House of Representatives
9 March 1961

23rd Parliament · 3rd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

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Suspension of Standing Orders

Motion (by Mr. Harold Holt) - by leave agreed to -

That, during the consideration of the want of confidence motion, so much of the Standing Orders be suspended as would prevent the House proceeding each day with the items of business numbered 1 to 5 in Standing Order No. 102.

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– I address my question to the Treasurer. As the Prime Minister has now arrived in London will the Treasurer and the Cabinet ensure that the right honorable gentleman is suitably briefed in relation to the serious anomaly that widows from the United Kingdom who are m receipt of a war pension are taxed on that pension in the United Kingdom as well as in Australia? Can some reciprocal arrangement be made to remove this anomaly?


– I am sure that we share the satisfaction of the honorable gentleman that our Prime Minister has arrived safely hi the United Kingdom to make his valuable contribution to the Prime Ministers Conference which is being held there. I shall certainly examine the matter to which the honorable gentleman has referred. On the face of it, I find it a little difficult to comprehend because we have a double taxation agreement with the United Kingdom which I should have thought would have some bearing on this matter. However, I shall take it up with the Commissioner of Taxation, and if I believe that there is a point of view which should be conveyed to the Prime Minister I shall see that it is done. .

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– Is the

Minister for Repatriation aware of statements that have been published to the effect that wards recently have been closed at Heidelberg Repatriation Hospital and that ex-servicemen, therefore, have been refused treatment? Are these statements correct? If so, what does the Minister propose to do about the matter?

Minister for Repatriation · EVANS, NEW SOUTH WALES · LP

– Statements to that effect have been made in Victoria recently, but they are only partly correct. Heidelberg hospital has a very great capacity. If all the wards in the pavilion as well as the wards in the multi-story building were opened the capacity of the hospital would be well over 1,200 beds. That sort of capacity has not been needed since the years immediately after the war. Recently, there has been some difficulty in filling the establishment of nurses at Heidelberg. We are short-staffed there, and this has led to the closing of some beds. The shortage of nurses is not restricted to the repatriation hospital, but applies, I believe, to hospitals generally in Victoria and, indeed, throughout Australia. It is not correct that exservicemen have been turned away without receiving the treatment to which they are entitled. The worst that has happened is that in some non-urgent surgical cases exservicemen have been asked to wait a week or a fortnight before admission. Steps are being taken to attract more student nurses and nursing aides to the repatriation service, but this necessarily is a long-term remedy. I can assure the honorable member for Chisholm, whose deep interest in the welfare of ex-servicemen is very well known, that I will see to it that no exserviceman goes without the treatment to which he is entitled.

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– My question is directed to the Acting Prime Minister, as Minister for Trade. In view of the Tariff Board’s rejection of the request for the protection of the Australian timber industry from cheap imports, will the Government consider giving emergency tariff protection to the industry? Is the Minister aware that in Tasmania alone, up to yesterday, 160 men have been dismissed, and that 200 will receive notices of dismissal in a few days, whilst 360 are to go on a short working week, with a possibility of 1,000 men being affected by an enforced 50 per cent, cut in production to enable the sale of stock-piled timber? Has the Tariff Board the final say in this matter? In view of the gravity of the situation brought about by the credit squeeze, will the Minister consider meeting representatives of the Australian timber industry? In asking this question I speak also on behalf of my colleagues, the honorable member for Bass and the honorable member for Braddon.

Minister for Trade · MURRAY, VICTORIA · CP

-I respect the concern of the honorable member for the timber industry, but he will understand me when I say that he is not alone in that regard. Many members of my own party and of the Liberal Party, as well as members of the honorable gentleman’s party, are concerned over certain aspects of the timber industry at present. To answer one point in his question: The Tariff Board has not a final, arbitrary authority to make decisions in these matters. The Tariff Board is an advisory body. The responsibility for accepting or modifying its recommendations rests with the Government. But the Government would wish, and Australian industry would wish, that the Tariff Board could be regarded as so authoritative and so fair in its judgment that it would be on very rare occasions only that the Government would not find itself able to accept the board’s recommendations. The position is that there exists, by virtue of legislation passedlast August, a provision that in certain circumstances a temporary, or what might be called an emergency duty, may be applied. To bring that provision into operation the industry must make out a prima facie case that it is being seriously harmed by imports. The mechanism is for the industry concerned to constitute a panel to present a case - not necessarily a conclusive case, but a convincing case - to officers of my department which I then, in every instance, study myself and decide whether it should go to the Deputy Chairman of the Tariff Board. That process would be followed in the case of the timber industry, and I am sure that this industry knows what its opportunities are in this regard.

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– My question is directed to the Acting Minister for External Affairs. Does the honorable gentleman recall the filibustering tactics adopted by the Soviet bloc at the United Nations General Assembly late last year, directed towards obstructing the work of the United Nations? Is he aware that last November and December Soviet officials and certain undercover Soviet associates in New York were canvassing the suggestion that if the free world would agree not to press the items relating to Hungary and Tibet on the United Nations agenda, the Soviet bloc would abandon itsobstructive tactics and permit the United Nations machinery to function normally? Has the Soviet in recent weeks renewed its suggestions of a deal along these lines? Can the Minister give the House an unequivocal assurance that Australia will in no circumstances be a party to such a deal, but will actively pursue courses of action directed towards the exposure, in the United Nations and elsewhere, of the nature of Soviet aggression in Hungary and Tibet and in other countries which have been victims of Communist imperialism?


– I do recall the scenes at the United Nations to which the honorable member directs my attention. I was there and I witnessed them, and it is a mild comment to say that they were disgraceful in a deliberative assembly. But I also think that the Soviet so far overreached itself in these scenes as to cause revulsion - a quite natural revulsion - against its own interests, particularly on the part of a new member of the United Nations. As to the suggestion of a deal, to which the honorable member directs attention, I have heard of such suggestions, but I crave leave to doubt whether these suggestions were founded on anything more than talk in the lobbies. I do not believe that any Western government contemplated any such deal as the honorable member describes. As to whether or not the Soviet has attempted again to make that kind of deal, I can only tell the honorable member that my latest information leads me to think that there is no development taking place of the kind that he has mentioned.

As to the honorable member’s last question, I think the House knows, from reiteration of it, what the attitude of the Australian Government is towards both the Tibetan and the Hungarian questions. As to Tibet, let me say again that we deplore the repressive conduct of the Peking regime in dealing with the Tibetan people, and its denial of human rights. Our delegates at the United Nations, at this resumed session, have been specifically instructed to vote in favour of a resolution along those lines. As to the Hungarian question, our delegation has also been instructed to support any move which will keep this question under review by the United Nations.

I think I have covered what the honorable member has asked. Let me say, finally, that our delegates are ready to emphasize strongly our views both as to Tibet and as

To Hungary.

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– I ask the Treasurer a question. The right honorable gentleman will recall that 5i years ago, when our overseas reserves last fell to £370,000,000, the Prime Minister said it would be intolerable and dangerous if our international financial position and external payments situation were not brought into full balance by the end of the financial year. Since our overseas reserves have now again dropped below £370,000,000, and since we are now at the commencement of the season when our reserves usually take a down swing, I ask tb3 Treasurer when he expects our external payments situation to be brought into full balance, and to what level he expects our reserves will have then fallen.


– I do not believe that the Deputy Leader of the Opposition has completely covered the statement made by the Prime Minister at that time. What the Prime Minister intended to convey, and what we have always stressed, is that the point that is reached with reserves is not as important as the trend in the reserves. What becomes significant, then, is the effect of measures taken to remedy the movement in overseas reserves. Reserves, of course, are intended to cushion the effects of fluctuations in one’s international trade situation and they have been used in that way in recent times. The honorable gentleman is well aware that this Government has taken firm measures of a significant kind in order to redress the downward trend in our balance of payments. The Acting Prime Minister announced last night a series of important proposals directed to improving the export income of the country. The other change since the period mentioned by the honorable gentle man should not pass without comment. It concerns our second line of reserves. As he will be aware, the Australian quota with the International Monetary Fund has been doubled since the time of which he speaks.

Mr Whitlam:

– Do you propose to borrow from the fund?


– The Deputy Leader of the Opposition refers to that as “ borrowing “. Portion of our drawing rights, of course, consists of payments we have made into the fund ourselves. These have in turn had the effect, nominally, of reducing our overseas reserves in the front line but strengthening our drawing rights in the second line.

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– I address a question to the Minister for Primary Industry. Having regard to a drive by the Australian Wool Bureau for an increased wool levy, is it the intention of the Minister to take immediate steps to implement the proposals or is it his intention to hold a referendum on this issue?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– I am aware of the actions taken by the Australian Wool Bureau with a view to implementing a proposal to increase the levy from 5s. to 18s. progressively over six years. The chairman is initiating a campaign to bring this proposal before the growers. The act prescribes that before the Government can take any action, the Wool Bureau must have the consent of both the organizations represented on that body - the Australian Woolgrowers and Graziers Council and the Australian Wool and Meat Producers Federation. So, in effect, both those organizations must consent to the proposals before any action can be taken to approach the Government. That is the position to-day.

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Mr J R Fraser:

– T ask the Minister for the Interior: Is h true that the National Capital Development Commission has informed some contractors engaged on Government work in Canberra that the commission will not be able to pay more than a proportion of progress payments which will fall due between now and the end of the financial year? Does this mean that the commission is over-committed to expenditure from the Budget allocation? Does it mean, further, that if the Canberra programme is to continue it must be, for the time being at least, financed by the contractors and suppliers of materials?

Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– As far as 1 am aware, it is not true that the commission has made such an approach to contractors. As far as I know, the liabilities of the commission will be met in full as they are incurred. However, the commission has had some discussion with contractors who are inclined to be ahead of time on their jobs and it has suggested that if they can keep to a normal schedule it will be easier for the commission. But there is no question at all of the commission not meeting its commitments.

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– My question is directed to the Minister for Labour and National Service. In view of the intense public interest in and concern over the dispute on the waterfront at Fremantle as a result of the registration of the Foremen Stevedores Union, and the strike action that has been taken by the Waterside Workers Federation of Australia, can the Minister comment on the general accusation in Western Australia that the machinery of conciliation works too slowly, and can he say whether quick action could be initiated in that State in the event of any stoppage or threatened stoppage?

Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– I think the House knows that the law relating to conciliation and arbitration applies with equal force in Western Australia and in the eastern States. The law is that if there is an industrial dispute in existence or the prospect of an industrial dispute, any party likely to be involved in that dispute can immediately refer the matter to a commissioner. So it would have been within the power of any party or any probable party to a dispute to refer the matter to Mr. Justice Ashburner for immediate conciliation and. if conciliation failed, for arbitration. That means that either the unions themselves or, for that matter, the Fremantle Harbour Trust, could have referred this matter immediately to Mr. Justice Ashburner had that been desired. The harbour trust did take action; the action which it took could have been taken at a much earlier date had it wished.

I have had consultations about this matter with my colleague, the Minister for Labour in the Government of Western Australia. He is very well informed on the law and on the practical problems involved, and I think I can assure the honorable member for Perth that the Western Australian Minister would agree with me that in the first place this is a matter for the parties and those interested, and that the Commonwealth Government did in fact do all that it could have done in order to have the dispute settled as quickly as possible.


– I wish to ask the Minister for Labour and National Service a question which is supplementary to that asked by the honorable member for Perth. In view of the representations that have been made over a period! of three years on the position of the foremen stevedores and crane drivers at Fremantle Harbour, culminating in the industrial dispute, which has occurred there recently, what Commonwealth interest is involved in maintaining as the law the proposition that if a waterside worker becomes a foreman or a crane driver, he is regarded as having resigned from the industry, and that if he subsequently ceases to be a foreman or a crane driver he cannot go back to work as an ordinary waterside worker? I have never heard any logical reason for this decision, and I would be grateful if the Minister can give me one.


– 1 am sure the honorable gentleman knows that the dispute involving the Foremen Stevedores Union is now before Mr. Justice Ashburner, who is sitting in Western Australia as a commission. Therefore. I think that the matter is sub judice.

Mr Calwell:

– That is not the question.


– On the contrary; the question involves that issue.

Mr Calwell:

– No.


– I think it does. In any event, the question asked by the honorable member for Fremantle is so much involved with the dispute over the position of the Foremen Stevedores Union, and the issue as to whether a stevedoring foreman should have the right subsequently to register as a waterside worker, that I consider that an answer to the question would not be proper at present. Prior to the matter being referred to Mr. Justice Ashburner, I wrote to the honorable member and explained the facts to him. He well knows what the facts are. As soon as Mr. Justice Ashburner has given a decision, I shall make the reasons clear. I do not think it would be appropriate for me to repeat now what I have already told the honorable member for Fremantle.

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– My question is directed to the Attorney-General. I ask him whether he is in a position to inform the House of the kind of reception that has been given by the State governments to his proposals for the control of restrictive trade practices.


– J have commenced confidential discussions with the attorneys and I will be continuing them through the year. I do not think it would be right for me to disclose, even in a general way, the result of these confidential discussions. The honorable member and the House can rest assured that I will be pressing for a result as soon as I can get it.

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– I desire to direct my question to the Minister for Health. I preface it with the remark that during the recent recess, at the invitation of the honorable member for West Sydney, I visited the island paradise which has the honour to be part of his constituency, Lord Howe Island. In view of the fact that Lord Howe Island is singularly blessed in many ways, such as being represented by the honorable member for West Sydney, freedom from newspapers, telephones and the common house fly, the house fly having disappeared Only during the last five years, will the Minister ask the Commonwealth Scientific and Industrial Research Organization to investigate whether some useful parasite responsible for the disappearance of the house fly from Lord Howe Island can be introduced into Australia?

Dr Donald Cameron:

– I will ask the C.S.I.R.O. whether it will investigate the question of the numerous pests to which the honorable member has referred.

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– I preface my question, which is addressed to the Treasurer, by saying that I am reliably informed that co-operative societies at Tamworth and Armidale require about £1,500,000 to enable them to carry out their homebuilding programmes. I understand that a similar position obtains in certain areas of the north coast of New South Wales. Further to the question asked by the right honorable member for Cowper yesterday, I now ask the Treasurer whether, as a short-term means of overcoming the present difficulties of the timber trade in the northern part of New South Wales, where some 500 men are out of work and 45 mills have closed or are closing, he will take up with the bank authorities the question of releasing some money, of which apparently not one penny is at present obtainable for the purpose of expanding building operations. Increased building activity would, of course, absorb the surplus timber.


– I intimated yesterday the extent to which the Commonwealth Government is involved in its Budget in assistance to home building in this country. Further assistance is given, of course, through banking instrumentalities under the general administration of the Commonwealth Government. The honorable member speaks of amounts of £1 ,500,000 being required in each of two centres. Of course, if that amount were multiplied by the many centres in Australia which require similar assistance, very large sums would be involved. I shall examine the question. I cannot give the honorable member any policy statement at this point, but I am weil aware of the need, as are my colleagues of the Government, to ensure that a good level of building activity, particularly home building activity, is maintained. It reached boom proportions last year and some reduction from that scale was desirable in the national interest. On the other hand, we do not want a depressed building industry. That consideration will determine the Government’s policy on this matter.

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– I address a question to the Minister for Labour and National Service relating to the serious unemployment situation that has now developed in Australia. Is the Minister aware of the retrenchments which have taken place, not only in seasonal employment to which he referred yesterday, but also in the motor industry, the textile industry, the timber industry and the building and allied industries generally? I remind the Minister of the statement which has just been made by the honorable member for Wilmot that in the last two weeks more than 400 men and women have been dismissed from two industries in Tasmania. If the Minister is aware of this situation, will he say what action the Government and his department intend to take to correct this deplorable and unnecessary trend?


– I am well aware of the trends both in registrations for employment and in the number of unfilled vacancies registered with the department. In fact, I keep myself informed daily of what is happening in Tasmania and in every other State. At the moment, figures are being compiled relating to employment and registrations for the month of February, and T hope to be able on Tuesday next to give the House a statement containing all available information, together with such comments as I can usefully make about trends.

As to my department, I believe that it is deserving of the warmest commendation for what it is doing to place people in employment. It did have a very busy time in February, but I think it can be said that most of the people who came to the department seeking employment were effectively placed. Nonetheless, I shall not attempt to state now in an incomplete form what T hope to be able to say on Tuesday.

As to general Government policy, one thing that can be well said is that the present re-deployment of labour will be for the benefit of Australia. Industries, some of them vital, such as the metal trades and the railways, are now, for the first time. getting employees that they could not get previously. To this extent, the adjustments taking place now will be in the nation’s interests. I give the honorable member my assurance that I shall make a comprehensive statement on theFebruary figures next Tuesday.

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– I ask the Minister for the Interior whether he is satisfied that the cyclone warning system for Queensland, particularly for north-east Queensland, is adequate and efficient for giving early warning and for the tracking of cyclones, which can always be expected in the monsoonal or wet season, and which so often cause such disastrous damage.


– Yes, I think that, within the limits of the resources available to us, the system is working satisfactorily. Over the years, it has proved to be a great improvement over what was operating previously. The system is not complete yet, but it will be improved progressively as funds become available for that work.

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– I ask the PostmasterGeneral whether he is aware that picture theatres are required to display at the beginning of films shown by them the censorship classification of the film being exhibited. I refer to the classifications “ For general exhibition “, “ Not suitable for children “, and so on. Is he also aware that when the same films or other films are televised the television stations are not required to exhibit such censorship classifications? If he is aware of these facts, can he tell me the reason for the distinction?

Postmaster-General · DAWSON, QUEENSLAND · CP

– All programmes in film form which are put on television are subject to the same kind of censorship and oversight as are films which are displayed in picture theatres. There is a difference, however, in the classifications and it lies mainly in the hours at which certain films may be displayed on television. Some films are classified as being suitable for general exhibition and may be put on at any time, while others are classified as suitable for children and for display before certain hours in the evening. After certain hours at night, films classified as not being desirable for juveniles to see may be put on. These provisions are pretty well known, and it then rests with parents to decide whether they will allow their children to see films which have been classified as proper for presentation after 8 p.m.

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Mr Malcolm Fraser:

– My question is directed to the Minister for Primary Industry. Can he tell the House whether he has yet had discussions with the leaders of the dairy industry regarding the dairy industry report? Is he aware that some of the major recommendations of that report are totally unacceptable to the dairy industry? Will the views of the industry be given the same sympathetic consideration by the Minister which they always have received in the past? Can the Minister give any indication to the House as to when it may be possible to make a final announcement about this controversial matter?


