agreement. If the bank believed that, it would be entitled to cancel this loan agreement forthwith.
The truth, of course, is that New South Wales is not in default. The Snowy Mountains Agreement specifies no time by which the New South Wales Government should build that dam. When that obvious fault on the part of the Commonwealth in drawing up the agreement was pointed out, the Government retreated and said that this was part of the spirit of that agreement. There is no spirit in written documents. There is the expressed word, and not what is floating around in the air or what is in the mind of somebody in an airy-fairy fashion.
I direct attention to Article VI. to drive home the point that I make as to how onerous these conditons are and how Australia has agreed to the toughest and, I repeat, most humiliating conditions for a nation of our status.
– 1 think the Leader of the Opposition (Senator McKenna) is becoming unduly sensitive about this agreement.
– No, just purely Australian.
– Not only is he becoming unduly sensitive about it but, 1 think, he is also inaccurate in his prognostications about the situation that may arise. Let me illustrate that point. He referred to Article VI. section 6.02 (d). It is most important to read that article carefully before becoming alarmed. The important part of it states- -
There shall have been a failure to perform any obligation due under the Snowy Mountains Agreement-
Then some very important conditions are attached to that general provision beginning with the conjunction “ and “ which I emphasize - and such failure to perform shall not have been consented to by the Bank nor have been remedied within a period of 60 days from the date upon which such performance was due -
Here is the governing phrase - and shall threaten materially to impair the carrying out of the project.
The default must relate to the threatened material impairment of the carrying out of the project. This aspect is not nearly as wide as the honorable senator has suggested. He implied that any breach of the Snowy Mountains agreement could be interpreted to mean a breach of this agreement and so put us in default.
– I point out that I read the whole of the clause and put the whole position before the committee.
– Yes. I suggest that your interpretation is far too wide because the default clause is governed by the expression, “ and shall threaten materially to impair the carrying out of the project.” The definition of “ project “ on page 3 is as follows: -
The term “ project “ means the project for which the loan is granted.
That dennes the default area of this agreement.
– Then apply that to the Blowering dam and the suggestion that it is an integral part of the project, as Senator Spooner has claimed, because of the tremendous loss of water.
– If it is part of the project as defined in the loan agreement, I agree, but the project does not encompass by any means the whole of the Snowy Mountains agreement. It relates only to one portion of the agreement, that is to say, the project as defined in this agreement. As I have indicated, the term “ project “ means the project for which the loan is granted, and none other.
If there is a default or some miscalculation in relation to any other aspect of the agreement, there is no default under this agreement. The default under this agreement is related to the project, and it cannot be interpreted in any other way. When we talk about the rather onerous conditions, to use Senator McKenna’s expression, we should have clearly in our mind what we mean by default. I emphasize again that the default relates to this project only and none other. It has no relation to any aspect of the broader Snowy Mountains project. For that reason I suggest that the Leader of the Opposition is becoming a little sensitive about this. After all, as I have already tried to point out, the bank is obliged by law to have default clauses in its agreements. We are discussing a contract, not an agreement between friends for the loan of a few pounds. This is a contract, and default clauses are normal clauses in a contract of this nature.
– I only want to add a little to what Senator Vincent has said. Senator McKenna, in addressing himself to this matter, has envisaged - almost anticipated - all kinds of dire developments, and in the end he has anticipated some action on the part of the bank which will result in the cancellation of the loan. He has addressed himself with some particularity to the Blowering dam and has asked how that project will be affected by the current proposal. The fact pf the matter is that it will not be affected at all because it is not a part of the project under discussion.
– Then what was Senator Spooner talking about?
– Senator Spooner was talking about the general concept of the development of the Snowy Mountains scheme at that time, not this particular project. The Blowering dam has no connexion with this project. Another point I want to make in relation to the anticipated dire happenings is that the bank would have to act in a way which was in fact capricious if it were to act in the way that the honorable senator has mentioned. Having regard again to the relationship which exists between Australia, the bank and the other members, I suggest that it is completely wrong to regard such capriciousness as being even remotely possible. As Senator Vincent has stated very succinctly, these provisions are what might be regarded as normal provisions in this kind of agreement, not being in any way harsh, onerous or humiliating.
.- I thank the Minister for what he has said. I just want to add that we have a supplementary reason for not accepting this loan when we find the agreement burdened with the kind of provision which I have been indicating throughout our consideration of the bill. I have been doing so deliberately to make my point. I think it is an insult to our status and dignity to have to enter into an agreement of this kind. I am not concerned about the bank being capricious, vexatious or anything else. I should not expect that it would be. But we are looking at a document and are concerning ourselves not with probabilities but with possibilities in respect of what could happen under the agreement. I have certainly not drawn the long bow in directing my mind to an interpretation of these clauses. I could have put more fantastic cases than I have put if I had used my imagination a little, but I have been keeping it within reasonable bounds. I invite the honorable senator to think again on section 6.02 (d) which entitles the bank to act. The mere fact that New South Wales or Victoria might commit some breach of an obligation under the Snowy Mountains agreement could certainly impair the efficacy of the project, but I think it is very undesirable - certainly undignified - that some one outside the agreement can put this nation in default and put the bank in a position to take certain action.
I pass now to Article VII., section 7.01, which reads -
The closing date shall be September 1, 1966, or such other date as may from time to time be agreed between the borrower and the bank. 1 do not find the closing date defined anywhere in the agreement. I take .that to mean, although this is not stated, that it is the closing date for the making of drawings. In other words, if you do not hurry up and complete the job by that date you no longer may make drawings. Drawings cannot be made after 1st September, 1966.
– Or such other date as is agreed.
– I merely point out again that there is a very tight date and that the Government is relying upon agreement.
– Surely there has to be a closing date in an agreement of this nature.
– I should think that in an advantageously negotiated agreement it would be a date twelve or eighteen months after what you would expect to be the normal completion date. You would allow for contingencies.
– You will concede there must be a closing date.
– I agree that there must be, but I think the date is fixed too narrowly. We are told that the project will be completed by June, 1966. Why was such a tight closing date fixed? If I had been negotiating for the Commonwealth I would have fixed a date within say, a year or eighteen months of the expected completion of the project. There could be avalanches of snow, breakdowns of waterways and all kinds of things. One hundred and one things over which nobody has any control could impede the project. I suggest that it was wrong of the negotiators to fix a closing date as tightly as that. We are told that the project will be finished in June and the closing date in this agreement is September. There certainly is a provision for fixing whatever date may be agreed upon, but I concede that there are two parties to the agreement, and that it would not be possible to compel the bank to agree to a date that did not suit it.
I turn now to the. provision relating to premiums on prepayment and redemption. This is another very difficult provision. If some future government that was opposed to this type of borrowing decided to replace it with some other form of local finance and to repatriate this loan prematurely, it would immediately be up for a very heavy premium. If a government were to do that within the next two or three years in addition to repaying the 100,000,000 dollars it would have to pay a premium of 5f per cent. Was any effort made during negotiations with the bank to have that penalty excluded?
I pass on to Schedule 3 of the First Schedule. I notice that alterations are made there to the bank’s regulations. I am most interested to see the modification in paragraph (b). Here is one alteration to the agreement for which Australia obviously contended. It is a provision which, I would think, would not be usual in the bank’s arrangements. It states -
Speaking entirely from memory, I have not seen that provision in the terms of any of the earlier loans. Is this the first time that such a provision has been included? I do not know. I welcome it. The provision relates to a situation such as this: I mentioned earlier in the course of the committee debate that Australia can give bonds to the bank. The bank, wanting to realize on those bonds, can sell them on the open market. The bonds are expressed to be free of taxes and all such charges. It is quite certain that we could not borrow overseas unless we gave that concession. A habit has developed with certain people in this country of buying up bonds connected with overseas borrowing so that they may enjoy the tax-free concessions on those bonds. This is the first time we have attempted to catch up with such people.
May I add one other remark: I notice that in Schedule 3 of the First Schedule the bank’s regulations are amended by the deletion of sections 3.02, 4.01 and 4.02. Despite the deletion of section 4.02, I find reference to it throughout the loan regulations. For instance, section 5.01 states, under the heading “ Cancellation by the Borrower “ -
The Borrower may by notice to the Bank cancel any amount of the Loan which the Borrower shall not have withdrawn prior to the giving of such notice, except that the Borrower may not so cancel any amount of the Loan in respect of which the Bank shall have entered into a special commitment pursuant to Section 4.02.
But there is no section 4.02. There seems to have been some carelessness on the part of the Government in not seeing that conse1quential deletions were made. It is regrettable that this sloppy kind of drafting has been allowed to enter into an act of Parliament. It worries me to think that the people who represent us regard this agreement so lightly that they allow inconsistency of this kind. It leaves one uneasy about how we are represented and who represents us in these matters. Why was the deletion of section 4.02 not followed up by consequential deletions? This kind of thing disturbs me. It may be only sheer carelessness, and the lazy view may be that it does not matter.
– The deletion is expressed to be only for the purpose of this agreement.
– That is right. The bank has regulations that apply to all loans and it has agreed for the purposes of this agreement to delete section 4.02.
– It is perfectly obvious that all the loan regulations have been incorporated as a schedule. Then certain sections have been specifically deleted for the purpose of this agreement. There may be other purposes - I do not know - that have a relationship to matters that are indirectly associated with this agreement for which the particular sections that have been deleted should be included.
– Would the honorable senator be happy about sending out of his office a document making reference to a non-existent section?
– If the section had some relevance in any other context, it might be wise to include it.
– But it is not. It is completely deleted. That is not a major point, but it is one of the grounds for the uneasiness. I feel that our representatives should let a drafting of that kind remain and be presented to us. I shall be very interested to hear an argument that would justify it. I should be delighted if the Minister would take the floor on that.
– I go back to the contentious Article VI., relating to remedies of the bank, in order to make what will be, I hope, one final statement in connexion therewith. I suggest that if all the terrible things anticipated by the Leader should occur, as a matter of practical business, the Australian governor of the bank would take this matter to the board of the bank and get it settled as a practical problem, divorced altogether from anything of the type that the honorable senator suggested.
– Why do we want an agreement? Just let us have a talk between governments.
– No. I differ with lawyers very frequently, but I can see that there is merit in agreements. However, when part of an agreement comes into dispute, it is sometimes settled in a more equitable and satisfactory manner by people who are not lawyers. The governors of the bank would probably see to it, where lawyers might fail.
The second point raised by the honorable senator was in reference to the closing date. As he pointed out, the clause provides that the date may be such other date as may from time to time be agreed. The Leader takes the point that, there being a provision for altering the date, an alteration sought by the borrower would be resisted by the bank and, further, any alteration would necessarily be to the disadvantage of the borrower. I suggest that as a matter of practical business this clause very likely provides a two-way advantage to both parties. It may suit each at different times or it may even suit both borrower and lender at the same time to alter the date. The clause gives sufficient elasticity for that to be done.
The next matter was in reference to the premiums on repayment. This is not an unusual clause in an agreement of this type; it is quite usual. I am interested to observe that section 2.05 (b) of the loan regulations provides that the bank will sympathetically consider requests for the premium to be waived on bonds held by the bank. The honorable senator referred to taxation on interest on bonds. This is the first time that this has been provided in connexion with a bank loan and it is in order to conform with the Loan Securities Act 1959. The honorable senator will recall that the latest loan from the bank was prior to that date. The provision makes explicit the Commonwealth powers to make such agreements and it is considered best to follow as closely as possible the wording of the act.
I now come to the deletion of section 4.02. I take time off to say to the honorable senator quite sincerely that there are occasions when I wish he would not read these things so closely. However, I think that the answer is available to him if he refers to the Second Schedule, Article 1, section 1.02, which deals with the application of regulations. It reads -
Any loan agreement between the Bank and a member may provide that the parties thereto accept the provisions of these Regulations. To the extent so provided, these Regulations shall apply to such loan agreement . . .
I would assume that in the absence of section 4.02, it could not possibly apply.
– I am not suggesting that it would have any effect. I am directing attention to the carelessness that has let it stand.
– It stands, but it is excluded; and its exclusion is acknowledged in the provision that the regulations shall apply only to the extent so provided. There being no provision, the section cannot possibly apply.
Schedule agreed to.
– I have no comment to make upon Article I or II, except in relation to section 2.05, which relates to repayment. Sub-section (c) provides -
It is the policy of the Bank to encourage the repayment prior to maturity of portions of its loans retained by the Bank for its own account. Accordingly, the Bank will sympathetically consider, in the light of all circumstances then existing, any request of the Borrower that the Bank waive the payment of any premium payable under paragraph (b) of this Section of under Section 6.16 on repayment of any portions of the Loan or Bonds which the Bank has not sold or agreed to sell.
I invite the Minister to consider the delightful situation of a borrower relying upon the sympathetic consideration of a hardhearted banker of any calibre, national or international. What reception would the Minister expect a Labour government, succeeding the present Government in a year or two, to receive if it wanted to cancel the loan and repay as much as had been received. Would we or would we not be required to find the required percentage, namely 5i per cent.? I do not derive much consolation from the provision that asks us to rely on the sympathetic consideration of the International Bank. I should prefer to rely on something much more solid.
We have had a discussion about the currency provisions in article III. of the Second Schedule, and I have directed attention to the fact that we have to repay the principal and the interest in the currency in which we obtained the principal moneys. We shall have to go scouting around the world when the time comes. The exchange rate may be to our advantage, or it may be to our disadvantage. I should like the Minister to comment on section 3.07, which refers to valuation of currencies. I have already mentioned this matter. The section states -
Whenever it shall be necessary for the purposes of the Loan Agreement to determine the value of one currency in terms of another, such value shall be as reasonably determined by the Bank.
That is a matter for the bank alone, although the word “ reasonably “ is used in the section. I should think that the effect of the word “ reasonably “ would be to enable us, if we thought that the bank was acting unreasonably, to invoke the arbitration clauses of the agreement. However, I am wondering how far that provision might go to our disadvantage and what is involved in it from a practical viewpoint.
I have already referred to the arbitration provisions of the agreement. Article IX. deals with the effective date and the termination of the loan agreement. I think we covered this matter when we were dealing with a clause of the bill. However, I invite the attention of the Minister to the fact that a condition precedent to the effectiveness of the loan agreement is that the bank must be given satisfactory evidence of the execution and delivery of the loan agreement on behalf of the borrower, duly authorized or ratified by all necessary governmental action. I think the Minister has agreed that that does not necessarily involve legislation. In reference to section 9.03, I ask the Minister whether the necessary notice has yet been despatched to the bank to make the date effective, or whether the Government is awaiting the passage of this legislation.
.- Senator McKenna’s first question related to earlier repayment of the loan and charges in connexion therewith. The honorable senator wanted to know what would be the possibility of the Government receiving sympathetic consideration from the bank in the event of early repayment of the loan, and he specifically asked for my opinion of the reaction of the bank if a request were made to it by a succeeding Labour government. The agreement makes it clear that it is the intention of the bank to deal sympathetically with such applications. The reason for that, I think, is inherent in the relevant clause. I am aware that on past occasions the bank has shown sympathy when such applications have been made.
I hesitate to say what other people would do in certain circumstances, but in the extremely unlikely possibility of a Labour Government wanting to repay this loan before the due date, the bank possibly would take notice of the wish of that government, as it would of the wish of any member government. I can only put forward that view as an opinion.
– In other words, you do not suggest that the bank is trying to make anything out of any member country?
– That is so. Much the same position applies in respect of the valuation of currency. I think it would be unreal to assume that the bank would adopt a currency valuation at anything other than the par rate. I do not think it would follow day to day fluctuations for the purpose of making additional profit. I think it would take a figure which could be regarded as a fair and reasonable par value of the currency.
