House of Representatives
15 February 1949

18th Parliament · 2nd Session

Mr. Speaker (Son. J. S. Rosevear) took the chair at 3 p.m., and read prayers.

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Motion (by Mr. Chifley) agreed to - That Use House, at its rising, adjourn to to-morrow, at 10.30 a.m.

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– I address a question to the Minister for Defence. According to current press reports, the diversion of the Snowy River waters will form a vital link in a vast new defence plan in which Australia will become the British arsenal of the Pacific, and munitions factories and associated industries will be built in selected areas, some of them underground. Are these reports correct? If so, in view of -.the need for the strictest security measures being taken if this vast plan is to be effective, what action, if any, doe3 the Government propose to take against subversive organizations in order to prevent the sabotage of plant and the leakage of vital information to a foreign power ? In giving his answer to the question I ask the Minister to bear in mind the experience of the guided weapons range project in regard to which special legislation had to be introduced in order to protect Australia’s interests.

Minister for Defence · CORIO, VICTORIA · ALP

– If the Commonwealth decides to establish a commission to undertake certain works in the Snowy River region the commission will be established under the defence power. The stories that have appeared in a section of the press - I have not seen them, but they have been reported to me - are mere speculation insofar/ as the defence activities outlined therein are concerned. If it be decided that certain defence research projects . should be undertaken in that area, the honorable member and the House may rest assured that the necessary security provisions will be taken to safeguard those undertakings.

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– Will the Minister for Labour and National Service state whether it is true that at present there is a strike of master bakers in Queensland, resulting in the people in the affected area being deprived of bread ? If so, can the Minister inform the House what action has been taken to end the Strike ?

Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

– Fortunately, a strike has not taken place. Some weeks ago, however, master bakers in Queensland notified the Government of thatState that if it did not grant them an increase of a half-penny a loaf, they would cut off supplies of bread in Queensland. They fixed a date when that threat would be brought in operation. A deputation waited upon the Queensland Minister concerned and conveyed that intimation to him, and the Minister has since promised to investigate the matter in the interests of the industry as a whole. That undertaking has been accepted by the master bakers as a temporary settlement of the matter.

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– I desire to ask the Attorney-General or the Prime Minister - I am not sure which Minister I should address - a question regarding the O’Keefe case. I refer to the fact that Mrs. O’Keefe and her family are reported to have applied, or to be contemplating applying, to the High Court for an injunction to restrain the Government from deporting -them. Can the Minister concerned inform me whether Mrs. O’Keefe find her family will >he given an opportunity to have their rights determined at law, or will they be rushed out of the country before that can be done?

Minister for Immigration · MELBOURNE, VICTORIA · ALP

– Any person is quite free to go to the courts or not as he thinks fit, but the Immigration Act will be administered.


– To remove all possibility of any misunderstanding, will the Minister for External Affairs inform the House whether or not he agrees with statements made by the Minister for Immigration regarding the relations of this country with the Netherlands

Government, and, in particular - (a) the allegation that the Dutch had resorted to trickery in their dealings with Australia; (h) that they had repudiated just debts to this country; and (c) that they had entered into a conspiracy in connexion with the O’Keefe affair? As such statements have been broadcast to the world, will the Minister star-e that they represent the personal views of the Minister for Immigration, and not the views of the Government, or, if he concurs in the statements, will he table any evidence in the possession of the Government to substantiate the allegations?

Attorney-General · BARTON, NEW SOUTH WALES · ALP

– I was asked questions about this matter last Friday, and I do not think that there is anything that .1 should add to the statement which I made on that occasion. I have dealt frankly and fully with the relations of the Australian Government with the Netherlands Government, particularly in connexion with the problem of Indonesia. As the matter will now be open to debate, and I shall have the right of reply, I consider that to invite a comment by one Minister upon some observations by another Minister in an entirely different connexion will not be of any assistance. Therefore, I refer the honorable member to the answer which I gave to similar questions last Friday.


– Has the Minister for Immigration noted that a “ Mrs. O’Keefe Fighting Fund “ has been started by the Sydney Daily Telegraph? Hae he also noticed that among the principal subscribers to the fund are Mr. J. Cassidy, K.C., Dr. F. A. Maguire, Councillor J. O. Cramer and other active members and supporters of the Liberal party? In view of the support given to this fund by these prominent members of the Liberal party and by the Opposition, will the Minister make inquiries, in the interests of the Australian people, to ascertain whether or not the Liberal party, in co-operation with the Daily Telegraph, is preparing to water down or abandon the White Australia policy?


– It is a great pity that this insignificant incident should have been made the subject of so much disputation and discussion and that one newspaper at least should have seized upon it to conduct, at best, a political campaign, and, at worst, to try to water down the White Australia policy. I was interested to see the names of those who have contributed to the fund, and those mentioned by the honorable member for Martin are all members of the Liberal party in New South Wales. Other subscriptions are credited to persons described as “ anonymous “. Apparently those people are so ashamed of their efforts to smash the White Australia policy that they do not want their names to be known. However, the law will take its course, and the White Australia policy will not be broken down or watered down. If there is to be a fight in this country on the White Australia issue - the first since federation - It is in ray opinion the best issue on which the next federal election could be fought. I know where the Labour party stands on it.

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Use of Diesel Fuel


– Owing to a serious breakdown of power supply in Perth, industry has been disorganized, with consequent loss of production. Some industrialists have established their own auxiliary power plants, but they require supplies of diesel fuel in order to operate them. Will the Prime Minister endeavour to ensure that supplies of diesel fuel will, be made available to those undertakings so that production and employment may not be disorganized ?


– The matter of the release of fuel oil to meet the situation that has arisen in Perth as the result of the breakdown of generators or other power plant equipment was reviewed last week by the Minister for Shipping and Fuel and myself. The suggestion that fuel oil be made available for auxiliary power plants had been considered previously, but the adoption of that suggestion might entail difficulties because, whilst some manufacturers possess auxiliary power plants, many do not, and those who do not possess auxiliary plants may be dissatisfied by the concession extended to those who do.

After consultation between the Minister for Shipping and Fuel and myself, several telegrams were sent to Perth concerningthe matter last Thursday, and on Friday night the Premier of Western Australia,. Mr. McLarty, discussed the matter with, me over the telephone. Following that, conversation, I had further discussions with the Minister for Shipping and Fuel. Mr. McLarty informed me, in the course of our telephone conversation, that he had’ arranged with the rationing authority in Western Australia - who, I understand,, is Mr. Dumas - to discuss the matter with me on the following morning. Mr. Dumas discussed the matter with me on Saturday morning and gave certain undertakings. I shall not detain the Houseby traversing the details of the discussions, but it was arranged that fuel for auxiliary plants was to be made available, provided that the Western Australian rationing authority ensured that some share of the available electrical power was made available, even though it might be at night-time, to those manufacturers who do not possess auxiliary power plants. That arrangement may go some distance to meet the needs of urgent production of essential goods during the period of two and a half weeks, which, I understand from Mr. Dumas, is the period estimated to be required for the repair of the generators.

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– I refer the Minister for Repatriation to the case of a returned ex-serviceman in my electorate who was granted a priority for a war service home in 1943. The home was to be erected by the War Service Homes Department. The man paid £18 in expenses as required by the department, and complied with all the conditions, but he is still without his home. Is the Minister aware that appalling delays are occurring in his department in connexion with the erection of war service homes, and that building costs are rising steeply? What does he propose to do about t.hp matter ?

Minister for Repatriation · BASS, TASMANIA · ALP

– As no doubt the honorable gentleman is aware, the erection of .homes for ex-service personnel does not come within the jurisdiction of my department. However, I shall bring the matter which the honorable member has raised to the notice of the Minister for Works and Housing and ask him to furnish a reply.

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– I inform the Minister for Immigration that many fanners in Western Australia desire to employ English people possessing certain qualifications, but they do not know the names of suitable persons who are willing to come to Australia. They would like t.o know whether the Department of Immigration will make a note of their requirements and select suitable migrants in England to work on farms in thi? country. Can the Minister give me any information about that matter?


– The Commonwealth authorities in all the States work in the closest co-operation with State immigration authorities in the matter of supplying labour to people who are in a position to employ and accommodate it. Persons in Western Australia or elsewhere, who can provide accommodation on farms for employees, but are unable to find relatives or friends in Great Britain to nominate, have only to communicate with the State immigration authorities or the Commonwealth migration officers in that State. All the information that is obtained here by that means will be sent to Australia House where my departmental officer.* will be only too ready to put a nominator in Australia in touch with somebody in England who desires to come to this country to do the particular job which the nominator has offered.

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– Shortly after I arrived in Canberra for the current session of the Parliament I directed a question to the Minister for Immigration relating to British migrant ships returning empty to England. Is the Minister in a position to furnish the House with any information relative to the possibility of those ships carrying both passengers and cargo on their return journeys ?


– I recollect that the honorable member for Boothby raised a question relative to the use of Dorsetshire and Somersetshire for the carriage of cargo and passengers to Great Britain. I promised the honorable gentleman that I would make inquiries on his behalf, and I cabled London in order to obtain the fullest possible information. I now have full detail?, relating to the matters that were raised by the honorable gentleman and also by the honorable member for Balaclava several days ago. I desire to advise both honorable gentlemen, and particularly the honorable member for Boothby, because there has been a great deal of misrepresentation in the South Australian press relating to this matter, that there are at present eight exclusively migrant ships carrying free and assisted migrants to Australia. Arrangements for the allocation and operation of these ships are made by the United Kingdom Government with the owners concerned. The Australian Government does not directly charter them or control their operation, but it has undertaken to meet the cost of migrants’ passages on the ships, provided, less the contributions of the United Kingdom Government and of the migrants themselves towards such passages. Generally speaking, migrant ships are made available on the basis that they will be used for one-way traffic with passengers, and that they will not carry cargo which can normally be handled by shipping companies engaged in trade between the United Kingdom and Australia. That is the agreement. When normal shipping services could not cope with the passengers and cargo offering from Australia, migrant ships have been used on the return journey to the United Kingdom. For example, Ranchi and Chitral have carried both passengers and cargo on one voyage. Georgie has just arrived in Australia on its first voyage as a migrant carrier. That vessel ‘brought 2,000 people from. Great Britain. It is one of the largest ships ever to enter Australian waters. It will take passengers back), but not cargo. Of course that ship will not take 2,000 people back to England, but it will carry a large number. Empire Brent has not taken cargo, but has carried passengers on the Australian coast. Those four migrant vessels are- operated by the Peninsular and Oriental Steam Navigation Company Limited. The four remaining ships, Ormonde, Asturias, Somersetshire and Dorsetshire are operated by the Orient -Steam Navigation Company Limited. Ormonde has carried both passengers and cargo back to the United Kingdom. Asturias is a British governmentowned ship, and has insufficient cargo space to warrant payment of heavy Suez Canal dues on cargo, and therefore has, not taken cargo. It has been suggested that Dorsetshire and Somersetshire should be used to carry both passengers and cargo back to the United Kingdom. There is now no backlog of persons wishing to return to the United Kingdom permanently as was the case for some time after the war, and passenger traffic from Australia is now back to normal, with the usual fluctuations associated with seasonal bookings. Concerning the use of Somersetshire and Dorsetshire for cargo purposes, as usual the critics are ill-informed. These sister ships are not large and have been converted to carry the maximum number of migrants consistent with safety, namely, 550 passengers, to the exclusion of all other considerations, including cargo. They carry permanent ballast, and have no refrigerated space, and practically no general cargo space. My object is to bring as many new settlers to Australia as possible and to obtain as many voyages as possible from migrant ships, instead of delaying their turnabout by having them utilized for other purposes. It has to be remembered, too, that the question of carrying cargo on the return voyage is bound up with Suez Canal dues. Operating companies for these vessels have to determine whether it is more economical for the ships to proceed in ballast or to accept cargo in sufficient quantity to ensure that the advantages of lifting cargo are not outweighed by costs incurred in handling charges and Suez Canal dues. Migrant ships are primarily intended to bring new settlers to Australia as the major part of their load, and not to be competitive with established shipping lines, which, in the ordinary course of business, provide a shipping service to handle normal passenger and cargo trade between the United Kingdom and Australia.

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– Under the existing legislation should a pensioner be compelled to leave his home for any purpose, and let it, he suffers a loss of pension in proportion to the yearly rental value of his home. As many pensioners have to leave their homes in order to receive proper care during illness, I ask the Prime Minister to consider introducing amending legislation so that discretionary power will be vested in the Minister for Social Services, in order to prevent these people from becoming virtual prisoners in their own homes.


– Discretionary power is now given to the Director-General of Social Services and the Director of Social Services in each State to deal with some of the points to which the honorable member has referred. There is nothing in our legislation which should keep pensioners prisoners in their own homes. If pensioners desire to stay with relatives for a month or two and if their homes are not let for the purpose of making a profit during that period, no question is raised by the pensions authorities. If a pensioner has to go into hospital, as was mentioned by the honorable member for Darwin-

Dame Enid Lyons:

– I had in mind those who need constant, permanent attention and care and who are, in fact, almost semi-invalids.


– I shall ask the Minister for Social Services to look at that aspect of the matter. If a pensioner’s absence from his home is only temporary, and if the Director-General or the Director of Social Services is satisfied that that is so, the pension is not affected. If the absence extends over a considerable period, the case is re-examined. If, during the period of absence, the pensioner’s home is used for the purpose of making a profit, the capital value of the home and the income derived from it is taken into account. I shall arrange with the Minister for Social Services to have all aspects of the question examined and to supply a detailed reply.


– Now that the Nationality and Citizenship Act has been proclaimed granting the right of Australian citizenship to all applicants who have resided in this country for five years, can the Minister for Immigration say whether regardless of such citizenship, former residents of the British Isles cannot qualify for an age pension until they have been here for twenty years? If this provision still exists, will the Minister ensure that steps are taken to place the citizens so affected upon the samebasis as other residents of this country?


– The proclamation of the Nationality and Citizenship Act does not in any way affect any social benefits payable under any other act of the Commonwealth Parliament. The position in regard to the payment of age pensions is the same now as it was before the act was proclaimed.

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– Will the Minister for Labour and National Service say whether his department is taking any action to settle the dispute at Homebush, where a large number of men are on strike ?


– Some slaughtermen have been on strike at Homebush. A conference was held before Mr. Justice Kirby. As a result, settlement terms were put before a meeting of the men yesterday. I heard this morning that all hands resumed work to-day.

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– Has the Prime Minister received from the Associated Chambers of Manufactures a protest against what was described as -

The continuedand expanding practice of information submitted confidentially to a Government department for a specific purpose being made available by that department to others, namely, taxation returns and documents in relation to the control of prices.

Will the right honorable gentleman inform the House whether the alleged practice is followed and, if so, to what extent, and whether he proposes to allow it to continue?


– Legislation that has been passed by the Parliament defines the information that may be obtained from the Commissioner of Taxation very clearly. It specifies the nature of such information and that information is not available even to the Minister. If I remember correctly an amendment was made to one act at the instance of the Leader of the Australian Country party, which provided that such information should not be available to the Minister. I know of no instance where information that has been supplied to the Commissioner of Taxation or to the Prices Commissioner, has been disclosed to the detriment of the person supplying -the information, by placing him at a disadvantage with his competitors or by prejudicing his business interests. I have heard no suggestion that such instances have occurred, but as the honorable member has made allegations which, if true, would be very serious, I shall arrange to have an examination made by the various departments concerned, of which there are several. Those departments are not permitted to examine the returns submitted to the Commissioner of Taxation, but may seek certain information on certain aspects of taxation matters, an instance of which would be in connexion with an application by a university student for financial relief during his studies. The Prices Commissioner had a right, to seek certain information. So that there shall be no doubt about the matter I shall have it investigated, to ascertain whether any such cases have occurred and whether there is any warrant for the suggestion made by the honorable member.

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Representation in Australia.


– Last year I asked the Minister for External Affairs “whether there were any indications that the South African Government intended to appoint a Minister to Australia, in view of the fact that Australia had had a Minister resident in South Africa for a long time. Has the right honorable gentleman any information to give now in answer to that question ?


– During the week-end it has been arranged by the South African Government to appoint as High Commissioner to Australia Dr. P. R. Viljoen, who is at present South African High Commissioner to Canada. Dr. Viljoen is a very distinguished public servant in South Africa. I believe that he was head of the Department of Agriculture there. We shall, of course, welcome him to Australia as High Commissioner for South Africa, as Australia has had a High Commissioner representing it in South Africa for several years.

Mr Menzies:

Dr. Viljoen is very highly regarded in Canada.


- Dr. Viljoen’s appointment will complete the mutual representation of Australia with every other part of the British Commonwealth.

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Army Huts - Conditions at Puckapunyal.


– I have a letter dated 27th August, 1948, from the Minister for the Army in which he promised to consider a suggestion that 1 had placed before him to transfer Army huts from Cowra or Bathurst to Orange, to provide housing accommodation for permanent Army personnel stationed at Orange. In view of the recent press announcement that the Minister for Immigration is transferring American Army huts from Manus Island to Australia to house displaced persons in this country, is the Minister for the Army prepared to provide some of the Manus Island housing, or other housing, for permanent Army personnel who are Jiving away from their normal homes because of their enlistment in the permanent forces?

Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP

– I shall examine the position and ascertain whether it will be possible to adopt the honorable member’s suggestion. At some other places, such as Ingleburn and Bonegilla, the department is making provision for the families of permanent soldiers. I shall investigate whether similar arrangements can be made with respect to soldiers at Orange.


– I desire to ask the Minister for the Army a question relating to an article in the Melbourne Age describing conditions at Puckapunyal military camp. The article is based on official statements which tend to give the impression that the Army offers a comfortable and attractive life. More specifically, it is stated .that the troops’ quarters are furnished with bedside lamps, carpets and wardrobes. It is also suggested that this statement is supported by a letter from an officer stationed at the camp. Can the Minister say whether the troops at present in this camp, who are members of the Australian Regular Army, were told when they were in Japan that their quarters in Australia, would not be worse than those which they had in Japan? Is it a fact, as a correspondent has’ told me, that nothing has been done to the great majority of the huts since the war, that the huts are in a state of disrepair, that locks and windows are broken and that the lines into which the troops moved were in a disgusting state? Is it correct, that, of 125 members of the 2nd Battalion, which is only a fraction of the establishment strength, 89 have already applied for discharge on the ground of bad quarters, lack of amenities, and lack of married quarters? Can the Minister say whether any blocks of huts at Puckapunyal are provided with wardrobes, bedside lamps or mats on the floors? What is the Minister doing to overcome the. disillusionment and disgust which many of the men feel at the treatment they are receiving?


– All of the honorable member’s questions appear to be based upon his opening inquiry. There is no truth in the statement that troops who were provided with houses in Japan were promised that they would have equivalent accommodation when they returned to Australia. If the honorable member understood the situation in Japan, he would know that that would not be possible. British Commonwealth Occupation Force troops in Japan are probably better housed than any other garrison troops in the world. That fact is well known to members of the Australian parliamentary delegation which visited Japan, and the honorable member is not obliged to accept my word for it. His other question related to the conversion of huts for families. Huts are being converted as fast as possible. I do not know anything about the provision of bedside lamps or carpets. It is not laid down that carpets or bedside lamps shall he issued to families of members of the services, but we attempt to provide Australian soldiers in barracks in Australia with conditions equivalent to those that they would enjoy at home.

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– In view nl’ the failure of the Stevedoring Industry Commission to maintain much needed continuity of industrial peace on the waterfront, will the Attorney-General consider abolishing the commission and allowing control of operations on the waterfront to revert to private enterprise, and the settlement of disputes to the Commonwealth Arbitration Court, thereby obviating the serious hold-ups which are continually affecting Queensland and other States?


– I have understood that, generally speaking, the Stevedoring Industry Commission has operated successfully. It has been presided over by a judge of the Commonwealth Arbitration “Court. I am certain that the Minister for Shipping and Fuel would be most indignant if I were to suggest to him that the administration of the Stevedoring Industry Commission Act had not boon good.

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– Has the AttorneyGeneral seen a report that a stopwork meeting of waterside workers was held in Brisbane on the 4th February to arrange for the staging of a demonstration in the Brisbane Town Hall against prices, and that the principal speaker at the meeting was Mr. James Healy ? Did the port committee refuse permission for the stoppage, and when the men disobeyed ite direction, was the matter reported to the Stevedoring Industry Commission for disciplinary action? Is the Mr. Healy who addressed the meeting a member of the Stevedoring Industry Commission, and has his absence in Perth since the 4th February prevented the commission from sitting to decide what disciplinary action should be taken? If the facts are as stated, does not the Attorney-General believe that Mr.

Healy’s participation in the demonstration has unfitted him for his position on the commission, and will the AttorneyGeneral take steps to have him removed ?


– None of the circumstances mentioned by the honorable member are known to me, but I shall refer his question to my colleague, who administers the relevant legislation, and an answer will be supplied later.

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Prize Money


– Can the Minister for the Navy say whether it is true that the British Government has arrived at a formula for the payment of prize money to personnel of the Royal Navy, and will make such payments at an early date? Has the Australian Government yet adopted a formula for such payments? Does the Government intend to liberalize the payments that have been determined by the British Government? Mr. RIORDAN.- It is true that the British Government has taken action with regard to the payments of prize money to members of the Royal Navy. The honorable member for Cook has been interested in this matter for some time and his question to-day gives me the opportunity to inform the House that Government approval has already been given in this country for the distribution of the share of prize money which will be allocated by the Royal Australian Navy. Payments will be made in like amounts to all members who served for six months at sea between the 3rd September, 1939, and the 2nd September, J 945, and who comply with the general conditions governing payment of prize money. The Prize Bill was introduced into the House of Commons in October, 1948, but until it has been passed and a definite sum has been allotted to Australia, no payments can be made. However, in the meantime, preliminary steps are being taken to determine those who are entitled to receive prize money in accordance with the approved conditions.

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– Can the Minister for Immigration say whether it is true, as has been reported in Broome, that two Japanese, Bernadette Murakomi and Michael Ito, are residing there, and have been given permission to do so by the Department of Immigration? If so, is it the policy of the Department of Immigration to afford to Asiatic enemy aliens privileges that are denied to Asiatics who were our allies during the last war?


– Some people residing in Broome were born in Australia of Japanese fathers and aboriginal mothers, and, as they were born in Australia, they are permitted to remain here. The law provides that all persons born in Australia, regardless of their racial origins, are Australian citizens, and are entitled to all the rights and privileges of citizenship.

Mr Ryan:

– Are the persons whom I mentioned Australian citizens?


– I ; believe those particular persons were born in Australia of aboriginal mothers and Japanese fathers. I shall make inquiries to see whether that is really so.

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– I ask the Minister for Civil Aviation whether two Hudson aircraft which were flown to Rome last October with the permission of the Department of Civil Aviation for the purpose of bringing immigrants to Australia have not returned. Did the department give any authority for the disposal of those aircraft abroad, and has it any knowledge of their present whereabouts ?


– Permission was given for two Lockheed Hudson aircraft to be flown to Rome for the purpose of bringing back immigrants. Whether they have been sold and, if so, to whom, I do not know. However, no authority was given for their sale outside Australia. I do not know whether we have any right to prohibit their sale. If authority was given for them to leave Australia for the purpose of bringing back immigrants, and if they were sold, it ‘appears to me that the permission was given as the result of false representations and that the people concerned should be asked, for an explanation. Very close supervision is exercised in relation to aircraft purporting to be taken out of Australia in order to bring, back immigrants, as it has been found that the conditions under which the machines return are quite unsatisfactory,, except in the case of those operated by well-known and responsible organizations. I shall be glad to obtain any further information on the subject that the honorable member may desire.

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Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– The Mount Barker Volunteer Fire Brigade has written to me asking whether it would be possible, in view of the great risk and damage which occur every year as theresult of fires caused by sparks from locomotives, for the Australian Government to offer a substantial reward to any person who invents an efficient spark extinguisher for locomotives. Will thePrime Minister consider that question and, if his reply is favorable, as I expect it to be, will he state what reward will’ be offered and any other particulars which he might like to add?


– The matter seems tobe somewhat outside the province of the Australian Government, but, in deference to the honorable member’s keen interest in it, I shall have the question examined.

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– On several occasions 1 have asked the Attorney-General whether the Australian Government proposes todo anything about the introduction of uniform divorce legislation throughout Australia, having regard to the power which is possessed by this Parliament under the Constitution. On those occasions the right honorable gentleman has told me, in effect, that the matter is under consideration. I now ask him whether the matter has been taken any further, and whether he is in a position to make an announcement to this House about it or to introduce such legislation in the near future.