– On Wednesday, a week ago yesterday, I met the members of the Australian Dairy Industry Council, which represents the three bodies concerned - the equalization committee, the Dairy Produce Board and the Australian Dairy Farmers Federation - and they presented the industry’s viewpoint upon the report of the committee of inquiry. I think their viewpoint concerning the controversial matter of a subsidy is generally known. In fact, the submission made to me has been publicized by them and has appeared in the press. They requested the Government not to reduce the subsidy until such time as costs decrease. That is, in effect, their submission. Having received the viewpoint of the dairy industry, I have reported to the Government and it has considered these matters. I hope to be able to issue a statement later in the day, if I can complete the case.

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– My question is directed to the Minister for Health. Is it a fact that a new pill, which is claimed to stop people from getting drunk, recently went on sale in Great Britain? Has this pill been included on the free medicine list? If not, will the Minister consider making it available through this medium to Australians who, because of the depressing effects of the Government’s changing policies and the resultant unemployment, bankruptcies and general distress may have taken to drink in order to drown their sorrow at the inability of the Government to protect their interests?

Dr Donald Cameron:

– I think there is only one certain and quite obvious way of avoiding the perils of alcohol.

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– My question is directed to the Acting Prime Minister. As part of the recently announced export production drive, is it the policy of the Government to give financial and other assistance to projects that will increase the production of exportable good’s? If so, will the Acting Prime Minister give due consideration to the suggestion I made during last night’s adjournment debate that the Government should convene a meeting of the Premiers of Victoria and New South Wales, or the appropriate State Ministers, and Commonwealth Government representatives, in an endeavour to break the deadlock that is preventing the building of the proposed high-level Marraboor weir on the Murray River, near Swan Hill in Victoria?


– I am well aware of the very great interest which the honorable member and my colleague, the Minister for Social Services, who each represent great irrigation areas on opposite sides of the Murray River, have disclosed in this matter. The Government’s attitude has been stated in the House on a number of occasions and, notwithstanding the pertinacity of the honorable member, I can only say that there has been no change in the Government’s attitude or in what it regards as the proper place where responsibility rests.

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– I preface my question to the Minister for Snipping and Transport by asking him whether since he came to office he has made a close study of transportation and has learned that express goods trains running between Port Augusta and Kalgoorlie are averaging more than 50 miles an hour and that trains of up to 5,500 tons are being hauled at a fast speed on the Stirling North line. 1 now ask: Has the Minister carefully analysed the manner in which the use of diesel-electric locomotives has revolutionized longdistance haulage? If so, has he considered the national benefit of proceeding immediately with an investigation of the opening up of the valuable Northern Territory by providing a standard gauge railway over the 645 miles from Dajarra to Birdum through the Barkly Tableland - a run which in modern railway operation could be done in less than sixteen hours, would involve no water or fuel problems, and would have no gradient greater than 1 in 100?

Minister for Shipping and Transport · CORIO, VICTORIA · LP

– All railway projects that have an economic value are carefully scrutinized. I think that the Commonwealth’s interest in the standardization of rail gauges is well known. The project of which the honorable member speaks would require a tremendous amount of study and research, but it is a proposal which we could consider. However, at present we have under consideration the standardization of the lines between Kalgoorlie and Perth and Port Pirie and Broken Hill. Even though some worthwhile development might follow from the proposal that the honorable member has advanced, it must nevertheless take a far lower priority than the projects which I have mentioned. The speed of diesel-hauled trains and their low overhead costs as compared with other forms of transport have been well studied, and we know that diesel locomotives have played a tremendous part in railway development.

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Australian Economy

Leader of the Opposition · Melbourne

). - I move -

That because the Government’s rapidly changing plans have failed to protect and develop the Australian economy and to safeguard our overseas funds and have caused grave confusion, dislocation and hardship to many sections of industry, both primary and secondary, and unnecessary suffering to many citizens, particularly those who have lost their employment, this Government does not possess the confidence of the Parliament or of the nation.

To tell a story properly one must always start at the beginning. To tell the tale of the political rake’s progress, which is the history of the Menzies Government over the last eleven years, and its handling of the economy, it is necessary to emphasize three facts. Firstly, when the Menzies Government took office at the end of 1949 the Australian economy was in a sound position; secondly, in 1949 the then Leader of the Opposition and now Prime Minister made his notorious promise to put value back into the £1 if the Labour Party were defeated, and thirdly, in the same speech he promised that a Liberal Party Government would, to use his own words, “ resist the return of oppressive government controls of all kinds “.

No one who knows the facts will challenge my claim that the Australian economy was soundly based when this Government came into office. In support of what I have said I should like to read an extract from a leading article in the London “ Times “ of September, 1949, less than three months before our defeat, dealing with Mr. Chifley’s last budget. The “ Times “, which is the most authoritative organ in the British Commonwealth, stated -

Australia has made remarkable progress in the ten years since 1939. During six of these years the country’s efforts were concentrated on the prosecution of the war and supplies of imported goods from the United Kingdom and other parts of the world were greatly reduced. A manufacturing capacity half as large again as in 1939 and fourteen people in work for every ten in 1939 were among the signs of prosperity to which Mr. Chifley was able to point.

The “Times” added-

Mr. Chifley is entitled to point with pride to the progress which his country had made.

But the most significant passage in that editorial, in the light of Australia’s current desperate plight because of its balance of payments difficulties, is contained in this paragraph -

In Mr. Chifley’s words, “Australia’s external position has been strengthened against adversity by reducing the burden of overseas debts, accumulating London funds and securing longterm contracts for a number of Australian exports “.

Mr Forbes:

– What date was that?


– That was in 1949. three months before our defeat.

Mr Stokes:

– Some one must have been wrong.


– Yes, it was you. As to the two promises made by the leaders of the Liberal Party and the Australian Country Party in their 1949 election campaign, which they mixed up with their ranting about socialist controls and the need to protect private industry against the inroads of socialism, there also can be no challenge.

The promise to put value back into the £1 was a promise to reduce prices. But prices have not been reduced. On the contrary, prices in Australia have increased to a far greater extent over the last eleven years than they have in any other Western country. The authority for this statement is the International Monetary Fund, the very organization to which the Government intends to go presently to borrow £200,000,000 to tide it over its difficulties in meeting its overseas commitments. The promise to resist controls of all kinds, like the promise to reduce prices, was dishonestly made and never intended to be kept.

Ever since this Government came into power it has increased rather than relaxed controls. We have more controls operating to-day in Australia than we had at any period during the war. For eight of the eleven years that this Government has been in office it imposed import restrictions and, as soon as it got rid of them - temporarily only, of course - the Treasurer (Mr. Harold Holt) denounced the system as arbitrary, inequitable and bureaucratic. The system that his Government has followed for eleven years he now denounces in that scathing language.

The Government’s credit control, which is better known, because of its hurtful effects, as the “ credit squeeze “, is the worst that this country has known. The Government’s ranks are silent when I make that statement. But again, that is not my own opinion only. I quote the views of Mr. R. W. R. Johnston, the chairman of the Australian Bankers Association, as expressed in the “ Sydney Morning Herald “ of 28th November, 1960, as follows: -

The major trading banks have entered a new decade under the shadow of an intensified credit squeeze. Indeed, with but a few brief periods of respite, they have been operating under restrictive conditions for the last 20 years.

But the most significant passage of Mr. Johnston’s statement was this -

The latest and most intensive phase of the restrictions-

That is, the present phase - enunciated by the Federal Treasurer, had its origin in a Prime Ministerial announcement in February.

That is, February, 1960.

Mr Harold Holt:

– If you were in office there would be no statement at all.


– If I have my way you will not be making many more statements in this Parliament from the ministerial bench.


– Order! I think that a little later the Treasurer will be wanting the Acting Prime Minister to be heard in silence.


– I know that honorable members opposite cannot take it. I am quoting their own supporters against them. Mr. Johnston added -

AH this has come at a time when Australia is facing the all-too-familiar problems of a deficit on its overseas balance of payments, together with mounting inflation at home.

He finished by saying -

The stage has been reached when the effectiveness of present weapons used in Australia for restricting bank lending has been blunted through excessive use.

Excessive use of credit control has been the policy of this Government, because it has been in office for twelve of those twenty years, and part of the remainder of the twenty years’ period during which credit restrictions were imposed lay in the war period. No wonder, Sir, that the Acting Prime Minister and Minister for Trade on the one hand, and the Treasurer on the other hand, have both said that the Australian economy is balanced on a razor’s edge. They do not deny that they made that statement. What does the statement mean? It means that our economy could not be more finely balanced. It also means that the economy could not be in a more parlous condition than it is in to-day. If it is balanced on a razor’s edge it must be in a parlous condition.

Last evening, the Acting Prime Minister produced a statement on incentives which might produce results - I say, “ might “ produce results - in the sweet by-and-by. My colleagues will deal with the details of this latest economy plan - the fifth to be produced by the Government in thirteen months. They will deal too with the various statements of the Prime Minister and the Treasurer as they have both sought to talk themselves out of the impossible position in which they have put themselves and in which they have landed the nation. 1 wish only to deal with one admission which the Minister for Trade made in last night’s statement. He said -

We have an intransigent balance of payments problem.