– Would you say that the actions you have mentioned would be against the charter of the bank?
– I should think they would be. For the bank to act in a manner such as that suggested would benefit neither its members nor its borrowers who, by and large, are the same governments.
Senator McKenna also referred to section 9.03, which relates to the effective date of the loan agreement. I am informed that the bank has now advised the Government that everything is clear. It is merely awaiting advice that the legislation has been passed and assented to.
Schedule agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from 1st May (vide page 995), on motion by Senator Wade -
That the bill be now read a second time.
– This bill will amend the existing wool tax legislation, which expires on 1st July, 1962. The bill will meet the wishes of the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation, acting in concert with the Australian Wool Bureau, to extend the collection of this levy for wool promotion for a further twelve months. This legislation reflects the unfortunate position in which the wool industry finds itself to-day. It also reflects the inability first of the Commonwealth Government, and secondly of the organizations concerned to give a lead to the wool-growers of this country. It is unfortunate that funds for wool promotion are not guaranteed for years ahead. It should not be necessary to legislate regularly for a levy for promotional purposes. Nobody doubts that promotion in any field is a very expensive exercise.
Wool promotion legislation was first introduced in 1936 and provided for a levy of 6d. a bale. In those days a bale of wool was worth £12 or £15 and many people were happy to get 9d. or10d. per lb. for their wool. I remember how delighted wool-growers were when they first received 1s. per lb. for their wool. In 1939, when wool reached 13d. per lb. the wool-growers felt that they at last had a chance to develop their properties. Over the years the price obtained for wool has increased. In 1945, a levy of 2s. a bale was considered a fair thing. In the minds of some people that levy may have been considered sufficient. In 1952, the levy was increased to 4s. a bale. In 1960, it was increased to 5s. and last year it was increased to 10s. a bale. Those increases reflect the inflationary period through which this country has been passing in the last ten or twelve years. Because of inflation the wool industry has suffered instability. Rather belatedly the idea of promoting the use of wool has gained strength, mainly because of the fierce competition from synthetic fibres. We know how attractive textiles made from synthetic fibres can be. Not only are they attractive but they also can be produced at a price competitive with woollen goods. So far the wool industry has not made a concerted effort to meet the challenge from synthetic fibres.
I pay a tribute to Sir William Gunn, Chairman of the Australian Wool Bureau, who has taken the initiative and travelled around Australia telling the wool-growers the -importance of unity in the industry. For some reason or other the primary producer is one of the most conservative men in the world. The primary producer does not seem to appreciate the value of unity in his industry. The industry is divided into two organizations. An industry so vitally important to this country should speak with one voice. Apparently the wool-growers have not heard that unity is strength. Even so far as this levy is concerned the woolgrowers’ organizations have been able to reach agreement only in respect of the next twelve months. Sir William Gunn deserves commendation for his efforts on behalf of the industry.
The wool promotion scheme is designed to place more woollen articles in the world’s shops, thus leading to keener competition and, perhaps, a higher price for our wool. The industry is starting behind scratch because of the inroads that have been made by synthetic fibres. Perhaps we can gain some relief from the thought that this seems to be a start in getting the whole of the wool industry on a firmer footing than it has ever been on before.
I believe that the report of the Wool Marketing Committee of Enquiry has many shortcomings. In my opinion, it is rather wide of the mark on many aspects. The committee could have done a great job for the wool industry if it had tackled the industry’s problems more thoroughly. Really, the report contains nothing concrete that will assist in getting the industry on a firmer footing, except the recommendation for the establishment of a wool commission. The committee, in its observations, has touched on subjects that are vitally important in putting the industry on a more competitive, more attractive and more economic basis.
At one stage the committee refers to the culling of flocks and the achieving of greater uniformity in breeding. But, instead of making strong recommendations which would give assistance to the wool-growers, the committee has treated that factor as a minor one. In my view, that is where we have to start in making a thorough approach to the problems of the industry. My opinion is that the whole industry should be put on a much more efficient and business-like foundation. The availability of good strains of sheep and high-quality rams is of great importance to the industry. I also mention the handling of the wool in the shearing sheds and pasture improvement which would enable more wool to be grown per sheep. If flocks are well-bred and are of a good wool-yielding strain, each sheep will produce more wool and the cost of production per pound will be reduced.
The Wool Marketing Committee of Enquiry should have gone much more deeply into the handling of wool in the sheds. That is the vital time. That is the pay-off time for the wool-grower. The time when he is reaping his harvest is when he is shearing his flock. Over the years a practice in which there is a contradiction has grown up under the contract system of shearing. The shearers work on contract, but the rest of the staff in the sheds work on weekly wages. Wherever there is that contradiction there are difficulties that are hard to overcome.
Men who can shear 100, 150 or 200 sheep a day have always been a source of great pride to Australia. Australians have been in the forefront of the great shearers. However, in their efforts to shear their tallies and get the wool off as quickly as possible, there is a bustle in the shearing sheds. That is not conducive to the best handling of this very valuable product. The amount of good-staple wool that is virtually wasted in the form of second cuts is very important, but that has not been the subject of strong recommendations by the committee. I also refer to the handling of the pieces and so on on the board itself.
Some reference was made to the classing of the clip. The wool-classing profession, despite its importance, has not been developed as it should have been, because of the circumstances in which the classing takes place. The shearing contractor usually tries to make his classer act as a woolroller. Consequently, when the wool is coming away quickly the classer has to pay attention to keeping his table as clear as he can and skirting all the time. At peak times he has not sufficient time to give the necessary attention to classing the clip.
The wool then comes away from the bins and goes into the bales. The inclusion in the wool of jute pieces through carelessness in the manufacture of wool packs, often necessitates re-classing and this has been causing a fall in the price of wool. When a wool-buyer sees pieces of jute fibre and other impurities in the wool, to be on the safe side he will often mark down the price that he is prepared to pay.
I believe that right from the beginning of the work there is a great need for a Commonwealth organization that can bring science into the industry, to assist in eradicating burr and other hard carbonizing vegetable matter that depress the price of wool. Often the price of very good quality wool is reduced out of all proportion by the presence of burr and vegetable matter which, by the application of scientific methods and instruction in their use, could easily be eliminated.
In the report the selling aspect has been skirted around. Observations are made, but very little change is recommended in the marketing of our wool. This legislation, which envisages the raising of a considerable amount of money, namely £3,100,000, for the promotion of wool, would not be supported by the wool-growers unless they knew that their commodity would go on to the markets at a competitive price. The influences in the haphazard method of selling our wool, which have been referred to without any recommendations being made, are of very great importance. I believe that they should be investigated very closely again. This committee had so little authority that all it could do was report on what it could see or what it could hear from interested parties. As the Minister knows, the only way to obtain a complete report is to have access to all relevant documents. This can be done only by a parliamentary committee, if it is a parliamentary matter, or by a royal commission. The whole industry needs a thorough investigation by a royal commission because of its importance to our welfare and economy. Figures released only yesterday reveal that the value of our exports of wool and sheepskins was £267,000,000. This indicates how large our wool industry is. About 90 per cent, of our production goes overseas. Without our wool industry we would be a much poorer country than we are and our standard of living would be much lower than it is.
I wish to make an observation relating to the amount which is being contributed by the textile industry towards wool promotion. I understand that a transfer of funds was made from the Commonwealth Trust Fund to the Australian Wool Bureau. I believe that this amount will go indirectly to the secretariat to assist wool-growers. Much more than is being done could and should be done by other people associated with the industry. It was pointed out recently that a man’s suit costing £30 contains 5i lb. of wool.
– Five and a half ounces.
– A suit of clothes contains more than 5i ox. of wool. It is 5i lb.
– That is greasy wool.
– Yes. If there were a 70 per cent, yield, the suit would contain between 4 lb. and 4i lb. of clean scoured wool. The point I am making is that if the grazier receives 5s. per lb. for that wool, there is between 25s. and 30s. worth of wool in a suit. Along the line a long series of transactions takes place before the consumer begins to send that wool back into the ground, if I may use that term, because I suppose eventually the wool does disintegrate and go back into the ground in one way or another. Transport organizations, both road and rail, receive a tremendous income from the carriage of wool. The agents in the cities are certain of their commission regardless of conditions on the farms or whether a season has been good or bad, or whether there has been fire, flood or any other adversity. Then we come to the buyers and the top-makers, and eventually to the mills. From the mills we come to the wholesalers and then to the retailers. They all should be made aware of their responsibility to assist this vital Australian industry. This awareness can come only from national leadership. All sectors of the community should be made aware of the importance of sustaining our wool industry internally and particularly externally.
In his recent report to the secretariat, Sir William Gunn mentioned our potential markets. He. spoke of Japan’s withdrawal for economic reasons during last year’s buying season, and he said that the price .of wool fell by 6d. per lb. largely because of Japan’s absence from the sales. On Japan’s return the price rose by 6d. per lb. That is an indication of our dependence on too few areas or blocs of buyers. That brings me to the point which was treated very poorly by this committee of inquiry because it did not get down to tin-tacks about the influence of buying rings and pies. All these things have a bearing on wool promotion. Wool is the commodity which we want to get ultimately into the consumer’s wardrobes. Modern promotion is based on high pressure and efficient methods. Not only do we have to go to Japan, Great Britain, the United States of America and the older established markets to sell our wool, but we have to go to other countries also.
I- have in mind two countries to which I think we could sell a tremendous amount of wool but before this could be done negotiations would have to be made in relation to financing purchases. I refer to India and China. Over the past few months I have been busy selecting some carpeting and rugs. I have taken particular notice of Indian and Chinese rugs made of wool. The workmanship is worthy of great praise. The rugs are things of beauty. Although Chinese rugs are beyond my means, I never fail to look at them two or three times. Apparently the Chinese people are able to do things with wool in their own country which has not been attempted in Australia. I refer to the art of rug-making. When you think of the population expansion throughout the Western world and the improving standards of living in so many homes which previously had linoleum on the floors but which now can have wool, it makes you wonder why we cannot sell a tremendous amount of wool to those two countries. At present our sales to them are negligible. Of course, promotion and the availability of finance to enable those countries to purchase our wool must be prerequisites to sales.
– We do not sell carpet wool.
– We have all types of wool here.
– Not carpet wool.
– Yes, we have. We; have wool here which would be admirably suited for carpets.
– We import it.
– This country is able to breed all varieties of sheep. Although the Indian and Chinese people are using a particular type of wool for their rugs, their craftsmanship is what really counts. If some of our wool were available to them no doubt they would be. able to adapt it to rug-making.
– Not for rugs. They want very coarse wools for rugs.
– That is true. We have such wool here. The Lincoln and some of the other coarser wool which comes from English breeds could be adapted to rug-making. One of our great assets is the expanse of land on which sheep can thrive,! but as we are in the wool industry it is up to us to find markets for our products. It is wrong for us to adopt the attitude that we cannot do these things. That is one of the drawbacks and bad influences in our wool industry to-day. In this connexion I wish to refer to the Japanese people. They are, of course, an Asian people living alongside 1,000,000,000 other Asians. I admit that some pf their neighbours are poor and probably have not reached anywhere near the stage where they can afford to wear woollen garments. However, habits can be changed. I was reading the other day some statistics about drinking habits in Japan. Whereas previously saki was Japan’s main drink, it is being superseded by beer. National habits can be changed.
Wool can be worn even in tropical and humid climates. I have seen material made from a combination of wool and synthetic fibres that is the equal of any tropical cloth. The blending of wool and synthetics is in its infancy, but the technique will be developed. In the United States in 1954 I saw a display of garments made by the blending of wool and synthetics. A fine two-piece suit weighed only 11 oz. Its crease-resisting qualities were an added attraction for those interested in air travel. There are many fields in which promotion can be extended to provide better prospects for the wool industry.
That is only one aspect of the problems of the industry. Until we can get our wool into the textile mills, and then into the shops at a competitive price, it does not matter how much we try to promote the sale of woollen garments. We might create an interest, but that will not be sustained unless all the anomalies throughout the industry are corrected. We on this side of the chamber do not oppose this measure. We believe that the wool-growers themselves have shown that they are amenable to reason by agreeing to allow themselves to be organized in their own interests, if only for a temporary period. Unless more money is made available for promotion any promotion scheme will be, of necessity, restricted. I hope that funds will be substantially increased by the other methods that I have mentioned. lt is important that the Commonwealth Government should realize its responsibility. It should come to the party on the most generous terms that are economically possible. Almost every other primary industry in this country has, over the years, had the benefit of a subsidy. At the present time the annual subsidy of £13,500,000 for the dairy industry is under discussion in this Parliament. Whilst other industries have enjoyed subsidies, the wool industry, through foul winds and fair, has battled on with an independence that has been most commendable. However, the time has come when the wool industry badly needs a shot in the arm. The wool-growers have helped themselves by agreeing to this levy for a period of twelve months. I think they should have agreed to it for an indefinite period, but they have gone some of the distance and I think a bonus should be given to them for being good boys and getting together on such an important matter as wool promotion.
Promotion, of course, is not the end of the story. Sooner or later we will have to set up a wool commission, perhaps along the lines recommended by the committee of inquiry. It is important, not only for the wool-growers, but for all of us that this should not be a haphazard industry turned one way or the other by winds of influence. The industry has to contend with natural hazards during production as well as the tremendous uncertainty of price and marketing. A thorough investigation is needed. I hope to see a wool commission set up which will not only consider the aspect of promotion, but will also make a thorough approach to the contentious subject of marl -ting. I think that the cover-up reference in the report to the disadvantages of a reserve price has not done justice to the subject-matter. Promotion depends on the stability of the industry. As an aside let me say that most people engaged in the industry would be obtaining a return of plus or minus 2 per cent, on their capital. That is not a good enough incentive. There is always, just over the horizon, the possibility of a drought or some other calamity. Planned marketing is a great need for the industry, and in my view it will have to be tackled in the very near future.
As I mentioned previously every aspect of the industry right from the grass roots to the garment in the wardrobe must be attended to. We have the wonderful natural background of sun, rain, soil and space in this country, but wool has now reached saturation level on world markets, and it is necessary for us to do better than we have done in the past. I wish the International Wool Secretariat every success because its success will be reflected in the prosperity of our wool-growers and, in turn, in the prosperity of the Australian people. If the funds are insufficient, this will be unpardonable. Some member countries have subscribed over £1,000,000 to the secretariat. Therefore, those persons in Australia who are handling wool in the secondary and tertiary stages along the road to manufacture should contribute their share towards financing promotion.
We agree that wool promotion is most necessary. We are pleased that the growers have stuck together on this matter. I am disappointed that the legislation provides for continuing the levy for one year only. That is not conducive to the success that is possible of achievement if we deal with the matter soundly and progressively. I should like to see Sir William Gunn go back along the tracks that he followed earlier in his efforts to bring temporary unanimity among the grazing fraternity on this subject. He will do a great service to Australia if he can get the growers organized in relation to. other aspects of the industry and thinking along similar lines. The margin for lack of organization and unity of purpose is not great. If the growers fail to achieve unanimity it will be of very great disadvantage to them in selling their product and in ensuring future prosperity. The Opposition supports the bill.