– Several years ago legislation was passed by the Parliament which greatly mitigated the position previously existing in Australia whereby the failure of an applicant to one of the Supreme Courts of a State to establish his. or her domicile and the domicile of his or her spouse, prevented the court from administering the appropriate divorce law. At the same time as we amended the law to give relief to Australian girls who had married allied servicemen who had subsequently deserted them, either in Australia or abroad, we amended the law in the way I have mentioned. The law as amended mitigates considerably the hardships that previously existed. It does not, of course, cover the broader suggestion made by the honorable member, that there should be a uniform divorce law for the whole of Australia. That matter has been, and still is, the subject of study in the AttorneyGeneral’s Department, but it is one of tremendous difficulty for the very obvious reason that it involves the study of the law of the six States and several territories. No decision has yet been made by the Government to proceed with such legislation. If the honorable member has any suggestions which will overcome the difficulties of the situation and form the basis of a uniform divorce law, I shall gladly welcome them.

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– In view of the repeated official denials of reports, attributed to a high-ranking American officer, that the United States of America intends to withdraw its occupation force from Japan, has the Prime Minister any information to give to the House about the source of the reports in question? If not, having regard to Australia’s interests in Japan and the Pacific, and the highly inflammable nature of such reports as fuel for the Communists, will the right honorable gentleman endeavour to obtain this information and furnish it to the House at an early date?


– Reports of various kinds which appear in the press are often based on sensational exaggerations of some statement that has been made. The continued occupation of Japan has been the subject of constant review by- the Government of the United States of America since, the conclusion of the war with Japan. The Minister for External Affairs and I have discussed the matter on several occasions with the American Government and also with General MacArthur, the .Supreme Commander of the Occupation Force in Japan. A considerable time ago a suggestion was made that the occupation force be withdrawn from Japan and that it be replaced by a security force which would be retained for some years. The Australian Government has received no official information of any change of intention on the part of the Government of the United States with regard to the occupation of Japan. I had heard of the report to which the honorable member has referred before it appeared in the newspapers. I immediately advised my press secretary and other responsible officers that it was unwise to comment on statements of that kind, which were frequently denied by the persons reported to have made them. No discussions have taken place between the Australian Government and the Government of the, United States of America relative to the withdrawal of the occupation force from Japan. What we have tried to achieve, and what the Minister for External Affairs has fought for very strenuously, has been the conclusion of a peace treaty with Japan. Unfortunately,, such a treaty has not yet been concluded. On the conclusion of such a treaty arrangements could be made regarding the force necessary to maintain order in Japan and to protect its industries. 1 am unable to add anything further towhat I have previously said on this subject.

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– I address a question tothe Prime Minister. The Commonwealth Bank intends to extend its premises at Barkly-street, St. Kilda, a district which is already well served with banks. I am informed that the Commonwealth Bank intends to demolish a shop and dwelling and to evict the tenant. As the shopkeeper is unable to obtain accommodation elsewhere, and the Government’s future banking policy is indefinite owing to the pending Privy Council action, and as labour and materials are at present more needed for building homes than banking premises, will the Prime Minister consult the Governor of the Commonwealth Bank with a view to staying his hands in this matter? Will the right honorable gentleman inquire into the whole proposal ?


– I shall draw the attention of the Governor of the Commonwea]th Bank to the honorable member’s question. As I have made perfectly clear in this House on other occasions, the administration of the Commonwealth Bank is in the hands of the Governor of the bank, and I do not attempt to interfere with it in any way. Indeed, I have no power to do so. The only point at which the Treasurer could intrude in the administration of the Commonwealth Bank is in connexion with matters of general policy, as provided for in the 1945 banking legislation, and then only when agreement between the Government and the Governor of the Bank on matters of general policy cannot be reached. Whether or not premises owned by the Commonwealth Bank should he enlarged, or its staff increased, are matters entirely for the bank itself. Many requests have been made, particularly from country centres, for the establishment of branches of the Commonwealth Bank. At one time the bank intended to proceed with the erection of 35 or 40 new buildings, but in view of representations that were made that material in short supply should be reserved for more essential work much of that programme was deferred. I know nothing of the proposal to extend the bank’s premises at Barkly-street, St. Kilda. As I have said, I shall bring the honorable member’s remarks to the notice of the Governor of the Commonwealth Bank.

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– I ask for leave to make a personal explanation.


– Before seeking the leave of the House to make a personal explanation the honorable member should state the matter with which he proposes to deal.


– I propose to deal with certain statements made about me by Mr. Miller, K.C., who is appearing before the royal commission inquiring into timber leases in New Guinea.

Leave granted.


– On Friday last before the royal commissioner, Mr. Justice Ligertwood, Mr. Miller, K.C. made some highly critical comments regarding me. I am indebted to the Attorney-General for making available to me the official transcript of those comments. I propose to recite them. According to the transcript Mr. Miller said -

Before the inquiry is resumed, may 1 mention a matter? Yesterday, in the House of Representatives, a statement was made by Mr. Holt, who, 1 understand, is a solicitor of the Supreme Court of Victoria, and also a member of the House, dealing with what is called the disappearance of a man named Kingsford, who. is referred to as a bank official. . . So far as the Minister is concerned; we will welcome the fullest possible inquiry by the resources of the Crown into the Kingsford disappearance, or so-called disappearance, and the circumstances of it. and, secondly, may 1 say publicly that Mr. Holt’s statement is based upon two gross distortions of fact.

He said that Kingsford gave evidence before the Magistrate on the 23rd January, 1048. That is quite untrue. What Kingsford did was to produce certain documents; he was called on subpoena duces tecum to produce certain documents. The second gross mis-statement of fact is that Kingsford is supposed to have produced documents which were contained in the safe deposit of Mr. Ward. All that Kingsford produced to the Court as a messenger from the bank, or a person in the position of a messenger, were the slips, which the bank officers require to be signed when persons go to make visits to their safe deposits.

The charge is that I have made two grave distortions of fact, and I propose to examine that charge in the light of the statements of fact made available to me. The first allegedly distorted statement is my assertion that Kingsford gave evidence on the 23rd January, 1948. By a process of hair-splitting Mr. Miller endeavoured to show that Kingsford was called not as a witness but merely to produce certain documents. However, I have an official extract of what took place before Mr. Atkinson, S.M., on Friday, the 23rd January, 1948, which is as follows : -

Ainslie Kingsford. ( Unsworn. )

Mr. Isaacs. ; What is your full name? ; Ainslie Kingsford.

You are an officer of the Bank of New South Wales, Head Office, Sydney? - Yes.

Do you produce under subpoena certain documents ? - Yes.

Would you mind handing the documents to the Court, together with the subpoena? - Yes. [Documents handed in.]

Mr. Isaacs. ; May I have Your Worship’s permission to see the documents? [His Worship perused documents which were then handed to Mr. Isaacs.’]

His Worship. - There does not appear to be everything asked for on the subpoena.

Mr. Shand. ; After my friend has finished with those documents, I would also ask for access to them.

His Worship. - Yes.

The witness withdrew.

In the course of the question that I asked in the HouseI inquired whether it was a fact that Kingsford had appeared before the court as a witness in the matter, and, speaking on the adjournment of the House that day, I used these words -

On 23rd January, 1948, Mr. Kingsford gave evidence as a witness in New South Wales. In the preliminary hearing in the New Guinea timber lease case he produced certain documents concerning a safe deposit box.

So much for Mr. Miller’s charge that I had wrongly described Kingsford, who appeared before the court, produced documents and answered a number of questions, as a witness who gave evidence, and so much for the allegation that I have been guilty of an abuse of the privileges of the House. Mr. Miller is welcome to whatever change he can make out of that quibble; I have given the House the facts.

In connexion with the second charge that I stated that Kingsford produced documents from the safe deposit of Mr. Ward, I invite Mr. Miller or the royal commissioner to find any reference in the question that I asked or in the statement that I made on the adjournment of the House which could be interpreted in that way. No reference was made by me to that matter. I asked -

Is it a fact that Mr. Kingsford was employed in the Security Department of the Bank of New South Wales, and, as a witness, produced documents on the 23rd January, l948, concerning a safe deposit box belonging to the Minister for Transport?

In the statement that I made on the adjournment of the House I said that Kingsford gave evidence on the day preceding his disappearance, and reference was made to his responsibility as an officer in charge of a section of the bank in which he worked, and an intimation was given that an inspection was to be made of the safe deposit boxes in that section. Those are the only references to the safe deposit box that occur anywhere in my remarks, and it is quite evident, therefore, that there is nothing to support the charge of gross distortion made against me by this eminent counsel. I have quoted to the House from official documents. I have had the advantage of consulting official records, but Mr. Miller, who apparently claims to be an upholder of professional etiquette, has chosen to make his offensive remarks concerning myself without even having recourse to the official records. I propose to send the text of the relevant Hansard report to the royal commissioner so that he may have all the information before him. With regard to Mr. Miller’s remarks -

I make that public statement, Your Honour, because it does seem to me, with alt due respect to the privileges of the House, that it was a grossly wrong thing for a solicitor to make such misstatements of fact at the very time when Your Honour is investigating these important matters.

I have already shown that the first allegation is a mere quibble, whilst the second is utterly baseless. Concerning the reference to His Honour’s investigation of “ these important matters “ - I speak now from my own impression and without having had the opportunity to consult the official transcript-I do not think that previously a single question had been asked either by counsel or by the royal commissioner, or any reference made by any person before the court, as to the whereabouts of Mr. Kingsford. Mr. Miller’s reference seems, therefore, to be beside the point. Mr. Miller has stated that he will assist the royal commissioner and the Crown, with all its resources, to discover the whereabouts of Kingsford, and if that is done the purpose of the question which I asked in the House originally will have been achieved.

page 239


Discharge of Order of the Day.

Mr. CHIFLEY (Macquarie - Prime-

Minister and Treasurer) [4.2]. - by leave - I move -

That Order of the Day No.9 - International Affairs - Ministerial Statement - motion for printing paper - resumption of debate - be discharged.

The original motion referred to a statement that I made concerning international affairs, but it has now been superceded by a motion dealing with another paper on foreign affairs tabled by the Minister for External Affairs (Dr. Evatt). I understand from the Leader of the Opposition (Mr. Menzies) that the Opposition is agreeable to that debate being resumed this evening, and I ask the House to discharge Order of the Day No. 9 from the notice paper.

Question resolved in the affirmative.

page 240


Prime Minister and Treasurer · Macquarie · ALP

by leave - As a preliminary to certain other measures that will be introduced to the House at a later stage I now indicate to the House that the Government intends to place before the House proposals for reductions in rates of social services’ contribution and income tax on individuals. Legislation for this purpose will be brought down immediately. These proposals are put forward now in order that the tax instalment deductions from earnings may be reduced as from 1st July, 1949. This could not be done if the decision were postponed until a full financial review is made in connexion with the budget for 1949-50.

The Financial Outlook

From the figures of revenue during the first seven months of 1948-49, which have already been published, it is clear that the budget estimate, which was £493,000,000 for the full year, will be exceeded. Collections of customs duty have been high because of the strong inflow of goods from a.broad. notably from the United Kingdom. Total imports for the six months ended 31st December, 1948, were £200,000,000 as compared with £157,000,000 for the same period in 1947-48. This reflects, on the one hand, the strength of demand within Australia for all types of goods and, on the other band, a degree of recovery in industrial production overseas. It is also likely that the estimates of income tax and social services contribution will be exceeded, this being a consequence partly of higher incomes and partly of further success in overtaking arreas of unassessed and uncollected taxation.


– Complete figures are not available, but I shall endeavour to furnish a short statement setting out the principal statistics. Sales tax is showing the effects of greater business turnover and pay roll tax of higher employment and wage earnings. Other revenue will probably not differ greatly from the budget estimates.

Expenditure on defence and allied services will be rather less than estimated, chiefly because delays have occurred in the delivery of stores and in the making of equipment on order. The works programme for which provision was made in the budget has also been retarded through difficulties in obtaining labour, equipment and materials. It would not be possible at this stage to foretell accurately what the final figures of revenue and expenditure for the year will be; but on the experience of the first seven months I expect that they will show an appreciable improvement on the net result predicted in the budget.

It will be recalled that in the budget an amount of £5,000,000 was provided from Consolidated Revenue for the War Gratuity Reserve. Consideration will be given to the possibility of increasing the amount of this provision in additional estimates for this financial year.

Looking to the future we must, I think, endeavour to see the financial position in its full breadth and relate it to the main economic trends within Australia and in the world abroad.

In Western Europe the economic situation, in its fundamental aspects, continues to give cause for deep anxiety. There have, it is true, been heartening signs that the recovery efforts of some countries, assisted by the great project of Marshall aid, with its counterpart in the intra-European payments scheme, are bearing fruit in .greater production and trade. This is notably true of the United Kingdom whose economic achievements, in face of the greatest difficulties, call for the admiration of the world.

But it must not be forgotten that although, under the Marshall plan with its attendant measures, it is hoped that the countries concerned will largely achieve independence of outside aid at the end of four years from the inception of the plan, this will be possible only if all those countries put forth the most intense efforts and work in the closest co-operation. Full recovery can come only through still more years of such efforts and co-operation; it must be world-wide; and it cannot afford setbacks from wars or political divisions. Lacking such conditions, an early flush of progress, due to the stimulus of international aid, may wither and fail without prospect of revival.

In our own dollar problem it is satisfactory to see that the restrictions imposed on dollar imports fifteen months ago, combined with efforts to expand dollar exports, promise to bring our dollar trade in merchandise fairly close to a balance for the current financial year. This position, however, should not be misunderstood. A good deal of misunderstanding often arises because people think that, as the value of trade is equal, we have achieved a dollar balance. A good deal has been due to exceptional prices for wool. Moreover, other items requiring dollar payments, such as interest, freight and remittances of dividends and royalties, are still likely to leave us with a net dollar deficit this year, and we remain under as strong an obligation as ever to keep to an absolute minimum our requirements from the sterling area dollar pool on which we have made heavy drawings in recent years.

Within Australia, there has been a large and widespread rise in incomes during the past two years. The primary industries have had two good seasons, and prices, especially for wool and wheat, have been high. There has also been a notable inflow of capital seeking permanent investment here.

At the same time, costs and prices have been rising at an increasing rate.

In part this follows from the release of price and cost influences which were held back during the war and early postwar years by controls and offsetting measures such as subsidies, but which had sooner or later to be allowed to pass into the economic system. More significantly, however, it reflects the continuing lack of balance between total demand and the supply of goods.

It is true that local production has increased - though not as fast as necessary in certain basic industries and other fields - and that the volume of imports has risen. No possible rate of increase in supply, however, could have kept pace with the rise of nearly 50 per cent which has taken place in national income during the past two years. The level of overall demand for goods, and for labour and capital plant to produce goods, remains excessi ve.

The Government is tackling the problem in two main ways. On the one hand production is being assisted by every possible means, especially production in the basic industries, such as coal, where shortage of output is holding up the flow of products elsewhere.

The Commonwealth Government and the Government of New South Wales, working through the Joint Coal Board, are engaged upon a complete reorganization of the coal-mining industry in New South Wales. Mining methods are being modernized, working conditions improved and long-neglected mining communities rehabilitated. Plant worth £3,000,000 is on order and deliveries are now coming forward. The Government has already provided approximately £2,000,000 for the work of the Joint Coal Board.

An important contribution is also being made to the problem of key industries by the placement of migrants. To date, some 2,000 men have been placed in such industries and the result has already become apparent in an improvement of output. The large prospective flow of migrants will enable this policy to be carried much further.

On the other hand, the Government is encouraging restraint on spending by individuals and organizations throughout the whole community.

Since the war ended the Government has sought progressively to ease the burden of taxation made necessary by the war. At the same time, it has eliminated the huge gap between revenue and expenditure and has built up reserves, such as the National Welfare Fund and the War Gratuity Reserve, against future expenditures.

Present conditions are such that this policy should be followed even more firmly than during the past three years. We face a greater need than ever to conserve the resources presently available to the Government. Revenue ought, as far as possible, to cover all forms of expenditure, including provision for definite commitments still to be met.

Moreover, we have to keep fully in view the trend of expenditure in wellestablished responsibilities of the Government.

For example, payments to States under the tax reimbursement grant will increase automatically under the formula adopted in legislation last session. For next year, the additional cost of this item alone will be about £6,000,000.

Then, in keeping with the movement of costs in private industry, Government expenditure on salaries, wages and costs of materials and equipment must be expected to rise further.

This trend creates a problem with regard to business undertakings which, in all spheres of government, have been particularly affected by the rise in costs. This matter has been discussed with the Premiers of the States at Premiers’ conferences. It is, I believe, a sound principle that, under conditions such as the present, the revenue of undertakings derived from charges for services to the public should, as far as practicable, suffice to cover their expenditure. Freights and fares of the Commonwealth Government railways were increased as from 1st December last by an average of about 25 per cent. The position of the other Commonwealth business undertakings is being kept under close review.

Taxation Proposals. Income Tax

The considerations I have just outlined all bear upon the question of how much revenue should be raised by the Government or, in other words, upon the rates of taxation which should apply. Since the war ended, in addition to substantial reductions in sales tax and other forms of taxation, four major reductions in direct taxation of individuals have been made and the effect has been to lighten the weight of taxation very considerably. The Government now proposes to make further substantial reductions in the rates of individual income tax and social services contribution. Full details will be given this afternoon when legislation is brought down and tables showing the total levy of tax and contribution that will be payable by various classes of taxpayers at different income levels are being circulated. The annual cost to revenue of the proposed reductions will be £36,500,000. This reduction represents approximately 23 per cent, of the total amount at present paid by individuals. The percentage reduction is substantially greater in the lower and middle income groups, but taxpayers in all ranges of income will benefit by the proposed reductions.

Entertainments Tax

It is also proposed to grant certain entertainments tax concessions in respect of sports or games in which men, women and children are the sole participants and which are conducted by non-profit organizations. These concessions will take the form of a reduction of the rates of tax in respect of these sports to the lower scale rates already applicable to plays and the like, as well as the raising of the existing limit of exemption from 11-Jd. to ls. 3d. The increase in the exemption will apply to plays and theatrical productions as well as to the sports or games in question. It is proposed also to remove the tax from payments of less than ls. for admission to amusements of the kind conducted at amusement parks, and also from payments of less than ls. for incidental refreshments served at dances. Details of the proposals will he found in the legislation which will be introduced later in the day. The cost of these concessions will be £135,000 for a full year, and approximately £50,000 for the balance of the current year.


The measures of taxation relief which it is proposed at this stage to give appear to the Government as the most appropriate under present conditions. In keeping with the policy of the Government during recent years, the financial position will be kept under regular review. I lay on the table the following paper : -

Financial Statement by the Bight Honorable J. B. Chifley, M.P., Treasurer - and move -

That the paper be printed.

Debate (on motion by Mr. Menzies) adjourned.

page 243


Motion (by Mr Dedman) agreed to -

That leave be given to bring in a bill for an act to amend the Entertainments Tax Assessment Act 1942-1946.

page 243


In Committee of Ways and Means:

Mr. DEDMAN (Corio - Minister for

Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research) [4.18]. - I move -

That a tax be imposed upon incomes at the following rates: -

Division A. - Rate of tax in Respect of a TaxableIncome Derived from Personal Exertion.

If the taxable income does not exceed £1,000 the rate of tax for every £1 of taxable income up to and including £500 shall be nil and the rate of tax for every £1 of taxable income in excess of £500 shall be 18.024 pence increasing uniformly by . 024 of one penny for every £1 by which the taxable income exceeds £501.

If the taxable income exceeds £1,000 but does not exceed £2,000 the rate of tax for every £1 of taxable income up to and including £1,000 shall be15 pence and the rate of tax for every £1 of taxable income in excess of £1,000 shall be 42.02 pence increasing uniformly by . 02 of one penny for every £1 by which the taxable income exceeds £1,001.

If the taxable income exceeds £2,000 but does not exceed £5,000 the rate of tax for every £1 of taxable income up to and including £2,000 shall be 38.5 pence and the rate of tax for every £1 of taxable income in excess of £2,000 shall be 82.01 pence increasing uniformly by . 01 of one penny for every £1 by which the taxable income exceeds £2,001.

If the taxable income exceeds £5,000 but does not exceed £10,000 the rate of tax for every £1 of taxable income up to and including £5,000 shall be 82.6 pence and the rate of tax for every £1 of taxable income in excess of £5,000 shall be 142.002 pence increasing uniformly by . 002 of one penny for every £] by which the taxable income exceeds £5,001.

If the taxable income exceeds £10,000 the rate of tax for every £1 of taxable income up to and including £10,000 shall be 117.3 pence and the rate of tax for every £1 of taxable income in excess of £10,000 shall be 162 pence.

DivisionB. - Rate of Tax in Respect of a Taxable Income Derived from Property.

If the taxable income does not exceed £500 the rate of tax for every £1 of taxable income up to and including £350 shall be nil and the rate of tax for every £1 of taxable income in excess of £350 shall be 7.755 pence increasing uniformly by . 005 of one penny for every £1 by which the taxable income exceeds £351.

If the taxable income exceeds £500 but does not exceed £1,000 the rate of tax for every £1 of taxable income up to and including £500 shall be 2.55 pence and the rate of tax for every £1 of taxable income in excess of £500 shall be 28.03 pence increasing uniformly by 03 of one penny for every £1 by which the taxable income exceeds £501.

If the taxable income exceeds £1,000 but does not exceed £2,000 the rate of tax for every £1 of taxable income up to and including £1,000 shall be 22.775 pence and the rate of tax for every £1 of taxable income in excess of £1,000 shall be 58.022 pence increasing uniformly by . 022 of one penny for every £1 by which the taxable income exceeds £1,001.

If the taxable income exceeds £2,000 but does not exceed £5,000 the rate of tax for every £1 of taxable income up to and including £2,000 shall be 51.3875 pence and the rate of tax for every £1 of taxable income in excess of £2,000 shall be 102.008 pence increasing uniformly by . 008 of one penny for every £1 by which the taxable income exceeds £2,001.

If the taxable income exceeds £5,000 but does not exceed £10,000, the rate of tax for every £1 of taxable income up to and including £5,000 shall be 96.155 pence and the rate of tax for every £1 of taxable income in excess of £5,000 shall be 150.0012 pence increasing uniformly by . 0012 of one penny for every £1 by which the taxable income exceeds £5,001.

If the taxable income exceeds £10,000 the rate of tax for every £1 of taxable income up to and including £10,000 shall be 126.0775 pence and the rate of tax for every £1 of taxable income in excess of £10,000 shall be 162 pence.

Division C. - Rates of Tax in Respect of a Taxable Income Derived Partly from Personal Exertion and Partly from Property.

For every £1 of taxable income derived from personal exertion, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division A, if the total taxable income of the taxpayer were derived exclusively from personal exertion, by the amount of the total taxable income.

For every £1 of taxable income derived from property, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division B, if the total taxable income of the taxpayer were derived exclusively from property, by the amount of the total taxable income.

Division D. - Rates of Tax by Reference to at Average Income.

For every £1 of taxable income derived from personal exertion by a taxpayer to whose income Division 16 of Part III. of the Income Tax Assessment Act 1936-1948 applies, the rate of tax shall be ascertained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal to his average income by that average income.

For every £1 of taxable income derived from property by such a taxpayer, the rate of tax shall be ascertained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his average income by that average income.

Division E. -Rates of Tax by Reference to a Notional Income.

For every £1 of the actual taxable income from personal exertion of a taxpayer deriving a notional income, as specified by subsection (1.) of section eighty-six of the Income Tax Assessment Act 1936-1948, the rate of tax shall be ascertained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal to his notional income by that notional income.

For every £1 of the actual taxable income from property of such a taxpayer, the rate of tax shall be ascertained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his notional income by that notional income.

Division F. - Rates of Tax Payable by a Trustee.

For every £1 of the taxable income in respect of which a trustee is liable, in pursuance of either section ninetyeight or section ninety-nine of the Income Tax Assessment Act 1936-1 948, to be assessed and to pay tax, the rate or rates of tax shall be the rate or rates that would be payable under Division A, B, C, D or E, as the case requires, if one individual were liable to be assessed and to pay tax on that taxable income.

Division G. -Rates of Tax Payable by a Company, other than a Company in the Capacity of Trustee.

In the case of a company which is not a life assurance company, the rates of tax shall be -

for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Sixty pence; and

for every £1 of the remainder of the taxable income - Seventy-two pence.