I thank him for the observation. He never spoke more truly, because the word “ intransigent according to “ Webster “, means “ irreconcilable “, and in that sense he tells the House and the country that the Government finds the balance of payments problem is insoluble as far as the Government is concerned. I thank him for his candour, even if the statement slipped out somewhat unintentionally and accidentally.

Over the last thirteen months the Government has announced, introduced, withdrawn and re-introduced many economic measures supposed to solve a whole range of economic problems.

Mr Pollard:

– Put and take, mostly take.

Mr Haylen:

– There are a lot of takes.


– There is a lot of foot and mouth about it, too. But throughout the period there has been only one economic problem that matters, and that is that imports have been too high. This was true when the Government announced in February, 1960, that it was lifting import restrictions. Imports were already running at as high a level as we could afford - even if we borrowed £200,000,000 a year to help to pay for them. At that time, the Government knew that the annual rate of imports was £900,000,000, and was rising. Before the announced lifting of restrictions could have had any effect the rate of imports was already up to £970,000,000 a year. Since then it has gone up and up and the rate, over the last three months - that is, up to last week - was £1,125,000,000 a year. It now appears that, if we borrowed £200,000,000 from overseas this year, we would be able to pay for about £850,000,000 worth of imports. Our imports look like being something more than £1,050,000,000. So the Government’s housekeeping for one year, if we could make out a balance-sheet for it, would read something like this: Income. £17,000,000 a week; expenditure. £25,000,000 a week; drew from bank, £4.000.000 a week; borrowed from friends, and where we could, £4,000,000 a week.

Then, of course, the Government will finish up with £200,000,000 more of debts and £200,000,000 less in the bank. And in a few more months our bank balance will be getting low and perhaps our creditors will be pressing for repayment It is in the light of all this that we get the latest edition of the Government’s plans - plans for development, plans for appointing trade commissioners, plans for attracting tourists - plans for doing everything except taking immediate action to bridge the gap between exports and imports.

Whatever virtue there might be in the Government’s plans they are all long-range plans. What this country needs at the moment is a plan, or plans, which will provide a short-term solution for the nation’s difficulties. It sounds a desperate situation, but I believe that it is all merely a desperate piece of folly. We will come out all right in the national sense eventually, because this nation, which has withstood flood and fire and drought can recover even from a Menzies Government. This nation, which cannot be devastated or destroyed by any affliction of nature, will certainly survive twelve years of misrule by a Liberal Party-Country Party Government. But what will have happened in. the meantime is this: We shall have lost £400,000,000, as I pointed out, because of the Government’s folly this year, and that, Sir, is about the cost of the Snowy Mountains Scheme. We have thrown that £400,000,000 away because of the stupidity, the ineptitude and the incompetence of this Government. In the view of the Government that does not matter. There will be a number of good Australians who will be without a job for some time. Many businessmen will have made losses or will have, gone bankrupt, but in the view of the Ministers and their supporters that is only a small price to pay for keeping the Menzies Government in power and the Labour Party out of office. It is only a small price to pay to enable this Government to put into effect its doctrinaire theories of how to manage the economy. And make no mistake - and I wish honorable members and the people to make no mistake - it is the theories of the Prime Minister and the Treasurer and the Minister for Trade of which I am speaking. These theories will be found in the text-books of the 19th century and in the higher financial circles of Wallstreet and the City of London. They are all part of a more sophisticated financial system which this Government has been attempting to develop over recent years, a system which involves transferring the burden of taxation away from those best able to bear it and placing it on the masses of the people by means of indirect taxation and like methods. If you look at the industrial charter of the Liberal Party you will find that a plank of the platform of that party is the elimination of direct taxation as far as .possible. This, of course, means the imposition of indirect taxation, with the principle of taxing according to ability to pay completely negatived.

A natural result of the Government’s policy of cutting off the money supply of the community as a means of solving our economic problems is, according to the Government’s theory, that prices will fall, imports will fall and we will have a sound and stable economy. Of course a few eggs may be crushed in the process, but what does that matter to the Government? The big enterprises will be able to go on making profits. They will survive, whoever else fails.

The Government has adopted only one serious method of curbing inflation and cutting back imports; it is credit contraction or restriction. This is the constant element in the ever-shifting policies of the Government. Taxes may be imposed or removed. Wage increases may be granted in one year but not in the next. Budgets may be balanced and unbalanced. Sometimes we have budgeted for a deficit and sometimes for a surplus. But the twin measures of tighter credit and higher interest rates go on and on. Even here, of course, the Government and its members have shown some confusion. Tighter credit was announced a year ago, but apparently the banks were assured then that they need not worry. It was only after five months, when the banks had allegedly released £162,000,000 of credit, which the Government said they should not have released, that anybody took any notice of the situation. lt is true that at that time the Prime Minister (Mr. Menzies) was moving his famous amendment in the United Nations.

It is true that the Attorney-General (Sir Garfield Barwick) was there to cheer him on. It is true that the Treasurer (Mr. Harold Holt) was also there to join in the felicitations, and there were about three other Liberal members of Parliament in the audience at the United Nations on that morning. It is also true that the Minister for Trade (Mr. McEwen) was preoccupied in Australia with other matters. Nobody seemed to understand just what was happening with regard to the banking situation. Apparently the banks were not told how serious the situation was until just before the Budget of August last. I refer to the normal Budget, not the little panic budget of the previous February, or the “ where-are-we “ budget of November last, or the “ offtoseePresidentKennedy “ budget of February last. The banks then realized that something had to be done, even if they did lose some business. But even then they felt that the Government would see them through. It is only now that they have been told that the situation is all their responsibility, and that they must call in loans left, right and centre or be left to run out of cash. They must recall overdrafts amounting to £70,000,000 by the end of this month, and they are proceeding to do so. That is why timber mills are closing. It is why many other businesses are closing. It is the reason given by Patons and Baldwins (Australia) Proprietary Limited in Launceston, Tasmania, for putting men off. It is the reason given by a number of motor car manufacturers and others for their inability to maintain a flow of employment let alone carry out expansion programmes.

I cannot make our position on this matter too clear. The Government has one problem that transcends all others. It is the problem of the flood of imports. That is the problem, I repeat, because the core of all our troubles is the state of our overseas balances. Unless we solve that problem we will solve nothing. We do not regard that problem as intransigent. We do not regard it as irreconcilable or insoluble. The problem has got to be solved. The Government hopes that by the credit squeeze, rather than by the direct imposition of import restrictions, it will be able to curtail imports. It hopes that the flood of imports will be cut by 25 per cent, within four months, but its hope seems rather vague. The Government thought that imports would start to- fall from the time it made its first decision in November last. The value of imports in January, Mr. Speaker, was of the order of £96,000,000, and in February I think it was about £100,000,000. The waterside workers in the port of Melbourne have increased their labour force by 250 so that they can unload the ships coming into that port with additional imports. The import flow in March will probably be as high as it was in February, and it will be more than four months before the flow tapers off. Well, that is our view, and I think it is the right view. I believe it is the view which is held by the Australian people.

The Government refuses to reimpose import restrictions and the Treasurer gives as his reason the fact that we are now bound up by so many agreements, in Gatt and in negotiations with various countries, that we really cannot reimpose import restrictions.

Mr McEwen:

– He did not say that.


– Well, what did he say? He said something very much like that. I think there are escape clauses in Gatt, and I can tell the House that a Labour government would soon find ways of protecting Australian industries and the livelihood of Australian workers. The Australian people are not free-trade in outlook, but there is a free-trade influence operating in the Cabinet to-day - I think through the Country Party - which is responsible for our present situation, and which has led to an almost unrestricted flow of imports at the present time.

Mr Thompson:

– The Government is looking after the big importers.


– Yes, it is looking after the big importers, and, in so doing, it is harming many Australians. It is even making those people who helped finance ft in its efforts to gain power in 1949, particularly the directors of the banks, wonder whether they did the right thing after all. because they are being put in the stocks, as it were. They are being held up to obloquy and ridicule. They are being made the scapegoats of the Government’s policy; and the banking system, of course is in a worse position to-day than it was in 1949.

I come now to the matter of export expansion. We have, of course, to do one of two things, or a combination of the two.

We have either to reduce our imports or increase our exports, or we have to do both. The Government proposes a policy of export expansion, but its plans are just being formulated as the economy is toppling. Most of the schemes are still in the planning stage. As the honorable member for Wilmot (Mr. Duthie) says by way of interjection, the financial provisions are not to operate until 1st July, and some of them probably will not be operating even then. All the talk of export expansion is like drawing a red herring over the mountain of imports. It may be the economic space vehicle of the 1970’s, but it will not leave the launching pad much before 1966.

We have also the other red herring of a new programme of national development, bound up with an expanded programme of Commonwealth public works. Where this money-conscious Government is going to get the money to finance even the planning of the development programme it has not said. But nobody will be fooled by promises as to what the Government intends to do about a railway line between Broken Hill and Port Pirie, or between Kalgoorlie and Fremantle, or about railway assistance to the Broken Hill Proprietary Company Limited, or about roads in the Northern Territory or roads in Queensland to help the cattle people. These are only placards put out in an attempt to delude the people into believing that the Government is really doing something. It is merely talking. It is stringing together a lot of platitudes. When you read some of the statements in the document presented by the Acting Prime Minister last evening you begin to wonder who it is that composes some of the sentences. Take, for instance, this sentence -

The Government has given much attention to the need to trigger off an increased interest in export in which manufacturers must play a bigger part than in the past.