– I have very much pleasure in supporting the bill. I am very pleased indeed that the wool-growers’ organizations have decided to continue the levy. At one stage it appeared there would be difficulty in arriving at such a decision but, very fortunately for the industry, a majority decision was reached. I was pleased to hear Senator O’Byrne say that the Opposition finds merit in the bill and is supporting it. As the Minister said, agreement was reached only on 4th April by the Australian Woolgrowers and Graziers Council, the Australian Wool and Meat Producers Federation and the Australian Wool Bureau. For some time it was thought that it was not in the best interests of the wool industry to continue the levy because it might detract from attainment of a wool marketing scheme which these groups have been wanting for some time. I am very pleased that wiser counsels prevailed and that it was decided that the levy of 10s. a bale be continued for twelve months. The levy has risen from 6d. a bale in 1936 to 2s. in 1945, 4s. in 1952, 5s. in I960, and 10s. in 1961. Whilst it may seem that a huge amount of money is being spent for this purpose, it is merely as a speck of sand in the desert in comparison with the £50,000,000 or £60,000,000 being spent on the advertising of artificial fibres. It is little wonder that the consumption of wool and the price received by the growers have been far from satisfactory for such a long period. With such fierce competition, we must provide the sinews of war for the fight in which we are engaged.
Senator O’Byrne mentioned the amount expended on wool promotion in the past year or so. We produce about 5,000,000 bales annually. At 10s. a bale, the levy returns £2,500,000 per annum. In addition, £1,000,000 was contributed by the woollen textile industries in various countries. This was very laudable, but it was due, after all, to self-interest. It is in the interests of those industries that wool should not decline. Some sections of our community are still not fully aware of the vital part that the woollen industry plays’ in Australia’s economy. Only the other day an accountant said that Australia does not, as it did years ago, rely on primary production, and particularly on wool, for export funds. I thought that people who thought along those lines had died out. How on earth such an opinion could come from an educated man in a position which should teach him better is beyond my comprehension. Senator Drake-Brockman reminds me that wool returns about 40 per cent, of our income. I do not know where we would be without it.
I am concerned with preserving this great industry. Growers are not getting enough encouragement to remain in it. It is all very well to refer to the. prices obtained in the 1950’s. Those conditions have gone. It is fairly well recognized that a price of 50d. per lb. or 52d. per lb. is required to enable a grower to meet expenses. Although there has been an increase of about 7 per cent, in prices in the past eight or nine months, the average price for greasy wool is only about 54d., or 56d. per lb. Therefore, there is very little margin of profit, even with improved prices.
As the industry means so much to Australia, it must be maintained. The idea that everybody growing wool is making a fortune is too ridiculous for words. Only the other day I was given particulars of growers on the northern tablelands of New South Wales, whose return on capital was about 1 per cent. It has been stated over and over again in the Senate that many primary producers engaged exclusively in wool-growing have been receiving a return of only 2 per cent, or 3 per cent, on their invested capital.
I turn to some of the criticism that has been levelled at the work being done by the Australian Wool Bureau and the machinery it has set up. Admittedly, only eighteen months or two years ago the bureau’s efforts left very much to be desired, and even now the machinery that has been set up is not yet capable of putting forward its best efforts. Honorable senators will recall, of course, that only a few months ago a new general manager was appointed. From what one can gather, he is doing a very good job, but obviously, to build up an organization that has been allowed to run down requires a little time. I do not imagine that we shall see the full benefits of the improved organization for some months yet. Nevertheless, we have already seen an improvement in the advertising methods that have been adopted.
Only last week I saw on television an advertisement for wool which I thought was quite an improvement on previous efforts. As we know, there have been many shortcomings. The bureau has been criticized for sacking a firm of business consultants or promoters with which it had been associated. In view of the results achieved by that firm, I think the bureau was thoroughly justified in sacking it. That was something that should have been done before. The bureau also has been criticized because of the fact that most of its advertising has been of a nature to appeal to our young people and not so much to the older members of the community. As I have stated in this chamber previously, it seems to me that money for the purchase of merchandise is mainly in the hands of the young people. The big retail stores in our capital cities woo the teen-agers. They would not do so unless they thought they were directing their efforts towards the people to whom they make most of their sales. As one who has been connected with the wool industry for a long time, I am pleased to see that far more wool is now being worn, and I hope that that trend will continue.
In the past, experiments have been conducted, mainly by the Commonwealth Scientific and Industrial Research Organization, for the purpose of evolving new methods of treating woollen fabrics. For instance, there are now pre-shrunk fabrics and there is the Si-Ro-Set process. When such experiments have been successful and publicity is given to them, people get to know about them and they want to buy the improved articles. However, in many cases people who have gone along to buy improved woollen fabrics have been told that they are just not procurable. That kind of thing does the wool industry much harm. I admit that when successful experiments have been carried out it is a good thing to advertise the fact, but unless the retailers are able to supply the demand for the improved articles, the publicity reacts to the detriment of the industry.
– The scientist cannot get his message through.
– I do not think it is a question of the scientist getting his message through. I do not know where the system falls down, although I should think it falls down on the promotion side. Having conducted successful experiments to produce improved articles, it is necessary to have those articles in production and available for sale.
Dozens of complaints have been made to me about difficulty being experienced in buying woollen ties. I know that that is so from my own experience. I find it very hard to believe that the woollen materials in dresses, men’s suits and other articles of clothing are not attractive. Their cost may be the deciding factor. They may be more costly than garments made from synthetic fibres, but because of their greater durability and comfort, they are cheaper in the long run. A factor which has operated against the sale of woollen goods for some years has been the custom in many of our large stores for prospective buyers to be told, “ We are very sorry. We have not got the woollen article, but here is something that is just as good.” An article made from an artificial fibre has been produced, and unless the customer has insisted on being shown the woollen article, it has not been produced. I do not know whether the sales people were receiving bonuses for selling articles made from synthetic fibres, but it certainly looked as though they were. If so, they were not acting in their own best interests, because the wool industry means so much to Australians generally that it must inevitably affect the prosperity of all of us.
I have undertaken a little research and 1 find that, at to-day’s prices, the woolgrower would make a profit of less than 2s. on each man’s suit, manufactured almost entirely of wool, that is sold. That would be the grower’s share. As Senator O’Byrne has stated, about 5i lb. of greasy wool is used in the average man’s suit. On presentday prices, the wool-grower is receiving a profit of about 4d. per lb. for his wool, so if we multiply 5i by 4d. we get an amount of something less than 2s. If we assume that there are 3,000,000 or 3,500,000 men in Australia who wear suits, we arrive at a figure of about ?300,000, which is the amount that the growers receive from the suits that are sold to the men of Australia.
– What does the middle-man get?
– He gets his 30 per cent.-
– It is 60 per cent, in some cases.
– I was being moderate. At 30 per cent., he would receive about ?7 on a suit costing ?21. That would be his cut.
– The retailer gets ?8 15s. on a ?30 suit.
– I accept that figure. I do not think it is excessive.
I mentioned previously that 1 thought there had been an improvement in the methods of advertising woollen materials. It has been well known to many of us for a long time that one of the very valuable properties of wool is its resistance to fire, which is quite the opposite of the artificial fibres, some of which are most inflammable. Wool is very difficult to burn. I saw on television recently an advertisement which brought this fact before the viewers, for the first time, to my knowledge. I also noticed a letter in one of the metropolitan newspapers which referred to the matter. It is something which I think needs to be emphasized.
In Sydney, two large wool firms have got together and are contemplating the spending of ?1,500,000 on wool stores at that centre. I understand they also propose to spend ?5,000,000 on wool stores throughout Australia, indicating that there is confidence in the industry and that it is not dying, as some of its detractors try to make out. We have seen a remarkable increase in buying by some of our customers, to an extent that would not have been thought possible only a few years ago. Of course, Japan heads the list. I have here some figures supplied by the Commonwealth Bureau of Census and Statistics which were published in the press on Tuesday last. They show that, in the nine months to 31st March last, our total exports of wool were worth ?285,847,000, compared with ?246,093,000 for the same period last year.
Japan was by far our best customer, buying ?85,500,000 worth of wool compared with about ?71,500,000 worth in the preceding period. Great Britain’s purchases dropped from ?43,750,000 worth to ?42,500,000 worth. Italy increased her purchases from ?20,250,000 worth to just under ?29,500,000 worth. Purchases by France, increased in value from ?26,500,000 to ?28,800,000. Belgium increased her purchases from ?12,900,000 to ?15,500,000. The value of wool bought by the United States of America increased from ?8,075,000 to ?13,400,000. Germany’s purchases increased in value from ?12,200,000 to ?13,000,000. The biggest proportionate increase was in respect of sales to mainland China, whose purchases increased in value from ?3,700,000 in the previous period to ?9,900,000 this year. Even some of the iron curtain countries came good. Russia increased her purchases from ?8,000,000 worth to ?8,200,000 worth. Poland’s purchases increased in value from ?4,700,000 to ?6,600,000. Only in the case of Czechoslovakia was there a decrease- from ?5,100,000 to ?4,200,000. Those figures show that we can sell our, wool. The problem is not to sell it but to sell it at a price that is satisfactory to the grower. That is one of the big difficulties confronting the industry and that is why the bill is before the Senate.
I do not think that many of our woolgrowers appreciate the part that this Government has played in wool promotion. At present the Government contributes about ?1,000,000 a year towards research. That is by no means a small sum. Many growers hold the view that the Government is not doing anything for the industry and that it must stand alone. Fortunately, such people are in the minority. They do not appreciate how much the Government contributes towards wool research and the very valuable results that that research brings.
Senator O’Byrne was disappointed because the woolgrowers do not speak with one voice as far as wool promotion and other matters are concerned. I will be surprised if I live to see the wool-growers speak with one voice. Senator DrakeBrockman is a little more optimistic than I am. He points out that the two federal bodies have amalgamated. I doubt very much whether I will live to see the majority of wool-growers agree to unite. What is the reason for this reluctance about unity? Part of the reason is that the very nature of their calling breeds a spirit of independence that is difficult’ to overcome. The wool-growers are so accustomed to meeting the difficulties that confront them from day to day and accepting responsibilities that must be accepted that it is not in their nature to get together and work as a united body. But let us hope that that attitude will change and that they will get together and speak with one voice. Let us hope that they will make up their minds what they want for the good of their industry and, having done that, let us hope that they will tell the Government what they want. But until that is done 1 do not think that a government should force its will upon the wool-growers. Such an action would serve only to breed resentment.
Not a lot can be said about this bill. 1 am glad to see it introduced. I am glad to see the measure of agreement that has been reached among the growers. 1 join with Senator O’Byrne in paying a tribute to Sir William Gunn for the work that he has done on behalf of the wool-growers. I think he must devote 90 per cent, of his time to assisting the wool industry. He gets his measure of criticism - he would be one of the first to expect it. He is to be commended for the wonderful work that he is doing not only for the industry but also for Australia as a whole. I have pleasure in supporting the bill.
– Throughout his second-reading speech the Minister for Health (Senator Wade) emphasized the unanimous support given by the wool-growers’ organizations to this levy. I do not agree that the woolgrowers are unanimous in their support of a 10s. levy being continued for a further twelve months. I propose to read a resolution adopted by the annual conference of the Farmers Union of Western Australia. It must be remembered that this resolution was unanimous. The delegates at the conference represented 82 per cent, of Western Australian wool-growers. The resolution reads -
This Conference, having considered the official precis of the Wool Enquiry Committee’s report, considers it unsatisfactory. It expresses its disappointment that the Federation submission for a Reserve Price Plan has not been recommended and that no practical alternative has been suggested.
The Conference reaffirms its belief already endorsed by the Federation that an overall Wool Authority will not bring any practical benefits to woolgrowers unless effective marketing safeguards are introduced.
Conference emphatically rejects the proposals to contribute increased levies for wool promotion until the implementation of a marketing Reserve Price Plan and instructs its delegates to the forthcoming Federation Conference to strongly oppose extension beyond June, 1962, of the increase of 5s. per bale agreed to for the current year.
A resolution adopted by the executive reads as follows: -
Having carefully considered the evidence as submitted by the Committee of Enquiry from which it derived its conclusions, we, as representatives of the Woolgrowers, consider that same evidence is entirely contrary to the conclusions reached. Having recognized the defects of the present auction system in forward selling and pies, the Committee of Enquiry has asked growers to take measures in the future to counteract these present menaces when it was unable to do so after fourteen months of intensive investigation. We therefore demand that a ballot of woolgrowers on a Reserve Price Plan as operating in New Zealand and South Africa be held.
As stated by previous speakers in this debate, the wool industry is very important to Australia. Every section of it becomes important because of the influence that it has on Australia’s economic position in the world. Whilst Western Australia is not the biggest wool-producing State in Australia, it has 17,150,000 sheep which produce 11.23 per cent, of the Australian wool clip. So Western Australia should not be ignored in this matter.
If one looks at the official organ of the Farmers Union published a few weeks ago, one finds that the union has threatened to take legal action to prevent the collection of the levy if this legislation is passed. I do not know how it intends to do that; but that is the thought in the minds of members of the Farmers Union of Western Australia. The wool-growers of that State are committed to an organized marketing scheme in preference to wool promotion. Of course, they do not rule out promotion. They say that promotion must continue. If we have goods to sell, we must promote them; but first we must have an organized marketing scheme to give the growers an adequate return to enable them to contribute to a promotion scheme. Otherwise the contributions will merely skim the cream off their profit. Senator McKellar said that the wool-growers’ profit is 1 per cent, on capital. If the wool producers have to support promotion schemes, very shortly they will not be making the 1 per cent, profit that they are making to-day, because it will be going overseas.
It is interesting to note that the Chairman of the International Wool Secretariat said on the radio last Sunday night that this would probably be the last time that the actual amount of money to be spent by the secretariat on wool promotion would be revealed. He said that the opponents of wool - that is, the producers of synthetic fibres - do not disclose the amount of money that they spend on promotion, and there is no reason why they should know the amount that the secretariat is spending on promotion. However, this Parliament will have to know the amount of money that is being spent as a result of levies on wool. What the industry itself spends in addition to that amount will probably be kept secret from the public. If any moves are made to increase the levy on wool for the purpose of promotion, legislation will have to be passed by this Parliament.
There is talk that the wool-growers will have to contribute very much more money if they want to be able to sell their product in competition with synthetic fibres. I do not subscribe to that view. I believe that we, as a nation, have to go out and sell the products that we produce. All the wool that we are producing to-day is saleable. There is no glut on the market. There is no large carry-over from season to season. In fact, if one studies the “ Wool Outlook “, one sees that during the last season reserve stocks of wool have been falling in practically all the wool-using countries. “ Wool Outlook “ states that probably the only wool that will go on to the market this season will be the current clip. It is a bit difficult to promote the sale of a product that is already saleable. We are able to sell all the wool that we are currently producing.
– Don’t be ridiculous.
– We are not shearing donkeys. Just leave them where they are.
– Try to get down to earth a bit. Talk about something that you know something about. You are just a fool.
– I know sufficient about-
– You know nothing of what you are talking about.
– I know sufficient about Nita Downs to know that you do not pay award wages for the labour that you employ and that therefore your profit from wool should be much greater than that of wool-growers who do pay award wages.
– You are just a fool. How do you know that I do not pay a.ward wages?
– I know, and if necessary I will produce the evidence.
– Mr. Acting Deputy President, I rise to order. I would like Senator Cant to produce the evidence that he is talking about.
The ACTING DEPUTY PRESIDENT (Senator Wood). - Order! There is no substance in the point of order.
– 1 do not believe that a promotion system of this nature can benefit very greatly the wool-grower who has no more wool to sell. That is my opinion. I do not know what the carry-over is. I know that there are openings on world markets for selling a greater quantity of wool. They have been mentioned by Sir William Gunn who, in my opinion, is the author of the report that has been submitted by the Wool Marketing Committee of Enquiry. He mentioned India and China as places in which we might be able to sell greater quantities of wool. I should think that there are many other places in Asia in which a greater quantity of wool might be sold.
I know that many honorable senators on the opposite side of the chamber are not happy about Australia trading with Communist China. They seem to think that the Communist countries use trade to break the economies of other countries. I direct the attention of the Senate to the fact that only this week Japanese wool-buyers walked out of the wool sales and the immediate result was a 2i per cent, drop in the price of wool. The emphasis has been on the sale of more wool to Japan. When the Japanese economy gets into trouble and a quota is put on the importation of wool, that is reflected in the prices that are paid for wool in Australia. That would not happen if we had an organized marketing scheme.