In the case of a mutual life assurance company, the rates of tax shall be -

for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Forty-eight pence; and

for every £1 of the remainder of the taxable income - Sixty pence,

In the case of a life assurance company other than a mutual life assurance company, the rate of tax shall be -

for every £1 of so much of the mutual income of the company, as defined in sub-section (1a.) of section one hundred and sixty c of the Income Tax Assessment Act 1936-1948, as does not exceed Five thousand pounds - Forty-eight pence :

for every £1 of the remainder of the mutual income of the company, as so defined - Sixty pence;

for every £1 of so much of the taxable income of the company, other than mutual income as so defined, as does not exceed the amount by which the mutual income of the company, as so defined, is less than Five thousand pounds - Sixty pence: and

for every £1 of that part of the taxable income to which none of the preceding provisions of this subparagraph applies - Seventy-two pence.

For every £1 of that portion of the taxable income which has not been distributed as dividends, on which the company is liable, in pursuance of Part IIIa. of the Income Tax Assessment Act 1930-1948. to pay further tax, the rate of further tax shall be Twenty-four pence.

For every £1 of interest in respect of which a company is liable, in pursuance of subsection (1.) of section one hundred and twentyfive of the Income Tax Assessment Act 1936- 1948, to pay income tax, the rate of tax shall be Seventy-two pence.

Division.H. - Tax Payable where Amount would otherwise include Odd Pence.

Where apart from this Division, the income tax which a person would be liable to pay under the preceding Divisions, before deducting any rebate to whichhe is entitled in his assessment, leaves an amount of pence remaining when expressed in pounds and shillings -

if the remaining pence do not exceed six - the income tax payable by that person shall be the amount so expressed in pounds and shillings; or

if the remaining pence exceed six - the income tax payable by that person shall be the amount so expressed in pounds and shillings plus One shilling.


in addition to any income tax payable under the preceding provisions of this Resolution, there be payable, subject to sub-paragraph (b) of this paragraph, upon the taxable income in excess of Five thousand pounds derived by a company a super-tax at the rate of Twelve pence for every £1 of that excess: and

the last preceding sub-paragraph does not apply to -

the assessment of a company as a trustee:

a private company as defined in section one hundred and three of the Income Tax Assessment Act 1936-1948:

a co-operative company as defined in section one hundred and seventeen of the Income Tax Assessment Act 1936-1948:

a mutual life assurance company, as defined in sub-_ section ( 1a. ) of section one hundred and sixty c of the Income Tax Assessment Act 1936-1948, or the mutual income, as defined in that sub-section, of a life assurance company.

That tax in accordance with the preceding provisions of this Resolution be levied and paid for the financial year commencing on the first day of July, One thousand nine hundred and forty-nine, upon the taxable income derived during the year of income as defined by section six of the Income Tax Assessment Act 1930- 1948.

That, until the commencement of the Act for the levying and payment of income tax for the financial year commencing on the first day of July, One thousand nine hundred and fifty, the foregoing provisions of this Resolution also apply for all financial years subsequent to that commencing on the first day of July, One thousand nine hundred and fortynine.

That provisional tax be imposed, and be payable in accordance with the provisions of the Income Tax Assessment Act 1936-1948, in respect of the income of the year of income ending on the thirtieth day of Juno, One thousand nine hundred and fifty.

This resolution is being introduced to give effect to the Government’s proposals for reduction in the rates at which income tax will be payable by individuals for the next financial year 1949-50, i.e., on incomes to be. derived during the year ending 30th June, 1950. The complementary reductions in the rates of social services contribution are embodied in a further resolution that will he moved later. As indicated in the financial statement just delivered by the Treasurer, it is estimated that the annual cost to revenue of these reductions will be £28,500,000 income tax and £8,000,000 social services contribution - a total of £36,500,000. Although the greatest percentage reductions are being granted in the lower and middle income ranges, all individual taxpayers will receive some benefit from the reduced rates.

The reduction now proposed will represent the fifth successive reduction in taxes upon individual incomes made by the Government since the cessation of hostilities in August, 1945. The annual cost to revenue of these reductions now totals £133,000,000. This figure represents the sum of the values of the various reductions, calculated upon the levels of income at the particular times the reduc tions were made. If war-time rates of tax were applied to estimated 1949-50 individual incomes, the yield from these rates would be over £200,000,000 greater than the estimated yield at the proposed rates. The new rates will have the effect of raising the limits of income, which may be derived before incurring any liability for income tax. Compared with existing limits, the amounts which will be free of income tax (as distinct from social services contribution) under the new scale will be as follows : -

It will be noted that, in the case of a taxpayer without dependants, the personal exertion rate of income tax (as distinct from social services contribution) will commence at an income level of £501 instead of £351 as at present. The personal exertion rate is being graduated to £10,000 instead of £9,000 as at present. On the excess of income over £10,000, the combined ceiling rate of tax and contribution is being retained at the present figure of 15s. in the £1.

The property rate will commence at an income of £351 but will be graduated to an income of £10,000 instead of the present £5,000. The reductions that are being made in the property rates broadly correspond with the reductions that are proposed for personal exertion rates. Although the. property rates are being reduced, those rates will still be higher than the .personal exertion rates. The maximum difference occurs about an income of £1,250 where the combined property tax and social services contribution is nearly one quarter higher than the combined personal exertion tax and contribution. On the excess of property income over £10,000, the combined rate of tax and .contribution will be 15s. in the £1.

So far as individuals who receive salary and “wages are concerned the reduced rates will he reflected in the instalment deductions which will be made from their earnings on and from the 1st July, 1949. Persons who receive income other than salary or wages will have the reduced rates reflected in the provisional tax and contribution payable in respect of income (other than salary or wages) of the year ending 30th June, 1950. Existing company rates of taxation are being retained.

It is considered appropriate at the present time to examine -briefly statements, frequently made, that the incidence of taxation in Australia is unduly heavy by comparison with overseas countries. Most frequently these state ments appear to be based upon a simple comparison of the total tax per head of population in the countries concerned converted to some common currency. In my opinion, this does not give a satisfactory basis for comparison owing to the absence of adjustments for such factors as the value of currencies and the purchasing power of money. Nevertheless, for what they are worth, Australia does not suffer in these comparisons. The Chancellor of the Exchequer in the United Kingdom is reported to have released figures of total direct and indirect taxation per head of population in the United Kingdom, the United States of America, Canada, Australia and South Africa based upon the year 1949. The published figures are as follows: -

These figures are expressed in sterling but do not include State, local and municipal taxes. On the information available to me, relevant figures expressed in Australian currency for the year 1949 would be as follows: -

On this comparison, taxation per head in Great Britain and the United States is approximately 50 per cent, higher than in Australia, while Australia is in much the same position as Canada, and only slightly higher than South Africa.

Another basis of comparison of taxation in various countries, and, in my view, a sounder one, is to ascertain the proportion of a nation’s gross product, that is, the total value of goods and services sold, which total taxation direct and indirect absorbs. A comparison on this basis overcomes the difficulties arising from the conversion of currencies of various countries to one common standard. The percentages of national gross product taken in taxation are as follows : -

This comparison shows that, despite claims to the contrary, the incidence of total taxation is lower in Australia than in any of the other countries mentioned. The further reductions in the individual rates of income tax now proposed should show Australia in an even more favorable light on this basis of comparison when figures in respect of 1949 and 1950 are available. Tables are being circulated comparing the proposed rates with, first, those in force at present in the United Kingdom and New Zealand; secondly, the combined State and Federal burden in 1939, and thirdly, the combined State and Federal burden in the year 1941-42, just prior to uniform tax. In the final analysis, however, the test which the ordinary man will make when comparing the weight of his war-time burden with that of his post-war burden will be embodied in the answer to the simple question, “How does the amount of tax payable on the income I receive compare with what I would have paid on that income at war-time rates “ ? That answer will be found in the schedules which were circulated by the Treasurer with his financial statement. These schedules show that the reductions will range from 100 per cent, for the man with large family responsibilities and moderate income to at least 25 per cent, for the man of considerable wealth. These schedules, and those now circulated, speak for themselves. I commend the resolution to the committee.

Progress reported.

page 247


In Committee of Ways and Means:

Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

– I move -

  1. That, in lieu of the basic rate of contribution and the concessional rate of contribution set out in paragraphs (1.) and (2.) of the First Schedule to the Social Services Contribution Act 1945-1948, the following rates apply:- (1.) The basic rate of contribution for every £1 of the contributable income shall be Threepence, increasing uniformly by three-eightieths of one penny for every £1 by which the contributable income exceeds £100, but the rate shall not in any case exceed One shilling and sixpence. (2.) The concessional rate of contribution for every £1 of the contributable income shall be -

    1. in any case where the contributable income exceeds the rebatable amount by less than £100 - the rate which bears the same proportion to Threepence as the amount of that excess bears to £100;
    2. in any case where the contributable income exceeds the rebatable amount by not less than £100 but less than £500 - the rate which would be the basic rate if the contributable income of the contributor were equal to the amount of that excess; and
    3. in any case where the contributable income exceeds the rebatable amount by £500 or more - One shilling and sixpence.
  2. That the amendments made by the Act passed to give effect to this resolution be expressed not to apply to assessments for a financial year prior to that which commences on the first day of July, One thousand nine hundred and forty-nine.

This resolution reducing the rates of social services contribution is complementary to the income tax resolution which has just been introduced. Where applicable, the reduced contribution rates will apply to contributors for the next financial year 1949-50, that is, to contributable incomes to be derived from the 1st July, 1949. At present, in the case of a contributor without dependants, the basic rate of contribution commences at 3d. in the £1 and is graduated to a maximum of 18d. in the £1 at an income of £350. The proposed basic rate will also commence at 3d., but the range of graduation will ; be extended so that the maximum of 18d. will not apply until an income of £500 is reached. Corresponding reductions are also proposed in the concessional rate of contribution payable by contributors entitled to concessional allowances in respect of dependants, &c. The proposed concessional rate will not reach the maximum of18d. in the £1 until the income is £150 higher than at present. I mention for the information of honorable members that the method of calculating the concessional rate of contribution will be modified as a result of the proposals contained in this resolution. The modification is designed to simplify the practical application of the schedule. However, in the simplified rate, contributors will have preserved to them the full benefits of the concessional allowances in respect of dependants, medical expenses, &c. These concessional allowances in conjunction with the contributable income will continue to be the determining factor in arriving at the concessional rate of contribution. As formerly, this rate will, for contributable incomes within the range of graduation, diminish as the concessional allowances increase.

These adjustments to the basic and concessional rate will alter the range of graduation of the contribution to 18d. in the £1 as f ollows : -

I commend the resolution to the favorable consideration of honorable members.

Progress reported.

page 248


In Committee of Ways and Means:

Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

– Imove -

That, on and after the sixteenth day of February, 1949, in lieu of the rates imposed by the Entertainments Tax Act 1942-1946, the rates of the entertainments tax be - where all the performers whose words or actions constitute the entertainment are present and performing and the entertainment consists solely of one or more of the following items : - a stage play ; a ballet ; a performance of music (whether vocal or instrumental) ; a lecture ; a recitation ; a music hall or other variety entertainment ; or a circus or travelling show, as set out in the second column of the Schedule hereto ; and where the entertainment consists solely of a game or sport in which human beings are the sole participants (but not including dancing or skating unless conducted solely for competitive purposes) and the entertainment is conducted by a society, institution or committee not established or carried on for profit - as set out in the second column of that Schedule ; and

The principal purpose of this motion is to allow a measure of relief from entertainments tax in respect of payments for admission to games or sports in which human beings are the sole participants and which are conducted hy organizations not established or carried on for profit. This action is being taken in response to widespread representations which have been received from time to time from non-profit sporting bodies conducting amateur sport throughout Australia. These representations have been supported by a number of honorable members.

Special rates of tax are applied under r,he existing law to the legitimate theatre, including stage plays, ballet, musical performances, and the like. These rates are lower than the rates applied to other classes of entertainment such as picture shows. It is proposed to extend the scope of the relevant definition so that games or sports of the kind that I have mentioned will obtain the benefit of the special rates. It is further proposed to allow exemption from tax in respect of payments not exceeding ls. 3d. for admission to all entertainments which fall within the widened definition. At present tax is payable on all payments of ls. or more for admission to such entertainments.

The sports or games affected include football, cricket, hockey, tennis, athletics, swimming, cycling, boxing and wrestling, provided always that the particular entertainment is promoted by a body not established or carried on for profit. The concession does not apply to horse racing and trotting, or to dog racing, coursing, or polo, whether or not they are conducted by non-profit organizations. The concession will not apply to entertainments such as dances and roller or ice skating except where the sole purpose of the entertainment is to conduct competitions in dancing and roller or ice skating. The existing rates of tax will remain in force in respect of exhibitions or contests promoted for the financial gain of the promoters in boxing, wrestling, foot racing, cycling, motor car racing, motor cycle racing, speed boat racing, skating, dancing and billiards.

A further purpose of the motion is to repeal the rates of tax which have hitherto applied to payments of less than ls. for admission to amusement devices of the kind operated at amusement parks, such as “ chair-o-planes “ and “ dodg’em cars “.

On the 3rd April, 1944, the Entertainments Tax Assessment Act was amended to give specific authority for the collection of entertainments tax in respect of such payments. These amusements were very extensively patronized during the war period, when spending was on a heavy scale. It was obvious that, at that time, a substantial number of adult patrons spent amounts considerably in excess of ls. during each visit to the place of amusement, and it was, therefore, deemed- appropriate that the law should authorize collection of tax in respect of swell payments.

In more recent times these amusements have, for the most part, reverted to a normal peace-time basis and once more the majority of patrons are children or youths. Individual patrons now 6pend much less on such amusements than in the war years. Since this section of the legislation has served its war-time purpose, and because of administrative difficulties involved in the collection of tax in instances of this kind, it is proposed to amend the law so as to place these amusements on the same footing as other classes of entertainment by requiring payment of tax only in respect of individual payments of ls. or more for admission. Under the amended law, tax will not be chargeable to patrons of the amusements in question notwithstanding the number of amusements they may patronize, and regardless of the question whether they patronize a. particular amusement more than once, provided that the payment for admission to each amusement is less than ls.

The motion is also designed to remove the liability for tax in respect of charges of less than ls. for incidental refreshments served at entertainments such as dances. Payment of tax is required at present in respect of such charges by virtue of section 16 1 a ii of the Entertainments Tax Assessment Act 1942-1946. The removal of the tax ofl such charges, together with the proposal regarding amusement devices, will ensure that tax shall not be payable upon any individual payments of less than ls. for admission to any form of entertainment, unless those payments are made for permission to transfer from one part of a place of entertainment to another, such as a transfer from the stalls of a theatre to the dress circle. In such an instance the law will continue to require the payment of further tax on the additional payment.

The amendments will operate on and from the 16th February, 1949.

The motion is confined to the allowance of the concessions mentioned and will, no doubt, find favour with all honorable an embers.

Progress reported.

page 250


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

Second Reading

Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

by leave - I move -

That the bill be now read a second time.

This bill is consequential upon the proposals which are the subject of the entertainments tax resolution which has just been introduced.

As previously stated, the Entertainments Tax Assessment Act was amended in April, 1944, to include specific authority for the collection of tax in respect of payments for admission to amusement devices of a kind operated at amusement parks even where those payments were less than ls. The relevant provisions are to be found in section 16a of the Entertainments Tax Assessment Act. In view of the proposal now to remove the tax from .payments of less than ls. for admission to such amusements, section 16a becomes unnecessary and is being omitted. Liability for tax in respect of any individual payments of ls. or more for admission to such amusements will arise under the general provisions of the law.

The amendments provided for in this bill are designed only to remove the tax from charges of less than ls. for admis sion to the amusements mentioned. The amendments will operate on and from the 16th February, 1949.

Debate (on motion by Mr. Menzies) adjourned.

page 250


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

Second Reading

Minister for the Army · Adelaide · ALP

by leave - I move -

That the bill be now read a second time.

This bill is entitled -

A bill for an act to approve the placing of the Territory of New Guinea under the International Trusteeship System, to provide for the Government of the Territory of Papua and the Territory of New Guinea, and for other purposes.

A bill for the foregoing purposes was introduced into this House and read a first time on the 18th June, 1948. That bill, however, had not been carried to the later stages at the time the Parliament was prorogued and was consequently removed from the business paper of the Parliament.

During the time that has elapsed sincethat bill was introduced copies of it were made available for information to the Trusteeship Council of the United Nations. The .provisions of the bill were examined by the Trusteeship Council at its third session .at Lake Success. The council was particularly interested in the provisions of the bill relating to the proposed administrative union of the trust, territory of New Guinea with the adjoining Australian territory of Papua and requested that certain provisions of the bill be reviewed in order to place beyond doubt that the identity and status of the trust territory of New Guinea would not in any way be jeopardized by the administrative union. Although particular care had been taken in the original bill to ensure that the separate entity of the trust territory of New Guinea would be preserved, the Government agreed to consider the requests of the Trusteeship Council and has decided that the following alterations relating to the status and identity of New Guinea as a trust territory should be made to the bill as originally presented to this House -

  1. Clauses 8 and 10 have been recast to emphasize that although the two territories will be governed under administrative union the identity and status of the Territory of Papua as an Australian possession and the Territory of New Guinea as a trust territory shall continue to be maintained.
  2. As the majority of the members of the Trusteeship Council felt that there might be a danger of the boundaries of the provinces, for which provision was made in clause 11 of the original bill, being so defined under that clause as to result in obliteration of the boundaries of the trust territory thus prejudicing the maintenance of its separate identity, the clause has been omitted.
  3. A suggestion that provision be made for a definite assignment of representatives in the Legislative Council to the inhabitants of the trust territory has been accepted and is embodied in clause 36 4 of the present bill.

In addition to the foregoing alterations further examination of the provisions of the proposed bill has disclosed that a number of amendments could with advantagebe made to the original bill and this has been done in the present draft.

I mention, incidentally, that in its observations on the administrative union issue the Trusteeship Council noted with appreciation the action of the Australian Government in submitting in advance of final legislative action its detailed proposals for the administrative union of the Territories of Papua and New Guinea. The Australian representatives of course made it quite clear that consultation with the Council did not, in any way, detract from the undoubted right of the Australian Government under the terms of the Trusteeship Agreement to reach a decision itself on all aspects of the Administrative Union and its duty to determine finally the entire character of the proposed legislation. When the Minister for External Territories (Mr. Ward) requested the Prime Minister (Mr. Chifley) in December last that he be relieved of his ministerial duties for” the time being, I was asked by the Prime Minister to take over the administration of the Department of External Territories temporarily. In consultation with the Minister it was decided that I should visit the territories of Papua and New Guinea to become acquainted with prevailing conditions and to meet the official and non-official residents of the territories. In January, I made an extensive survey of the territories during the course of which I visited Port Moresby and surrounding districts including Lae, Wau, Bulolo, the Markham Valley, the Central Highlands, Madang, Wewak, Manus and Rabaul, which necessitated approximately 7,000 miles of travel.

For many years Australia has accepted responsibility for the administration of areas in the Pacific Ocean in which the people have not yet attained a full measure of self government. Those areas comprise Papua and New Guinea, Norfolk Island and Nauru. Papua became a Territory of the Commonwealth in 1906 and the former Territory of German New Guinea was placed under the authority of the Commonwealth Government by a mandate from the League of Nations which was effective from the 9th May, 1921. These territories were administered as separate units as territories under the authority of the Commonwealth with separate administrators, separate legislative councils and separate public services. The Territory of Papua received an annual grant of £42,500 from the Commonwealth Government but no regular financial assistance was given to the mandated Territory of New Guinea. The administrations of both territories were suspended on the 12th February, 1942, in consequence of the Japanese invasion of the territories, and such functions of civil administration as were necessary in the areas not occupied by the enemy were vested in the Australian Military Forces. For convenience the territories were regarded as one administration area whilst under military control.

In 1945 it was decided to restore civil administration to the Territory of Papua and the portion of the Territory of New Guinea south of the Markham River and the Papua-New Guinea Provisional Administration Act 1945 was passedby the Parliament to give effect to that decision. After the conclusion of hostilities, large areas of the Territory of New Guinea remained under the control of the Australian Military Forces and civil administration was not restored to the whole of the territory until the 24th June, 1946. The provisional administration was a tentative arrangement pending the determination of the future policy for the administration of the areas of New Guinea held under the League of Nations mandate. In accordance with the provi sions of the Charter of the United Nations the General Assembly approved the terms of a trusteeship agreement for the Territory of New Guinea, in substitution for the terms of the mandate. The agreement designated the Government of Australia as the sole authority to exercise the administration of the territory. The text of the agreement is included as the fourth schedule to the present bill.

It will be seen that articles 4 and 5 of the agreement recognize that Australia has the same powers of legislation, administration and jurisdiction in and over the Territory of New Guinea, as it would have if that territory were an integral part of Australia. It has power to bring the territory into an administrative union with other dependent territories under its jurisdiction or control, if in its opinion it would be in the interests of the territory and not inconsistent with the basic objectives of the trusteeship system so to do. I quote these basic objectives as set out under Article 76 of the Charter of the United Nations -

  1. to further international peace and security;
  2. ) to promote the political, economic, social and educational advancement of the inhabitants of the trust territories, and their progressive development towards self-government or independence as may be appropriate to the particular circumstances of each territory and its peoples and the freely expressed wishes of the peoples concerned, and as may be provided by the terms of each trusteeship agreement;
  3. toencourage respect for human rights and for fundamental freedoms for all without distinction as to race, sex. language, or religion, and to encourage recognition of the interdependence of the peoples of the world; and
  4. to ensure equal treatment in social, economic and commercial matters for all members of the United Nations and their nationals, and also equal treatment for the latter in the administration of justice, without prejudice to the attainment of the foregoing objectives and subject to the provisions of Article 80.

This bill is designed to effect an administrative union between the Territory of Papua and the Territory of New Guinea, and to provide a permanent administration for these territores which will in future be called the Territory of Papua and New Guinea. The experience under military administration and the provisional administration of working common services for the two territories, has demonstrated the distinct advantages of such an arrangement. This was indeed the period during which the arguments advanced previously in favour of administrative union were being thoroughly tested. These arguments were so amply justified by results, that the Government determined that it was essential to have included in the Trusteeship Agreement an article specifically covering the question of capacity to implement an administrative union between the trust territory and the neighbouring territory. Such an article, it was realized, would finally remove any doubt that existed under the mandate concerning the Government’s capacity to carry out an administrative union.

The following general considerations influenced the Government in coming to the decision that the provisional administrative union between the Territory of New Guinea and the Territory of Papua should be continued : - The two territories are geographically united, the division between them being merely a line drawn on a map. The racial groups are, broadly speaking, Negritos, Papuans and Melanesians and are scattered throughout the two territories. The problems involved in the raising of the living standards of the population of both territories which totals more than 1,000,000 people, demand the most efficient utilization of all resources and equally efficient execution of the policies evolved for the advancement and welfare of the inhabitants of the two territories. It is very difficult for services subject to different executive controls to do this. It is essential that in the carrying out of these policies of development, reliance should not be placed merely upon consultation and collaboration between the two different administrations. The fact is that whilst certain co-operation along these lines takes place, the degree of co-ordination effected is never entirely satisfactory. Furthermore, it is believed that through the establishment of a single public service greater opportunities are given for advancement and there is greater diversity of training and opportunity for gaining knowledge and experience. In consequence a more efficient technical staff can be built up.

There should be little need to point to the advantages gained from the development of the area comprising both territories as one economic unit. It will be possible to develop much more easily the communications between the two territories by air and by land and also communications with the outside world.

Apart from the provisions relating to the Trusteeship Agreement the present bill follows in principle the Papua Act and the New Guinea Act under which the former separate administrations functioned and performed notable achievements within the limits of the finances that were available to them. There are, however, significant departures from the provisions of those acts, the principal of which are: -

Part IV.. Division 3. - Provision for the establishment of Councils for Native Matters and Native Village Councils.

Part V., Division 2. - Provision in the Legislative Council for three non-official members to he elected and for three nonofficial native members to be nominated.

The Legislative Councils of the former Territory of Papua and the Territory of New Guinea comprised only nominated members and no special provision was made for native members.

Division 3. - Interim legislative powers of the Governor-General.

Part VII. - Special provision for projects to promote the development of the resources of the territory or the welfare of its inhabitants.

Part VIII. - Provision for the training of staff for the specialized task of carrying on the administration of the territories.

I shall deal with those provisions of the bill in further detail at a later stage. I do not have to remind honorable members that the territories were major battlefields in the Pacific war, that practically every settlement was devastated and every public utility, including the small ships so vital to the island areas, was destroyed, and that there was a complete disruption of commercial activities and the organized life of the indigenous inhabitants on whose labour the whole of the economy of the territory is based.