Mr Haylen:

– That is what you call an “ adult western “.


– I think that whoever composed that sentence must have been wandering around the Northern Territory in fancy. Such peoplelive in a world of fantasy and not in a world of reality.

To-day the Government has not the money even to prepare plans. It budgeted for a very small surplus and it looks as if it will not have that. The Government has not indicated where it will find the finance for the works which it proposes to undertake, but I know this: It is rapidly making labour available because of the growing army of unemployed. If the Government has any developmental plans in the next few months, plenty of people will be required for work.

I want to say something more about the Government’s one policy measure which pertains to the internal economy, that of credit restrictions. As imports flow in and as tax revenues flow in during the next four months, the cash held by the banks will dribble away. Already, the banks have the bare minimum necessary for their operation, and before long the Reserve Bank will have to start releasing statutory deposits. It is possible that, by the end of June, the banks will have withdrawn all their statutory deposits. Of course, that will not be allowed to happen. At the same time, the Reserve Bank has to find other ways of keeping the public supplied with ready cash, such as by buying Commonwealth bonds on the open market.

All these things amount to a great expansion, but they will, by Government decision, be insufficient to offset the import and tax payments. Credit will be tight - the tightest ever - while the Government will be making splendid claims of how it released £20,000,000 to the trading banks this week and £20,000,000 that week. T am certain that neither you, Mr. Speaker, nor I would be able to borrow anything of those sums of £20,000,000, even if we were being forced into bankruptcy by being required to reduce our overdrafts. It will all be needed to keep the trading banks with enough till money for ordinary business. So do not let any one be fooled in the coming months by the Government’s protestations that it is releasing credit. It will not. it cannot, and it dare not. If it does, the overseas creditor will not receive his cheque.

Meanwhile, some of the smart boys - and with a smart government who can blame them - are borrowing from overseas to pay for their imports, since they cannot get the money here. So the credit restriction is not nearly as effective directly on the importers as it ought to be. The old principle of capitalism, that if there are profits to be made the funds will be there, is coming into operation. We are even cashing in on other people’s export drives. We were not the first to think of trade commissioners, trade publicity and export credits. We were nearly the last. So we are able to borrow quite a bit here and there provided that we import. imports from America have reached almost astronomical figures, while our exports to America are falling. Our imports from Japan are growing more and more and our exports to Japan are only rising reasonably. The Acting Prime Minister intends to strengthen our trade mission in Cairo and send some bright young fellow to Caracas, in Venezuela, to work alongside the Americans, who will be able to dump all their goods into Venezuela while we will not even be able to pay for the salary of our trade commissioner. This might appear all right to the Government, but it does not appear all right to anybody who analyses the situation.

The Government has another gimmick. It talks about capital inflow as a wonderful thing. It says that the higher capital inflow is, the greater is the world’s faith in Australia. Borrowers often feel like this, but those who have borrowed from the banks are now beginning to realize that it was not a sign of faith. We can borrow because people believe that we will pay them back. Australia will repay those from whom it has borrowed. But of how many countries can this be said with certainty to-day? And who would not lend to some one who was certain to repay? Why pretend that we are wonderful because we are honest? lt may be, then, that it will be possible to keep up imports for a while by short-term borrowing from suppliers in other countries, but this is merely deferring the problem.

Meanwhile, what are these imports that we are getting? Many of them are pure replacements for Australia’s products and at higher prices. Because the Government was unable to restrict Australian expansion any longer, employment began to rise eighteen months ago. Industrial output rose sharply, too, as excess capacity was brought back into use. We at last began to use our surplus labour and machines. To the Government, this was inflation. So we had the dire warnings of thirteen months ago.

After three years of stagnation, the expansion was reasonably rapid and there were some temporary difficulties in obtaining supplies of some components and raw materials. It would appear that a number of people jumped on the band-wagon and began to import so that in the last six months or nine months we have received grossly excessive supplies from overseas - not only the tinned chicken which the honorable member for Mitchell (Mr. Wheeler) talks about, not only the tinned ham that some other people talk about, not only the bread that we have been importing from Holland and other countries in Europe, and not only those frogs’ legs in aspic that I mentioned last year. We may resent the importation of these things but they do not amount to so very much either in volume or in value. They add up, certainly. But there are other things that have been imported that are vastly more important to us. These include tinplate, carpets, paper and timber. Every member would be able to supply further examples from his own experience.

I was interested to hear the right honorable member for Cowper (Sir Earle Page) and the honorable member for New England (Mr. Drummond) talking about timber imports. The imports of Douglas fir in 1958-59 amounted to £5,500,000. For the September quarter of last year the sum was £3,700,000. Multiply that by four and you get the value for a year. We have plenty of timber in Australia. Probably certain timbers that have been imported are equivalent to a third of the Australian supply and that is why timber mills are closing down. That is why plaintive questions are asked in this House by Australian Country Party members. If they were really earnest in their concern for the timber millers who generally vote for them, or the timber workers who live in their electorates, they would do more than merely ask questions. The total value of plastics imported into Australia in 1958-59 was £10,500,000. The amount for the December quarter of last year alone was £21,000,000, an increase from £10,000,000 for a year to £80,000,000 for a year. The same situation arises in connexion with paper imports.

The total value of all papers imported into this country in the financial year 1958-59 was £6,100,000. In the December quarter alone of 1959-60, paper imports amounted to £12,900,000. So imports of paper rose from £6,100,000 to a Tate of almost £52,000,000 in a year. When we look at steel, Sir, we find an extraordinary situation. In 1958-59, total imports of steel of all kinds other than tinplate amounted to 115,000 tons. In the December quarter of 1959-60, imports of steel totalled 1,011,000 tons - a rate of 4,044,000 tons a year. We did not need all that steel. We did not need all the carpets that have been imported. We did not need all the motor vehicles that have been imported - £53,100,000 worth in 1957 and £96,600,000 worth in 1960.

I have taken the trouble to obtain all this information because the figures prove the validity of our argument that the imports situation has run away from the Government and that the Government has run away from its problems. Now that we are faced with a situation of this sort, we are told that the pay-roll tax on the production of certain goods for export may be rebated and that businessmen who travel overseas to obtain markets for export goods may be allowed to treat as allowable deductions for tax purposes expenses incurred on train fares in foreign countries or on steamship and air fares for overseas travel. We are led to believe that these measures will open a new era for us and solve all our export problems and that this country will be greater than we ever knew it to be before

Mr Thompson:

– Who will make up the loss in tax revenue?


– As I said before, all of that burden will be thrown back on to the masses of the people. The little people will pay, because it is the little people who always pay, Sir. I believe that the Australian people have expressed their discontent and dissatisfaction with this Government. Our balance of payments problem must be solved this year.

Mr Peters:

– Now.


– Now - as quickly as possible. Something must be done, and the only practical way to do it is to re-impose import restrictions. We have to deal with this problem immediately, because if we do not, we shall have no money with which to import anything next year. This is a matter of stern reality. Harsh reality presses upon us more severely than at any other stage in the past twelve years. I do not cry calamity. Nor would it be fair for me to say that out of this Government’s bungling inevitably will come the misery of depression. There is great zest in the Australian people - a great power for adaptation and a great resourcefulness. However, I wish to point out to all the many young people who have not experienced a depression that depressions are not necessarily things of the past which were due to the mistakes of the past. Wisdom and sound government are still necessary if we are to avoid a recurrence of the misery of the 1930’s. From government inspired and created inflation; from panic measures such as those which were taken in February and November of last year and again in February of this year; from a complete absence of a definite and imaginative economic policy, could emerge a situation somewhat akin to that which obtained in the late 1920’s.

If costs continue to increase and if, at the same time, our industries cannot absorb all the labour that is offering; if overseas investors become increasingly distrustful of Australia; if we can no longer readily sell our products overseas; if our business leaders are shrouded in uncertainty; if the leaders of our trade union movement continue to be dismissed with an airy wave of the hand when they point to dangers with which they are so intimately familiar; if this Government acts on whatever nonsense is trotted out for it by its economic advisers; and if this Parliament does not openly, before all the people of Australia, censure this Government, then easily - quite easily - we can slide into the treacherous sands of depression.

I have little doubt that some honorable members opposite will attempt to assure the Australian people that the situation is now fundamentally sound as a result of what the Government has done. If Government supporters do this, the Australian people should remember that words of this kind were the catch-cry of the depression years. This was the catch-cry of the Lyons Government and the first Menzies Government. Such words were uttered by men who could find nothing better or more constructive to say when 30 peT cent, of our population was out of work. If we hear these words again in this Parliament, or words of similar emptiness, assuredly they must be taken as a warning.

This is a complacent government. Let us hope that it will no longer lure the Australian people into complacency. I believe that it will not do this. I believe that the flood-tide of misfortune is thundering down upon the Menzies Government. But this is only poetic justice, Sir, because never did a government obtain office and remain in office by means so dishonest and disgraceful as those resorted to by this one.


– Is the motion seconded?

Mr Whitlam:

– I second the motion and reserve my right to speak on it.