– This is not wool promotion.
– The fact is that wool has been promoted in Japan; but when that country does not want to buy wool its buyers walk out of the sales and the price of our wool falls- If we continue to promote wool in countries such as Japan, and keep the promotion to one country instead of spreading it properly, we will be faced with that position on quite a number of occasions. We are facing a similar problem at the present time in respect of the entry of Great Britain into the European Common Market-
– Can you think of a scheme that will avoid price fluctuations?
– Organized marketing will avoid price fluctuations. In this speech I hope to be able to show that many of the price fluctuations can be eliminated without even having an organized marketing scheme, if the Australian Wool Bureau and the International- Wool Secretariat will consider the industry on a proper basis. Even without interfering with the pies and the organized buying, wool can be presented in a better way and in a much more standard form. That would eliminate many of the price fluctuations. I hope to deal with that matter later.
The Queensland Primary Producers Co-operative Association Limited also is not in favour of the report of the committee of inquiry. The committee’s only firm conclusion was in favour of promotion. On 23rd March, 1962, an official of that company had this to say: -
Unless adequately dealt with elsewhere, I shall feel compelled to make a supplementary statement - although it is felt that the facts already revealed demand the rejection of the Committee’s Report in toto.
Sitting suspended from 5.45 to 8 p.m.
– Prior to the suspension of the sitting I was discussing the question of whether the recommendation for a levy on wool was the unanimous decision of the industry, and I had indicated that the levy was not favoured in Western Australia nor by the primary producers’ co-operative in Queensland”. Furthermore, at the meeting at which the levy was approved five States were represented and the voting was three to two in favour of it. We always bow to majority rule, but it is apparent that the decision to continue the levy for a further twelve months was not unanimous by any means. I have indicated that the growers in Western Australia are contemplating action to challenge the tax which will be applied under this legislation. I do not know how they can do that because the Government has the power to levy taxes. I am not one who is wedded completely to the principle of wool promotion, although it has its place in the field. In my opinion, organized marketing is a much more urgent matter at this stage because we are able to sell all the wool that we produce. I have indicated that substantially the only wool which will be on the market this year will be the Australian clip, and that reserves in the industry were greatly depleted last year.
The Australian Wool Bureau could consider with advantage the method of handling wool and, in particular, the method of classing wool. All honorable senators know that activities in the shearing sheets to-day are on a hit-and-miss basis. Very much of a human element comes into wool classing. Different classes have different methods even though they may have come from the same school’. Procedures in the shearing shed, not so much on the board as mentioned by Senator O’Byrne, but from the table to the press should be investigated. A great deal of damage is done to the wool. The methods of preparing the wool for baling vary according to the shed. Because of this, the wool that comes on to the selling floor is not by any means of a uniform grade. For instance, one classer may want a heavy skirting on the wool and the fleece then falls to pieces. Some classers take off only the necks while others take off the necks and the backs. When there is a massive clip coming from various centres after passing through the hands of a multitude of classers, the wool that goes on to the selling floor is not of a uniform grade. As a result, it is not presented in the best way to those who want to buy it. The buyers bid on the lowest quality wool in the lot that they want to buy, and on many occasions the better grade wool in the lot is sold at the lower price. Consequently the producer suffers. If there is to be wool promotion, that aspect could be looked at with advantage to the industry. I ask for leave to continue my remarks at a later hour.
Leave granted; debate adjourned.
– by leave - As honorable senators are aware my colleague, the Minister for Trade (Mr. McEwen), is making a statement on this subject in another place. The statement that I am about to make is in similar terms to the one which he is making.
Last July, Britain decided to negotiate for admission to the European Economic Community. Shortly afterwards the Prime Minister (Mr. Menzies) in his statement in this Parliament explained the background to that decision. The Prime Minister described the talks which had taken place in Canberra a little earlier with Mr. Sandys, the British Secretary of State for Commonwealth Relations, and set out the issues involved. In his speech during the debate that followed Mr. McEwen dealt with the trade aspects of Britain’s decision, as they concerned Australia. What clearly emerged from those statements was that this Government regarded the negotiations on which Britain was then about to embark as being of tremendous importance to Australia.
Britain’s decision to apply to join, was, we recognized, one which she was entitled to take. We did not consider that it was proper for us to raise objection; but neither - and this we made clear to Mr. Sandys - was the absence of objection on our part to be interpreted as implying approval. This should be kept in mind. Since then, negotiations have been proceeding. But they have not yet reached the stage of definite or decisive negotiations, at least insofar as our trade interests are concerned. There have been, as was to be expected, the inevitable preliminaries - the statement by Britain of its general approach, the assembling of facts and the identification of the problems. The development of the negotiations has been followed - very closely followed - by this Government. The possible implications for our vital trading interests have been the especial concern of the Minister for Trade. The Government’s course from the outset has been to see that Australia’s trade interests were adequately understood and, so far as could be contrived, safeguarded.
At this point Mr. McEwen recalls the basic elements in the Government’s approach to Britain’s negotiations. Before these began we were assured by Mr. Sandys when in Australia and by statements by the British Prime Minister and other Ministers, that entry by Britain into the Common Market would be conditional upon her securing special arrangements to protect the important trading interests of Australia and other Commonwealth countries. No one could validly challenge Britain’s right to apply to join. Our attitude is to accept her application as real, to take in good faith her assurances that she would not join if the price was serious damage to Commonwealth trade and, with these points constantly as the background of our -thoughts, proceed to constructively propose the kind of solution which would protect our trade, always bearing in mind that to advance proposals which have no possibility of acceptance would be both futile and indeed deceptive to the industries concerned. We have seen the need, and seized every opportunity, to try to ensure that at the highest political level the critical issues for Australia are fully understood by those Government leaders whose views and policies will determine the outcome of the negotiations.
As the Prime Minister made clear in his statement to this Parliament last August, it was not until the visit of Mr. Sandys in July that the Government was told that Britain was on the point of making a decision whether she would enter negotiations to join the European Common Market, notwithstanding the involvement of agriculture and Commonwealth trade. Within a month of Mr. Sandys’ visit we proceeded to call Australian industries into consultation, so that the Government could operate in partnership with those whose interests were touched. Since then Australian industries have been kept informed on developments, and Government policy has evolved in close consultation with them.
We have been in continuous consultation with Britain over the last seven or eight months and have had the opportunity to inform her fully pf the facts and circumstances of our trade. Indeed, in September last, even before the actual negotiations commenced, a team of officials led by the Secretary of the Department of Trade and the Secretary of the Department of Primary Industry was engaged in extensive discussions with British officials on the whole range of our commodity trade interests that could be affected. Since that time senior officials from the various departments directly concerned, including either the secretary or deputy secretary of the Department of Trade, have been constantly in Europe in contact with the officials concerned in London and Brussels with the negotiations.
Beyond these direct and most important contacts among officials, the Government has made its view known at the highest level by way of normal diplomatic representation. No opportunity has been lost to ensure that Australia’s case and needs were brought to the attention of the governments of the Common Market Countries. From the outset we have taken the view that Australia should be given the opportunity to explain at the negotiating conference, through its own representatives, the facts of Australia’s trade interests in the British market, and the vital importance to Australia that these interests should be preserved.
Mr. McEwen’s arrival in Europe was timed to enable him to have personal talks with Mr. Macmillan and Mr. Heath, the British Minister responsible for the actual conduct of the negotiations, on the question of our participation in Brussels. At their next meeting after his arrival in London the British and Common Market Ministers agreed that an Australian representative could make a comprehensive statement at a meeting of the top level officials who, under the direction of their Ministers, are conducting the negotiations. Dr W. A. Westerman, the permanent head- of the Department of Trade,- prepared this statement in consultation with Mr. McEwen and made it in Brussels on 26th- April.
I turn now to report Mr. McEwen’s overseas visit. One thing should be made clear at once. He did not go abroad to conduct conclusive negotiations in the ordinary sense. His mission was to explain Australia’s interests and to convey the views and thinking of the Australian Government by direct personal contact, at high political level. At the same time it was his purpose to elicit the thinking on these matters of the governments of the countries which he visited so that we might better be able to design our own requests, in the shape most likely to be accepted.
His discussions were, of course, primarily concerned with the implications for Australia of Britain’s application to join the European Economic Community. It was his intention also to canvass the prospects for- wider international action to improve the conditions of trading in bulk commodities. As is well known this Government has consistently supported the introduction of broadly-based international agreements as a means of tackling some of the fundamental problems affecting trade in the bulk commodities.
Mr. McEwen’s first talks were in Washington. The United States is not a principal party in these negotiations, but we all comprehend the massive influence of the United States in European affairs today. He was able to explain Australia’s attitude and her problems in this situation to the President, Mr. Kennedy, and to the Acting Secretary of State, Mr. George Ball; also to the Secretary to the Treasury, Mr. Douglas Dillon; Secretary for Commerce, Mr. Luther Hodges; in the absence of the Secretary for Agriculture, to the Under Secretary, Mr. Murphy; and to a number of very senior officials of President Kennedy’s Administration.
In each case Mr. McEwen had very full and adequate discussions, and without exception was assured that the United States regarded Australia as a very worthwhile friend - an important Western country - and that the United States would wish to see our essential interests protected. This, of course, was satisfying and gratifying. However, any one familiar with international trade is aware that the United States has always had an objection to the system of British preferential tariffs.
So that he would not fall into the error of over-interpreting the expressions of goodwill to Australia, Mr. McEwen raised the question of our preferences with Britain and the need for them to be preserved if Britain should join the Common Market.
This resulted in it being made clear to him that the United States felt that preferences were wrong in principle, and, in their opinion, ought not to be perpetuated.
Mr. McEwen took the line that the United States was entitled to have its own view about British preferences. But he recalled that in the General Agreement on Tariffs and Trade which was constructed in 1947 - and constructed predominantly on American initiative - British preferences had been an important issue. He reminded them that no British country could have joined the General Agreement unless the system of preferences was recognized, and that in fact a recognition of the system had been incorporated into the General Agreement. It was against this background that Mr. McEwen pointed out to the United States Government that if it wished to eliminate British preferences, the place to raise it was in Gatt.
It was made clear that Australia would take it very badly if the United States attempted to exercise an influence on the occasion of Britain applying to join the Common Market to try to kill the system of preferences. Mr. McEwen pointed out that in Brussels, where Britain’s negotiations were proceeding, we had no right to appear or to speak. Nor for that matter had the Americans, but it was recognized that they could exercise a most powerful influence and that for them to do this there against preferences would be quite wrong.
The outcome of these discussions was that Mr. McEwen was clearly told that the United States Government would not seize on the occasion of Britain’s application to campaign with the countries of the Six to kill preferences. At the same time he was told that, if questioned, the United States Government would certainly have to make clear its well-known objection to the system. The attention of the Americans was directed to the British assurances that they would not join the Common Market on terms which would seriously harm her Commonwealth trading partners. Accord ingly, strong American resistance to the continuation of preferences could have the result of making it virtually impossible for Britain to go in.
The Minister for Trade then had discussions with the Prime Minister of Canada, Mr. Diefenbaker, and his Ministers for Finance, Trade, and Agriculture, and their officials. Canada, and also New Zealand, have problems in this situation comparable to ours but, of course, not identical. Mr. McEwen was invited to visit New Zealand but unfortunately was not able to do so. He looks forward to talks with the New Zealand Prime Minister when he is in Canberra next week.
Mr. McEwen then went to London and had discussions with the Prime Minister, Mr. Macmillan, Mr. Heath, and with other Ministers with particular responsibilities in the negotiations - Mr. Butler, Mr. Duncan Sandys, Mr. Selwyn Lloyd, Mr. Erroll and Mr. Soames. He was again assured by Mr. Macmillan and his Ministers of their firm intention to represent Australia’s needs clearly to the Six, and to press for adequate safeguards for our trade.
As mentioned earlier, it was after these discussions and Mr. Heath’s subsequent attendance at a conference of the Common Market Ministers that the decision was taken to enable Australia to state her case directly in Brussels. The discussions in London were concentrated less upon explanations of what stood to be affected than upon the real problems of the practical ways and means by which what stood to be affected could be safeguarded.
Mr. McEwen was able to say that in Washington he had been assured that it was the policy of the present administration to support efforts to achieve global arrangements designed to accord stability to world trade in bulk commodities. He had welcomed this. However, he emphasized in London, as he had earlier emphasized in Washington, that we were not prepared to concede that transitional arrangements would be sufficient, if it were left to mere hope, that at some point of time in the future satisfactory global arrangements covering trade in these commodities would be devised. The protection which we would need if Britain joined the Common Market would be protection adequate in its terms, and continuing until such time as world arrangements were achieved.
Following his first series of talks in London, Mr. McEwen went to Paris. He had discussions separately with the President, General de Gaulle, Prime Minister Debre and Foreign Minister Couve de Murville, Minister for Economic Affairs Giscard d’Estaing and Minister for Agriculture Pisani. Here, every one assured him of the high value which France puts on the British Commonwealth as a political group and the high regard in which Australia was held and the sympathetic desire to see our economy remain viable. However, it became clear in Paris, as it continued to be clear in each successive capital of the country he visited, that at high government level there was a feeling that Australia was predominantly an exporter of wool, the bulk foods and metals, and that arrangements which would cover these items for a transitional period would be sufficient to protect the Australian interest. Also it became clear that certain views were commonly and strongly held by each of the Common Market governments.
Here for the first - and not the last time - Mr. McEwen was profoundly impressed by the deep political attachment of the governments of the Common Market countries to the basic objectives of the Rome Treaty and the common agricultural policy. It was clear that any special arrangements for Britain would have to be consistent with the principles of the Rome Treaty. They would not be acceptable if they resulted, for example, in the United Kingdom having cost advantages over other Common Market countries. Accordingly, Britain could not expect to import food or materials free of duty, whilst other members of an enlarged Common Market paid higher prices for such items or paid import levies or duties on their imports. The view is also most strongly held by the Six that if Britain joined she could not have special dispensations which would in fact establish her as a separate trading area within the overall Common Market bloc.
The points were stressed that such a situation would require a customs frontier between Britain and the other countries, would be a violation of the basic concept of a Common Market area, and would be a constant inducement to other members, present or prospective, to also want separate treatment. Furthermore, Mr. McEwen was left in no doubt that members of the Six would expect to obtain a greater share of the British market for agricultural commodities if Britain joined. This certainly would be the expectation of the French. This attitude represents a line of thinking generally and strongly held by the Common Market countries, which, we must remember, have the decision on whether Britain shall be allowed to join.
Under present Common Market policy we would expect that of our recent trade with Britain about one-third, covering mainly wool, hides and skins, and metal concentrates, would not be subject to new trade barriers of one kind or another. But everywhere in Europe Mr. McEwen found it necessary to point out that another third could be seriously affected - embracing the bulk commodities such as wheat, meat, butter and sugar; and that the remaining third of our trade with Britain, about f A. 80,000,000 a year in value, could also be grievously disrupted if subjected to the common external tariff. It was in respect of items in this last group, such, for example, as canned and dried fruits and lead and zinc metal, that Mr. McEwen pointed out that entire Australian communities, often in isolated areas, were dependent on trade deliberately geared to Britain; that, indeed, Government investment in irrigation works and private investment in orchards, farms, mines and smelters had been built upon the contractual preferential position, including unrestricted duty-free entry, which we had enjoyed for 30 years in Britain. Our competitive position in that market rested on the preservation of our rights. Mr. McEwen made similar points, of course, in relation to industries like sugar and meat which are the great staple industries of the tropical north and the northern interior.