The cost of reconstruction and rehabilitation over a period of many years will greatly exceed the total revenue of the territories. Although much has been achieved with the allocations that have already been made it is apparent that to develop the territories expenditure must progressively increase and that it will be a long time before the revenues of the territories will be sufficient to support their developmental needs. In this connexion I refer to clause 11 of the bill which has been included as a part of our obligations in the acceptance of the Trusteeship Agreement. Under the organization proposed in the bill the administrator will have the assistance of an Executive Council, thus reviving a pre-war practice of both Papua and New Guinea.

A step towards the ultimate objective of self-government for the inhabitants of the area is being taken in the establishment of advisory councils for native matters and native village councils. The latter will be the nursery from which will be drawn the members of the advisory councils, which will function on a district, or perhaps, regional basis. In time, the advisory councils should provide native members for the Legislative Council, which will be empowered to make laws for the territory.

The legislative provision for the establishment of village councils and advisory councils for native matters is something entirely new for the territory, and the step has been taken as a result of experiments and trials over some years in the functioning of village councils. Since 1936, village councils have been operating to a very limited extent in New Guinea, mainly around Rabaul, and they have been watched very closely by the administration officers who attended meetings of the councils, and guided their deliberations. Village councils have been functioning in Papua for many years. As a result of that experience it is considered that the time has arrived when provision can be made to vest such councils with some statutory authority. This will be done by ordinance, and it is realized that at the commencement and probably for some time councils with statutory authority will be possible only to a very limited degree.

The bill makes provision for the continuance of the existing laws of the Territory of Papua and the Territory of New Guinea. It is intended, however, that these separate laws should be unified progressively until there is one code of laws for the whole of the area covered by the administrative union. This is a task of considerable magnitude, but a start has already been made, and a group of qualified legal officers has been engaged for the purpose. In order that the Legislative Council for the territory should not be unduly burdened with the mass of legislation that will be necessary to bring about unification of the laws of the two territories, and for other reasons, the Legislative Council will not be constituted for at least one year after the proposed act comes into operation, and during that period ordinances will be made by the Governor-General in Council vide Part V., Division 3, of the bill.

The proposed composition of the Legislative Council will ensure the nonindigenous community of representation, either by nomination or election, whilst for the first time the native inhabitants will have direct representation on the body that will make laws for the territory. The judicial system is in line with the practice which existed in each territory before the war, and has been continued in the provisional administration. There is an important addition, however, namely, provision for the establishment of native courts and tribunals.

Part VII. of the bill has been included to emphasize the Government’s plans for the fullest development of the resources of the territory, and the advancement of its inhabitants. The Government is convinced that special efforts are necessary to secure the achievement of those objec- tives, and thus provision is made in the bill to make possible projects to be undertaken by and at the expense of the Commonwealth Government which will have as its objective the acceleration of the development of the territory. It is essential too, that staff should be adequately trained for their specialized task of administering a dependent territory, and for the purpose, it is proposed to maintain a school which will meet this need.

The war created reconstruction problems common to the two territories, and the immediate task of the Government was the planning and organization of rehabilitation measures. The provisional administration provided a single head-quarters, and the establishment of essential services including native affairs, medical and hospitalization, education, agricultural and transport services and public works on a common basis. The resources of both territories in man-power and materials have thus been used for the purpose of dealing with the most urgent reconstruction problems common to both.

The repair of destruction caused by the war in the territory will require considerable sums of money. Some of this money will come from the Australian war damage scheme, under which compensation was paid to non-indigenous residents of the territories for loss and damage to property during the war. Several millions of pounds have already been paid in this way, and it is expected that when final payments have been made for Papua and New Guinea, the amount of war damage compensation will total approximately £9,000,000. The natives of the territory were not included in the Australian war damage scheme, but, as they bad suffered considerable losses, a special scheme was devised and funds were provided to enable compensation to be paid to them.

In addition to the payments made under the Australian war damage scheme, approval was given as a special measure of assistance for the payment, ex gratia. of additional amounts to cover the cost of clearing overgrown plantations and for other purposes that were designed to assist in the rehabilitation of the copra industry. It was realized that this industry could make a valuable contribution towards relieving the world shortage of edible fats and oils, and the AustraliaNew Guinea Production Control Board was given the task of assisting in the re-opening of plantations and the general restoration of this industry. Damage caused to plantations during the war is estimated to have reduced the potential output of established plantations, and the maximum output of copra from Papua and New Guinea will be about 60,000 tons per annum compared with a pre-war maximum output of about87,000 tons. Current output is already approximately 45,000 tons per annum.

Mr Menzies:

– Is it expected that 60,000 tons will be the ultimate limit, or does that estimate cover only the next few years?


– As a matter of fact, I questioned that figure myself, and was informed that so much of the land had been taken over for the construction of aerodromes, and for other purposes, that it was not expected that the estimate of 60,000 tons would be exceeded.

Mr White:

– An additional reason is that no more land is being made available for the production of rubber.


– It is true that no more land is to be opened for that purpose.

The importance of the copra industry to the territory renders it imperative that measures be taken to ensure its future stability. Experience has shown that the price of copra is subject to considerable fluctuation, and even as late as 1941, copra, where saleable, returned only approximately £4 10s. a ton. To-day, because of the world-wide shortage of fats and oils, the price has reached a high figure. Negotiations are in the final stages for the conclusion of a long-term agreement for the sale of copra with a view to securing satisfactory returns to the industry in the future. I think a final decision was reached yesterday regarding a contract with the United Kingdom.

One of the most difficult tasks which has confronted the Government has been that of providing adequate small ships to meet the coastal and inter-island trans port requirements. Practically all of the vessels that operated in territorial waters before the war were destroyed by enemy action and many were lost in the service of the Allied war effort. However, immediately after the reestablishment of civil administration in October, 1945, the Australian Government took steps to secure ships, and a fleet of thirty vessels is now providing a service throughout the area. The possibility of extending the scope of the inter-island service of larger vessels is being explored. It should be remembered that Port Moresby was the only European settlement thatwas not completely destroyed during the war, and, therefore, the provision of housing, administrative facilities and public utilitieshas been a major problem. As has been the experience in Australia, acute shortages of man-power and building materials have been the principal difficulty standing in the way of speedy rehabilitation. Added to this, such wartime installations as were established by the Allied forces were only of a temporary nature and a long-range works programme has to be faced to provide such facilities on a permanent basis. The former settlements are to be rebuilt in accordance with advances in townplanning and housing, taking into consideration the tropical conditions. Wharfs and other harbour installations are to be rebuilt, aerodrome facilities improved, and internal communications systems expanded to meet post-war needs. The road from the coast at Lae to Wau, which was built for strategic purposes during the war, is being maintained.

Valuable research work is being undertaken at Government agricultural research stations which have been established in the territories. Experiments have demonstrated that cocoa, tea, coffee, rice and jute can be cultivated in certain areas. At Karavat, near Rabaul, 50 acres of experimental cocoa are under cultivation and tests are being made to determine the most suitable types. Distribution of seed to planters has already started. At that centre, other experiments are being carried out in the development of the best types of vegetables suited to different localities and for distribution amongst the natives.

At the agricultural research station at Aiyura, which is located in the central highlands, successful experiments have been carried out with the cultivation of tea and coffee. Tests have also proved that rice can be grown, but research is still proceeding to evolve a type strong enough to withstand mechanized farming, which is believed to be essential to establish the industry successfully. I visited the farms when I was in New Guinea and saw those crops growing.

Mr White:

– They have been growing most of those things for ten or fifteen years.


– That is not so. The natives are at present in a primitive stage of agricultural development, but it is believed that, by education and instruction in improved methods of cultivation of such crops as coffee, tea, cocoa, cinchona, rice and fibres, they will reach a stage at which mutual trade relationships can bo established on a profitable basis. In order to promote such development, the Department of Agriculture will undertake expansion of existing experimental farms, the establishment of new ones as areas are developed, stockbreeding and animal husbandry, native training centres and the provision of technical services, which will he available to natives and Europeans alike. Investigations have established that cattle and certain varieties of sheep and horses can also be successfully raised in certain of the highlands areas and fertile river valleys. The formation of native co-operative societies is being fostered to assist in the development of native enterprises.

Education will ‘play a most important part in raising the standards of living, and a scheme is now in operation designed to provide an education system adequate to the needs of the natives. At Sogeri the Education Department has established a centre for the training of native teachers to primary standard in a number of subjects which include English, arithmetic, geography and hygiene. Under the supervision of a European staff, the natives will be trained at that centre so that they may return to their native villages to take charge of village schools. In addition to training as teachers, natives will also he trained for employ ment in clerical and other positions in the Public Service and industry. During 1948, approximately 50 natives completed refresher teachers’ courses and were sent to native schools throughout Papua and New Guinea. In the past, much of the education of the natives had been in the hands of the missions. Our present plans provide for a vigorous programme of education in the broadest sense controlled and directed by the administration. The missions have performed very valuable service in the field of education and .can continue to do so within the framework of the educational programme that is now in operation. Many natives whose war service rendered them eligible are receiving training in arts, handicrafts and trades under the Commonwealth reconstruction training scheme.

Expanded and improved health services have been inaugurated, and provision has been made for the necessary staff, embracing 41 qualified medical officers, including specialists in leprosy, malaria, tuberculosis, venereal disease a lid other sicknesses common to the tropics. Natives are being trained as medical assistants, orderlies and hygiene workers at training centres throughout the territory. It will he realized, therefore, that the Government has put into practical operation a policy designed to promote to the utmost the material and moral welfare of the inhabitants of Papua and New Guinea.

The bill provides the machinery to continue this policy under an administrative union of the two territories. Apart from the debt of gratitude that the people of Australia owe to the natives of the territories for their valuable assistance and co-operation during the war, the Government considers it has a solemn obligation to further the welfare and advancement of the natives. It considers that this can be achieved only by providing facilities for better health, better education and greater participation by the natives in the wealth of their country and, ultimately, in its administration and government along the lines that I have indicated.

These aims are considered to be of primary importance in the long-range plans for the betterment and protection of a primitive yet intelligent people who, during the war and the immediate postwar years, have become progressively exposed to the impact of civilization.

Debate (on motion by Mr. Menzies) adjourned.

page 257



Third Annual, Report. debate resumed from the 11th November, 1948 (vide page 2872, Vol. 199), on motion by Mr. Dedman -

That the following paper be printed: -

Aluminium Industry Act - Third Annual Report of the Australian Aluminium Production Commission, for year 1947-48.


.- The history ofaluminium tells the story of the world’s greatest trade cartel. It is a cartel that has divided the world into spheres of influences. It swallows or destroys all competition; it is ruthless in its business methods; it fixes prices in every country in the world; it even rations supplies. It is a closely-knit world government in its own sphere. That was the problem with which this country was confronted when “World War II. began. Australia did not have any independent supplies of aluminium; it was dependent upon the world cartel. The lack of aluminium held back development of aircraft for the defence of the country. It could have contributed to the loss of this country. As Leader of the Australian Labour party, the late Mr. Curtin pledged himself to put an end to the threat of the cartel obtaining control in Australia. That was why the Australian Aluminium Production Commission was established. That was why the Parliament agreed to make available a sum of £3,000,000 to establish the industry in Tasmania. Now, this Government is about to repudiate Mr. Cur tin’s pledge. It is about to sell out by admitting the cartel into the commission. The cartel will soon control the commission. Two very important conditions were laid down by this Parliament in the act. The first was that. Australia should become completely independent in respect of its supplies of raw materials, and the second was the all-impor tant paragraph j of article 3 of the agreement with the Tasmanian Government which provided that the Australian undertaking must remain absolutely independent of any trust or combine. It is for this Parliament to examine how the commission has carried out its work, and also to ensure that the charter of the commission shall be maintained. To say the least, the commission has been very lackadaisical in getting on with the job. It has not tackled it on the basis of the urgency which is so essential to the future security of this country. There have been many alibis. Lengthy investigations were made into bauxite supplies. There has been confusion over the site of operations. There were difficulties in the way of finding out how to go about the actual work of production. All of these factors have been suggested by the commission as reasons for the delay. But is there some more important reason? This House should be told frankly by the Government of the precise character of the negotiations that have been proceeding with representatives of the aluminium cartel. The Prime Minister (Mr. Chifley) has repeatedly refused to place the cards on the table. He is handling this industry as though it were his own personal property. It brings him into contact with international bankers and monopolists. There has been a strange change in the attitude of the Government towards the cartel. Is it that this Government no longer believes that the Australian undertaking should be completely independent of the cartel, as required by the act? If so, this House should be told. If the commission is to continue, this position should be clarified immediately. Last year the Prime Minister spent a week in London. While he was there he found time to meet the representatives of the cartel. He has admitted that in this House. The Minister for Supply and Development (Senator Armstrong) also had conferences with representatives of the cartel. No sooner had the Prime Minister returned to Australia than representatives of the cartel began to arrive in Canberra. Mr. Thomas, production manager of the British aluminium interests, came here to survey the Australian position. Then. Mr. Cunliffe, a very powerful British banker, connected with the tobacco combine and the international investment firm of Goschen, arrived in Canberra for negotiations with the Prime Minister. Almost immediately, the news leaked out that the Australian Government had been negotiating with the Cosgrove Government to get Tasmania out of the commission. What is the purpose of that manoeuvre? It is suggested that the Government wants to dispose of Tasmania’s interests to the overseas combine. At present, the commission consists of four members - two representatives of the Commonwealth and two representatives of the Tasmanian Government, with a Commonwealth representative as chairman. What will happen if the overseas combine takes the place of the Tasmanian Government representatives on the commission? The Prime Minister says that the Commonwealth will retain control because it will put up most of the money and will hold a majority of the shares. But is that how these things work out? The. Prime Minister is fond of quoting Amalgamated Wireless (Australasia) Limited as an instance of Government and private co-operation. In that company the Commonwealth provided £500,001 out of a total nominal capital of £1,000,000. The private interests in Amalgamated Wireless (Australasia) Limited never at any time fully paid up their holdings in the company. The Commonwealth had four directors and the private interests, including Marconi’s, had three directors. But whose policy was followed? Was it not the. policy of Mr. Fisk, the Marconi nominee in the first place? Is not that what always happens in these marriages between governments and big business? Even if the Government has a majority of directors, will not the Australian Aluminium Production Commission he run by the people with what the Prime Minister himself calls the “knowhow” - the cartel? On the 3rd December last, the Prime Minister said that he had had .discussions with Mr. Cunliffe about large-scale production of aluminium in Australia, but that for such increased production highly qualified technicians were necessary. “ In other words “, said the Prime Minister, “ we must have what is known in engineering circles as the know-how ‘ “. Yet, in its second report, the Australian Aluminium Production Commission stated that it had obtained the services of Mr. K. F. Carmichael an engineer with more than 25 years’ service with the British company, Aluminium Limited. He came from the cartel. He arrived in Australia in April, 1947, and then went to New York for the commission to assist in assembling the plant being bought there from the Dorr Company. During the war we manufactured our first aeroplane engines in this country and every person in the plant, with the exception of one American technician, was an Australian ! Now, after we have had the services of a leading engineer from the combine itself for just on two years, we are told that we are not going ahead because we have not the “ know-how “. That sounds fantastic to me. The next alibi is that the Government is thinking of large-scale production. The original estimate was for 10,000 tons of ingots a year. Then the probable demand was examined, and it was considered thai 5,000 tons would be ample. However, the fact remains that production has not yet even started. Machinery has not been installed, nor has the site been finally determined. What is the use, therefore, of talking about large-scale production when the expert already employed ha? not yet landed the machinery that was ordered more than two years ago? How can we say that Australians lack the “know-how”? Until the machinery is installed, what justification is there for making that criticism of Australians ? Where is the evidence that a demand exists that is beyond the capacity of the proposed Commonwealth-Tasmania plant? The Prime Minister admitted that the discussions with the overseas interests included representatives of the Treasury. Then came the strange explanation of the reason why the Tasmanian Government was to be squeezed out. The Prime Minister said that the Tasmanian Government would not be able to bear the financial responsibility involved. I emphasize that that statement was made by the Prime Minister, not by the Premier of Tasmania. Of course, unless the Prime Minister, who is also chairman of the

Loan Council, agreed, Tasmania could not raise the money to invest in the proposal. Therefore, the quickest way to prevent the Tasmanian Government from taking up its full share of financial responsibility and its part in what should be a sound investment, is to deny to it funds from the Loan Council and to withhold permission for Tasmania even to approach the Loan Council for money. The sop offered to the Cosgrove Government was an assurance that the Commonwealth would guarantee the Tasmanian Government that the industrial activity contemplated in the agreement would be implemented. That is a very vague kind of guarantee. The Government of Tasmania would have no say whatever, but would be dependent entirely on circumstances. If the cartel decided that it could produce ingots more cheaply elsewhere, it might convince the commission, through its representatives, that it would be economic to -shut down. Then what would become of the Prime Minister’s guarantee? Is there to be a written document? At present the Tasmanian Government has a legally executed document which has been ratified by both the Commonwealth and the Tasmanian Parliaments; if it withdraws, it will have nothing. But why did the cartel make such a sudden decision to take an interest in Australia? In these days the cartel is working on a plan different from that of the pre-war period. It is prepared to work through governments. It has taken the advice of the Swedish match king, Kruger, that many governments are most amenable to cartels and that they make ready instruments with which to bludgeon competition out of existence. If a government is monopoly-minded - and this Government is so minded - it is the perfect tool for combines. The platform of the Australian Labour party contains <% declaration against monopolies and trusts; but only the other day the AttorneyGeneral (Dr. Evatt) said, in reply to a question. “ Time marches on”. Appa: rent,lv the Government believes that it should not wait for the Labour movement; it has not the time. It alters the platform to suit itself. So, instead of making Australia independent of the aluminium combine, it proposes to enter into fi partnership with it. To speak of the British Aluminium Commission is all eye-wash. The British Aluminium Commission is still Aluminium Limited, which is the British branch of the world cartel. The present aim of the cartel is to tie-up the Australian end, and its next move will be to ensure that Australia’s deposits of bauxite shall not be developed. The cartel depends on its power to withhold or restrict supplies of raw material. The VicePresident of the Executive Council (Mr. Scully) believes that the commission should use bauxite from the Inverell district. The honorable member for New England (Mr. Abbott) could point to other important deposits that would be economic. There are substantial known deposits in Victoria and Tasmania, but if the cartel gets its way, none of them will be worked.

Now, there is talk about obtaining bauxite from the Solomon Islands or Borneo. Who controls those deposits? The cartel does. What would happen in the event of war in the Pacific? The entire basis of the all-Australian approach to this industry is being undermined by the combine. During the past week, another representative of the cartel arrived in Australia. He was Mr. Waterhouse, who was associated with the parent combine, Aluminium Limited, of Canada. He was described as the company’s representative in South-East Asia. That region includes Australia. He is in charge of the company’s interests in this sphere of influence. He also talked about obtaining bauxite from Borneo or the Solomons in almost exactly the same terms as the Prime Minister (Mr. Chifley) used in this House. But the cartel has further plans for throttling back the development of the aluminium industry of Australia. I read in the New Zealand press recently lengthy details about large-scale aluminium developments at Lake Manapouri, in that dominion. According to the New Zealand press, British and Canadian interests in the cartel propose to invest £10,000,000 in an ingot production plant that would supply all the requirements of Australia, New Zealand and South-East Asia. I ask: Was that a gun held at the head of the Prime Minister? Was he informed that unless he entered into negotiations with the cartel and admitted it into partnership in the Australian Aluminium Production Commission, the cartel would go ahead with the Lake Manapouri scheme? If it did, it would proceed to deal with Commonwealth competition just as it has dealt with its competitors in every other part of the world.

The Attorney-General of the United States of America took action on the 1st June, 1938, to dissolve the Aluminium Company of America, with a capital of 253,000,000 dollars, on the ground that it was a monopoly in restraint of trade. The trial lasted two and a half years, and during the proceedings, the existence of a world aluminium cartel was proved. German, British, French, Swiss, Canadian and United States branches had their own individual monopolies, and carved up the world into spheres of influence. They fixed production quotas and also prices. If a competitor came into the market, they had their own formula for cutting his throat. The Australian Aluminium Production Commission is regarded at present as a likely competitor and therefore the cartel is determined to control it. That control can be exercised only through the Chifley- Cunliffe plan. The Attorney-General of the United States traced the development of Aluminium Limited from the date of its establishment in 1928. A man named Arthur Vining Davis was the organizer. His partners’ were Andrew Mellon and R. B. Mellon, American trust lawyers, financiers and politicians. Aluminium Limited took over 33 foreign subsidiaries of Alcoa, the parent company, and established its head-quarters in Canada in order to escape the antitrust laws of the United States of America. Nearly all the shares in Aluminium Limited were held by the shareholders of Alcoa, and 51 per cent of the common stock was held by Davis and the Mellon brothers. Aluminium Limited actually sold aluminium to Alcoa at a price below cost, and Alcoa reciprocated by fabricating for Aluminium Limited below cost and shipping direct to the customers of the Canadian company. Aluminium Limited had an agreement not to sell in the United States market whilst

Alcoa and its subsidiaries agreed to stay out of the British and European markets.

The aluminium combine was actually established as far back as 1888 as the Pittsburgh Reduction Company when it obtained a monopoly of most of the American bauxite, which came from a small area. It then set to work tying up electricity companies in agreements not to supply power to any of its competitors. The American tobacco magnate, James Duke, was given 25,000,000 dollars worth of shares in Alcoa on condition that he did not go ahead with the establishment of a production plant . in Canada. The French company was also bought out at an excessive price in order to keep its production off the American market. It also had to sign an agreement not to compete with the combine. The present world cartel was completed during the financial and economic depression, and the world was carved up into spheres of influence. The combine controlled the world’s scrap aluminium market as well as the raw aluminium.

Summing up, the United States Attorney-General said that Alcoa monopolized 100 per cent of the United States capacity for melting bauxite ore into aluminium ingots and 90 per cent, of the bauxite deposits of the country. Through its “ stooge “, Aluminium Limited, the Canadian firm which has a capital of £25,000,000, Alcoa controlled world production and prices. During World War II. competition did develop to the combine in the United States of America through Reynolds and Kaiser and that event convinced the cartel that it might be wise to arrange a monopoly in other countries in conjunction with the respective governments, and still squeeze out all possible competition. The one weak link happened to be Australia. Had the Australian Aluminium Production Commission been forced along by the Government it could have competed with the combine, not only in the Pacific but also throughout the world. That is why the cartel is so anxious to get in and squeeze Tasmania out. This Government appears to have a fatal weakness for cartels and monopolies. Its policy has been to strengthen the monopolies and squeeze the small men out. Now it wants to squeeze the small State out also. The people of Australia have & far greater stake in this industry than any cash investment. They need it to be developed entirely within Australia, as a vital link in the country’s defences. If the project is thrown to the cartel wolves, we will not have an Australian aluminium industry. It will be sacrificed, just as every other potential competitor has been throttled. Our bauxite resources will not be developed for exactly the same reason as the South African diamond magnates control the distribution of gems. No doubt the directors of the cartel believe that they will be able to move in very cheaply. The Government has no faith in the industry and its talk about not having the “know-how” is typical of its attitude in such matters. Apparently the combine has the “ know-how “ in every department. The Government should place on the table a complete record of all of these negotiations. It owes that to its partner, the Tasmanian Labour Government. Apparently Tasmania is beingtreated in exactly the same manner as were two directors in another very important deal. If the Tasmanian Government refuses to have the gun placed at its head, it will be acting in the interests not only of Tasmania but also of the whole of the Australian people. There must be no sell-out in aluminium.


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

Motion (by Mr. Fadden) negatived -

That the honorable member for Reid (Mr. Lang) be granted an extension of time.