Acting Prime Minister and Minister for Trade · Murray · CP

Mr. Speaker, we have listened to a typical speech by the Leader of the Opposition. I do not know how many times he has charged this Government with gross mismanagement of the country’s affairs. We are quite accustomed to the extravagant claims that he makes when he says that great harm has been done, and to his dire predictions that calamity is just around the corner. The Leader of the Opposition and other members of the Australian Labour Party have cried wolf so often in this Parliament that the people are awake to their use of the terms which they adopt for the purposes of their political stunts. Labour finds it much easier to tear down than to build up, and the Leader of the Opposition has a gift - if I may describe his facility as an art - for destructive criticism. He is fluent in making predictions of calamity for his fellow Australians.

All that has emerged from Labour spokesmen, Mr. Speaker, is that in order to avert the disaster which he predicts for his fellow Australians, controls should be adopted as a cure-all. He and his supporters say that controls are what we must have. This is the old and never-changing Labour theme. As the Leader of the Opposition has stated many times, his view is that if we cannot, under the terms of the Australian Constitution under which this country has grown to its present greatness, impose sufficient controls, the Constitution ought to be amended - so that if Labour takes office again it will be more than ever free to live up to its theme by exercising constant and ever more numerous controls.

If the Australian economy were completely self-controlled, Mr. Deputy Speaker, one could think of plotting a simple and straight course, just as the navigator of a steamship does. But if the economy is not controlled, and has some of the characteristics of a sailing ship, you plot your way to your destination with a certain amount of tacking and turning. This analogy is correctly applicable to the Australian economy, which is dependent on overseas earnings in so great a measure as to be not completely self-controlled. We cannot at all times plot a simple and direct course. Inevitably, in circumstances of varying economic fortunes, whoever governs this country is obliged from time to time to modify policy. No measures taken by any Australian government, regardless of its political persuasion, can control the world prices of wool, wheat, lead and the other commodities that are vital to our economy. As I have stated, as we have fluctuations - violent fluctuations - in the values of these important items of our trade, inevitably our policies will have to be modified on occasions. Having said that, I say - I am sure I cannot be challenged - that this Government has done more to lessen the impact of these beyond-Australia world-price circumstances than has any other government. We have managed our economic life by developing our resources and we have in our period of responsibility established an expanding basis to carry an evergrowing and fast-growing Australian population with a high and enviable level of prosperity and with the greatest possible degree of economic stability. I have not the time now to recite the achievements in the Australian scene over the past eleven or twelve years, but every one knows that they are very impressive, by any basis of comparison.

We want growth and prosperity; we are determined to have them. We do not want to boast that we have perfect price and cost stability gained at the cost of widespread unemployment. We do not want to boast that in this country there are jobs galore through reckless indifference to inflation. We have always pursued a bal anced course and I am sure the Australian people recognize this. We do not ever want to boast that we have illimitable and mounting reserves of overseas currency gained at the cost of stifling restrictions of trade within Australia. We do not want to boast that profit-making here is high because of opportunities for unbridled speculation and engagement in nonessential industries. We want what we are sure the Australian people want, and what we have achieved is the development of our country with stability and without the stifling of enterprise.

The Government that is now under attack is the Government that has sustained this progress and this development of our country and of our natural resources. This is the same Government under which there has been an unchallengable period of unparalleled industrial development. This is the same Government under which there has been an enormous expansion of rural production and rural prosperity. This is the same Government under which the population of Australia has grown at a rate that would have provoked laughter had one predicted it twenty years ago. This is the same Government that has generated for the Australian people a level of constancy of employment and a height and generality of prosperity that is the envy of the world. This results in many people overseas looking at Australia and saying, “ This is the place to which I want to go to establish my new life”. People by the million say this when they view the circumstances that have been generated by the policies of this Government and the parties that support it. This is the Government that has produced the situation in which Australia is recognized by shrewd and experienced investors and industrialists around the world as the best country on earth for investments. This is the Government that has managed the affairs of the country to the point at which all Australians - Labour. Liberal and Country Party - are proud to boast of it daily, except on an occasion such as this.

We have done this by a complexity of policies. When wheat has been unsaleable and when butter on overseas markets has been at give-away prices, there have been stabilization schemes to invoke. These schemes have been so effective that the

Australian economy has been unaware of the grave marketing problems that have occurred from time to time. When a crop of wheat has been delivered whilst the last crop remains unsold, has there been any calamity or any loss of confidence? No! The policies of the Government have come into operation. When butter has been at deplorably low .prices, as it is in London at this moment and as it was two years ago, has there been any panic in the dairy industry or any thought that dairy farmers are not credit-worthy? No! The policies of the Government have applied over the whole field of dairying. The policies of the Government have been effective in insulating the Australian economy from grievous harm resulting from these circumstances overseas, which, as overseas circumstances, frankly we cannot control.

When circumstances in Australia have combined to threaten the security of employment here, this is the Government that has proposed to the Parliament a budget cinder which on one occasion £110,000,000 was injected into the economy through the instrument of the Budget alone to provide security of employment and continuity of profit-making by many of those who to-day attack us. I do not remember any one on such an occasion as I have mentioned saying that these are stop and go policies. Those whose jobs were made secure and those whose profits were sustained did not go out yelling politically or writing leading articles in which they said that this was terrible. They were very glad to enjoy the benefits that flowed from the policies of the Government. Now when inflation threatens the stability of our progress and our prosperity this is the same Government to-day that, having injected money into the economy, is siphoning off the dangerous inflationary surplus. If we apply the same economic philosophies now as we did when we injected credit to sustain our stability, we are told suddenly that we have a stop and go policy. T say that there is nothing stop and go in the objectives of the policies of this Government. They are absolutely constant and have been constantly effective.

In the recent period, two factors have emerged to menace the continuity of the steady development of Australia. First has been the occurrence of inflationary pressures and the second has been the acute character of the balance of payments problem, to which the Leader of the Opposition has referred. Let me take the balance of payments problem first. It is more apparent and more understandable. While there are sectors of the community who frankly feel that they are shrewd enough to benefit by inflation, the community at large recognizes that no national economy can sustain an adverse balance of payments situation indefinitely. Let me give a simple illustration. How would a worker and his wife manage the family budget if they never knew what the pay cheque would be - if one week it was up 30 per cent, from the normal and the next week down 30 per cent, from the normal? Would not the trader with whom they did their budgeting business say that these people were engaged in a stop and go buying policy? Would not the same sort of thing apply if there was that violence of fluctuation in the experience of a business? Of course there must be modifications. We can understand it in the domestic scene. If domestically there were these violent fluctuations in the wage packet, the dreams of buying a house and furnishing it would become a nightmare for the average person.


– Order! There are too many interjections. The Leader of the Opposition was heard in silence. I ask Opposition members to extend the same courtesy to the Acting Prime Minister.


– What I have just been illustrating in a domestic or business sense exists in exactly comparable circumstances for the Australian nation in respect of overseas earnings. Over the eleven years during which this Government has been in office there have been violent fluctuations of international commodity prices, and in recent years the severe decline in prices has been a nightmare. But we have managed. It is true that on occasions we have had to embark upon internal policies of restraint, notwithstanding general policies of expansion. We have had import controls. We have tightened them, and we have relaxed them. We were abused by vested interests when we had import licensing controls, and we are being abused by vested interests now because we have sought to give freedom from them. In spite of the calamity howlers - and we have heard some superb and gifted calamity howlers in this House to-day - the Australian economy has still gone along.

The Government has embarked on farreaching policies to encourage the production of more and more items for export. There have been constantly expanding trade promotion drives right round the world. I think I am justified in saying that our trade negotiations have been notably successful that we have obtained access to new markets on terms which have given us the opportunity to sell our products to the best advantage. Under these internal policies, the volume of goods for export has increased enormously, and increased assistance has been given in the promotion of sales. In spite of all this however, we have this intransigent or intractable problem caused by the fact that prices for the bulk of the commodities which we sell have gone down on the world’s markets while, by and large, the value of the things we are importing has continued to go up.

Let honorable members take note of the figures I am about to quote. When this Government came to office it deliberately introduced policies to stimulate the production of things, for export. It set out to ensure that, there was a market for those goods overseas, and sought to stabilize conditions in Australia to tide us over until its policies produced their effect. Our efforts have had varying results. The Commonwealth Statistician will say that, having regard, to the immediate post-war shortages, the Korean war boom and so on, 1953 could be taken as being as near to a normal year as one could get when dealing with world values of bulk commodities. I emphasize that that is not my opinion; it is the judgment of the Statistician. I have taken 1953 as a basis for the purposes of comparison. This year, Australia will sell overseas about £880,000,000 worth of wool, butter, meat, fruit, lead, zinc and so on. The return will fall far short of our needs, but, if we got this year for those things that we export the prices obtaining in 1953, our income would be not £880,000,000, but about £1,300,000,000, and this country would have no balance of payments problem whatever. Therefore, to the extent that 0U policies have induced production for export and. secured the right to sell those things, they have been completely successful. What has militated against us has been the fall in the value of bulk commodities throughout the world. I say to my friends opposite, and to some of the leader writers of the great newspapers of Australia, that they would be serving the Australian people better if they were to devote themselves, as 1 and this Government have been doing over recent years, to pointing out to the rest of the world that Australia is not getting, a fair go in connexion with bulk commodity prices. That has been the theme of Australia’s policy declarations at the great Montreal conference and other places.