In the case of metals, he had to show that duty-free entry for concentrates, but substantial tariffs for ingot metal, would be damaging to us from the aspect of employment, exchange earnings and the profitability to our industries. We have no export trade as yet in aluminium. However, there is a great investment in Australia, and in New Zealand, of Australian, British and United
States capital. The total commitment would be in excess of £200,000,000. This great prospective export industry- of both Australia and New Zealand must not be frustrated by an insurmountable European tariff barrier. Our real and direct interest on behalf of Papua and New Guinea was, of course, raised. It was explained that we would want to have an opportunity to consult on any arrangements regarding the future trading of tropical products which emerge from the Brussels negotiations, and which may affect the interests of these territories.
These explanations did arouse a new consciousness in the minds of the European governmental leaders that problems were raised for Australia beyond what they had previously comprehended. With variations of emphasis, Mr. McEwen found the same point of view held and the same explanations needed when he called upon the West German Vice-Chancellor, Dr. Erhardt, in Bonn, and other ministers and officials of that government. This was so again when he called on Ministers of the Governments of the Netherlands, Belgium and Italy - Foreign Minister Luns, Minister for Economic Affairs de Pous, and Minister for Agriculture Marijnen, in The Hague; Deputy Prime Minister and Foreign Minister Spaak, and Minister for Trade Fayat, in Brussels; and, in Rome, Deputy Prime Minister Piccioni, Minister for Foreign Trade Preti, Minister for Industry and Commerce Colombo, and Foreign Minister Segni. The executive body of the present Common Market is a commission. Mr. McEwen interviewed Dr. Hallstein, the president of the commission and also Dr. Mansholt, vice-president and commissioner in charge of agricultural matters inside the community. Here Mr. McEwen found full knowledge of Australia’s trading circumstances but a knowledge represented in terms of arithmetic and statistics. This he set out to supplement, with explanations of the human and community problems for producers, many in remote areas, whose industries were geared to their contractual, preferential entry into the British market.
Mr. McEwen received full acknowledgment that this left a different kind of comprehension of the Australian problem in terms of social and human considerations.
A very important aspect of his mission in Europe was to form a judgment as to what we should ask for, with hope of success, by way of protection; to decide in what manner the request could best be presented; to see to it that the governments which had to respond to that request gave their reactions with a full comprehension of the nature of the problems being raised for Australia.
Important impressions made on his mind as the result of these most valuable discussions in the capitals of The Six may be briefly summed up in this way. There would be the strongest resistance to securing long-term special arrangements for Australian items, to enter Britain only, on terms different from those under which the same items of trade were being sold in the other Common Market countries.
From the Australian point of view it is obvious, of course, that our position is no worse, if we can sell an item into the whole Common Market area, including Britain, on the same preferential terms as we can sell that item in Britain to-day. Our position would, of course, be better if we could sell that item in unlimited quantity into an enlarged market, retaining the preference. But that would represent in the terms of Gatt a new preference for Australia. Gatt forbids that. So if Britain has no chance of securing continuance beyond a transitional period of our preferences in her market alone, and if we cannot have our full preferential opportunity extended to the enlarged Common Market, how then can our trade be protected?
There is one obvious means. That would be an arrangement under which we could sell on preferential terms the same items of trade into the enlarged area, but in quantity no greater than the quantity which we sell to Britain. In this situation there would of course be no limit to the quantity we could sell beyond the quota by meeting the common external tariff. So here is a request which we can make. It is one that ought to be regarded as fair, because it would give us no new advantage but merely preserve our present opportunities. This would be represented by a right to sell, on our present preferential terms, a quota into the Common Market - the quantity being equivalent to our recent pattern of trade and with some fair provision for growth in the quota.
Such a provision for growth- exists now, since our present right of duty-free entry is unrestricted as to quantity. We have trees planted, not yet bearing fruit. We have mines and smelters in the course of expanding, but not yet producing to their designed capacity. Under this kind of approach our trade would be protected. We would gain no new advantage of preferences. The principles of Gatt would not be violated. It is clear that article 234 of the Treaty of Rome contemplates the possibility of some such situation.
That article says, in effect, that prior obligations to third countries resulting from conventions - like our trade agreement - shall not be affected by the provisions of the treaty insofar as those obligations are not incompatible with the treaty. Our existing rights of access to the British market are Britain’s obligations to us under our long-standing trade arrangements. Here is an approach, a principle, which would protect our trade, shaped after Mr. McEwen’s full opportunities to ascertain the views strongly held by the countries which will have the determining decision upon this matter. It would not provide for Britain lower costs than her other partners in the Common Market if she should join. It would not extend the value of our preferences beyond their present worth.
It was on the basis of that principle and against that background that Mr. McEwen turned to examine our items of trade category by category in the second series of talks that he had with British Ministers after his discussions in Europe. His knowledge of the firmness with which certain views were held by the governments of the Common Market countries, and in the commission, enabled his consultations with British Ministers to be more practical and more fruitful.
In these discussions it was assumed that there could be secured special arrangements covering most of our trade for a transitional period. The main problem which had emerged was to secure special arrangements for our trade over the long term, that is without a particular cut-off point of time. It was agreed that our claim was quite different and very much stronger than that of a trading partner outside the Common Market which did not have an historic special pattern of trade and a whole system, of contractual arrangements. Therefore, our claim for protection could be related to our justifiable expectations in the1 British market if the issue of Britain applying to join the Common Market had never, arisen.
It was obvious that we should not make any requests which would be in conflict with Gatt. It was agreed that we shouldnot make requests which would be regarded as violating basic principles of the Treaty of Rome. It was agreed that our requests should be designed in relation to article 234 of the treaty. That article, as I have mentioned, contemplates continuation of trading relationships with a member country where a convention has previously governed the terms of trading. It was regarded as desirable that notwithstanding the complexity of our items of trade and the1 differentiation of treatment by the CommonMarket countries between items of different character, we should nevertheless aim to have perceivable in our various proposals a framework of consistency.
On these basic points it was valuable that Mr. McEwen reached an understanding with the Ministers of the British Government. At the same time, there was a further examination and strengthening of the procedures of consultation between the British negotiators at various levels and the Australian representatives who will be maintained in London and Brussels.
In the broadest sense we are concerned with two categories of items which the Common Market itself deals with, each in a different manner. These are the items of the common agricultural policy, in abbreviation referred to as the C.A.P. items, and the other category, the list of items whose import into the Common Market would be subject to a common external tariff - the C.E.T. items. Basically, the common agricultural policy items with which we are1 concerned are those major items of foodstuffs which are produced in bulk quantity within the Common Market area - wheat,, barley, butter, meat, sugar, apples and pears, wine, &c.
In regard to these items it is the intention of the Common Market that the producers of the Common Market countries shall receive a price to be agreed between the countries. After a transitional period, the level of prices shall be uniform as between the countries. The producers are assured of receiving these prices because the Common Market Commission will see that the market operates to ensure them. This policy clearly requires that, to protect this objective internal price, imports shall not be permitted to under-sell the local product. So the intention broadly is that an import levy or customs duty shall be imposed which will bring the landed cost of imported wheat or sugar, &c, to a level at which the local product cannot be undersold.
For us this would mean that if Britain were a member, her producers would not have their returns made up by subsidies, but would receive the higher internal price, and Britain would have to accept these items without restriction when offered for sale from within the Common Market countries. Our wheat, taking wheat as the example, would no longer have duty-free entry but Would have to pay the levy prescribed at the time. To effectively protect the European producer the levy would have to be high enough to accord protection against the cheapest wheat offering. Therefore, the measure of the levy imposed on our wheat Would not, in effect, be determined by the British Government for instance, or by the Common Market countries as a whole. The levy on our wheat could be determined by some other country, perhaps a Communist country, offering wheat at a lower price and* attracting, as we now see it, a high levy on all wheat imports. This, of course, produces a most dramatic change in our circumstances.
We believe that there is likelihood that the Common Market price for internal wheat will prove an incentive to increased production. So we fear a diminished market attracting fierce competition from outside Europe. The more a seller cuts his prices to achieve a sale, the higher would be the levy on him and every one else. Such wheat sold more cheaply would be of no benefit to British or other European consumers. European treasuries would gain by collecting the levy in the first place, but in the second place the regulations under the Treaty of Rome contemplate that revenues so collected would be used to aid European agricultural production and, if necessary, provide funds to subsidize exports. So taxes collected on our own wheat could, under this situation, finally be spent to subsidize competition against us in third markets.
Against this situation, and these contingencies, what should we ask the British to request as special protection for our trade? Our trade treaty with the United Kingdom provides us with the right to have a market there for 750,000 tons of wheat a year at commercial prices. The purpose is to give us price security against competition from subsidized wheat. This establishes the quantity we may state as our legitimate expectation in the United Kingdom market. On price Mr. McEwen sees no reason in logic why British consumers should not pay as much to our growers for our wheat, allowing for quality differentials, as they pay, for example, for French wheat. On. the other hand, he sees no reason why, in this artificially diminished market for nonEuropean wheat, we should be forced into acceptance of very low prices through fierce competition. This would be very important as there is a history of the price realized for wheat in Britain being taken as the price guide by importers everywhere else in the world. Britain has a balanceofpayments problem which would be aggravated if she had to pay a much higher price than has recently prevailed for imported wheat, and we are asked to recognize that. On the other hand, this country has a grievous balance-of-payments problem. Due to low-commodity prices our terms of trade have deteriorated in recent years whilst Britain’s terms of trade have actually improved.
Very full and frank discussions in London, taking wheat as a pattern common agricultural policy item, confirm that the interests of Australia and Britain are different, in this situation. They face their consumers having to pay higher prices for home-produced food, and higher prices for European imports, but they do not want the burden of higher prices for food and raw materials bought from outside the area. On the other hand many of our exports are not sold at profitable prices and there is our serious balance-of-payments problem. Therefore we need higher prices. This situation will show quite clearly why Australia wants satisfactory world arrangements for the bulk commodities.
Mr. McEwen says that he did not succeed in resolving these differences, but the British became increasingly aware of the strength of our arguments and the firmness of our views that our trade in wheat and the other common agricultural policy items should be sufficiently protected. Because of the inherent difficulties of this situation Mr. McEwen says that it is not possible to proceed further to-night in any analysis of the problem. However, British officials are now working in the closest co-operation with Australian officials in trying to work out an approach for these commodities which both governments might accept in the Brussels negotiations.
Each of the common agricultural policy items has its own complexity. Meat as a commodity is extremely complex in its various forms, and, incidentally, does not lend itself to regulation by storing in bulk as does wheat or butter or wine or sugar. Britain is the big market of the world for imported butter yet every one familiar with that trade believes that if butter prices go up beyond a certain level in Britain, consumption will fall off. This identifies butter as providing a quite special problem. These references illustrate the very great difficulties of devising proposals acceptable to the industries and to the countries concerned. Mr. McEwen reports that we are still at grips with these problems. In the meantime, however, the long-term Meat Agreement and the Commonwealth Sugar Agreement cover the position of those items at least for the unexpired periods of the agreements - until 1967 in the case of meat, and until 1969 in the case of sugar.
The items of our trade with Britain which would be subject to the common external tariff are valued at about £A.80,000,000 a year. In respect of this group Mr. McEwen was able to reach agreement with British Ministers as to the best method of having our problems considered. In the first place this would be to seek to have these items considered in four separate groups. The first group would comprise agricultural products, not subject to the common agricultural policy, including the processed foodstuffs; the next group, raw materials, includ- ing the metals; the third group, ordinary industrial factory products or hard manufactures; and the fourth group, tropical products. To the extent that our preferences in Britain operate at present against the products of countries of the Common Market, it is quite clear - Mr. McEwen emphasizes this - that there would be no hope of securing approval of the Common Market countries for the perpetuation of the preferences for our products against theirs. We must strive to preserve the measure of preference which we have against suppliers from outside the Common Market area. This will be of major importance in cases such as canned fruits and meats.
In other cases we must strive to preserve the right of duty-free entry, or aim to achieve the lowest possible common external tariff duties - with the retention of the existing preference margins - against nonmember countries - on a given quantity of exports. In effect, we are asking for tariff preference quotas, which will provide Australian exporters wilh comparable outlets to those currently enjoyed in the British. market. In the case of metals, including lead, zinc, alumina, aluminium and cadmium, we have supported Britain’s request for a nil rate of duty in the common external tariff.
Again, Mr. McEwen feels that he should! point out that we could follow a course other than to accept the loss of our preferences against European production, and demand the preservation of that preference. But he is quite sure that to ask Britain X& press this line would be to invite complete rejection. As Mr. McEwen has said earlier we must always bear in mind that to advance proposals which have no possibility of acceptance would be both futile and deceptive to the industries concerned. What we have done is to take the common external tariff products in the four categories and os most cases to request that special arrangements be approved for us to continue t» export either to Britain or to the whole Common Market area, on our present preference terms into Britain, a quantity representing our present pattern of trade, with a growth factor. This obviously is. and should be recognized as reasonable, and in conformity with our contractual rights with Britain, and with the provisions of the Rome Treaty and Gatt.
So, summed up, Mr. McEwen’s second visit to London produced a wide area of agreement with British Ministers on the principles of the approach to our problems, an agreement on the kind of proposals to be advanced in respect of the items subject to the common external tariff and a very valuable, but not conclusive, discussion on wheat. This, as he mentioned, is a pattern item for the common agricultural policy products of which, in total, our recent trade with the United Kingdom has been worth around £A.80,000,000 in a year.
All that Mr. McEwen has already explained will serve to indicate the lines on which the Australian case was presented by Dr. Westerman to the top level negotiating officials of Britain, and the Common Market countries, in Brussels on 26th April. He, of course, had the practical aid of the industry consultants and the co-operation of the Secretary of the Department of Primary Industry and of senior officials from departments concerned. Dr. Westerman was a highly trained man, greatly experienced in public administration, and of high technical competence. Not only does Mr. McEwen think he composed and presented the Australian case splendidly, but advice from a number of quarters comment in most gratifying terms on the efficacy of his presentation.
Naturally enough, Mr. McEwen has been asked since his return whether he feels more optimistic or more pessimistic about the prospects for us in relation to Britain’s negotiations. To that kind of question he can give no definite answer. On the credit side of developments, he is sure that our prospects of securing protection for our trade if Britain does join the Common Market are improved now that all the governments concerned have a much better comprehension of Australia’s trade problems. They have a better understanding of the breadth of our items of trade; the measure of our dependence upon our historic preferences; and the extent to which both public and private investment has been geared to the legitimate expectation that these preferential arrangements would continue.
Within this understanding, there is now he realization that what we have at stake s not merely an amount of money in our balance of payments, but the actual livelihood of communities, many of them remote, which form the pattern of population and development of this country. Mr. McEwen would put on the credit side also what he would believe to be a new awareness within the United States administration of the strength which we feel against the exercise of United States influence to kill preferences in these negotiations, and the positive and valid nature of our belief that the only point at which the United States can seek to reduce or eliminate preferences is by negotiation with us and others in the General Agreement on Tariffs and Trade.
He is sure it is an advantage that this Government comprehends more vividly than it did the deep feeling in the present Common Market countries against any arrangement which would disrupt the character of the Common Market. In the same field on the credit side, and flowing from our perception of this position, is the fact that we are now able to advance proposals to protect our trade which are tailored to avoid conflict with the Treaty of Rome. Our request for protection must be recognized as having the validity of being based upon our rightful expectation to have an historic contractual pattern of trade protected if our trading partner joins the Common Market.