.- I have no desire to repeat the speech that I made on this subject during the last sessional period, when I referred to many aspects of the proposal to produce aluminium in Australia. I should like now to deal more specifically with various features of the commission’s report. Although I believe that this venture should become one of Australia’s major industries, I have the unhappy feeling that its only significance in this House is that it is a useful subject with which to fill in time. It will he remembered that Ave had no discussion on the first and second reports of the Australian Aluminium Production Commission, and it is very doubtful indeed whether any profit will accrue from the discussion of its third annual report. The honorable member for Darwin (Dame Enid Lyons) secured the adjournment of the debate. Whilst I am not capable of anticipating the line of argument that the honorable member proposes to adopt, I believe that she expecté to elicit information about the Government’s final intention with relation to the production of aluminium. However, ] am very much afraid that she will bounsuccessful in her attempt. A debate on a report of this description allows for the belief that reference will be made to some activity in which the Government proposes to engage at some future time. There is a well authenticated belief thai the Government’s final interest in this scheme to produce aluminium in Australia has little or no relation whatever to the Aluminium Industry Bill that was passed by this House in 1944, following which £3,000,000 was appropriated for the purpose of implementing that measure. This belief is based on statements that have been attributed to the Prime Minister (Mr. Chifley) from time to time concerning negotiations with British Aluminium Limited. It has been claimed that that company is capable of producing aluminium on a scale quite beyond the reach or capacity of any Australian concern, or even of the Australian Government. If that is so the utter futility of discussing a report of a commission that will not continue to exist and whose reports will not be required by this huge concern, will be realized. Needless to say, that company has available to it all necessary data. Honorable members can do justice to this commission only by not being too critical of its activities, because it was hopelessly handicapped from the beginning. The commistion recognized that in paragraph 32 of its third annual report, which reads -

The Commission is bound by its governing Act to establish its electrical reduction plant in Tasmania, and there appeared no reason to consider the erection of the alumina unit elsewhere than alongside the reduction section until the Commission’s surveys showed that the predominant reserves of Australian bauxite lay in New South Wales. In any Australian aluminium scheme using domestic ore. the Inverell ore must inevitably he the major factor, and this consideration gave rise to an economic survey to determine whether it would not be cheaper to erect an alumina plant on the Inverell bauxite fields, and transport alumina to the Tasmanian works for reduction to aluminium, in preference to carrying bauxite from Inverell to Launceston.

That was a major dilemma, and the paragraphs immediately following that are what in modern language might he termed “ escape clauses “ - that is, escape from the settled convictions of intelligent men that the correct place to establish these plants is on the fields where the raw material is available. But then came the Heaven-sent inspiration that it may be expedient to import raw materials from foreign countries, because at the normal rate of consumption the known supply of bauxite in Australia could not be expected to last for more than 200 or 300 years. That is a greater quantity than Australia and New Zealand together could ever hope to consume. The effect of the escape clauses is that, in spite of the known deposits being sufficient to meet requirements over 300 years, it may be expedient to import ore from foreign shores. That gives some semblance of reason to the establishment of the production plant in Tasmania in preference to Inverell, which is inland. There is therefore no need whatever for the bauxite reduction plant to be established anywhere other than on the field on the mainland where the raw material exists, lt might well be asked where is there a precedent for a government in any country solemnly passing a measure to establish an industry in that country, making £3,000,0000 or £4,000,000 available to run it, and then appointing a commission to investigate the .practicability of running that industry? Surely it would have been logical to adopt the reverse procedure and to obtain first the report of the commission as to the practicability of the scheme. I have an opinion which may be at variance with that of the Government and which may, for all I know to the contrary, be unjust to the Government, but. it is founded on my observations of the way in which this matter has developed. I say that all this is in keeping with the atmosphere of insincerity which has characterized this scheme from its very beginning. A scientific commission was established to dis- cover something which had already been discovered. There is nothing in this report, or in the first and second annual reports, to indicate that this commission, which, I will admit, has not cost the country a lot of money, has discovered a single item of information which was not available to the Government for nothing. It was given the superhuman task of discovering something which had already been discovered. Then it had the job of applying that rediscovered knowledge to the installation of a reduction plant in Tasmania. It did its job well in that respect. As is only to be expected in circumstances such as these, all of the reports of the commission are of a pattern. Each one is uninspiring and uninformative. To those who know something about this subject, not one of the reports would provide more than a basis for an uninteresting discussion over an afternoon cup of tea. There is nothing in them. When the bill was being debated in this chamber, honorable members on all sides of the House made available to the Government every iota of the information that is contained in these reports. The third annual report confirms statements that were made in this House when the bill was under- discussion. It was said that the industry must be established in Tasmania because of the existence of cheap hydro-electric power in that State. Honorable members on this side of the House said at that time that there was no hydro-electric power available for that purpose. It is not there now, four years afterwards, and there is evidence in this report that it will not be available for another four or five years. It will not actually be available until nine years after the bill was passed by the Parliament. It was stated during war-time that.. this industry was wanted for war purposes and that, because power was available in Tasmania, it should be established there. Paragraph 45 of this report reads as follows : -

The Hydro-Electric Commission had made it clear that until a contract had been signed no move could be made towards commencing the design of the new works necessary for the provision of power, and had indicated that full power could not be available until at least four years from the signing of the contract.

Paragraph 50 contains the following passage : -

Although power under the contract will not be available until 1953 at earliest, . . .

Hypocrisy is a nasty word, hut I point out that years ago the existence of cheap hydro-electric power supplies in Tasmania was flaunted as the reason for establishing the industry in that State, against all the evidence of logic and reason, which prompted the establishment of the reduction works on the field where the raw materials were. The power will not be available until four or five years from now. I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

Sitting suspended from 6 to 8 p.m.

page 263



Debate resumed from the 9th February (vide page 92), on motion by Dr. EVATT-

That the following paper be printed: -

Foreign Affairs - Ministerial Statement, 9th February, 1949

Leader of the Opposition · Kooyong

– Last week the Minister for External Affairs (Dr. Evatt) addressed a long and careful speech to the House on the questions associated with our foreign relations. He painted his picture on a very wide canvas, and I do not propose to endeavour to cover the whole of the same field. I do wish, however, to direct my attention to some matters in connexion with our foreign affairs that seem to me to be of outstanding importance, great gravity and great urgency. In any nation continuity of foreign policy has always seemed to me to be of importance. I believe that when we debate foreign policy in this House - and honorable members do not always have the opportunity of debating it in the presence of the Minister himself - we should look, as far as we can, for elements in common, confining our criticism, as far as possible, to points of difference because, as I say, continuity of foreign policy is of very great moment. The trouble with the Minister is that, so far as one can judge by statements made by him in this House and in public, he has never yet been able to make up his mind whether he is claiming that there was no Australian foreign policy until he arrived, and that in consequence our foreign policy is his own and possesses novelty; or, alternatively, whether his policy is equally that of both sides of the Parliament and therefore he speaks for the whole of Australia and for all political parties in Australia, when he speaks abroad.

That curious inability that exists in his mind to decide on which of those grounds to stand was very clearly illustrated in the speech that he delivered to the House last week. He went to some pains to state that Australian foreign policy had been the same since the late Mr. Curtin took office in 1941, and 1 took it that there was some particular point about that selection of an event and of a date. That idea has quite plainly obsessed his mind ever since 1941, and yet in the next breath he indicated to us what the three basic principles of Australian foreign policy are. He stated them in this way: First, support of the United Nations; second, co-operation with the British Commonwealth; and third, co-operation with the United States of America. I do not propose to take up any time by overemphasizing some small extravagance about that claim, because, of course, the United Nations was not established until 1945 and can, therefore, hardly have figured in Australian foreign policy in 1941. I put that on one side because it is a small matter. Is it really true that those elements did not exist before 1941? Every honorable member who has been a member of this House for a long time will agree with me that if one substitutes the title “ League of Nations “ for “ United Nations “ the three elements mentioned by the Minister have represented the Australian approach to world problems for very many years. The Minister says, “ Those three principles are mine “. They are the principles of the Government, and as a statement of principle I shall accept them for the purposes of this debate, although I am bound to point out that co-operation with Great Britain and the United States has occasionally seemed to many of us to have functioned very oddly. But let us assume that they are now accepted as the broad fundamental principles. If that is so, then, I say again what I have said before in other words to this House - it is unfortunate that the Minister, in what I venture to describe as his proprietorial approach to foreign policy, has sought always to make his policy a partisan one and not, to use the term now in use in America, a bi-partisan one. He has never in reality sought from this House a general policy on foreign affairs. That, I venture to think, is because he baa been anxious to create the impression, and in fact has met with success in other parts of the world in doing so, that until he came into office other Australian governments regarded Australia as a British colony, and were the obedient “ yes-men “ of Downing-street

Mr Conelan:

– Quite right !


– Anybody who knows nothing about it will say “ Quite right “, but anybody who knows anything about how those matters were handled in the so-called bad old days knows perfectly well that those three elements have always been the elements of our foreign policy although, it is quite true, that under previous governments we were a little more co-operative and a little less noisy about it.

If the Minister is seeking a general foreign policy, I am astonished that he has so constantly rejected proposals for the appointment of a parliamentary foreign affairs committee, and that he has never adopted the practice which is becoming well established in the United States of America of occasionally sending as a delegate to an international conference someone who is not a pledged government supporter. As honorable, members know, among the delegates that the United States of America sends to the General Assembly of the United Nations is Mr. John Foster Dulles, who is a member of the Republican party in America and who, it was commonly understood, would in the event of a victory by the Republican candidate, Mi-. Thomas Dewey, in last year’s presidential election, have succeeded General Marshall as Secretary of State.

Mr Beazley:

– Only if the Republican party had gained a majority in Congress as well as the presidency.


– The honorable member’s interjection is of academic interest only. The fact is that Mr. John Foster Dulles was, and is, a strong Republican.

Mr Holt:

Senator Vandenberg is a similar example.


– That is so. Senator Vandenberg, who is a leading member of the Republican party, has also been sent abroad by the Democratic Government to overseas conferences. The view has been taken in the United States of America that there should be continuity in such matters. The Americans have acted on that view and applied the principle.

I repeat what has been said many times on this side of the House by my colleagues and myself, that there should be a foreign affairs committee of this Parliament. The lack of it is a grevious deficiency. The Opposition does not suggest that such a committee should formulate policy. That is a matter for the government of the day. But it contends that such a committee should be established for the purpose of providing the Parliament with an opportunity effectively to influence foreign policy through the existence in the Parliament of a group of honorable members with special access to information and, therefore, with special knowledge of special matters. Having said that, once more, I fear, in vain, I desire to deal with several of the outstanding questions that arose in the Minister’s speech, and that touch the subject of foreign affairs as a whole. First of all, I should like to say something about the United Nations. “We have had, in the course of the Minister’s speech, a. very full restatement of what I will describe as the “ theoretical case for the United Nations “. It is open to very grave question whether the formation of an international body with a membership of 57 or 58 nations, having no real power of enforcement, with no uniform understanding among its members and no uniform acceptance of obligations, does not tend to defeat itself and to break down under its own weight. But whilst that is valid criticism it is still true that the ideals of the United Nations and the ultimate objectives that the United Nations seeks to serve, command the warm support of the Australian people and, I believe from my own observations, the warm support of the British and American people. My criticism to-night is not of those ideals or objectives. My criticism is that when the Minister approaches the international problem, in the light of those ideals, he assumes too readily that the ideal is practical and that the distant is near. His approach to the problem and his explanation to this House of it bad great superficial logical force but, on examination, that approach and those views turn out to be completely theoretical and, what is equally dangerous in this workaday world, completely legalistic. In this House and perhaps throughout Australia we can all agree that international peace will become the commonplace only when international law is as commonly accepted by nations as domestic law is commonly accepted by private citizens within the boundaries of their own countries. We can agree also, I think, that we cannot have an international law of an enforceable kind without an international governing organization which commands instinctive support, and which, in the last resort, has an independent power of enforcement, lt is because of our agreement on those two propositions that we all subscribe to the ultimate ideal of the United Nations and to the ultimate ideal of the permanent court of international justice. But our problems are of to-day and to-morrow and not of the distant future. The immediate, practical, urgent problem that must be faced in this world so full of danger is not whether we ourselves subscribe to a certain ideal state of affairs, but whether this scheme works now or can work now. Those are the major questions and they are matters of genuinely vital and preliminary importance which must be tackled before we can really set out in our pursuit of the ideal. In brief, it is no use being theoretical about practical and imminent dangers. It is no use opposing aggressors with pious resolutions. It is of no use being legalistic when the real basis of law, either as to consent or obedience, has not yet been established. Itis of no use, as the Minister for External Affairs is doing constantly, contrasting justice and expediency as if justice were some ideal commodity existing at large, and criticizing force and expediency as something to be rejected just because they are expedient. Some things are lawful, but not expedient. Expediency matters in this world, and if we- are confronted by a state of affairs in which we find thugs challenging the peace of the world and the security, safety and future of our own people, it is of no use stating airy-fairy legalistic ideals. We must face the fact that until the ideal happy state of affairs can be brought into existence, we must first deal with the enemy as wc find him and deal with problems which may be solvable only by expediency, as the problem of the Berlin blockade has been solved. Do not let us become too high and mighty about the contrast between justice and expediency when we contemplate that blockade, and the expedient that it has evoked from the people of the western powers. Here we encounter a great paradox because, as a very careful speech, and a not unduly modest but at least full report show, the world has never had so many charters, assemblies, councils, committees, rules, resolutions and reports, nor has it ever had so many thousands of people employed more or less actively or inactively in association with them. Yet, in spite of all this great cloud of witnesses, the world is in a ferment and peace at this very moment hangs on a thread. The Minister for External Affairs himself exhibited quite unreal optimism and even, I think, once or twice, some measure of boasting, but let us face the facts quite bluntly. In spite of all these things, the Soviet Union, which is a subscriber to the Charter of the United Nations, and is, in fact, a member of the United Nations, equally bound by the same theories and ideals, and which constantly attends those councils and assemblies and constantly takes part in them, has by aggressive action, by march, threat or bluster, overrun countries like Poland and Czechoslovakia and has committed an unprovoked and unparalleled act of war in relation to Berlin. By indirect methods, the Soviet has attacked the self-governing sovereignty of France. Italy and China, and is at the moment- although this is sometimes forgotten - by means of bluff, infiltration, and fifth column activities, threatening western democracy and the peace of the world. The Australian Government scoffs at the idea of the fifth column in this country, lt persists in its curious views that although the Soviet Union is doing all those things in the international sphere, its loyal adherents in this country are not responsible for destructive activities of a purely fifth column kind. It believes that active revolutionary Communists must not be dealt with harshly because they merely have a political philosophy of their own. Does anybody in this country of full age and understanding believe for one moment that if - and it is a possibility - this country were brought into a war by further aggression on the part of the Soviet Union, all the experience now being acquired, and the organization now being built up, by these people, would not immediately be devoted te fifth column activity? And turning away from the Soviet Union, the fact ls that although we hear a great deal about councils, assemblies and a charter based upon ideal internationalism, nationalism is more acute and positive in the world to-day than it has ever been before in our lifetime. So to-day we are given by the Minister for External Affairs the theories of distant perfections, as we were given them by other men ‘between the two wars; but if those theories are not to be only marsh lights luring us to destruction as they almost did between the two wars, the immediate problems which, if they are not solved, will prevent the United Nations from ever functioning in any real sense, must be attacked clearly and resolutely. Surely it is clear that until the turbulence of the war and arising from the war has been settled, the United Nations organization cannot begin to function except, of course, as a forum of international debate and a vehicle for international propaganda. That truth has been recognized before by the Minister for External Affairs himself. I read with great interest a book fresh from the press written by him on the United Nations, and containing a reproduction or expansion of some extremely interesting lectures he had given on this matter in the United States. As the Minister will recall, he said in that book as, indeed, he has said in this House - and I will quote his exact words because this is a matter too often overlooked by many people -

It was never intended that the United Nations should be charged with the responsibility of negotiating and concluding peacesettlements with Germany, Austria, Japan, Italy or the late German satellites. It must be remembered that the United Nations consists of 57 Member States. Some of them made nocontribution whatever to the defeat of the aggressors in World War II. - indeed, some were neutrals in that struggle. Ex-enemy countries are applicants for admission to membership and one (Siam) has already been admitted. It would be inappropriate (save possibly as a last resort) for the United Nations to lay down the conditions of peace. The Charter was designed to create an international organization which could maintain peace in the future; not an organization to finish off the war, or to make the peace settlements.

I quote that passage not to challenge it, because it quite neatly and, I think, accurately expresses the position. In brief, we hear a great deal of the proceedings of the Assembly or the Council of the United Nations. Many millions of people have been led to believe that those proceedings have something to do with the pacification of the world, and yet there can be no pacification of the world until Asiatic and European peace settlements have been made. Nevertheless, such settlements are not properly the concern of neutrals or of the United Nations, but of the belligerent countries. If we assume that the United Nations Charter is powerful, if we accept the proposition that the United Nations agencies- -the Council and the Assembly, and the various committees - can act as well as talk; that they are concerned - and I say this with some reservation - with international peace, and not with the legitimately local affairs of individual nations, then the speech of the Minister for External Affairs is a logical plea for co-operation in the procedure, and participation in the debate and, of course, obedience to the decisions, of the organization. But these basic assumptions are, at present, utterly wrong. They are in almost ludicrous contrast with the real state of affairs, with the lack _ of power and significance of the United Nations organization. Therefore, a speech, admirable as it may be on its own premises, becomes illusory and unduly complacent and, indeed, dangerous, if accepted by public opinion.

I turn from that to say something about the relation at this time between the United Nations and the great powers. There are two features about the Charter that need great emphasis. One has had emphasis, although its significance has never been very clearly stated. The first of those features is the existence of the veto. It cannot be said against the Minister for External Affairs that he has not challenged the veto right, left and centre, but his challenge has had a limit. It is most significant that in the very book to which I have referred - and this is included in the historic summary of the approach - the Minister says that Australia was prepared to accept the veto in respect of enforcement action, but could see no reason whatever why it should be applied in the peaceful settlements of disputes. Thus, the veto is acceptable if we are dealing with enforcement action. I do not quarrel with that statement, because acceptance of the veto in those circumstances is, no doubt, completely in line with the real facts of international life, but it involves two conclusions. The first is that no great power - that is to say, no permanent member of the Security Council - can be restrained from aggression by the United Nations unless we imagine the curious event that it votes in favour of itself being restrained from aggression. And as we cannot admit that possibility, we are left with the fact that no great power can be restrained from aggression, having regard to the existence of the veto, even in that limited sense, because no decision about restraint could ever be taken at all. In the second place - and I emphasize this - it means that the forces to be placed by a member nation at the disposal of the Security Council under Article 43 of the Charter need not, and cannot, be great, because there is no need for a great international police force to restrain a small power. A great international military array might very well he needed to restrain a great power, but if a great power cannot be restrained by action of the Security Council, the question does not arise. Thus, all the talk about the United Nations being a “ League of Nations with teeth” turns out to be nonsense. The Security Council, under the terms of the Charter, and having regard to the existence of the veto, cannot have at its disposal anything more than a nominal force. If honorable members realize that, they will see in a flash that if there is aggressive action by a great power - and that is the real threat to the peace of the world to-day - and if that power is to be restrained at all, it will he restrained, not by the Security Council, but by some other great power or great powers acting together, not under the Charter, but in spite of the existence of the Charter.

It is for those reasons, which I venture to say are highly important reasons, that one concludes that, while support for the Charter of the United Nations is, of course, to be a background and the ultimate ideal of our international policy, the immediate task which, unless it is performed, will prevent any real peace being achieved in the world, is to build up the strength of the British Empire and of the United States of America, first and foremost. Secondly, it is to press on with the restoration of France and of western Europe generally. Thirdly, it is to promote among the nations of western Europe such special pacts of assistance, such special alliances, if one must use an old-fashioned word, as will bring the Soviet Union - and I do not believe that anything else will do it - to a realization that aggression will not pay any longer, and that a period of co-operative action must begin. Therefore, if we are to be useful on this matter at all, all our emphasis must be, not on legalistic notions and not on questions of procedure, but on such practical measures as some form of executive union in Western Europe and an Atlantic pact which may ultimately, I trust, become a Pacific pact as well. We are frequently told that such arrangements are regional arrangements and that they are justified, not because of their intrinsic merit, but because they are “within the structure of the United Nations “. But I point out, in answer to that rather optimistic statement, that they will derive their validity and their force from the intrinsic powers of the contracting nations and their willingness to act together through thick and thin. In brief, arrangements of that kind could be made if there were no Charter at all. Therefore I say that the true value of the Charter is not that it contains strength or a power of action in itself. I hope that nobody will be misled into believing that there is either intrinsic strength or a real power of action in the Charter of the organization as it now stands. There could not be. It is mere paper-chasing to suppose that all those documents and reports represent real strength. The true value of the Charter is that it has given expression to an ideal which encourages the peaceable people of the world to hope that, when the grouping of national power has really restored peace, the United Nations at that stage, by its discussions and procedures, may help to maintain peace on a basis of good sense and reason.

One other matter that the Minister for External Affairs referred to, in what I have undertaken to describe as an excessive eulogy of the Charter and of the United Nations, was full employment. There is a constant reiteration by Ministers of catchwords about full employment, and whenever they refer to the Charter they refer to it as a sort of obligation accepted by all member nations. It is a very misleading reiteration. Nothing is said about full production, which is at least equally as important as. full employment. The apparent assumption that is made all the time is that full employment is something peculiarly within local control and that, therefore, if all nations say, “We pledge ourselves to full employment “, and honorably observe the bond, then “ full employment will exist as the result all around the world. The position in Great Britain disproves that. These idle boasts that are made here are not made by British Socialist Ministers. In Great Britain, it is freely admitted by all Ministers that, but for Marshall aid, but for the American millions so freely given to the United Kingdom* there would be anything from 1,500,000 to 2,000,000 people unemployed in Great Britain at this time.

Mr Beazley:

– The 1939 level.


– The honorablemember for Fremantle has a genius for irrelevancy. I do not care whether it is the 1839 level. My point is that it is always claimed by Socialists in Australia that full employment represents a mere enlightened policy applied locally, that we can accept an obligation to produce it and, lo, there it is. In Great Britain they have encountered facts and therefore they all admit what I have just said.

Mr Haylen:

– The right honorable gentleman is trying to say what Professor Hytten said.


– I am not quoting Professor Hytten, whatever he may have said. I ani about to tell honorable members what was said by Mr. Herbert Morrison, a Socialist, I should think, of at least equal standing to that of the honorable member for Parkes. Mr. Herbert Morrison said -

We should be facing big cuts in rations and a million or two people on the dole if our generous and far-sighted friends and allies in America had not come to the rescue.

He did not say, as some honorable gentlemen in this House would say, “ We should be facing 1,000,000 people on the doleif the Conservatives were in office “. Not at all! He said, in effect, “The Socialists having been on the treasurybench for three and a half years, I say to you that we should be facing 1,000,000’ or 2,000,000 people on the dole if our generous and far-sighted friends and allies in America had not come to the rescue “.

My friends may say that Mr. Herbert Morrison is perhaps under suspicion of being of the right wing. I do not havehim under any such suspicion. I merely know him to he a wholehearted Socialist of uncommon ability and administrativeexperience.


– Order ! The right honor able member’s’ time has expired.

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

That so much of the Standing Orders besuspended as would prevent the Leader of the Opposition (Mr. Menzies) from completing his speech without interruption.


– I am indebted to thePrime Minister and to the House for their courtesy. I am glad that the right honorable gentleman intervened at that moment, because I was making a complimentary reference to a Socialist Minister in Great Britain. Mr. Herbert Morrison is not the only authority on the matter with whichI was dealing. A month later, Mr. Aneurin Bevan, who is a Socialist, I believe, said at Scarborough -

Without Marshall aid, unemployment in this country would at once rise by 1,500,000.

The Board of Trade Journal, which, the Lord knows, is a sober document, put it in this way, very powerfully and very grimly-

But for that aid the general dislocation of industrial activities in this country might well have brought unemployment figures up to 1,500,000, and would have become progressively worse as a lower standard of living resulted in a diminished productive effort.

Mr Holloway:

– It could not be otherwise.


– That is unquestionably true and very grim, but I mention it to the House so that we will not be given too much of this idea that full employment merely represents an effort of will on the part of some government in respect of its own country. It emphasizes the truth that full employment will, in the long run, depend on various elements, two of which are, the increase of production by every known incentive that ingenuity can devise, and the full flow of products into old and new markets. Each of those elements will be impossible, or not fully capable of achievement unless world peace is established by the settlement of the outstanding disputes in Europe and in the Far East. The greater the danger of war, the more manpower will we have to divert in preparation for it, and the less will we have for the satisfaction of ordinary human needs. Once again, therefore, we see that it is the immediate problem of peace that has to be tackled, and that it is fatal to turn away from vital questions of the moment to contemplate the anticipated perfections of a distant future.