That brings- me back to the comparison between the ship propelled by steam and the one that sails before the wind. This country is not engine-motivated. It is influenced by external circumstances. But we can have, just as the master of a sailing, vessel has, a constant objective. So long as this situation exists - and I think it will always exist in. the foreseeable future - this economy will have to tack and turn to get to its destination. But that does not mean that it will not get there, nor does it mean that we shall have to change our objective. No Australian Government can compel buyers overseas to give us more than they are prepared to pay, and no Australian Government can compel those who sell tous from overseas to sell for less than they have elected to charge.

Just about twelve months ago, the Government decided to free imports from control. It had two reasons for that. The first was an economic one. We wished to make a contribution to abating the pressures of inflation. The second was to give nol unbridled, but reasonable freedom to do business. I am proud to stand here and say that, because of the basic political philosophies of this Government-

Mr Costa:

– Which are wrong.


– Of course, they arewrong from the Opposition’s point of view. The Opposition does not believe in freedom in the economy. We understand that only too well. The tenor of the debate so far has emphasized that. 1 repeat that we on this side believe in freedom. This Government confidently believes that we can sustain freedom to import, and we have no intention of departing from that policy. But the calamity howler who shakes the confidence of overseas investors in the wisdom of sending money to Australia, or who stimulates the Australian merchant to import more than he needs for the time being is making a powerful contribution to wrecking this measure of economic freedom, which we have sought to extend to Australia’s trading, industrial and consuming communities. I am sure that every responsible Australian citizen and organization realizes that the success of the measures depends upon overseas markets. No Australian Government can escape from that reality. Surely, therefore, it is essential that modifications be made to policies from time to time to adjust them to the changing aspect of international trade.

The other phenomenom which impelled the Government to action last year was the clearly developing inflation. But before passing from the balance of payments, let me point out that excessive internal buoyancy, which is typical of an inflationary situation, does produce abnormal import demands and calls upon overseas funds. The figure which the Leader of the Opposition (Mr. Calwell) quoted as an example - that related to imports of tin plate, steel, carpets, plastics and so on - is the result of the pressure generated by the buoyancy of the internal situation which produces a level of demand which, quite clearly, cannot be serviced indefinitely unless things are brought to a reasonable balance.

This Australian inflation is an unseen robber. Surely there is no need for me to explain how it harms the thrifty, those who are in the fixed income group. Surely there is no need to explain how it robs the workers’ pay packet, or how damaging it is to export industry. We take inflation as a serious happening, and we deal with it. Wherever it occurs, inflation is always accompanied by a concentration of the economy upon the non-essentials and a neglect of the essentials. This Government would much prefer to face blasting attacks from its political opponents, and from those whose balance of profits and in some cases whose jobs are interfered with by our antiinflationary policies, than to allow damaging inflation to undermine the Australian economy. We would rather risk our political reputation, in the short term, by taking the inevitable unpalatable steps necessary to arrest inflation than to let it slide by more comfortably. Money and credit must be restricted in the inflationary situation. That level of profit making which produces a reckless indifference to cost and wage levels must be minimized. In times of inflation, steps taken to divert from the non-essential to the essential are always necessary, and they are inherent in our policy at the present time. In a country like Australia, where the balance of payments problem is concurrent with inflation, and is indeed a by-product of it, there is a dilemma for those who are responsible. The dilemma is that we want to encourage economic activity in the export sector while at the same moment we are setting out to restrain it over the broad field. Here, of course, there is a real problem for us, but no problem for the socialist mind. All this can be controlled, says the socialist, by the iron hand of government. We seek to use that means to the minimum extent.

Let me turn now to some actions which have been challenged and which have generated criticism. The reduction in overseas earnings, which is apparent to every one, inevitably reduces the liquidity of the banking system. Part of our recent policy has been to minimize the abruptness of the impact of that situation, which was quite unpreventable. To that extent the bank credit policies now operating have been designed, importantly, to produce an impact earlier than it otherwise would have occurred, but, in the ultimate, to produce an impact much less severe than would otherwise have occurred. That really ought to be understood. Who will attempt to justify the unrestricted availability of funds for non-essential and speculative purposes when, at the same time, there is money starvation for essential export industry and basic industries and essential community services such as health and education, and public works like roads, communications, water and sewerage, and power, without which, of course, the economy would quickly become grievously unbalanced. Where does Labour stand on that, when it challenges our credit restriction policies? They are designed - and we make no bones about if - to divert in this situation from the less essential activities to these activities that are basically essential to the Australian life and living. Every single point of our policy of credit restriction - motor car taxation, non-deductibility of certain interest payments by companies, the desire to divert some life insurance funds to Government loans, and the raising of interest rates - and the other points, without exception, have been introduced for the explicit purpose of preserving balance in the Australian economy. There is no intention that essential undertakings in either the private sector or the public sector shall be permitted to starve. And for this very reason, that interference with expansion in the private sector - motor cars, commercial building, &c. - is only defensible when the level of activity in those spheres has been carried to the point of endangering the basic economic stability. That has occurred; it is demonstrable.

It is only when this has occurred that the Government has felt obliged to minimize these activities through particular policy actions. The automobile industry was at an extremely high level of activity and had been making excessive calls on overseas funds and local resources; and that explains the increase of the sales tax as a deterrent. The purpose of that step was clearly stated by my colleague and others of us in the Government, and we said it would be maintained only for so long as it was judged necessary for the purpose for which it was imposed. Now, as the total and cumulative effects of other factors have operated, the judgment has been made that the additional sales tax was no longer necessary for the purpose for which it was applied, and it has been removed. Is that not understandable to any reasonable person? Is it not the correct course of action for us to have taken?

Under the policies of this Government, home ownership is, I think, higher in Australia than in any other country, but the cost of home building at any time reflects the pressure of the whole building programme of the country. Beyond a point, if there is unlimited credit available for building you must get dearer homes, to the detriment of people who are aspiring to own their homes. What we aim at is reasonable stability and sanity over the whole of the building field. That is our only objective and clearly we have made it apparent in the bank credit directive that it was not intended to depress home building for home ownership. In this enormous and new country we have not inherited the public works of centuries, of which older countries have the benefit. We have enormous areas and few people. Heaven knows we have high ambitions and an enormous demand for public works, and there are only two ways by which to finance them - by borrowing money or levying taxation on to-day’s generation. We think that taxation for public works is high enough, but if you cannot borrow the balance - if you think taxation is high enough and you cannot borrow the balance - then clearly you must either fall behind in your public works or turn back to even higher taxation.

In this field, over the last ten years, 60 per cent, of all Australian public works have been done by levying taxation to pay for them - £2,000,000,000 has been levied upon the people to pay for public works which posterity’ is to a large extent to enjoy. Historically, the life insurance companies have subscribed to public loans to an important extent. It is a fact that over most of our history, works to which public loans are geared have depended importantly upon subscriptions from life insurance companies. This Government believes in life insurance. This Government, more than any other government in the history of this country, has diverted, by its policies, a positive torrent of money into the coffers of life insurance companies and superannuation funds. When we came to office a taxation deduction of £100 a year was allowed for life insurance. To-day the rate, under our policy, is £400 a year, and as a direct result the funds of life insurance and superannuation bodies have risen prodigiously. The total deductions from income tax allowed for subscriptions to life insurance companies and superannuation and provident funds, I am informed, are currently running at the rate of £150,000,000 a year. This concession, to use the tax jargon, involves the Commonwealth Government in forgoing £35,000,000 of revenue a year. While the Government has given up that amount of revenue, paradoxically the subscriptions to government loans from these traditional subscribers have diminished practically to vanishing point. We do not rebuke the companies for that. They are the masters of their own affairs. This is not to rebuke them but to state the objective fact. We have foregone £35,000,000 a year because we believe in life insurance by the people, but at the same time subscriptions have really diminished to vanishing point. In the light of those facts we have concluded that rather than see the works programmes for hospitals and schools, communications, essential water, power, sewerage and so on wither away - or be paid for by punitive increases in taxation - we should turn to this historic source of loan money to support to a not unreasonable extent government loans for this purpose. That is why we proposed that life assurance companies should make some reasonable contribution from the funds that our policies have directed into their coffers, not for the support of this Government but for the progress of the Australian nation. And, after all, what is the difference between the policy-holders of the great insurance companies and the Australian people? There is no difference! 1 turn now from that which I am sure is understandable to this controversial issue of non-deductibility of certain interest liabilities of some public companies. Over the years the allowance as a tax deduction of interest on borrowings generally has been, and is, beneficial to the development of the economy in quite important aspects. Nevertheless, certain financing encouraged by this deductibility, helpful as it may be to some sectors of the economy, can do harm to others. For instance, deductibility can, and does, give undue encouragement to those engaged in the business of raising money from the public to finance share and land dealing, and promotion and construction of more or less speculative kinds. With the general rate of company tax at 8s. in the £1 deductibility means that in profitable ventures the Commissioner of Taxation bears up to 40 per cent, of the interest cost of the borrower, and so in those circumstances some people can afford to offer, and have been offering, very high rates for funds from the public. So is it any wonder that in a buoyant economy where every one wants to expand and must have the funds to do so the cost of borrowing - the rate of interest - has, as every one knows, really threatened to get out of hand? As is always the case in these circumstances, investment was being channelled increasingly into the less essential at the expense of the more essential sectors of the economy, both private and public.