These are all significant advantages in the conduct of great and historic negotiations in which we are involved, though not as a principal. We recognize the need for our ideas about safeguarding arrangements to conform to the requirements of the Rome Treaty, and the reasonable expectations of The Six for improved access to the British market. In balance of this we can expect the Common Market countries to recognize that the strength of the Commonwealth depends importantly on the trading relations among its members.
Commonwealth countries generally would endorse what Mr. Heath - Britain’s Lord Privy Seal and the Minister conducting its negotiations - said in his statement to the Ministers of The Six in Paris on 10th October. He said -
Commonwealth trade is one of the strongest elements in maintaining the Commonwealth association. It would be a tragedy if our entry into the Community forced other members of the Commonwealth to change their whole pattern of trade and consequently perhaps their political orientation. I do not think that such a development would be in your interests any more than in ours. Nor, looking at it now from the point of view of a potential member of the Community, would any of us wish the Community to be met with the hostility which would flow from a large group of countries strung across the world if they were to feel that their interests had suffered at our hands.
These are clear and important words of Mr. Heath.
Lest it be felt that Mr. McEwen has given grounds for optimism, he feels bound to say that he is far from satisfied that all of the genuine sympathy for, and understanding of, our problems, that was expressed will necessarily be translated into the sort of practical arrangements which would adequately safeguard our interests. As he said in a speech in London, arrangements purporting to protect our trade with Britain, or the equivalent, would not be satisfactory - if they left our industries facing a disastrous “ precipice “ after a transitional period; if they failed to cover sections of our trade which traditionally rely on the United Kingdom market; if the amount of tax imposed by the British authorities on food imports from Australia can be set by the price quotations of foreign suppliers, even Communists, outside the Commonwealth and outside the Common Market; if we are expected to give up concrete protection of trade items at a definite future point of time in the mere hope that “ world-wide solutions “ will by then have been found; if we are to be deprived of “preferences “, and our traditional “ free entry “ into the British market, on a fiction of making trade freer, while, at the same time, formidable barriers are erected between us and our traditional market where none have previously existed; and above all, if, in the guise of the doctrine of “ non-discrimination “, our producers were to suffer transformation from a preferential position of very long standing to a position of drastic inferiority among suppliers to the British market.
Of course, it would be a travesty for the established industrial nations of the Western world to welcome the transition to political independence of the many under-developed countries, if there were not displayed concurrently an absolute determination to preserve for them a basis of economic survival.
Britain cannot dictate the terms of her entry; she is, in plain fact, an applicant. She cannot dictate to The Six what they must agree to, to protect our trade. She must negotiate and seek to persuade them, and for reasons that have been made clear she must negotiate for us as- well as for herself. This statement, therefore, is to put clearly before the Parliament and the Australian people the best assessment that Mr. McEwen has been able to reach of the terms; - reasonable and practicable - to be sought to protect our trade. It is his best judgment that to request Britain to ask on our behalf more than he is illustrating, would be to invite rejection with unpredictable consequences for us. On the other hand, if in the final stages of the negotiations Britain ha9 been able to secure in our protection less than we seek, then we will be articulate in stating our position at that point of time. Britain herself, with her great responsibilities, has the ultimate decision as to whether she will enter on terms less than satisfying to us, or decline to enter.
If that point should be reached, she will - as Mr. Macmillan has already pointed out - have a heavy responsibility. But, as Mr. Macmillan has also recently pointed out, an equally heavy responsibility would be borne by the European countries who in that contingency had refused measures of protection to our trade. Further, Mr. McEwen is not overlooking the massive influence of the United States in this whole matter. She, although not a principal, has a great influence and if less than justice is obtainable for our circumstances, a share of the responsibility may, particularly if it extended to an issue of preferences, rest upon the United States.
For his part and for the part of this Government, it was Mr. McEwen’s duty to interview, inform and get the views of all who carried responsibilities. He has done that. Every country has its unique set of circumstances. We have analysed the Australian set of circumstances. We have constructed proposals accordingly. We have put these proposals forward within an overall framework of consistency. We have not fumbled the challenge to government, arising from these tremendous and historic negotiations in Brussels. From the time of Mr. Sandys’ visit we have seen our line of conduct clearly and we have stuck to it. We have declared that nobody could put Australia’s case in Brussels with the same wealth of understanding as Australia, and we won the right to do this last week. We have throughout kept in closest consultation with the industries whose trade is at risk.
Mr. McEwen detects since his return to Australia a much greater consciousness of the enormous significance for us of the outcome of these negotiations. There is now widespread recognition of the implications for our trade, for our development and for our capacity to grow. What the Australian Government is determined to do is to battle to protect Australian trade opportunities. We are not obstructive to the momentous prospect of Britain going in. We have demonstrated a constructive attitude. We do not accept for a moment, that the overwhelming part of our trade interests cannot be safeguarded, if the governments which are now negotiating have a full understanding of our trade and of the Australian case and, indeed, a full consciousness of our destiny in this remote continent.
The issues which Mr. McEwen has discussed this evening are, in fact, part of a great historical drama now being played out in Europe but they have repercussions around the whole world. The European Economic Community and all it stands for undoubtedly represents one of the great initiatives of history. The last two great world wars commenced between nations which are now joined in the Common Market. If a political and economic integration in Europe eliminates the possibility of a repetition of those devastating experiences, or importantly contributes to lessening the likelihood of conflict with the Communist world, the significance for all mankind must be assessed as very high.
Because of her geography, her history ind her great influence in world affairs, Britain must concern herself with developments in Europe. We understand this very clearly. But no one must ever think that political integration or greater economic strength achieved in Europe, or even between Europe and the United States, will be a conclusive advantage for all that we of the West stand for, if the arrangements turn out to be achieved at a price which leaves many nations outside Europe hurt, harmed and disillusioned. There is no security for what the Western world aims to make secure, in such a situation as that. Because of the obvious truth of this we feel that a fight to safeguard Australia’s trading interest with all our European kinsfolk, is much more than an activity of selfinterest. There is nothing that we are fighting for on Australia’s behalf which we are not equally fighting for on behalf of all the young countries of the world. So we feel we can hold our heads high. There are no party politics in this. If ever there was an issue which should produce an Australian bipartisan policy, this is it.
I lay on the table the following paper: -
Australia and the Common Market - Statement by the Minister for Trade, dated 3rd May, 1962.
. I move -
That the paper be printed.
I ask for leave to make my remarks at a later stage.
Leave granted; debate adjourned.
Debate resumed (vide page 1136).
– In 1960-61, Australia produced 1,632,000,000 lb. of greasy wool with a clean equivalent of 922,000,000 lb. We used approximately 5 per cent, of the wool production, the balance being exported. In that year we exported 1,358,000,000 lb. of greasy wool with a clean equivalent of 787,000,000 lb. This means that 571,000,000 lb. of matter other than wool was exported, on which freight was paid. That freight was a charge on the wool industry. Much of the matter in question was dirt and grease. If our export wool were scoured before shipment we would save the freight on the foreign matter which is exported and, in addition, have the benefits of the by-products which would result from the scouring. This is an important matter which bears some weight when we consider that the wool industry is operating on a marginal price, that is, the price which is being received as a result of the hit and miss methods of disorganized marketing leave the grower with only a very small margin of profit. The industry should be taking account of these things, which are increasing the cost of the commodity, in an endeavour to obtain a higher profit.
Although there is agreement on the freight rates charged on Australia exports, all honorable senators know that for some years we have been over the barrel in the negotiations which have resulted in the current freight rates because we have no alternative to accepting them. We have no shipping service of our own to transport our commodities overseas. We are perhaps the only great trading nation in the world which is bound in such a way and which has to accept the dictates of the shipping lines in relation to freight rates. As 1 have said, we pay freight on the 40 per cent, of matter which is exported with our wool. We can ill afford to allow the existing practice to continue. We should be developing a system of exporting only clean wool which has many advantages over the existing system. Apart from the freight aspect, one such advantage is that if the wool is scoured a more uniform grade of wool will go on the selling floor. Buyers and sellers could expect to get higher and more uniform prices for their products. They could also expect to make some profit out of the by-products after the scouring had taken place.
I regret that I have seen only the summary of the recommendations of the Wool Marketing Committee of Enquiry and not the evidence upon which those recommendations are based. Although not all members of Parliament have been supplied with copies of the report, I noticed in the press to-day that the Minister is advertising them for sale at 7s. each. I think that is regrettable. Having had a look at the summary of the recommendations, 1 find that the committee has recommended that another profit-sharing organization should be imposed upon the industry. It has suggested the adoption of a method of classing wool to a standard grade. There is no question that the cost of this classing or, rather, reclassing, will fall upon the grower. There will be another middleman who will make a profit out of the industry. This profit will be made at the expense of the producer, who has no way of passing his costs on.
I believe that over the years the method of classing wool in Australia has been completely unsatisfactory. The best service that the Government could give to the wool industry would be not so much the payment of a subsidy, as Senator O’Byrne mentioned, but the institution of a system whereby wool could be marketed in a standard condition. If this were done at the expense of the Government it would assist the grower and would be of great advantage in the marketing of a commodity which is responsible for 40 per cent, of our export earnings. The human element comes into wool classing to a very great extent. As a result of this human element growers are putting their wool on the marketing floor in a condition that prevents them from obtaining the best return, irrespective of what action they have taken to improve the efficiency of their industry. The Government should consider doing something about this matter. Instead of exporting waste matter with our wool and having to pay freight and handling charges upon it, the industry should be assisted to see that this waste is eliminated. In making that statement I do not intend to detract from any remarks I have made about organized marketing. I feel that organized marketing has already done very much for the industry. Those wool-growers who have been in the industry over the past 50 years will remember and appreciate what happened after the first and second world wars.
The principal recommendations of the committee of inquiry were in the fields of research and promotion. The committee took every possible opportunity to cast doubts on the organized marketing scheme for which a large section of growers in Australia are agitating. It gave all sorts of reasons why such a scheme should not operate, but did not visit the countries in which organized marketing schemes are already operating. Surely a committee inquiring into the best marketing methods should have visited New Zealand and South Africa in an effort to find out whether those countries were satisfied with the scheme? that are operating there. The committee should, have found out what profits are flowing to the growers as a result of organized marketing:
– Can you give us any estimate of the comparable size of the industries of those two countries and the industry in Australia?
– That information is contained in the “ Wool Outlook “.
– I wondered whether you. could give: us that information.
– I do not intend to look rt up at present. The fact is that Australia produces 29 per cent, of the world’s wool.
– You have had a lot to say, about the classing of wool. How is South African, and New Zealand wool classed?
– I do not know how it is classed, but I do know that in Australia wool is not classed uniformly. If you know anything about wool, you will know that two classers on two separate stations running the same grade of sheep, will classify the wool differently.
– Do you mean to tell me that two classers would grade two lots of 56’s on two stations differently?
– There is no question about it.,
– You would do me for a wool classer.
– I have been in woolsheds even if you have not. I think you know very little about it. I can remember during the First World War when all wool that was being held had to be re-appraised because of the inconsistency in the grading. The wool industry has lost millions of pounds as a result of the haphazard system of wool-grading throughout Australia. By creating a standard grade, and being responsible for the maintenance of that standard grade, the Government could greatly assist the industry.
I repeat that this committee of inquiry found all the reasons in the world why there should not be an organized marketing scheme in Australia. The committee said, iti effect, that the answers to Australia’s problem at the present time - I grant that it limited itself to this point of time - were research and promotion. It reached that conclusion, without having visited the countries in which a marketing scheme of the kind to which we were married at one time, is in operation.
– What has this to do with promotion?
The ACTING DEPUTY PRESIDENT (Senator Anderson). - I have let you range very widely. Now you must link your remarks to the bill, which deals only with promotion.
– I submit that the method of presentation of wool for sale is an aspect of promotion. We cannot promote something that is not presented in a saleable manner. The committee of inquiry dealt extensively with the research side. Even though there is a section headed, “Wool Research and Promotion”, almost all of the eighteen recommendations in it are confined to research. The committee stated -
Growers have voted large funds for the promotion of Australian wool and they are being requested, in our opinion rightly, to vote still larger funds for this purpose.
That is a matter that the wool-growers should begin to examine. Is it a warning that next year they will be asked not for 10s. a bale but for £1 a bale? Inherent in the talk given by Mr. Vines last Sunday night, was the suggestion that the wool industry will be asked to contribute more towards promotion. I submit that that warning is expressed in the committee’s recommendations and that the wool industry should have a serious look at that position. Whilst promotion is good for the industry, I must restate that we are trying to promote something, sales of which are already at saturation point. What we should be doing is endeavouring by all means available to us to increase, by means other than promotion, the return to the grower. I am not satisfied that promotion provides the best means of satisfying the wants of the wool industry at this stage.
– I should like to make a personal explanation.
– Is it by leave?
The ACTING DEPUTY PRESIDENT. - Leave is not required. He has the right to do so.
– Have I permission?
The ACTING DEPUTY PRESIDENT. - Yes.
– Senator Cant accused me of paying less than award rates on Nita Downs. I think that that is a fair statement of what was said. I notice that there is no objection to that. Therefore, I should like to make this explanation to the Senate and particularly to Senator Cant: I have a minority interest, amounting to 25 per cent., in a station in the north of Western Australia, called Nita Downs. I have never engaged any of the staff to work on the station. The manager has a share equal to mine and my brother’s and the share of one other. He receives more than the basic wage and is a partner. He engages the whole of the staff of the station. That is left to him and I do not believe that he has engaged any white labour on the station at less than the basic wage, or coloured labour at rates that are not satisfactory to the Native Affairs Department, an office of which has been established adjacent to the station.
I believe that this accusation is just another endeavour, such as we have seen this week particularly, here and in another place, to cast slurs on supporters of the Government. If the senator wishes to accuse Mr. Fox,the partner and manager, I suggest that he accuse him directly, instead of accusing me, because on account of heavy political engagements I have not been on the property for almost two years. I challenge the senator to supply the names of people-
– Let him do it by speaking on the motion for the adjournment.
The ACTING DEPUTY PRESIDENT. - Order! I must now tell you, Senator Scott, that you cannot make a personal explanation without leave.
– I sought leave.
The ACTING DEPUTY PRESIDENT. - Is leave granted?
– No. He may make the statement on the motion for the adjournment.
– I have only one line to go.
– I said, “No”. I have my rights.
– The Senate is debating the Wool Tax Assessment Bill 1962, the object of which is to continue for a further twelve months, that is, until June, 1963, the levy of 10s. a bale of wool, which is to he used for a special purpose, namely, research and promotion, partly in Australia but particularly overseas. Therefore, it is not my intention to discuss wool marketing at all. I shall confine my remarks, as far as possible, to promotion and research. Some growers, of course, are not in favour of continuing the levy, but it can be said that the majority of wool-growers do accept that arrangement and have requested the Government to continue with it for a further twelve months.
The levy will provide the Australian Wool Bureau and the International Wool Secretariat with an amount of £2,500,000 for promotion and research. This is assessed at the rate of 10s. a bale on a Commonwealth production of 5,000,000 bales of wool per annum. Last year Australia’s contribution to the International Wool Secretariat was £1,600,000, which was 62 per cent. of the combined funds, New Zealand and South Africa providing the balance in the proportion of 24 per cent. and 14 per cent. respectively. In addition, £400,000 was spent in the Commonwealth by the Australian Wool Bureau. Some wool-growers complain that the money that is being raised is not spent to the best advantage. That may be true of a small proportion of the funds, as it is true in most businesses, but I am sure that the bulk of the money made available to the bureau is spent to the best advantage, not only in providing for early establishment of the promotion scheme and getting it under way, but also on research.