I turn from that subject to an aspect of foreign policy which is very near home. After all, apart from great principles, there are immediate obligations laid upon nations to help to preserve the balance of peace in their own parts of the world, and to observe the necessary rules of courtesy and co-operation with adjoining govern ments. Therefore, inevitably, I refer to the Netherlands East Indies. We cannot sensibly expect to maintain our own territorial integrity and our own national, racial and economic policies - which we are perfectly entitled to have and which we do have and hold very strongly - if we take sides against European nations as though they were, of necessity, interlopers in countries where they have long been colonists, administrators and educators. I like to remind people, and to remind myself of this, when I hear discussions about the problem of selfgovernment in India and Pakistan, where two great new self-governing communities have now come into being with the very good will of all the people of Australia, that we are entitled to some just pride in the fact that these great communities have reached a stage where they are competent to govern themselves, where they have set up a. parliamentary system of government and have established a system of law closely resembling our own, at least in respect of administration. Do not letus forget that it was the privilege of the British people to be their guides and instructors on these matters. That these great things have been given to them over the course of centuries by the people of our own race is something of which we may be proud. If we remember that fact, we shall not be in such a hurry to assume that when new forms of local self government come into existence there at once becomes something disreputable about the old. Not at all. What have we in Australia been doing? In plain terms, we have been assisting to put the Dutch out of the East Indies. If we continue to do that the same process will, no doubt, in due course, eject the British from Malaya and the Australians from Papua and New Guinea. We might as well keep that clearly in our minds. I have frequently been puzzled, and some other honorable members have at least shared my bewilderment on this matter about where the United Nations gets its authority to intervene in the Netherlands East Indies. Setting out once more to instruct myself on that matter. I had a look and saw that clause 7 of Article 2 of the Charter contains a provision whichI think was one to which we attached great importance at San Francisco. The clause reads -

Nothing contained in the present Charter shall authorize the United Nations to intervene in matters which are essentially within the domestic jurisdiction of any State or shall require the members to submit such matters to settlement under the present Charter; but this principle shall not prejudice the application of enforcement measures under Chapter 7.

Up to that point there is no doubt that that provision wa9 intended to exclude from international jurisdiction such domestic matters as Australia’s immigration policy or the handling by some other country of its internal problems. If we look at Chapter 7 we find that the celebrated Article 39 provides -

The Security Council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression- and that certain recommendations may be made or measures be taken to restore international peace and security. Presumably the Indonesian affair is brought within that language as involving some threat to the peace. It is not difficult to see that by parity of reasoning based on this perhaps unfortunate phrase, the White Australia policy or the Australian immigration policy may some day be treated as a threat to the peace by a security council the majority of whose members may regard it as provocative offensive, or discriminatory. If we are to regard the Charter as warranting interference in such internal affairs, it is quite clear - and I remind honorable members of this - that each time there is interference or threat of interference in the internal affairs of some country, nation after nation will become hostile to the Charter and the whole organization will tend to break down. Even assuming that there is a right to intervene, the Australian policy of intervention has been so handled as to merit the sharpest condemnation from all of the people of Australia. In his speech the Minister for External Affairs said -

I entirely repudiate any intention, on behalf of this Government at any time, of any hostility to the Netherlands.

That observation, I regret to say, was greeted by loud laughter from this side of the House for reasons with which I think all honorable members, including honorable members on the other side of the House, are quite familiar ; whereupon the right honorable gentleman said -

I am surprised that honorable members opposite do not at once accede to that.

He continued in these ineffable words -

There is an attempt in some circles to sow distrust between Australia on the one hand and the Netherlands on the other.

An attempt in some circles to sow distrust between Australia and the Netherlands! He continued -

I do not know what the motive is, but it is not based on fact.

I venture to describe that as a most pious observation. Would the Minister feel that I was attempting to sow distrust between Australia and the Netherlands if I said that Dutch subjects who had come here during the war, who, indeed, were brought here by the strokes and blasts of war, were wished on to Australia by the Dutch Government? Would he think it conducive to the establishment of trust between the two nations for an Australian Minister to say that there was a Dutch plan to embarrass the Australian Government, and that that plan had been conceived because the Australian Government had sent representatives to the New Delhi conference ? Would he feel the same way if, for example, it was I who had said that it was part of a plan to get even with the Australian Government? Does he think that it would be conducive to good understanding and good neighbourliness and to the objectives about which he has spoken so eloquently if I were to suggest - and the right honorable gentleman knows that it has been suggested, although not by me - that all the trouble has been caused by colonial Dutchmen and colonial Englishmen, each of whom is included in that condemnation. Would he think it a good idea in the interests of good relations for me to quote Dr. Usman, and to say that it was obvious that there had been a clever Dutch stunt to embarrass the Australian Government? Does he regard it as a contribution to peace to have it said here: “ The Dutch officials have been playing a tricky game. They have refused to pay us money that they owe us; they owe us £8,000,000, anyhow - and I hope we shall get it”. The right honorable gentleman knows what I mean. Here we have one

Minister speaking - so far as I know, with the full authority of the Government - and using these words : “ Sowing distrust between Australia, on the one hand, and the Netherlands, on the other “. Sowing distrust! I should say, breeding hatred between two peoples! Yet, in spite of that expression, he makes the pious observation that he is at a loss to understand who can be concerned to create these false impressions; and that, in reality, we are living on terms of the warmest and friendliest co-operation, mutual admiration and undying esteem, t think that it was high time that the Minister for External Affairs returned to Australia and got in touch with what is going on in this place. Here is a glaring ministerial conflict, an it ought to be resolved, once and for all, by the Prime Minister (Mr. Chifley) - unless, of course, he accepts the view, which is apparently widely held in his Government that it is better to placate neutrals of former collaborators with the Japanese, than it is to play the game by our former allies. That is the first point I stress; but there is a second point.

Australia has many representatives all around the world. We, on this side of the House, whose minds no doubt, are suspicious, have been under the impression that very few, if any, of our representatives go on a frolic of their own. When they speak, even 10,000 miles away, the words that they utter are the words of Evatt. The voice may be that of Hodgson, but the words are those of Evatt. Yet, my friend, that mild-mannered man, Colonel Hodgson, who represented Australia at an important United Nations conference publicly used about the Dutch abusive, scandalous language, which created a great sensation at the time it was spoken, but which, I confess, [ brushed on one side. I said, “You cannot blame Hodgson; he is talking from instructions. This is the policy of the Australian Government.” And until yesterday afternoon I was firmly of the impression that it was. Now I am told that these things do not represent the considered policy of the Government. There is no ministerial responsibility in this Cabinet ; there is no idea of accepting the responsibility for what one Minister says so long as the Government can accept responsibility for what some other Minister has said.

There is a third matter which calls violently for explanation. There was a conference recently at New Delhi to consider the problems of the East Indies. Either it was a conference designed to deal with some party who had already been found guilty, or it was a conference really designed to get at the truth and arrive at a fair judgment. It could not be both; it was either one or the other. If the objective was to reach a clear and balanced judgment after disinterested consideration, one would have thought that the interested parties would have been invited to it. Yet Great Britain, which has vast interests in the Far East, was not invited, nor was the Netherlands Government invited, although that Government was the one against which all the charges - charges made not by the Indonesian people but by the Indonesian Republican group - had been levelled. Neither of those countries was invited. It was explained later that an invitation to Great Britain would have converted what was intended to be a sort of regional conference into a world conference, and that was thought to be undesirable. With all respect to the gentleman who gave that reason it is a very poor and unconvincing one. It is a very odd reason for leaving out a nation with outstandingly important interests - not merely regional, but world, interests - in that area. But even that poor and unconvincing reason could not have applied to the Dutch. Had the Dutch no right to be heard? Is there any rule of natural justice that runs in these international discussions? Is there any real reason why the Dutch should not have been heard? The conference at once stood exposed as an anti-Dutch conference, and Australia was fully represented at it. This country was represented not merely by an observer but by a delegation ; and it was the only Government outside Asia whose representatives attended the conference. Our attendance at that conference fitted as neatly into the anti-Dutch pattern of the Chifley Government’s policy as the long-sustained ban placed on the loading of Dutch ships in Australia - a ban which, I remind everybody, was organized by Communists and connived at by the Australian Government.

The right honorable gentleman turned from that subject - because I have no doubt that he felt himself to be on difficult ground - and sought to effect a recovery by knocking over an “ Aunt Sally “, which is often a health-giving exercise.

Mr Conelan:

– The Leader of the Opposition often indulges in it.


– If the honorable member for Griffith (Mr. Conelan) can regard himself as an “Aunt Sally” for the purposes of this exercise, his interjection fits completely. The Minister in speaking about the British Commonwealth and its relationship to the United Nations, said -

How can any one say that there is any conflict or antithesis between these two objectives, that it is a matter of choosing one or the other?

I say with respect that that is an “ Aunt Sally “ argument. No one has suggested at any time that we must choose one or the other. We all accept the ideals of the United Nations, though many of us, like myself, have criticized that body - indeed, the criticisms which we have uttered are unanswerable - for its lack of executive power and lack of force. But the real danger of the United Nations not having executive power is that it may induce many well-meaning people to think that Empire unity, which is still, and ought to be, the greatest thing in our policy, is either outmoded or is unnecessary. It cannot be said that Ministers have shown any great enthusiasm for Empire unity at any time of difficulty. Yet the fact nevertheless remains that it is the vital thing - the most vital thing, from our point of view. It is more essential than ever. In the absence of great and concerted strength in the British Commonwealth and in the United States there will be no real peace. In those circumstances the United Nations must be a dismal failure. We need to pay a great deal more attention to Empire cooperation, economically, politically and militarily, and to pay a little less attention to the widely-scattered, busybody activities which characterize so much of the foreign policy of this country. It has all happened before. The right honorable gentleman has, perhaps, encountered a comparatively recent book by Lord Elton entitled Imperial Commonwealth. I quote it now merely because it has a very short but illuminating historic passage. Writing of the period between the two wars Lord Elton stated -

Among the British the most sterile controversy at Geneva would for a while attract more respectful attention than the most urgent problems of their own world community. For the British knew next to nothing of their Imperial history, and what they had lately learnt of the Empire in the hard school of war they soon allowed themselves to forget. This indeed was one of the few indisputable achievements of the League, that in Britain for the generation between the two German onslaughts it overshadowed and outmoded the Empire, and engrossed much crf the energy and idealism which, had it been devoted to Imperial opportunities, might have gone far to ensure the peace of the world.

There are many real questions that confront us; I am merely going to mention a few before I conclude. The first of them is this: What are we to do about Russia in Europe? Here is a huge problem of which we have heard relatively little. The General Assembly for the United Nations took a hand in the German stalemate recently. It intervened. It demanded, in effect, of the great powers that they should negotiate. It did not say a word about the blockade. It was apparently unaware that there was a blockade. Its intervention was roundly condemned, in Great Britain and the United States of America because, in effect, it was chiding or criticizing the western powers for insisting upon the lifting of the blockade before negotiations about the currency and other matters. That intervention, as I happen to know, produced great resentment in London and New York, although I dare say that it gave some gleams of satisfaction in Moscow. The blockade of Berlin is an act of war. It has evoked, and this is where expediency comes in, a miracle of patience, resourcefulness and courage on the part of the air forces of three or four nations, including members of the Royal Australian Air Force.

I do not know how far even now the reality of the Berlin blockade is realized, and how far it is understood that it is a military blockade. The western powers ure kept from transporting goods, materials and foodstuffs into Berlin by road or rail, and are so prevented by armed force, by the armoured car, the tank, field artillery and the bayonet. This is not some gesture. This is not some resolution. This is an act of war. The western powers are kept out of a place in which they have an equal right with the Russians to be. They are kept nut of Berlin by acts of war, and it is only the patience of the western powers and their sincere devotion to the idea of peace that has prevented them from receiving this act of Avar as at one time in the history of the world it would instantly have been received. Is it of no moment to us that every day there should be literally thousands of young men at risk in an air-lift operation which must bp carried on in fair weather or foul under all sorts of difficult conditions - an operation that has to put an Allied aircraft down on a runway every minute and a half day and night? Six thousand tons of foodstuffs, coal and raw materials are daily carried by air into Berlin so that 2,000,000 Berliners in our sectors of the city may he kept in some sort of miserable condition of subsistence. Is that fact of no moment? “Whatever else the British blockade has done, I believe that it has brought appeasement of the Soviet Union to an end. I do not believe that we shall see any more retreats or any more acceptances of acts of aggression.

Does Australia support a policy of no further appeasement? Is it the view of the Australian ‘Government that there should be resistance to further encroachments on Europe, in other words, further blacking out of human liberty in Europe? If that is the view of the Australian Government, then here is a practical problem on which it may speak and he heard. Does the Australian Government want the nations of Europe, including the Netherlands, to get together with the British and Americans to” use real power, concerted power and concerted preparation, as the guardian of peace - not powerless resolutions in debates unbacked by strength, but real power and a real grouping of national power in order to protect peace? Have we devoted some attention to the problem of how we can give help to France? I find, and I hope that the noi

Minister will agree with me, that there is a great deal of misunderstanding abroad about the position of France. It is true that France, at the moment, from the military standpoint, is not a factor in Europe, but it is equally true that France, since the liberation, has had the most tremendous internal struggle against communism, a struggle which, so far, the French have been able to win. That is, of course, an immense internal strain. We all know from our own limited experience the weapons that the Communists use, and the enormous strains that they can put on the economy of a country. How can France be helped? These are matters to which we, in common with other British countries and the United States of America, should be devoting our real energy and imagination.

At this point in the Minister’s speech, the honorable member for Warringah (Mr. Spender) made an interjection about the North Atlantic Pact, and the Minister, as I say, obsessed by his documents, said -

Regionalism is good and is recognized in the Charter under certain conditions.

He elaborated that statement later, and said, of regionalism -

It is good because you may- and here followed very significant words which I hope will not be forgotten - in the long run, be faced with the position where the United Nations, devoid of physical power to carry out decisions, is unable to meet a situation, and, therefore, you are forced back upon other alternatives.

That is true. I make only one comment on that statement. I am not at all sure that, having put all our eggs in a basket which is conceded to be devoid of the necessary power, strength and containing capacity, we should, at some future time, permit ourselves to be forced back on some alternative. If there is an alternative that will produce peace, to-day is the time for it, and not some distant time when the failure of the United Nations in point of strength is universally conceded. It is conceded now by the foremost champion that it hae in this country. Later, the Minister said -

If von simply have two regional organizations in the world struggling for mastery and without a forum at which they can meet and discuss their differences with a view to proserving peace, the future of the world under those condition? may be a terribly dark one.

Honorable members will see that what is not perceived in these statements is the danger that what is essentially a forum, a place of debate, may, in the light of extravagant claims by its champions, be thought by millions of people either to have power or to be an effective substitute for power. I say, with peace to all the people who like to pose the old alternatives “either you are for power politics or you are for collective security” - the most unreal antithesis that was ever put in the history of the world - that peace will not be established in the world in the next few years unless there is real power behind the nations who stand for it. Resolutions, debates and forums are no substitute for real power. It is a melancholy but inescapable fact that peace in Europe, and the continued presence of the Western Allies on German soil, and, perhaps on French soil in a sense, are not preserved at this moment by the United Nations. They exist for reasons the chief of which is, and let us face it, that the United States of America has the atomic bomb at this moment and the Soviet Union has not.

My next question is, What is our attitude to the North Atlantic Pact ? Is Australia interested in the North Atlantic Pact? Are we doing all that we can to encourage the continued intervention of the United States of America in Europe? Here we have something of moment. This intervention by the United States of America in Europe is the greatest revolution in American foreign policy that has occurred in our lifetime. After the first world war, for reasons entirely within America’s own judgment, that country became isolationist. It withdrew from the affairs of Europe and did not accept membership of the League of Nations, although, in a sense, that was President Wilson’s own creation. But to-day, ever since the termination of World War II., America has been interventionist in the affairs of Europe, and has measured up to its responsibilities as an enormous power, because it has accepted enormous responsibilities. We must all speak with respect of the United States of America. Its policy of bearing the world’s burden in the last three years has done the greatest good in interna- tional affairs since the war ended. In fact, in American policy in relation to Europe we begin to see the United Nations in something like its true perspective. The American people, I believe, favour the United Nations. It expresses an ideal of world peace which appeals to them but they and their Government see, as this Government does not, that of itself the United Nations cannot protect them. That is a matter of hard fact and they therefore while preserving their allegiance to the United Nations, hoping that in due course it will be able to function in a peaceable world, attack the immediate task of seeking peace out of the last war, restraining aggression, restoring Europe and building up the forces of democratic liberty wherever they should be found. They do not do these things by resolutions in councils or assemblies, but out of real financial, industrial, and military power, and a clear and entirely unacademic realization of immediate problems and facts.

I apologize for trespassing on the time of the House for so long. My last observation relates to our attitude towards potential dangers in the Far East. Let me put a blunt question. Do we want to eliminate European powers from all eastern countries? Do we recognize that the continuance in the Far East of the vital interests of Great Britain, because it has interests which are vital to us, of France, the Netherlands and the United States of America, are in cold fact something the continuance of which will prevent Australia from being isolated and perhaps neglected? No sensible person supposes that European nations should, over long years, train native populations in the arts and science of self-government, and the acceptance of the orderly processes of the law, and then deny selfgovernment to those over whom they have ruled. That has not been our approach. It is not the approach of any sensible people or nation. But the grant of selfgovernment is not to be confused, as the British see in Malaya, with the surrender to Communist insurrection. We have seen in the case of India and Pakistan an orderly grant of self-government. It is not to be confused, as the Dutch see in the East Indies, with the abject abandonment of legitimate material interests and administrative responsibilities, of which many millions of their colonial peoples still warmly approve. Do we, in Australia, desire to see the United States of America remain in Japan? If we do, for what purpose, to what end, and for how long? What contribution have we to make to that matter in negotiations and discussions with the United States of America? I confess that I have never understood quite clearly the approach of this Government. At times I would have .thought that the furthest spreading out of American interest in the Pacific would have been one of the greatest things that could happen to us. Here is a great nation which is bound to be our friend, not a potential enemy. Sometimes I have felt that that idea was received coldly. Let us now hear from the Government how it approaches that problem, because in the last day or two it has been in the air. It is fantastic to be bandying words about fine theories and airy paper schemes at a time when lawless and revolutionary forces are on the war-path in Europe and in Asia, and when the human rights of peaceable men and women can be defended only by resolute decisions and the real substance of strength, by complete unity of British policy and action, and by a deep, friendly, and enduring association with the Government and people of the United States of America.


.- The Leader of the Opposition (Mr. Menzies) has made a very extensive survey of some of the problems which face Australia in framing its foreign policy. In the latter portion of his speech, when he placed emphasis upon the Netherlands East Indies and certain other problems, such as our attitude to the Atlantic Pact, he correctly pointed out that these matters are the sharpest issues that we face. Whether the Government’s policy, or the policy that he suggested, is the correct one,- is another matter. The policy of the Opposition on the Indonesian question has followed several differing lines during the last two years. There was a time when every Opposition speaker spoke of the Indonesian nationalist leaders as Communists, and described the insurrection in Indonesia as a “‘Communist insurrection “. They maintained that thesis even when the Dutch did not. That it was a hollow thesis was exposed by the fact that Russia sent to Indonesia one, Muso, who had been trained for 23 years in Russia to organize an insurrection against Soekarno and Sjahrir, who had all been characterized in this House as Communists. At that time, the policy of Moscow radio and the Communist party of Australia was to say that the Indonesian Nationalist leaders had sold out to the Dutch, and that the correct policy for Communists to pursue was one which would prevent the Indonesian revolution from consolidating at the “ burgeois’ level “, to use their expression, and to turn it into a Communist revolution. We have the implication in his speech that, alone among the European nations, Australia has condemned the Dutch action in Indonesia. The right honorable gentleman speaks of the United Nations’ attitude towards Indonesia to avoid referring to the fact that American and French representatives at the United Nations had spoken in the most condemnatory terms of the Dutch action in Indonesia. Having chided the Minister for External Affairs (Dr. Evatt) for being academic, he brings to us the academic thesis that the Indonesian dispute is purely a domestic dispute of Holland’s and that nobody else is interested. The Dutch have never maintained that thesis, at least not consistently. I presume that Britain had no right to interfere in Dutch domestic matters when Killearn mediated in Indonesia. Quite apart from the hard reality that a colonial war may have international repercussions and, therefore, concerns the United Nations, there is the fact that it concerns the United Nations with the consent of the Dutch themselves. All the legalistic argument, which is supposed to be the monopoly of the Minister for External Affairs (Dr. Evatt) in this chamber, which the Leader of the Opposition advanced on that occasion was entirely specious.

Let us review the Indonesian dispute as objectively as possible. It was thought to be settled by the Linggadjati Agreement, whereby the Dutch promised to call into existence a United States of Indonesia, which was to have as one of its constituent States the Republic of Indonesia. The Dutch undertook to sponsor the international recognition of the United States of Indonesia. Therefore, the point made by the right honorable gentleman that there is a stage when colonial peoples have the right of selfgovernment has already been recognized by the Dutch to exist in Indonesia, who iia ve in fact established a constituent assembly for the forming of a federal government of Indonesia. The talk about an educational mission and the right to decide at some distant date that the time for self-government has come was equally specious, because the Dutch themselves have already decided that the time is ripe to establish a United States of Indonesia. When I say that the Dutch Iia ve made that decision, I mean that they have accepted Lord Killearn’s arbitration. That settlement was a typical British compromise. It is extremely doubtful whether it was ever really accepted by the Dutch because, after they had signed the agreement, they proceeded to increase the number of their troops in the Netherlands East Indies from approximately 20,000 to approximately 100,000, thus giving rise to the suspicion among a number of nations, particularly Asiatic nations, that their acceptance of the agreement was intended to give them a breathing space before conducting a colonial war. After disputes had arisen concerning the Linggadjati Agreement, the United Nations appointed a Consular Commission, which was later replaced by the Good Offices Committee of the United Nations. Its function was to police the truce which had been arrived at under the Linggadjati Agreement. The military truce was policed by military officers, Lieutenant-Colonel Rhys of the British Army and Captain McCallum of the United States Navy. The Leader of the Opposition made a great point when he said that we should always act in conformity with Great Britain and the United States of America. In our votes on the Indonesian situation in the United Nations Assembly, we have acted in conformity, but it suits the Opposition, when pretending that the attitude towards the Indonesian situation that has been taken up by Australia is exclusive to Australia among the European States, to ignore the attitude of Great Britain and the United States of America. The officers who policed the truce and announced that the Dutch had violated it were not Australian officers. One was a British army officer and the other was a United States naval officer. A subsequent truce was arrived at, whereby the Linggadjati Agreement was reaffirmed by the Dutch, who undertook to establish an Indonesian national sovereignty. The Van Mook Line was drawn, demarcating the Republic of Indonesia from the Dutch areas. United Nations military officers undertook the policing of the truce. The Dutch guaranteed that they would resume trade with the Indonesian Republic and lift the blockade. They also undertook that the Agreement was to be binding and that before it was denounced by either party the United Nations should be informed. It must be said that the Dutch kept that agreement. Ten minutes before they attacked they informed the United Nations arbitrator that they intended to denounce the truce agreement.

After this truce certain statements emanated from the Dutch Government. The Dutch Prime Minister, Beels, made a statement on the 13th January, 1948, in which he announced that outside of the Republic of Indonesia, in eastern Java, in Madura and in the outlying islands of the archipelago, there would be set up other States; that they would have a place in the provisional Federal Government, that an interim Federal Government for Indonesia was to be established and that the Republic would have seats reserved for it within that Federal Government. The Indonesian Republican leaders denounced the States as puppets of the Dutch. That was very inaccurate because, although their attitude was a complete acceptance of Dutch sovereignty, a conference of their Prime Ministers, called by the Dutch, which met to discuss the problem of the forthcoming constituent assembly for the formation of the Federal Government, asked that the Dutch Lieutenant-Governor should be replaced by a directorate of three Indonesians, and demanded an all-Indonesian foreign service, an all-Indonesian army and greater Indonesian representation in the provisional Federal Government. Those were the Indonesians who were most acceptable to the Dutch. They constituted, one might say, the extreme right wing of the Indonesian movement and were established by the Dutch as the leaders of States outside the Republic of Indonesia. It is stated continuously that millions of Indonesians do not want a change, but the hard fact remains that Indonesians who were selected by the Dutch to head these States, Indonesians who are hostile to the republic, made those extremely nationalistic demands.

Then came the Communist revolution directed against the men whom every honorable member opposite has at one time or another characterized as Communists. The revolution was directed by an agent sent from Moscow, Muso. He had been trained for 23 years in Russia. He organized a revolt against the Indonesian nationalist leadership. Since I am the recipient of Dutch statements issued through an organization which calls itself the Netherlands Information Service and which puts the crest of the Royal House of the Netherlands at the head of its correspondence, I am bound to comment that that is a reflection on the accuracy of the Dutch statements that were sent to me in the early stages and which characterize as Communists the Indonesian leaders whom the Communists tried to murder. A Soviet Republic was proclaimed by Muso at Madioen. Soekarno then banned the Communist party, arrested 700 Communist leaders at Djokjakarta and sent Republican troops to suppress the Communists. Muso fled and was killed. The Netherlands Army in a communique verified the fact that Muso was killed and that the Communist rebellion had been suppressed by the Indonesian nationalist leaders. Following that, a ministerial mission was sent from Holland to the Netherlands East Indies on the 21st November, 1948. The mission conferred with the Committee of Good Offices, which had on it at the time a Belgian, an Australian and a United States representative. The Committee of Good Offices made a report on this ministerial mission which was supposedly sent out to negotiate with the Indonesians. But the mission was reluctant to consider proposals put forward by the Committee of Good Offices, and the United States and Australian representatives. On the 16th December, 1948, the Dutch rejected proposals set out in a letter by Dr. Hatta, the President of the Indonesian Republic and - and this is interesting - the Dutch never made public what those proposals were. On the 21st December, the Dutch Government declared that no choice remained, that Indonesian provocation was so great that it was necessary for it to take police action. It took that action. After ail sorts of excuses about violations of the truce and of the frontier the Dutch forces crossed the Van Mook line. They encountered very little resistance from the Indonesians, although there were supposed to be Indonesian troops on the border engaged in provocation, and the entire Dutch operation was over in ten days with 66 killed and 172 wounded Then followed, on the 2nd January of this year, the arrest of the Republican leaders. The United States representative on the Security Council who, presumably, like Colonel Hodgson, acts on the instruction of his Government, characterized the actions of the Dutch as “ disgusting “. I should be interested to know whether the right honorable gentleman views that as an abusive term, because he accused Colonel Hodgson of using abusive terms although Colonel Hodgson did nothing of that kind. The United States representative went on to say-

My Government fails to find any justification for therenewal of military operations in Indonesia. If, as is alleged, violations of the truce agreementsby the Republic have been so extensive and persistent overa period of time, the Netherlands Government should have reported these violations to the Security Council before denouncing the agreement and resorting to military action by land, sea and air against the Republic.

In a resolution passed by the Security Council, on which Australia is not represented, the Council called for a cease-fire by the Dutch and for the release of the Republican leaders. Such a demand, if made by the Australian Government, would be characterized in this Parliament as “ Communist-inspired “. The Council asked for a report from the Committee of Good Offices, and the United

States Government withdrew economic aid to the Netherlands East Indies, which was a form of economic sanctions imposed on the Dutch Administration there. Seven powers of the eleven represented on the Security Council, including the United States, Britain and Canada, voted in favour of the resolution. We are informed by honorable members opposite that solidarity with these powers is essential. Well, those three powers declared that the Dutch should cease fire and should release the Republican leaders; that they should report to the Committee of Good Offices ; and that they should never have engaged in aggressive action in which they did engage. I should have respect for an absolutely unapologetic defence of the Dutch action if it took a realistic form. The right honorable gentleman is keen on realism, but what is the realism in this matter? Holland is a nation of 8,000,000 people inhabiting a country half the size of Tasmania, and possessing a colonial empire inhabited by 60,000,000 people. Before the war the Dutch imported annually more than £90,000,000 worth of goods above the annual value of their exports, the balance being adjusted by the resources of the Netherlands East Indies that the Dutch were exploiting. The loss of these economic resources that enable the Dutch to continue in existence would mean that many thousands of Dutchmen would have no alternative except to emigrate from Holland, whose own resources would be unable to support the present population. That is a statement, in plain terms, about the naked power politics that the right honorable gentleman has held up to us to-night as admirable. The Dutch need their empire if Holland is to continue to exist, but there is no need for people in this country to adopt the role of apologists for the Dutch and lie about Asiatic nationalists, repeating uncritically what comes to them, as honorable members of this Parliament, through the post from the Netherlands Information Service, and to say that the Indonesian Nationalist Movement, which is of a typical Eastern pattern, is led by Communists, even when the Communists are trying to murder its leaders ; that the Indonesians have no right to independence, even though the Dutch have entered into an agreement to give them that independence soon. Our function is to ask ourselves, “ What are the real interests of Australia in this matter ? “ The first real interest of Australia is to say to itself in cold terms, “Do you think that the Dutch in the Netherlands East Indies can be a European bulwark against Asiatic aggression, or do you think they are a standing provocation to Asia which presents a liability to Australia if they continue to engage in action, such as they have been engaging in recently ? “

The whole of Australia’s policy was directed towards a compromise settlement, and that compromise settlement was expressed in the Linggadjati Agreement which maintained Dutch sovereignty in the Netherlands East Indies. Under that agreement there was to be an association between the United States of Indonesia and the Government of the Netherlands, with the monarch of the Netherlands as the head of the association - in other words, much the same relationship as exists between Britain and India to-day, with a common crown and complete self-government. The Dutch were to set up a united states in which the Republic, that section of the Netherlands East Indies which is most emphatic in its demand for self-government, would be one constituent State, and there would be other constituent States which are more pro-Dutch. That compromise settlement would have had two advantages from our point of view. It would have maintained Europeans in the Netherlands East Indies in the same way as the United States remains in the Philippines, although it does not interfere with the self-government of that country. At the same time, it was a compromise which was acceptable to Indonesian national sentiment and would have lessened the attention directed to this area by Asia. The day is past when European nations could dominate Asiatic States against the will of their peoples. It has been an act of wisdom on the part of the British Government that it has recognized that fact, and it would have been wisdom on the part of the Dutch had they really accepted the compromise settlement of Linggadjati. They did not do so. The Australian action in the United Nations had no other aim than to support Great Britain and the United States, and, indeed, Australia was not represented on the Security Council as a voting member on the occasion when the last Dutch action was condemned. The United States moved the resolution of condemnation. The Australian attitude has been an attempt to get back to the compromise settlement reached at Linggadjati.

As his last instalment of condemnation of the Australian attitude on Indonesia, the Leader of the Opposition condemned the fact that the Australian Government accepted an invitation to attend the conference at New Delhi that was called by the Prime Minister of India. The right honorable gentleman says one sort of thing in this House, but writes another sort of thing, especially for the American Public. Because he knows that super-patriotic clap-trap would not impress them, he says something different to the Americans. He said, for instance -

The same notion is inherent in a view recently expressed in this review that because Australia is the nation most immediately interested in the Far East and the Western Pacific she should there be regarded as the spokesman of the whole Commonwealth. There is much force in this contention. But there is equally clearly a reciprocal proposition; that because Great Britain is the British nation most immediately interested in Europe she should there be the spokesman for all the rest of us.

Of course, I agree with the logical corollary that Britain shall have the initiative in Europe, but Australia has rights and interests in this area which concern us closely. Are we to treat India with contempt if that country invites us to a conference at New Delhi on a matter which India regards as important to it, and to the part of the world in which we are situated? If that is the opinion at the Opposition it would appear that the. Opposition does not take very seriously the position of India within the British Commonwealth of Nations. In the last resort, the opinion of 380,000,000 Indians means more to us than the opinion of the Dutch in the Netherlands East Indies or, for that matter, than the opinion of the Dutch in South Africa. India is an Asiatic country which has established two dominions of great importance in world affairs. Those dominions are, at the moment, the recipients of a great deal of Asiatic Communist hostility, because they are establishing progressive governments without bowing the knee to Russia. The fact that they recently acquired full selfgovernment naturally makes them sympathetic towards other Asiatic peoples which are aspiring to self-government. The most childish illusion is to imagine that it is possible to confine the effects of a revolution - and I use the word “ revolution “ as meaning no more than a sharp change such as Indian selfgovernment represents - to the country where it has occurred. It must necessarily act as a continual stimulus to the Indonesians, to the inhabitants of the French Asiatic possessions, and to all other Asiatic people who are still under European rule.

The statement made by Pandit Nehru, when issuing the invitation to Australia to attend the conference at New Delhi, expresses the view of Asiatic people. Referring to the Dutch action in Indonesia, Nehru, whose opinion apparently is not to count - that of Van Mook is more important, according to the right honorable gentleman - uttered these words -

We have seen the most naked and unabashed aggression and the use of armed might to suppress a people and a government. We see attempts to revive a dying imperialism and colonialism. That this imperialism will die I have no doubt, hut there is danger that in the process of fading away it may bring catastrophe on a large scale in its train. We have to confess with sorrow that the attitude of some Powers to this attempt to destroy the Indonesian Republic has been one of tacit approval or acceptance of aggression. The Security Council passed a resolution which was very weak and inadequate. Even this was not implemented. The Council then asked for the release of the Indonesian leaders within 24 hours. This also was flouted, and the Council looked on but did nothing. On the contrary, some Powers pleaded for the Dutch. Every effort was made to give the Dutch time to complete their work, and then to present an accomplished fact.

So far as India, and, I believe, the countries of Asia are concerned, they cannot possibly submit or agree to this aggression in Indonesia. This is not due merely to love of national freedom and opposition to every form of imperialism, but it is essentially a matter of self-interest for them. The least that can be done in Indonesia immediately is -

the withdrawal of all Dutch forces to the line they occupied previous to this aggression;

an inquiry into this aggression;

the stoppage of all aid in any form to Holland; and

4 ) the creation of conditions in which the Indonesian Republic can function.

It is not necessary that we should agree with everything in that statement, but it is as well to recognize that it expresses the Indian point of view. In this world of real power politics, to which the Leader of the Opposition referred, I suggest that the opinion of 380,000,000 people in India and Pakistan is a quite important reality.

The events which followed after the Dutch action in Indonesia are interesting. I propose to quote from Keesing’sContemporary Archives, which is a coldly objective journal, used as a background by leader-writers on all newspapers, and slanted by them in any direction which their policy requires. The following is the unslanted comment of the journal on the Dutch action, and the negotiations with the Good Offices. Committee: -

Dr. van Royen had stated in the Security Council on January 7th, that President Soekarno, Dr. Hatta, Dr. Sjahrir and Dr. Salim had been released, though confined to the Island of Banka for the time being in order “ not to endanger public security “. When, however, the Good Offices Committee requested permission on January 11 to visit theRepublican leaders on Bauka, the authorities in Batavia asked for a few days’ “ forbearance “, and later the same day announced that President Soekarno, Dr. Sjahrir, and Dr. Salim were, at their own request, not on Banka but were staying at Bapat, Sumatra, as the guests of Dr. Mansur, head of the negara of Eaet Sumatra; that Dr. Hatta, Dr. Roem, and Dr. Sastroamidjojo were on Banka : and that Dr. Leimena and other Republican Ministers were in Jogjakarta, with complete freedom of movement. The Good Offices Committee, on January 16, reported, however, that the Republican leaders on Banka were being kept in close confinement and under heavy guard, that they had virtually no freedom of movement, and that on January 10 they had been visited by the High Commissioner for Sumatra, Dr. Brouwer, who had asked them to sign a pledge to refrain from all political activities, and had assured them that, if they did so they would have freedomof movement on Banka and could be rejoined with theirfamilies if they desired. The Dutch officials in Batavia informed the Good Offices Committeeof their “ surprise “ and “ regret “ that instructions concerning freedom of movement for Dr. Hatta and the other Republican loaders had not been put into effect, and gave an assurance that the state of affairs disclosed in the Committee’s report would be remedied and that those responsible would be punished.

That was, at least, an equivocal attitude, and one which would scarcely impress the United Nations Security Council, when it was given one piece of information by the Dutch Government, when its officers . on the spot found out something different.

Australia did right in attending the conference at New Delhi. India and Pakistan are members of the British Commonwealth of Nations, which the Leader of the Opposition says should be taken seriously. The conference was called to discuss a regional matter which concerned those Dominions, and Australia and New Zealand, in attending the conference, were acting courteously to India, Pakistan and Ceylon, and were taking part in a conference which has had international repercussions. Australia’s policy was realistic, because the conference dealt with matters of grave concern to countries in this part of the world, and the attempt to arrive at a compromise settlement on the lines suggested by the Good Offices Committee was entirely sound.

The Leader of the Opposition discussed the United Nations at length. When he wanted to point out how we must not take (he United Nations too seriously, that we should realize its present weakness, and that it is not contributing to the peace settlement in Europe and Asia, he resorted to quotations from speeches of the Minister for External Affairs to prove his argument, but he then went on to accuse the Minister of attaching too much importance to the deliberations of the United Nations. It was impossible to hear in the reasoning which supported that thesis anything other than the political angle, which lies in the fact that the Minister for External Affairs happens to be President of the United Nations Assembly and that anything said to discredit the Assembly will therefore discredit the Minister. The only occasions when there was warmth in the right honorable member’s speech were when he was directing some personal innuendo at the Minister about his “ boastfulness “ or his “not too modest statement “. Those were the passages that the Leader of the Opposition really enjoyed delivering, as the emphasis and the animation in his manner snowed when he came to them. Why did he not speak about the failure of the Big Four to arrive at a peace settlement in Europe? That was equally significant in the international scene. Why did he speak about the United Nations as though the organization were a nonentity? (Extension of time granted.] The organizations which the right honorable gentleman suggested as being alternatives to the United Nations, or which at least he said we should put greater emphasis upon, were the British Commonwealth of Nations, the Western Union and the Atlantic Pact. He made a fair analysis of the weaknesses of the United Nations organization, but he did not say that the Atlantic: Pact, had not yet come into insistence, nor did he mention the difficulties that had obstructed its formation or the weaknesses in the Western Union. After all. if it be important to warn the Australian people not to have illusions about the United Nations, it is also important to warn them not to have illusion!! about the Atlantic Pact and the Western Union, both of which have encountered many snags and disagreements amongst constituent members.

Mr Rankin:

– The main snag is Russia.


– I do not think that the honorable member will find that Russia is the snag in the particular qualifications to the Atlantic Pact which worry Norway and Sweden. I shall discuss that subject later.

The Leader of the Opposition was much less prone to-night than usual to accuse the Minister for External Affairs of lack of co-operation with Great Britain. The right honorable gentleman was uncorded a civic reception in Perth when he returned from abroad. He i9 an ex-Prime Minister, and it was widely assumed that any statement that he might, make would be completely responsible. Having been abroad, and having written his false election prophecies from the United States of America informing us that Truman had no chance of winning, that Dewey was “ a little man who could walk about, under his own bed “, and making other uncomplimentary references to the possible alternative presidents of the United States of America, he repeated earlier statements concerning the conference of Empire Prime Ministers which were untrue. He had not attended the conference, but he took it upon himself to report to the Australian nation that the conference had decided to delete the word “ British “ from the term “ British Commonwealth of Nations “. He said at the civic reception, that though he admitted the right of Canadians and some . others to say what they liked, he insisted upon the right to he called British, and waited with a demagogue’s pause for the applause which was duly forthcoming, the reception having been packed ‘ with officials of the Liberal party. He repeated’ that statement at a meeting of the Liberal party on the following evening, declaring that the word “ British “ was to be deleted from the term “ British Commonwealth of Nations “. We may say that on that occasion he was casting his artificial pearls - I shall not complete the paraphrase. The Minister for External Affairs was not accorded a civic reception in Perth, although he happens to be the Deputy Prime Minister and really had attended the conference of Empire Prime Ministers. He stated that the deletion of the word “ British “ from the title of the British Commonwealth of Nations had not even been discussed at the conference, so that the touting speeches ot the Leader of the Opposition in the United States of America and Australia can only be said to have done a grave disservice to the British Commonwealth of Nations, especially in view of the fact that certain dominions might very well have sensibilities about the use of the term “ British “.

The right honorable gentleman’-s entirely impudent intervention in affairs of British politics, when he took it uponhimself to comment, both in Australia mid in the United Kingdom, upon the British Government’s domestic programme and the nationalization of the steel industry, came very ill from one’ who speaks of inter-imperial cooperation.Suppose that the Opposition should become the Government after the next election and that a Labour government should still remain in office in theUnited Kingdom. If British Ministers then visited this country and commented upon a “ tory reactionary policy in Australia “, I imagine that the right honorable member would be the first to protest that the domestic issues of a dominion are domestic issues. His public comment upon domestic issues in Great Britain did a great disservice to the cause of inter-imperial co-operation. All of the right honorable member’s statements had one thing in common. His prophecies about the American election, his jabber about the scrapping of the term ’ British “ and his comment upon the domestic programme of the British labour Government demonstrated clearly that in the United States of America and Great Britain he moved in businessmen’s circles. He repeated businessmen’s rumours. The “Wall-street talk about Dewey’s inevitable victory was pumped into the Melbourne *Herald as his serious comment about affairs in the United States of America. The talk amongst London businessmen about nationalization of the British steel industry and the rumours about the dropping of the word “British” from “British Commonwealth of Nations “ was pumped out to the people of Perth with all the authority of an ex-Prime Minister, whom one would imagine to be commenting responsibly though he was speaking about a conference which he had not attended and upon which no report at that time had been made public.

I refer now to the Western Union and the Atlantic Pact. We have been told that these are strong alternatives to the United Nations, which, admittedly, is a weak instrument in restraining aggression by any great power, or even a nonexistent instrument when the veto operates. The time is premature for comment about the Atlantic Pact. The pact, if and when it conies into existence, will include the States of the Western Union, the Scandinavian States, the United States of America, and Canada. Excluding Finland, which is not involved in this question, the Scandinavian State which would be most seriously threatened in the event of war with Russia is Sweden. It would suffer from Russian aggression more directly than would any other power. It is the strongest power among the Scandinavian countries, and it is the key power in any Scandinavian alliance. Sweden requires, as a condition to joining an Atlantic pact, or even a [Scandinavian pact which is satisfactory to Norway and Denmark, a specific American commitment to go to the aid of the Scandinavian countries in the event of aggression. Honorable members opposite have spoken very freely about American policy as though the decisions of the President must immediately come into operation. But the President of the United States cannot declare war without the consent of Congress, and the consent of Congress to any such declaration is considered by the Swedes to be a. doubtful factor. That has caused the Swedish Government to make terms for the Scandinavian pact which the other potential parties to the pact have not. been prepared to accept. Sweden has proposed as an alternative a Scandinavian neutrality pact because, over the last 100 years, it has succeeded with a policy of neutrality when Denmark and Norway have not been able to do so. That is unacceptable to Norway, which is prepared to go out and identify itself, in the words of its Prime Minister, “ completely with the western powers “. Sweden has not done so, and Denmark is in a compromising position between the two States. Thus, so far as the Atlantic Pact is concerned, an unqualified adherence on the part of the Scandinavian powers is not at present to be looked for. That leaves the two wings of the Atlantic Pact - the Western Union and the possible entrance of the United States and Canada. Let us examine the Western Union. I do not think that any one would say that Luxembourg, Holland and Belgium can bc considered as great powers. The key power in the Western Union is France. Since honorable members opposite have emphasized the weakness of the United Nations, are they prepared to say that, in the event of war with Russia, France would join in as a united nation fully adhering to the possibility of opposing Russia, or are they prepared to admit that the French trade union movement is almost entirely Communist-led, that there are more than 200 Communist deputies in the French Chamber of Deputies who must represent a powerful strand of opinion in France itself, and that outside Great Britain, which is not on the continent of Europe, on every issue of foreign policy, France, which is one of the most vital countries of Europe, is the key State in the Western Union? It is necessary to look at the hard realities of the situation. Some of the States of the Western Union may acquire more strength in the event of complete United States and Canadian backing for the Atlantic Pact, but it is rather premature to comment on the Atlantic Pact which is not yet forthcoming. I think that the Leader of the Opposition was correct in emphasizing that we should speak realistically on these matters, but that realism should extend beyond the United Nations to the Atlantic Pact and the Western Union. This brings me to the statement of the right honorable gentleman in regard to Berlin, in which he characterized the Russian action as an act of war, as it undoubtedly was, and spoke about the impotence of the United Nations General Assembly in the face of that fact. The great powers which would presumably lead the United Nations if it were to challenge that fact are not prepared to challenge it outside the United Nations. Nobody has advocated a. policy of making war inevitable by bursting through the Russian blockade. There is weakness not only in the United Nations. There has been a decision on the part of the other powers involved not to challenge the Berlin blockade beyond the question of the air lift. The right honorable gentleman went on to speak of the action in the United Nations General Assembly as being embarrassing to the Western Union as it presupposed that there would be negotiations before the lifting of the blockade. That is absolutely untrue. The resolution which was carried in the Assembly referred to the lifting of the blockade first and, seventeen days later, discussions on the currency question, and, a further fifteen days later, discussions on the problem of Western Germany; but the Russians were not prepared to accept that resolution for precisely the reason which the right honorable gentleman said did not exist. The resolution of the United Nations presupposed that the blockade would be lifted before thecurrency and Western Germany discussions took place, and for that reasonRussia would not accept it. That is theexact opposite of what the Leader of the Opposition said. The aims of Russia in regard to its satellite powers are, I think, best revealed by Marshal Tito who, at one time, worked in conjunction with the Russians. If we were to look at Russian foreign policy objectively we would agree that if Russia were concerned merely about the triumph of certain economic doctrines which it believed to be right it would have supported the Tito Government in Yugoslavia because Tito had gone further along the road towards the attainment of the Communist ideology than had most of the Russian satellites, even including Poland. [Further extension of time granted.] Referring to his five-year plan, which envisaged a further instalment of communism in Yugoslavia, Tito said -

We were not surprised when Western reaction attacked us for our five-year plan, saying that it was ambitious and unfeasible, but we were immensely surprised when friends in the East-

He was referring to Russia and its satellites - certain countries of the people’s democracy, started to reproach us for the same thing. Immediately after we had adopted our fiveyear plan, responsible men in these countries began to make statements which greatly surprised us. It logically followed from these statements that we should continue only to sow our fields - and, moreover, in the most primitive way - and continue to supply raw materials for the industries of those friendly countries which have a strong industry of their own.

Russia had attempted to get some economic agreement with Yugoslavia on that basis. Tito continued -

Some of the Marxist wiseacres go so far as to support their perverted views with quotations from Marxism-Leninism, although it is precisely on the grounds of the theory of Marxism-Leninism that such views are wrong.

I interrupt my quotation from Tito at this stage to say that he opposed them on their own grounds. He continued -

On the basis of this theory it is correct to build up industry where there aTe raw materials.

Russia had opposed the industrialization of Yugosalvia.

Had we, for example, drawn up a plan to build a heavy industry in our country with out possessing the prerequisites for this, had we not possessed iron ore but had to import it from the countries of the people’s democracy, then that would have been wrong, and those countries would in that case be fully entitled to reject our request provided that their capacity was sufficiently great to cover our needs too. But we have in our country so much iron ore that we can build up a strong heavy industry of our own and still have a surplus left to give to other countries in exchange for those products we need . . . The same applies to our copper. Why should we not process our copper in our own country and export finished copper goods?

That was characterized as a heresy of nationalism by the Cominform. Tito continued -

It is the same with our bauxite, which we possess in great quantities . . . The same applies to other ores, of which we have a sufficient quantity not only to cover our own needs but to give to our friends if they need them, and if they help us to mechanize and modernize our mines and to build up our heavy industry. But if our allies from the countries of the people’s democracy refuse to help us in this respect, if they violate agreements and commitments which they concluded with us, then we shall have to sell our raw materials elsewhere, even if it be to capitalist cou ntries, so that we may be able to buy the machinery we need for the mechanization of our mines and heavy industry.

I think that Tito’s defection shows clearly that Russia is primarily concerned not with the spread of economic ideas which it might happen to regard as good, but with the spread of Russian power. It was on that ground and not on the ground of any deviation from Communist ideals that Tito was regarded as persona non grain in Russia and the other States in the Cominform. If the Balkan States had federated they would have been much better off. That would have created another great power outside Russia; but Russia did not want that. Even in Communist countries the policy of Russia is revealed clearly as being solely concerned with the spread of Russian domination. The spread of its economic ideas is ancillary to its domination. In countries where those ideas have not been completely accepted, Russian policy has become hostile. It is perhaps significant that Tito alone amongst the proRussian satellite leaders was not Moscow- trained. As we know, Tito was a nativeborn leader thrown up by the Yugoslav party, unlike Natallic, Dimitrov, Groz, Gottwald and the Polish leaders, who spent nearly all the inter-war years in Russia, and were established in the satellite countries by the red army itself.