During my stay in London, I spent several days at the head-quarters of the International Wool Secretariat discussing with its personnel their plans for wool handling, manufacturing, display and selling, in conjunction with operators both in the United Kingdom and on the Continent. I formed the opinion that the secretariat had a very good grip of the requirements and was making its presence felt in the markets of the world. This is the first time that promotion and research into wool have been handled expertly and efficiently by a staff which really understands its job. The outlay in the early stages certainly has been heavy. That has been inevitable, in order to establish the scheme. Much of the early expenditure will, of course, be non-recurring.
I believe that money spent on research with a view to making the articles for sale 100 per cent, reliable as to wearability, washability and resistance to shrinking, while retaining the best appearance possible, is money well spent. In the early stages, such expenditure may be more important than expenditure on promotion. It is not much use promoting the sale of articles that are not fully reliable, because doing so would have an effect on the sale of the articles at a later date. Therefore, I think that research is very important in the early stages and probably more important than promotion.
It has been estimated that 93 per cent, of the wool we produce is sold on world markets. As we know, the return from wool sales represents 40 per cent. ‘ of our income from primary production. There are, I think, approximately 200,000 woolgrowers in the three countries which are represented on the International Wool Secretariat. Those wool-growers have proclaimed pretty clearly that they are against any form of regimentation. As a matter of fact, they have stated that they will not accept even a subsidy on wool under any consideration. Our wool is sold to fifteen major wool-users. Man-made fibres, including rayon and acetate products, provide real and tough opposition to wool. The producers of those products are spending at present from six to ten times more on sales promotion and research than is the International Wool Secretariat. This year, that body will spend probably £3,250,000 on establishment expenses, on promotion and on research.
Our great difficulty, of course, and one of the great drawbacks from which we suffer, is that we are 12,000 miles from the markets of the world. The International Wool Secretariat has been very active. It has established branch offices in eleven countries, and it is surveying, exploring and building markets for the future. Wool, as we know, is vital to our exports and to our economy. It can be said that the present Government has done all that it has been asked to do by the wool-growers to stabilize the industry, but unfortunately the wool-grower organizations have been torn apart by internal differences and very serious dissensions. Because of these differences - I think mainly because of them - the Government decided to set up the Wool Marketing Committee of Enquiry. The committee made extensive investigations, and its very interesting and informative report is now available. In addition, the Government has invested millions of pounds in research into myxomatosis and other matters affecting the wool industry. It has built up a fund of £7,000,000 for the benefit of the industry. The value of the wool clip has been increased by between £50,000,000 and £80,000,000, on account of Japanese competition in the open market. It must be remembered that every increase of Id. per lb. in the price of wool means in the aggregate about £7,000,000 to the wool industry.
Our trade posts overseas are well staffed and efficient. I was proud to meet representatives of the Department of Trade overseas, particularly in European countries. 1 assure the Senate that the Department of Trade is doing a magnificent job in negotiating with other countries on trade matters. It co-operates with traders at all times to the fullest extent, when and as required. Manufacturers have complained that there is too much fluctuation in wool prices in comparison with the prices of synthetic fibres, but it must be admitted that in the past wool has been out-researched and outpromoted by its competitors. The position can be described, I think, as unorganized selling trying to cope with organized buying.
In my view, increased promotion and competition are the only answers to this problem. Wool must hold its present position at all costs. We must try to improve its position, if that is possible. To do this, money, technical skill and top-line management are required. The wool industry is now in a position to obtain all three of those essentials, and in my opinion, the industry will never have a better opportunity to win out than it has now. The prospects for the sale of wool in Canada and the United States of America are bright. There is a definite swing back to wool. In those countries there are two great possibilities for increased selling. The first is concerned with promotion, and the second with new processes. The International Wool Secretariat plans to get right behind every new process and to exploit it to the full.
The discussions which have been taking place in Melbourne on the subject of developing the wool market in Asia are of great concern to Australia. The chairman of the Australian Wool Bureau, Sir William Gunn, who has done such a magnificent job for wool interests, and the managing director of the International Wool Secretariat, Mr. Vines, have been working in close collaboration for several months surveying the world markets for wool. Concrete proposals for the development of those markets are now to be placed before the International Wool Secretariat for confirmation and approval. Mr. Vines has estimated that £100,000 will be needed to develop the Asian market.
I have every confidence in wool. Its position as a commodity is secure. Wool will long continue to enrich the countries that grow it and to benefit the countries that buy it. I support the bill.
.- Mr. President, the purpose of this bill is to continue for a further twelve months the levy of 10s. a bale on all wool sold in Australia. The amount raised by ‘this levy, estimated at about £2,500,000, will be used for wool promotion purposes. The extension of the levy has been agreed to - reluctantly, 1 believe - by a number of growers’ organizations, the principal ones being the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation. I think it will be agreed that many wool-growers, particularly in Western Australia, are opposed to this levy. Many growers in Victoria, also, are opposed to the levy. Three wool-growers from the western portion of Victoria were in my office on Monday last to see me about the holding of wool sales at Portland. They referred to this levy and they told me that they were opposed to it. I do not imagine that woolgrowers would be opposed to the levy if they were satisfied with the price obtained for their wool and the methods by which it was sold. I am pleased that the bill will extend the levy only until the end of June, 1963.
I do not know a great deal about primary producers’ organizations, but I know that quite a number of them exist. That is unfortunate for the producers. They must learn, as we have learned over the years, that unity is strength. I know that farmers are individualists. They work alone. They do not mix with other people as much as other workers do. They may go to sales once a week and they may meet their colleagues at sporting functions, but they tend to work alone more than do other workers. Unfortunately a farmer’s views are largely obtained from newspapers. He is not in a position to discuss matters with other persons engaged in farming pursuits. I do not think that the wool industry is in the flourishing condition that it once enjoyed. I do not think that many young people are entering the industry. I hope that before this legislation expires in June next year the woolgrowers will have decided what they want in the interests of their industry.
It is true that there has been an inquiry into the industry. When I read the names of those who constituted the committee of inquiry I wonder whether those persons were appointed because of services rendered in the past. When I say that, I have in mind the Petrov inquiry. The committee travelled abroad extensively, but, as Senator Cant pointed out, it did not go to the two countries, however small they may be, that operate a floor-price system. The committee by-passed those countries. Looking at the list of countries visited by the committee one is forced to the. conclusion that this must have been a pretty good committee on which to serve. The committee spent ten weeks abroad. It visited all the nice places - France, Belgium, Italy, the United Kingdom, the United States and Japan. It attended a meeting of the International Wool Textile Organization held at the Hague in the week commencing 6th June, 1961.
I do not altogether blame the committee for travelling so extensively abroad. After all, as I have said, I think that the chairman’s appointment in particular was for services rendered. Why did not the Government give to the committee the powers of a royal commission, enabling it to call before it witnesses and to order the production of documents? The Government did not do that. The Government did not want the committee to delve too far into the industry, but just to scratch the surface. I do not think the inquiry was warranted in the first place. The Government must have had enough information in the departmental files to know whether or not a floorprice plan should be introduced.
The wool-growers are entitled to a fair return for their labour and on the capital that they have invested in their industry, just as people in any other industry are. The wool-growers are striking lean times. They are very valuable to Australia. Members of the present Government often tell us that it is a free enterprise government; but to-day it introduced into this chamber a bill to regulate the production and marketing of sugar within the Commonwealth for a period of six years from 1st September, 1961. It is all right to do that for sugar, but apparently it is not good to do it for wool. About £17,000,000 worth of sugar is consumed in Australia annually and about £26,000,000 worth is exported. About £30,000,000 worth of wool is consumed in Australia annually, and the latest figures show that about £337,000,000 worth is exported. It is all right to have planned production of sugar. It is an important product because at least it puts people in northern Australia, where we want them. But every one must agree that wool is vital to the interests of Australia.
The bill before the Senate deals with the promotion of wool. The promotion of wool is not difficult because it is a good product. We in Australia are fortunate that our merino wool is second to .none in the world.
– Hear, hear!
– I am delighted to have the honorable senator’s support. Fancy a Country Party man agreeing that what a Labour man says is good! I learned from a discussion that I heard between two women in my home recently that this year the large emporiums in Melbourne have on display many more all-wool cardigans than cardigans made of orion or other synthetics that are combined with wool. The fashion people seem to change the fashions from year to year in order to get people to buy articles. Whether or not the promotion that has already been done has changed the fashions I could not say. The people who run the fashion shows have more cheek than four of those four-footed animals that are not very large. They seem to be able to fool the women nearly every year. Let us hope that the fashion this year is for women to wear all-wool cardigans because Australia will benefit. We undoubtedly could derive great benefit from the promotion of wool.
I was pleased to see the managing director of the International Wool Secretariat on television one afternoon recently. I was not looking at the “ Herald “ television station. I do not look at that channel and I am sure no one would expect me to. I saw this gentleman on the other commercial channel and he acquitted himself very well. The case that he presented was very simple; yet it could be of great importance. He spoke about teaching the women in China how to knit. I do not care whether it is the women in China or any other part of Asia; it was a wise proposal.
– That was Mr. Vines, was it?
– He was on the “ Guest of Honour “ programme last Sunday night. I wrote for a copy of his speech. When I receive it I will lend it to you.
– On what station was that?
– On an Australian Broadcasting Commission station.
– Yes, on the best station. I knew that it would be.
– What are you talking about?
– The suggestion that Mr. Vines made shows how simply the product of an industry such as the wool industry can be promoted. I am aware of the standard of living in Asia; but if we could get the women of Asia who can afford it to become interested in the knitting fever that we have seen in this country over the long years, we would sell much more of this very important commodity. No one expects the promotion of wool to do away with synthetics altogether; but if it helps to reduce the quantity of synthetics that has come into Australia in recent years, it will be a means of promoting the welfare of our country. In Australia we use only £30,000,000 worth of wool annually. I believe I am correct in saying that a bale of wool is worth about £70. If we increased our consumption we would help the industry greatly.
I am worried about the price of wool. When winter comes, we must wear warmer garments from about the end of May until September, and at times I am appalled by the fact that usually one pays the same price for woollen garments when wool is bringing about 10Od. per lb. as when it is bringing much less than that. I admit that the woolgrower cannot have any control over that; but I repeat that to-day, as has been the case over the years, we have to deal with a government which has imposed no controls on any one associated with the industry. It has not worried itself about the woolgrower or the price that he receives for his wool. Instead, it has allowed the middleman - the person in the area between the grower and the consumer - to skim the cream from the industry.
We must concern ourselves about the price of wool. Why are we promoting the sale of wool? The greater the quantity of wool that is sold the higher the profit the grower expects to receive. But how can he expect to receive a higher price for the commodity after the findings of Mr. Justice Cook of New South Wales who conducted an inquiry into the industry? He found conclusively that the buyers put their heads together and more or less fixed the price of wool. I believe in fixed prices, but I do not want that kind of people to fix them. In this instance, as in all others, the people who produce the commodity should have a say in its price. Let us hope that out of the exposures which followed the New South Wales royal commission, sooner or later, even this Government, however timid it may be - it is timid when the question of helping the producers arises - will take some action. When I think of those people now sitting in the Country Party corner-
– Why do you not apply this principle to the shearers’ award?
– We do.
– What about doing something for the men who produce wool?
– No, the court makes the shearers’ award. Do you want the shearers to fix their own award? We would not mind that. A judge or a conciliation commissioner fixes the award. All you want to do is follow the usual line adopted by the Country Party.
– But what about-
– Let me answer one interjection before you make another. All you want to do, I suppose, is to put the shearers back 40 or 50 years in their conditions and give them as little as you can. You believe that that will solve the problem, so you are prepared to allow the people who auction the wool to club together - call it what you will, pies or whatever else - and fix the price. You would not mind that, because you would take it out of the hide of the shed hand, the presser or the shearer.
The wool-growers will not do any good by adopting that attitude. They cannot hope to be as prosperous as are the sugargrowers unless they are prepared to talk with one voice on behalf of their industry. There should be a fair return to the grower for his labour plus the capital involved. If the Country Party adopted that attitude I am certain that it would have the assistance of the Labour Party at all times, because we believe in a fair price. In Queensland, which the Labour Party controlled from 1915 until four or five years ago - and probably will control again next year - we had more marketing schemes than existed in any other State. I am subject to correction because I am speaking from memory, but I think that in all cases the growers - whether peanut-growers, wool-growers or any other growers - comprised the majority of members on the various boards. They fixed their own prices. All we want is a similar system in respect of the wool industry.
After listening to-night to the most interesting speech of the Minister for Trade (Mr. McEwen), which was read for us by Senator Spooner, I believe that the sooner we break down prejudices the better, because they must be broken down sooner or later. I cannot understand the Country Party senators. If I were a member of the Country Party I would get everything that I wanted from this Government.
– God help us.
– It is “ God help us “ now, for you, because all you want out of this game is to get the second preferences of the Liberal Party. You want nothing else. You sit meekly while the producers are kicked left, right and centre. If you ever dare to say anything against the Liberal Party you always vote for it. That is the greatest joke in the political life of the nation. I should think that at times members of the Liberal Party must laugh at Country Party senators. I sorrow to see how servile those senators are.
– You obviously do not know much about it.
The ACTING DEPUTY PRESIDENT (Senator Anderson). - Order!
– Thank you, Mr. Acting Deputy President. I am still speaking about promotion - I am trying to promote those fellows in the Country Party corner into doing something for the people whom they purport to represent. Let us make a start with the wool industry. Let us hope that within the twelve months in which this bill will operate the Country Party will take the lead for the people in the wool industry and will have a little bit of courage. Let us hope that it will organize the growers and help them to agree among themselves so that this great industry on which, as has been said on many occasions, Australia rests so heavily, will get a fair go. It is true that we have been, and still are, riding on the sheep’s back.
One does not seem to get much information about the promotion activities of the Australian Wool Bureau. Its report for 1961 shows the general pattern of promotion activities. The first step was a direct advertising campaign. Of course, as always, the newspapers want their pound of flesh and, as they own the television stations, they will get more than their pound of flesh. They will tell the Government what to do, and the Government will be servile to Williams in Melbourne and will trip over itself in its haste to do what he says. To promote an industry you must tell the people about it and, as all the mass mediums of information are in the hands of four or five men in Australia, unfortunately we have no one else to whom we can turn at the moment.
There must be co-operative advertising of the industry. Then there must be major sales development projects and the improvement of technical processes. Also increased activity is needed in the rural areas where the wool is produced. Then there must be an export development plan. I do not know how that would affect Victoria. The brokers there clubbed together to prevent wool being sold at Portland. That affected the wool-growers in the western portion of the State. The Minister in charge of this bill has a very good knowledge of that area. He possibly knows more about wheat, but he has a little bit to do with wool. He knows that the area from which he comes - the western area of Victoria - is possibly the best wool-producing area-
– In Australia.
– I did not want to go as far as that, because I am not as game as you are. I was about to say that it was the best wool-producing area in Victoria. If the proposals I have just mentioned are carried out and there is an expansion of the education programme, great benefit to the industry should result. I would have been more pleased had the committee explained all these things, but it did not. I am a little bit worried. I have heard the words educate, agitate and organize used over the last 40 or 50 years, and we are still using them. Only by acting upon them can we get anything done.
I am particularly pleased to see the growth of combined promotion by the Wool Bureau and the wool industry. I understand, too, that the French merchants and combers are contributing equally with the International Wool Secretariat to a fund of almost £1,000,000 for promotion of pure combed wool. Japan is contributing almost £500,000 for the promotion of wool All this is most desirable. Japan is either the largest or the second largest wool-buying country. I was amazed to read of the amount of wool that is used in Japan itself. I am sorry I cannot remember the percentage, but I was really amazed when I read it.
– Seventy or eighty per cent.
– It is an amazing figure. I always thought that Japan bought wool largely to re-export it in the form of textiles.