To sum up, I believe that the Leader of the Opposition made no case in his complaint about the lack of co-operation in the British Commonwealth of Nations. Australia and New Zealand have consistently asked for the establishment of a secretariat to co-ordinate the policies of the Dominion. When the Leader of the Opposition spoke to the American public, to whom it was not necessary to make false representations for the purpose, of winning votes, he made a realistic statement when he said that Australia and New Zealand would go very far on the road to co-operation, but that some other dominions did not want co-operation. The right honorable gentleman contributed an article on foreign affairs to an American quarterly review of January, 1949, in the course of which he wrote -

In the nature of things, uniformity of ideas about it wouldbe unlikely.

It is evident, therefore, that the right honorable gentleman has changed his views, and of course, his speech this evening implied another change of view. The article continues -

For example, there are no real racial difficulties in the relations of an Australian or a New Zealander, either with his fellow citizens or with the land from which his grandparents came. He has no difficulty in understanding the institutions of the homeland which are also his own. He rejoices in being British-

That is a recantation, without acknowledgment, of his previous arguments on the point. It continues -

  1. and has a respectful but affectionate and almost proprietorial interest in the Crown which makesa common “subjecthood “ a matter not of subordination but of pride. But in this matter a Canadian has great difficulties to face.

Every time an Australian delegation comes back without having achieved imperial federation or having established an imperial secretariat the fault is said to be clue, to our lack of co-operation. The article proceeded -

There are marked differences of race and tradition between the major groups of inhabitants of the major provinces, and there is in the immediate proximity a powerful United States which must exercise an influence upon many matters, including the psychological problems of national security. These and other factors have inevitably encouraged the growth of a conception of local and special Canadian nationality which differs very clearly from that to which we Australians are accustomed.

He was not playing politics at all, honorable members will notice! The right honorable gentleman continued -

Again, the problems of the Union of South Africa are in a. sense known to and understood by students, but can be fully appreciated only by those on the spot. Eire also chronically produces problems: we who look on from a distance are sometimes tempted to be impatient about them, forgetting, as men commonly do, that distant difficulties always falsely seem capable of relatively easy solution. The new Indian Dominions have, in their accession to independent self-governing nationhood, brought with them a host of new questions as well as what all hope will be an increasingly strong and fruitful partnership in world affairs.

But according to the right honorable gentleman we should have refuted their first invitation to join with them in a partnership in world affairs. The article continues -

This curt and inadequate summary need not be elaborated; but its elements must constantly be borne in mind if we are to make reasonably objective approach-

I wish the right honorable gentleman would adopt such an approach in his utterances in this House. The sentence continues - . . to the total problem of the British Commonwealth association. For these immense and inescapable differences of approach have meant that nothing is static. A process of adjustment and accommodation constantly goes on.

The fact is that during and since the war Australian representatives overseas have sought the closest co-operation and have advocated, amongst other things, the establishment of an imperial secretariat. The right honorable gentleman’s realization of the Government’s proposal caused him to genuflect perfunctorily before that Liberal shibboleth, and then to sheer away from it again as quickly as possible. By contrast, the Minister for External Affairs has been realistic in his approach to international affairs, and particularly in dealing with the recent Asian conference at

New Delhi summoned by India. In coordination with the United States, Australia has attempted to bring Holland back to the Linggadjati Agreement, and the United States even attempted to do so without Australian participation. It is evident, therefore, that so far as Indonesia is concerned, our policy has conformed not only with the requirements of reality and justice but also with the policy of the United States. In emphasizing that the United Nations must still be used, even if only as a meeting ground between rival blocs, the Minister’s statement of policy has conformed with reality and with the will of the people of this nation at least in one important respect, which is, that in common with every other Government of the British Commonwealth, it should make every reasonable effort to maintain peace in Europe and in the rest of the world.


– First of all, I congratulate the Minister for External Affairs (Dr. Evatt) on his elevation to the high office of chairman of the General Assembly of the United Nations. I certainly do not agree with many of the acts of policy of the Minister, but I agree that the position which he has attained is one of very high honour. Although he may be following a path which many of us believe to be detrimental to Australia, he is nevertheless following it with a great degree of zeal and industry. I wish that I could utter the same words of congratulation to the honorable member for Fremantle (Mr. Beazley) on the speech that he has just delivered. The honorable member has had the reputation in this House of being a commendable speaker, but if one looks around the House now one finds that, although it was filled to overflowing when he began his speech, it is now deadly empty. The reason is, of course, that his contribution to the debate was the dreariest speech on foreign affairs that any honorable member has made for a long time. Although he is a young man who has never been out of Australia, he spoke on foreign affairs in every part of the globe with the greatest certainty that what he said was right ; with the evident conviction that what he believes is the only aspect of the matter worth considering. He referred to the speech delivered by the Leader of the Opposition (Mr. Menzies) in belittling terms; criticized it as “ jabber “, and accused the right honorable gentleman of “ pumping stuff into the people of Australia “. Phrases of that kind come very ill from a young gentleman of the calibre of the honorable member. Then he wearied the House by reading from an American quarterly review pages of an article contributed by the Leader of the Opposition and quoting at length from speeches delivered by the right honorable gentleman in other parts of the world. He told us three or four times in the course of his speech about the New Delhi conference, and repeated the alleged justification for Australia’s participation in that conference. He criticized the Dutch in the most unequivocal terms; in fact, he criticized almost every allied nation except our former ally, Russia; and he concluded his speech by commending to us the United Nations.

Mr Daly:

– That was a devastating attack.


– It was so devastating that of those who were present when he began there was hardly one, except the unfortunate members of the Hansard staff left to listen at its conclusion.

I propose to say a word first of all about the policy that Australia has followed in respect of the Netherlands East Indies, and I shall endeavour to establish that that policy is not one which has been inherent with the Australian Government, but rather is one which has been “ briefed “ to it by the waterside workers and the Communist party of Australia. The Minister for External Affairs, in his speech last week, said that we did not wish to pick a quarrel with the Dutch, but desired to live on the best of terms and. maintain friendly relations with them. However, the honorable member for Fremantle, who was put up as the first speaker on the government side in this debate, appeared in the role of prosecutor, judge and jury in respect of the Dutch Government. He did not say a word in favour of the Dutch point of view, or mention the services that the Dutch in the Netherlands East Indies and Holland had rendered to the Allied cause when we were in desperate danger. The Australian Government has never spoken one word of gratitude to the Dutch in respect of the tens of thousand of Dutch citizens who gave their lives in the protection of Australia. I desire now to tell the story from the Dutch standpoint. Early in 1941, the aggressive Japanese Government exerted greapressure upon the Netherlands East Indies, demanding huge quantities of oil, rubber and tin. The Netherlands East Indies Government, under Dr. Yan Mook, gave a blunt refusal. The Dutch parleyed with the Japanese for more than six months and delayed their attack for that time, because they could not obtain the sinews of war which they urgently needed. Within seven hours of the Japanese attack on Pearl Harbour, the Dutch, of their own volition, had declared war upon the enemy. They entered tinstruggle, not because they were forced into it, but of their own choice. They were only a small white outpost, the nearest group of white people to the mainland of Japan, yet knowing all th” risks that were involved, they sent their navy to sea and ordered their aircraft into the air. All their aircraft were shot down, with the exception of a few that escaped to Australia. Almost every vessel which they possessed was sent to the bottom of the ocean. Many of their soldiers, and other nationals who supported them, were compelled to flee to Australia. But in this year of grace 1949, an Australian Minister has said that those nationals who left the Netherlands East Indies because they would not collaborate with the Japanese were wished on to Australia”. That statement expresses the kind of friendship that we exhibit to our wartime ally. I should like to trace a few of the stage? in the development of the Australian Government’s policy in respect of the Netherlands East Indies. On the 15th August, 1945, Japan surrendered. On the 24th September, six weeks later, tin? Communist-controlled Waterside Workers Federation imposed a ban on the loading of Dutch ships in Australian ports. Four days later the Prime Minister (Mr. Chifley), speaking in this House, gave to the nation an assurance that the Dutch ships would be loaded. The Sydney Morning Herald of the 29th September published the following report: -

The Prime Minister made it clear in the House to-day that where Dutch mercy ships were not carrying arms but only food and medical supplies, the Government will take every possible step to see that they are loaded.

Those ships were to carry food, clothing and medical supplies to persons in the Netherlands East Indies who had suffered starvation and degradation as prisoners of the Japanese. I ask the House to note that the Prime Minister made that statement on the 29th September, 1945. But the Dutch ships lay idle in Sydney until the 1st June, 1948. For nearly three years after the Prime Minister had given that pledge, not a Dutch vessel left Australia.

The Minister for External Affairs also came into the picture. He was most perturbed that the Waterside Workers Federation - an irresponsible body - which, as was well known, was dominated by the most aggressive Communists in Australia, such as Mr. Healy, Mr. Elliott and Mr. Roach, should whip the control of foreign policy out of the hand of the elected government. He warned the waterfront unions for the action that they had taken. On the 12th March, 1946, six months after the Prime Minister had given his assurance that the Dutch ships would be loaded, the Sydney Morning Herald published the following news item under the heading, “ Evatt Wa rns Unions “ : -

The Federal Attorney-General, Dr. Evatt, yesterday told the waterfont unions that he would not allow the foreign policy of the Government to be dictated by them. [ Quorum formed.]

On the 13th March, 1946, Mr. Monk, the secretary of the Australian Council of Trades Unions, who is not a Communist and is not regarded as the leader of the Communists, stated that -

His executive dissociated itself entirely from the tactics adopted by the Waterside Workers Federation in the “ loading of ships for Indonesia. There was more chicanery in this dispute than he had experienced in any other dispute.

Mr. Monk proceeded to say, in justification for the recommendation of the Aus tralian Council of Trades Unions that the ships be loaded, that -

The goods would be distributed by English, Australian and Indonesian Red Cross officers.

But the truth is that Dr. Evatt and the Netherlands Minister Baron Van Aerrsen had agreed that the goods would be distributed among former internees, prisoners of war, and others in greatest need, without regard to nationality or political persuasion. So that the Minister for External Affairs, the Australian Council of Trades Unions and others interested in this matter were agreed that the policy of banning Dutch shipping with Indonesia was wrong, was not in Australia’s best interests, and should notbe tolerated. I point out that it was tolerated for three years by this Government. There was another insult to the Dutch shortly after the end of the war. In June, 1946, the destroyer Piet Hein limped into Fremantle for repairs. The original Dutch destroyer of that name was sunk in the battle of the Java Sea. It had been in consort with the Australian destroyers Hobart and Perth, and had gone down fighting, in company with our own naval vessels, to prevent the enemy from getting to Australia. After its loss, the Dutch built another destroyer and named it after the one that had been sunk. At the end of the war this unfortunate Dutch destroyer came first to Fremantle, and then to Sydney, and was denied succour at each of those places because of the policy dictated by the Communistdominated unions of Australia. It finally limped out of this country with none of the repairs effected.

In June, 1948, because of the agreement reached between the Dutch and the Indonesian Republic, referred to frequently during the course of this debate as the Linggadjati Agreement, the ban was lifted. It remained lifted for three or four weeks. Then the Dutch took further action against the Indonesian Republic, calling it Dutch police action. A great deal has been said to-night by the honorable member for Fremantle in his attack on the Dutch for the action that they took. As extracts from Keesing’s Contemporary Archives have been quoted as being a fair and contemporary record of the proceedings in Indonesia, I draw attention to the following additional extract : -

On 20th July, 1948, the truce was never in fact, honoured by the Republican forces. Attacks on people under Dutch protection have continued. A food blockade has brought near famine to large areas) and has not been lifted. Hostages are still held in the interior. Senseless destruction of roads, bridges and valuable economic objects continue. One hundred thousand Chinese, Indonesians Arabs and Dutch have been driven from their homes. The Republican Government is unwilling or incapable of enforcing the terms of the truce, or the Linggadjati Agreement. The Netherlands Government will take suitable action to restore order.

There is the reason for the breaking of the truce. Any country such as Britain or Holland or the United States of America, if in a similar position, would have endeavoured to protect the interests of its own nationals. That is exactly what Holland did. If the Dutch had been allowed another fortnight, the Indonesian issue would have been settled for good. But Australia intervened and cited the case before the Security Council. Australia indicted the Dutch and brought that nation to the bar of the United Nations. As the Leader of the Opposition pointed out to-night, under the terms of Article 2 of the Charter, the Dutch had every right to resent any interference by the United Nations organization, because the Indonesians were in the same position as the aborigines of Australia or the original inhabitants of Malaya. The Dutch held the territory prior to the war as an integral part of their possessions, and they had every right to resent the interference of the Security Council of the United Nations organization. But in order to try to resolve the matter in the best possible manner, they had voluntarily agreed to submit it to the mediation of such Council. The Security Council appointed the Good Offices Committee. There are some interesting facts about this committee. It had three members. The Indonesians were entitled to choose one ; the Dutch were entitled to choose one; and those two representatives were to choose a third member. The Dutch chose Belgium as their nominee; the insurgent Indonesian Republic chose Australia as its nominee, and those two nominees selected a United States repre sentative. I shall show something of the type of people who were considered of more importance than those who laid down their lives assisting in the defence of this country. According to Keeaing’s Contemporary Archives, Mr. Attlee, speaking in the House of Commons on the 17th October, 1945, said -

Upon the Japanese collapse we were faced with the task over a wide area simultaneously of disarming Japanese forces, releasing prisoners of war, and helping to restore normal conditions. In Java, as throughout the whole S.E.A.C. area, it was necessary to place responsibility on Japanese forces for maintaining law and order outside key areas.

But in Java, we found outside Batavia, control had in fact been largely relinquished to an Indonesian independence movement. It had been sponsored by the Japanese for two or three years.

Replying to Mr. Eden, who asked whether the Prime Minister was aware that the difficulties of the Dutch in this area were very largely due to their own action as allies in declaring war on their own account against Japan. Mr. Attlee said -

We are very conscious of the fact that throughout those years the Netherlands East Indies Government have stood with ue, and that the difficulties that face them inevitably arise from the conditions of waging war.

There is the story. The British Prime Minister, following the conclusion of the war, told the House of Commons that the people Australia was backing were Japanese collaborators during the war. In fact, for three years before the end of the war they were furnished with Japanese arms, ammunition and support. Yet to-day they are the blessed of the Australian Government. The policy that is being followed by the Australian Government to-day is not one that it has evolved of its own accord. I have shown that it was foisted upon this country by the Communist-controlled waterside workers’ unions of Australia when they imposed a ban upon Dutch shipping and that the Prime Minister rejected such a policy a few days after it was, announced on the 29th September, 1945. I have shown that the Minister for External Affairs, who is the distinguished President of the General Assembly of the United Nations, also rejected it. Nevertheless, in the speech of the honorable member for Fremantle, in the speech of the Minister for External Affairs, and in the attendance of our representatives at the New Delhi conference, we see a sponsoring of everything for which the Communistcontrolled waterside workers’ unions and others who have sought to drive a wedge between ourselves and our allies have striven for so long. It is not necessary to go farther into the Indonesian question than to say that if the same policy were followed and the same support as that which has been given to the enemies of Holland in Indonesia were to be given to the enemies of Great Britain in Malaya, it would be a sorry state of affairs. If the same policy were to be followed in respect of the United States and its occupation of Japan for 25 or 50 years, and if we sought to have the Americans thrown out of Japan because that action was sponsored by Communist organizations throughout the world, we should be following a policy inimical to our own interests. According to the Minister for External Affairs, we are running a true and consistent course. He has maintained that our policy does not deviate and that at least it has the virtue of being consistent. Is it consistent to attend the New Delhi conference and to pose as the friend of millions of Indonesians and of the coloured races and, within a fortnight of that time, to throw an Indonesian woman out of Australia because of her colour? Is there any consistency in a policy such as that? Can we have our feet in every camp and enjoy the confidence of everybody? Do we think the Asiatic peoples are so foolish that they cannot see through the camouflage? They prefer honesty every time. If we stand for a White Australia, as we do, we should be sympathetic to the white races who are placed in positions similar to our own in this corner of the Pacific. The Dutch colonized Indonesia long before Captain Cook saw Australia. They have been there for 300 years or move. I am not an apologist for the Dutch, but I desire to state these facts in fairness to them and to their contribution to us in a period when wc needed it most. I am very sorry that we have involved ourselves in the Indonesian dispute. We should have done as Canada, the United States of

America and Great Britain have done. Those countries may not have approved of everything that the Dutch have done, but they did not broadcast to the world that the Dutch were wrong. They did not go out of their way to put the Dutch in the dock, as Australia has done. The actions of our Minister for External Affairs and those who support him have lost for ever whatever influence we might have been able to exert upon the Dutch Government and people. We have been thrown willy-nilly into the camp of the Indonesian Republic and, because of the way in which the Government has acted, it will never be believed that the majority of the people in Australia think differently from the Minister for External Affairs.

Our intervention in Indonesia might be sought to be justified by the contention that because Indonesia is on our doorstep wc .must take a special interest in it. How close to our doorstep is Spain? Is there anything about Spain that warrants Australia taking a leading and decisive part in urging punitive action against, the Franco Government? That is exactly what the Minister for External Affairs has done. He was chairman of the Security Council sub-committee which considered the question of Spain. The sub-committee held nineteen meetings to consider what the Security Council should do about Spain. Spain was certainly no friend of ours or of our allies during the last war, but at the same time it took no belligerent action against us. These are the conclusions that were reached by the sub-committee that was presided over by the Minister for External Affairs -

Although the situation in Spain did not constitute an existing threat to peace within the meaning of Article 39 of the Charter, it was a situation the continuance of which was likely to endanger the maintenance of international peace and security.

That was the right honorable gentleman’s report to the Security Council, as chairman of that committee. The ‘report was considered by the Security Council on the 13th June, 1946. The right honorable gentleman submitted a motion. Mr. Gromyko said of it that the Spanish situation was such that it called not merely for moral condemnation but also for practical action under the Charter.

The resolution did not go far enough for Mr. Gromyko, hut it went too far for the British and United States representatives. The report of the 7th June, 1946, reads as follows: -

The Australian Minister for External Affairs will have a hard fight for the acceptance of his report. Britain and America will oppose the specific recommendation for a break with Franco-

Dr Evatt:

– From what is the honorable gentleman reading?


– I am reading from Keesing’s Contemporary Archives, which the honorable member for Fremantle said was a most objective journal and an authority beyond dispute.

Dr Evatt:

– It must have been written before the event.


– If it is wrong, the right honorable gentleman can show where it is wrong later. The passage continues - contending that there is insufficient evidence for it. The Spanish Government, in a 300- word Note, urged that Russia was the chief figure behind the sub-committee’s decision, and said that in denouncing Russia, who so determinedly tries to isolate her, Spain lays bare the mistakes of those helping Russia’s sinister ambitions.

The Spanish Government condemned the Australian Minister for External Affairs as being one who was aiding the sinister ambitions of Russia. Everybody knows that there is not a country that Russia would like to topple more than Franco Spain.

Dr Evatt:

– That was 1946. Every country except Russia supported the report.


– Russia vetoed it because it did not go f aT enough. Great Britain and the United States of America would not go as far as the sub-committee’s report. If that is not so, then Keesing’s Contemporary Archives is wrong for the first time. I shall go a little further. A report in the Sydney Morning Herald of the 8th June, 1946, stated -

The Australian Minister for External Affairs, Dr. Evatt, when he presented to the Security Council the report of the Committee on Spain, declared - “ Here is a challenge to the Council, and ultimately to the United Nations Assembly, to reach a just and fearless decision.”

The report continues -

The challenge, however, failed to arouse other delegates.

Russia was the sole country pressing foi direct action against Franco. When the President of the Security Council (M. Parodi asked other delegates to speak, there was only an embarrassed silence. As some one remarked, it was like a group of diners fumbling for the bill.

The British and American attitude appears to be to leave Franco alone for the time being since his deposition might result in Spain going Communist.

That was in 1946, as the Minister says, but it does not make the circumstances any less potent and dangerous to Australia. The Minister goes abroad and uses the prestige and reputation of his position as Minister for External Affairs of this country to become chairman of various organizations and committees, and then he exposes Australia to the enmity of many countries. I am not suggesting that the Minister served the Soviet intentionally, or was acting on instructions from the Soviet, but I do say that any one who has studied the Spanish situation will realize that every move of his was made in accord with which the Soviet would have liked somebody to do. But the Minister did not go as far as the Soviet wanted. The Soviet wanted action of a military kind by the Security Council against Spain. All our Minister wanted to do was to cut Franco off. What has Franco’s Spain to do with Australia? Is it not the business of the major powers to intervene, if intervention be desired? In any case, was -it necessary for the Australian delegate to press for punitive action against the Franco regime, when the obvious sins of the Soviet all over the world were being left unchallenged ? Honorable members opposite talk about, the Franco regime as being a menace to peace. It is a totalitarian regime, our friends opposite say. Is Communist, Russia a democratic regime? Is what has happened in Czechoslovakia not in:voking the attention of the Minister? Is what has happened in Hungary, in the trial of Cardinal Mindszenty, of no concern to the Security Council? Is the suppression of freedom in Latvia. Lithuania and Estonia of less importance than dealing with General Franco? Are these the matters that absorb _ the attention of the Australian Minister for External Affairs when he is abroad? Nothing that Russia has done has been subject to any serious challenge on the part of the Australian delegates, but when it comes to tackling the Dutch in Indonesia, or Franco Spain, or when it comes to being meddlesome in Palestine and thereby creating hostility from the Arab States, Australia is right in the forefront of the picture. Let me say here that friendship with the Arab States has been a cardinal point of British policy for many years. Saudi Arabia, Transjordan, Iraq with its oil-

Mr Calwell:

– Oil !


– ‘’ Oil “, says the Minister for Immigration in a derisive tone. If it were not for the oil that flows from, those lands the Minister would not have such a pleasant time getting round Australia, and Australian industry and trade would shortly come to a standstill. The cultivation of friendship with the Arab States, which are astride the Mediterranean and the Bed Sea, who could close up the port of Aden, and who have an enormous and expanding influence all through that sphere, is a well-recognized factor in British foreign policy. Yet the Australian Government sends its Minister for External Affairs to preside over the partition of Palestine, ft was a question of “ Who is going to bell the cat? “ No country but Australia would take the job on.- Australia, with great courage if little discretion, goes in and tackles the enemy. Of course, nothing was said in the course of the Minister’s speech, when he claimed credit for what was done in Palestine, about the unfortunate British soldiers who were strung up without trial in the orange groves there. Nothing was said about the five British planes shot down a few weeks ago when flying along the frontiers of Transjordan, as they had a right to do because, by treaty, Britain is bound to assist in the security of that State. Nothing was said about these matters, but instead we heard a claim that the partition of Palestine and Australia’s part in it, were definite achievements. If Australian foreign policy cannot be regulated better than it is, if and when the next outbreak of hostilities in the world occurs - and it is on the cards that it will occur at any time in the next few years - Australia may find itself without a single friend in the world outside the British Commonwealth of Nations.

Australia has virtually thrown the Americans out of Manus Island, which the United States wanted to fortify - that worthless base, that barren island to the north of New Guinea. The United States was prepared to spend millions of dollars to make Manus Island one of its greatest naval bases, but because the Minister for External Affairs said, in effect, “ No thanks, it is an Australian possession and if - you desire to spend 50,000,000 or 100,000,000 dollars on fortifications you can only do so with our permission “. The Americans walked out of Manus Island. I was speaking to a young airman recently who had flown there, and he said to me: “ Manus Island, which was a great American naval base, is now practically deserted. The Americans have demolished everything there; they have taken everything away. Now there is only a handful of Royal Australian Air Force men there. The routine planes that fly from Moresby to Rabaul stop at Manus, and it is of so little importance that their stay is only ten minutes at a time once a week.” But for this Government, Manus Island could have been one of the strongest outposts under the control of the United States that we could have had in the Pacific. There honorable members have one example of the work of the Minister for ‘External Affairs.

I opened my speech by congratulating the Minister on his elevation to a high post. T repeat that congratulation because the post is indeed a high one, hut T say that nobody could have done more to damage Australia’s future security by his actions than has that same Minister.

Debate (on motion by Mr. Thompson) adjourned.

page 291


The following papers were presented : -

Commonwealth Public Service Act - Appointments - Postmaster-General’s Department - L. L. Birch, C. K. Lamb, I. D. Morsley F. W. Sharp, P. J. Simonds, N. D. Strachan.

House adjourned at 11 p.m.

Cite as: Australia, House of Representatives, Debates, 15 February 1949, viewed 22 October 2017, <>.