I read a report that Sir William Gunn has been to China trying to sell our wool there. I hope that he is able to do so. I do not say that simply because China is governed in the way it is. If it, is good enough to sell the Chinese a large amount of our wheat, I do not suppose much damage can be done by selling them our wool. I have my own thoughts about what effect this will have in the international political field. 1 was wondering whether it could have some bearing on the question of which side Japan will be on in the future. I do not think there is much patriotism amongst manufacturers where profits are concerned. There has never been any in the past, at any rate. It is to the advantage of the Australian economy and, of course, of the wool-growers, for us to sell as much wool as we can, and I would have no hesitation in selling wool to China. But one needs to keep a close look on the situation lest political implications arise.
I regret that when this bill was introduced the Minister was not supplied with more precise information and did not give examples of how promotion funds are to be spent. When all is said and done it was a pretty lean speech. He did not get down to tin tacks.
– I had a few words to say.
– You are all right. You are at least courteous and one likes to deal with courteous people. I am perturbed about one thing. I was amazed to find in the July issue of “ Fashion News “, which is a trade journal, the heading, “ Wool Bureau Tries to Muzzle ‘ Fashion News * “. The article then explains that the Wool Bureau had withdrawn advertisements from the magazine, and quotes an extraordinary letter from an officer of the bureau relating to the placing of future advertisements. I regret that I have not the letter here, but it states in part -
The only condition is that you stop knocking the Wool Bureau in your editor’s page, because this can only counteract the effects of paid advertising by your wool-using customers. If they are going to spend money with you, the best you can do is to support them.
That surely gets close to commercial blackmail. I do not know who owns thi9 journal; so please do not accuse me of being friendly towards it. I only look to journals for support at election time. If “a journal supports me then I will be friendly with it. I did not know this publication existed until very recently when it was brought to my attention. It seems a bad thing for an officer of the bureau to attempt to blackmail a journal in this way. It may be that he was suffering from pique because of something he saw or read. I hope that it does not happen again.
I am vitally concerned only about one other matter. Victoria is getting a rough deal in the promotion of wool. We promote wool if we sell it at certain places. You will remember, Mr. Acting Deputy President, that in your own State there was a fight to get wool sold at Goulburn. Of course, the Labour Government in New South Wales did not mess about. It said, “ There will be sales at Goulburn “. We have spent £6,000,000 or more on a port at Portland. This should have the effect of promoting the value of wool. I say that because I believe it to be true. However, we cannot get sales there. I believe that this is more a State matter than a Commonwealth matter, but with a combination of governments of the same ilk something ought to be done. This Government talks about decentralization, but I know that that is a matter more for the States than for the Commonwealth. Both governments should get together and tell these people in no uncertain terms that they will have no consideration from either government unless they do the right thing. If that is done, it will help the growers. They will be saved money in the transport of wool. They will be saved the trouble of travelling to the big cities of Melbourne and Geelong. They will be able to talk wool and promote it among people in their own areas. The townspeople would be grateful if something were done.
I do not want to detract from the efforts of Mr. Malcolm Fraser, the Liberal member for Wannon. One must be fair. We would not see any Country Party fellows down there fighting for this cause. We must give that member credit for attempting to help out the people. If we are to promote wool we must help those who produce the article. They are entitled to a fair price. We shall see that the workers in the industry get one. The unions to which they belong will help them. If we on this side can help, there need be no fear that we will not do it. I say, with great friendliness towards all senators, that if the five or six Country Party senators in the corner really wanted to help, farmers and wool-growers would be in a much better position than they are in now.
– Senator Kennelly spends a great deal of time talking about every subject under the sun other than the one with which we are dealing. He opened his remarks by talking about the report of the Wool Marketing Committee of Enquiry, and said that he did not know why this Government had set up the committee. This Government set up that committee at the express wish of the two federal wool-growing organizations. Furthermore it granted the request of the growers for the appointment of a member of the judiciary as chairman of the committee.
– Was he the chairman?
– That just about indicates the value of the honorable senator’s speech on wool. He spent a considerable time talking about the sale of wool under the present auction system, with the growers taking what the buyer was prepared to give. He said that the growers should demand a fixed price for their goods. I could not agree more, and on a number of occasions I have made that point in this chamber. But when I asked him whether he would apply that principle to the fixing of a wage for shearers, he abused my party. If growers should fix a price for their wool, on the same principle they should fix the piece rate paid to the men who come on to the property to shear the sheep. When Senator Kennelly found that he had been taken up on that point, he set about abusing senators who sit in this part of the chamber. We have only to look at the record of the leader of the Country Party over the past fortnight to see what that party has done.
I support this legislation. The bill provides for the renewal of authority to impose a levy of 10s. a bale on all shorn wool sold. The income from this levy is to be used for the promotion of wool in Australia and promotion and research in relation to wool overseas. I am very pleased that Opposition senators also are supporting the legislation, which I believe is important for the wool industry. We all recall that last August we had a similar amendment to the act, after the chairman of the Australian Wool Bureau had asked the Government to introduce legislation to increase the levy from the ruling rate at that time, namely 5s., to 10s. a bale. Because the committee investigating wool marketing and promotion activities was still in the midst of its investigations, the growers asked that there be a limitation on the period for which the levy was to operate at that rate. It was further indicated that when the committee’s report was available the growers would have a look at it and indicate to the Government whether they wanted the levy to continue at the present rate, to revert to the previous rate, or to be increased. They have had a look at the report and have approached the Government for an extension of the present rate for a further period of twelve months.
Senator Kennelly and other honorable senators opposite suggested that there was a certain degree of dissension among wool-growers in regard to the rate of levy. It is true that growers in some States have expressed themselves as being against a continuation of the present rate until such time as a wool marketing scheme is implemented.
Words Used in Debate.
The PRESIDENT (Senator the Hon. Sir Alister McMuIlin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
– Following a speech made by Senator Cant earlier to-night, and as soon as it was concluded, I endeavoured to make a personal explanation. I had gone a certain way towards making that explanation when I was interrupted and was not allowed to continue. I now wish to say, Mr. President, that Senator Cant accused me of paying less than award rates to employees at Nita Downs station, which is in the north of Western Australia. I think that that accusation was hitting a little below the belt. Therefore, I would like to make the position clear.
I want the Senate to know that my only interest in this station is a 25 per cent, interest. I have a quarter share. I do not engage labour. I have never written out a cheque on the station account since I have been a part owner. Labour is engaged by a partner of mine who lives on the station and who is the manager. I have not been on the station for almost two years. This accusation by Senator Cant is just another in a series of accusations that have been made in the last few days in an endeavour to cast a slur on supporters of the Government. As I have said, I think it is hitting a little below the belt.
– It is not as low as you get.
– We know the answer to that. I want to continue to discuss Senator Cant’s allegation, but if there are others, they can be taken afterwards, one by one.
If Senator Cant wishes to accuse the manager of the station, he should accuse him directly, instead of accusing me. Because of very heavy political engagements, I have not been on the property for almost two years. I should like the honorable senator to provide the names of the people working on this station who are receiving less than award rates. I want to make it quite clear, Mr. President, that on the property there are some aborigines who are employed, I understand, from time to time by the manager at rates that meet with the approval of the Native Affairs Department. I do not even know what those rates are. The aborigines are employed under the conditions which the Western Australian Department of Native Affairs requires. Those standards are set by the department and apply to all the stations in the north and north-west of Western Australia. They are administered by the local government authorities.
I do not wish to carry this matter any further. I should like Senator Cant to provide the names of people employed on the station who he claims are being paid less than award wages. I challenge him to name them, because I am anxious to see that, if the allegation is correct, the matter is corrected.
– It is interesting to look at the “ Hansard “ transcript of my speech which has not been corrected by me in any way. I had said that it was difficult to promote something that you did not have to sell, meaning that all the wool being produced was saleable. Senator Scott then interjected, “ Don’t be ridiculous “. I said -
We are not shearing donkeys. Just leave them where they are.
Senator Scott again interjected ;
Try to get down to earth a bit. Talk about something that you know something about. You are just a fool.
– It is all pretty right so far.
– That is your opinion, Senator. You may be laid by the heels before very long. Senator Scott also interjected -
You know nothing of what you are talking about.
I then said -
I know sufficient about Nita Downs to know that you do not pay award wages for the labour that you employ and that therefore your profit from wool should be much greater than that of woolgrowers who do pay award wages.
I do not withdraw that statement. Before coming into this Parliament I was employed by the Australian Workers Union in Western Australia for ten years to do all its court work. I knew practically everything that was going on in a vast number of industries. I knew a good deal about what was going on in the north of Western Australia. I also know a little about award conditions that apply to labour employed in the pastoral industry.
Senator Scott admits that the labour employed at Nita Downs is not being paid the award wages when he says that coloured labour is paid rates of pay that are satisfactory to the Native Affairs Department.
– He did not say that at all.
– Yes, he did. Let him contradict it. Never mind about what he intended to say; that is what he said. Senator Scott said that the native labour employed on the station was employed at rates of pay that were satisfactory to the Native Affairs Department. But there is an award operating in the industry that is applicable to such labour! His remarks were a clear admission that less than award wages are paid.
– It is not an admission at all.
– I do not have to go any further. Senator Scott has proved my statement out of his own mouth.
– He did not do anything of the sort.
– I do not know that I have to go any further-
– ‘Produce the names of the people.
– If I do have to go further, there are many other aspects of this matter that could be brought into it, too, showing that workers on this place are not receiving terms and conditions that should apply to labour employed in the pastoral industry. I leave it at that. My case is completely proven.
– 1 enter this debate not having heard the original debate and basing my comments on what I have heard explained to-night by my colleague, Senator Scott, and the quotation from the “ Hansard “ typescript of the speech made by Senator Cant of Western Australia. Whatever transpired in a rather fiery exchange of interjections does not and cannot remove the clear allegation made by Senator Cant that on a property in the north-west of Western Australia in which Senator Scott is interested he was not complying with award provisions so far as wages are concerned. Unmistakably that is what Senator Cant said. In reply Senator Scott, explaining his position, said directly to Senator Cant, “ You stand challenged to produce the name of any employee who is not paid award rates “. Now, an interesting aspect of this matter and one that should not be overlooked is that Senator Cant has explained to the Senate that for a number of years he was employed by the Australian Workers Union as an organizer.
– Not as an organizer.
– Well, he was employed by the union. That fact is well known not only within the union in Western Australia, but among all people who are in any way interested in the north-western portion of the State. The significant aspect of this allegation is that although Senator Cant was connected with the Australian Workers Union for a number of years and knew, so he now says, that these breaches of the award were being committed at Nita Downs station, no action was taken by the union at any time to rectify the matter. Senator Cant now stands in the position of a man who is challenged to produce facts. It will be interesting to see whether he produces them.
– I am rather amazed that the Minister for Civil Aviation (Senator Paltridge) came into this fight in view of his admission that he was not in the Senate when the fight started. He relies for his facts on a statement by his colleague and a quotation from a “ Hansard “ typescript. The facts are that Senator Cant made the statement. The letters may be produced from the office of the Australian Workers Union. If honorable senators opposite want to take the matter that far, we will produce the letters. We will not stand for the threats of blackmail - threats by Scott that if Cant goes on with this matter he, Scott, will refer to incidents that took place here some time ago involving Cant’s admission to Canberra Community Hospital. We will not stand for blackmail by honorable senators opposite or anybody else. Those who sit opposite have been cheeky for a week or more. One honorable senator opposite said something to-day that no decent man would say. It is time we had some fair play in this place. Those who sit opposite get away with murder almost. I challenge Scott to say whether he attempted to blackmail Cant.
– I rise to order! Senator Kennelly should at least refer to members of this place as honorable senators and not by their surnames.
– Order! Senator Kennelly. has. of course, been out of order. I should have directed his attention to his error earlier.
– 1 will correct the reference to Senator Cant. All I say is this: If honorable senators opposite want to take this matter further, we will produce the letters. It is all very well for Senator Scott to say that he owns only 25 per cent, of this concern, that he knows nothing about it and that he has not been to the property for a couple of years. I can imagine that he would not know anything about it. We will produce the evidence if required. We can produce the correspondence. Then we will see whether the little Hitler opposite can get away-
– I rise to order! I object to Senator Kennelly’s application of the word “ Hitler “ and ask that it be withdrawn.
– Order! Senator Kennelly will withdraw the word “ Hitler “.
– I withdraw it.
– You are very obliging to-night, Mr. President. This morning you did not order the withdrawal of a statement which I claimed to be offensive to me.
– Order! The honorable senator must not reflect on the Chair.
.- I was in the chamber when this exchange took place. I have listened to the two statements that Senator Scott has made. I have listened also to the irascible statement that Senator Kennelly allowed himself to make. We are in a House of the Parliament. It is despicable of Senator Cant to bandy charges of this kind. Why did he do it? His aim was deliberately to cast a slur, not to advance debate. His action is the more despicable if he held a position in which it was his duty to enforce the industrial law and knew that a breach of that law had been committed. It is despicable if, knowing a breach had been committed, he did not prosecute the matter in a court of law, rather than resort to badinage on the floor of this Senate. His action is particularly despicable because the extent of his allegation has not in the slightest degree been indicated. But the terms of the allegation suggest that award requirements so far as payment of wages is concerned have not been observed.
Any fair assessment of the position will support Senator Paltridge’s submission that if there is substance in the suggestion that there have been some cases of technical or inadvertent breaches of the award, those allegations should be proved. I know nothing of the facts, but it is clear that the matter involves an allegation of a general practice to pay less than award wages. To neglect one’s duty - to choose the floor of this Senate not to advance debate but to stand in one’s lava bed and splutter insinuations against members of the Senate - is despicable to a degree - one would not expect Senator Kennelly to recognize this - and entirely beneath the standards that even the meanest senator should conform to.
.- Honorable senators opposite think that it is all right for them to try to get away with this. To-night Senator Wright has taken the role that I expected him to take. He has endeavoured to protect an employer who has been accused of under-payment of award wages.
– You would not have enough brains to try to protect anybody.
– I have as many brains as you have, and I will prove it to you anywhere at any time.
– Senator Wright said that we were in a House of the Parliament and Senator Cant had cast a certain slur. Having had years of experience as a trade union official, I know that Senator Cant would not cast any reflection unless he had some foundation for it. My experience has also taught me, Mr. President, that many breaches of awards committed by employers never see the light of day in a court.
– What about the employees?
– Yes, breaches are committed by employees, too. I am not trying to blacken only the character of employers.
– How many jobs-
– I will see you afterwards. On many occasions, when a union official goes to a job and finds a breach of an award he brings that breach before the notice of the employer and that is where the matter rests. Provided the employer corrects the breach of the award, no action is taken. When the employer does not correct a breach of the award such as underpayment of wages he is usually taken to court. He can even be taken to court without a union official taking the action. He can be reported by an arbitration court inspector, if the employees are working under a federal award, and then prosecuted by the Department of Labour and National Service, which is one of this Government’s departments.
Another aspect of this allegation by Senator Cant is that unless Senator Cant was the secretary of the relevant union, he could not take action against the employer for breach of the. award. Only the secretary of the union can do that. Although Senator Cant may have found a breach of an award and reported it to the union, if he did not have a. witness or some documentary evidence that he could bring forward to prove his case against the employer, the secretary of the union would not be prepared to go on with that case. A union official cannot always obtain documentary evidence of breaches of awards. I am sorry, Mr. President, that this matter cropped up; but as it has cropped up, I do not intend to see one of my colleagues hounded without coming to his defence.
Question resolved in the affirmative.
Senate adjourned at 10.54 p.m.
Cite as: Australia, Senate, Debates, 3 May 1962, viewed 22 October 2017, <http://historichansard.net/senate/1962/19620503_senate_24_s21/>.