I have said that deductibility in some cases is desirable and necessary as my colleague the Treasurer (Mr. Harold Holt) has pointed out. I have explained that in some circumstances it can have, and has had, harmful results. It is quite important to the community to ensure that action necessary to curb the harmful effects does not strike at the valuable aspects of deductibility. Accordingly, when the Government introduced the current measure on this matter it said that this was a holding operation. The Treasurer, to use his own words, said that it is “ to remain in force only until such time as a more comprehensive and detailed scheme is fully developed in the light of experience and wider information “. We shall preserve the valuable features of deductibility, but we shall, in to-day’s circumstances, minimize other features which may produce, and have produced in the past, distortions of the economy which can harm the public interest.

I turn now to the subject of employment or, as the Leader of the Opposition prefers it, unemployment. He has been proclaiming that we soon will have 150,000 unemployed in this country. This is the usual, regular, calamity call and I suggest that it be not taken too seriously. What is relevant to this matter is that this Government has never treated the question of employment lightly. To prove this, I draw upon the figures covering the decade from 1949 to 1959 which have been published by the International Labour Organization. These figures indicate that in each year of the decade unemployment in Australia has been much lower than in the United Kingdom, the United States of America, Canada and West Germany, to take just four leading industrial countries. There is the proof nf the effectiveness of the Government’s policy of sustaining employment in this country. In the future, as in the past, our policy will be adapted to changing circumstances and our purpose will be to continue to maintain what we regard as our proud record in the employment field.

We are determined to solve our problems of the moment without throwing away our freedom. We are certain that minimum government control produces dynamic business expansion which can never be matched by socialist constriction of the economy. Members of the Government parties are experienced in public life. We know what wins a vote and we know what loses a vote. We know that tightening bank credit, presenting evidence and advice to the Arbitration Commission as we did a year ago, raising interest rates, exposing some Australian manufacturers to sharper import competition and increasing taxes are not vote winners, but we have enough confidence in the Australian people to be sure that they believe that we have sound judgment - and we have eleven years of experience to draw upon to prove it. We are confident also that the Australian people believe that what dominates us in our sense of responsibility to their future and that no true progress is possible without a healthy economy.

An economy that cannot procure, through earning or borrowing overseas funds, enough to pay for its essential imports is not healthy. That is why we have taken certain action. Where costs are rising at an intolerable rate, the economy is not healthy. That is why we have taken certain action. An economy that can produce funds for boom, non-essential expenditure but cannot find funds for essential developmental work, particularly in relation to exports, to keep pace with the growth of the nation, is not healthy. That is why we have stepped in and introduced our policies. The steps that the Government has taken are designed to restore health to the economy so that our expansion, with prosperity and full employment, can proceed from a stable base. We are confident that our policies are right and that the desired results will flow from them.

I conclude by saying that the attack which the Labour Party has made upon the Government’s policies is not just a parliamentary incident. Fundamentally, what emerges from this debate is that the two sides of the Parliament offer the Australian people two completely different ways of life. That is the point; and I say to friends of the Government who criticize some of our methods that they should not be com pletely carried away by one aspect of our policies that may hurt them or with which they may not agree. Let them not forget that what has been said in this Parliament to-day has been designed to develop an atmosphere for the next election when the Labour Party hopes to regain power to enable it to change the way of life of the Australian people. That is the critical issue. 1 have not the slightest doubt that the Australian people, recognizing that issue, will have confidence in this Government and will indicate that confidence now and when they get the opportunity to vote.

Sitting suspended from 12.40 to 2.15 p.m.

Melbourne Ports

.- Mr. Speaker, surely no one could assert seriously that the present economic situation is one of stability; nor, I would suggest, in the face of the daily announcements of dismissals of people from employment, could it be seriously argued that many people can expect increasing prosperity. It is true to say that not for many years have Australians been so apprehensive as to what the future holds for them. I think that the only point of the speech made by the Acting Prime Minister (Mr. McEwen) with which I can find much agreement on this side of the House is his diagnosis of the trouble. But we certainly are not in agreement with his prescription for treating the ills that particularly menace the Australian economy at the moment. The right honorable gentleman spoke of these things and he listed them in order.

First, there rs the acute balance of payments problem and, secondly, the continuance, at the same time as we face recession and the diminution of employment, of all the symptoms of inflation. That is anomalous in many ways, because traditionally when people fell out of work the tendency was for those who believed in something that they called the law of supply and demand to assert that decreased employment would lead to reduced prices, and that things would adjust themselves. But in Australia to-day there is stagnation in large sections of the economy, although at the same time there is no fall in the prices of the goods and services that industry still manages to produce.

I take these two problems in order. As I say, I agree with the Government’s diagnosis, but we on this side believe that the proposed treatment is entirely wrong. The statement of the Acting Prime Minister serves only to highlight the basic difference in the philosophies of the Government and of the Opposition. We believe in approaching these questions from the point of view of humanity.

Mr Pearce:

– Socialism.


– I repeat, we believe in approaching them from the point of view of humanity. We reject the ancient, outworn shibboleths to which the party of the honorable member for Capricornia adheres. But I will come back to that in a moment. It is rather interesting, Mr. Speaker, to hear the Acting Prime Minister so glibly deny the suggestion that his Government believes in controls. I suggest that if he meant that he did not believe in socially desirable controls but believed in the anti-social controls, which he chooses not to call controls, that might be a fair statement of his views.

The other thing that characterizes the approach of the Government to the economic problem is how simply its members explain the steps they are taking and how complicated they make any suggested alternative policy sound. The Acting Prime Minister said that the Government did not believe in controls. So, let us come back to this basic question - the question of Australia’s balance of payments. In a few minutes I will quote some figures which show that the balance-of-payments problem has not just emerged during the last six or eight months. It has existed pretty well for the life of this Government, because the Government has failed to grasp what is involved in the problems of economic growth in an economy such as Australia’s. It is all right for the Acting Prime Minister to talk about having no controls, but the history of the Government from 1951 to 1960, even in terms of this thing that he now says he discards - import controls - has been one of on-again-off-again.

I should like to go back, just to refresh the memory of the House, to what the former Treasurer said when he was Acting Prime Minister, again presumably at a time when the real Prime Minister was abroad. In announcing import restrictions which were to operate from 1st October, 1955, with the object of reducing imports by about £80,000,000, he said, when speaking of the fall in Australia’s overseas reserves in 1955-

If the fall is to be arrested more quickly import restrictions alone cannot be relied on. Domestic measures must be adopted calculated to reduce the demand for imports.

In those days at least, the then Treasurer used import controls as a part weapon to abate this particular problem, and he said that if we did not use them sensibly we would have to take domestic measures of another kind calculated to reduce the demand for imports. The present Government’s principal spokesmen - the Prime Minister, the Minister for Trade, who is now Acting Prime Minister, and the Treasurer (Mr. Harold Holt) - all have discarded the weapon of import controls as though they have no intention of using it again. If they do discard the weapon of import controls, then I suggest that they need to be a little more specific about what these other measures may be that are calculated to reduce the demand for imports. Already one can begin to see the pattern of what they may be. We have the spectacle of unemployment in considerable sectors of the Australian economy. We have also the spectacle of the Commonwealth sending an advocate the other day to appear before the Commonwealth Conciliation and Arbitration Commission in a wages case, to say that he was neither for nor against the submissions being made by the trade unions, although the whole burden of his argument - and he put it very pointedly to the commission - was that it would be dangerous in the present circumstances to raise the wage level in Australia because of the critical condition which the economy faces, particularly in regard to imports.

Now, here is where you get the basic cleavage between this side of the House and that. You on the other side are prepared to allow a certain amount of unemployment to develop, but you are not prepared to interfere with certain other people’s economic freedom in order to reduce the flow of goods and services into this country. Apparently, it is not considered interference with freedom when thousands of people lose their jobs altogether. That is regarded as just the inevitable working of economic forces. I suggest again that that outlook pinpoints and highlights the difference between this side of the House and the other.

We say, and we emphasize it, that when your economy is basically dependent, as Australia’s is, for what it can import upon the prices and the quantities of a certain number of primary products, you cannot say categorically that you will not resort to such economic controls as import licensing. If you discard import licensing, and if you discard as an alternative - and the Government has announced its intention to do so - some degree of revaluation of the exchange rate, is it not obvious that you must come back to the third alternative, which is described as exchange control? Of course, in the Government’s view that is a dirty term, and the Government will not call it a control. It will say that it is a purely economic measure, leaving those who want to import, and who are allowed to import, say, only £90,000 worth of goods instead of £100,000 worth, to decide exactly what kind of imports they will buy with the £90,000. The decision will be left to them, irrespective of whether the imports they bring in are essential to the welfare of the Australian economy or not. The decision will be theirs, even if th*:v decide to import timber, while people in Tasmania who produce Australian timber are being thrown out of employment, as the honorable member for Braddon (Mr. Davies) told us yesterday. If that is the Government’s conception of economic freedom, then T do not want any part of it; nor, T think, do any other honorable members on this side of the House.

Let me return to a point that I made previously. Whether you like them or not, you have got economic controls of one kind or another in this community at the present time. You have controls over wheat sales. You have controls over sugar sales. You have controls in the banking system. But of course our glib Acting Prime Minister says that these are not controls. I wish to refer to an article in a journal which is before me, and I commend it to both the Acting Prime Minister and the Treasurer. It comes from a source to which I would not normally go for endorsement. I quote from Lloyd’s Bank Review for January. 1961, which contains an article entitled. “ Bank Advances as an Object of Policy “, by the Right Honorable Sir Oliver Franks, who was chairman of the Lloyd’s Bank Board and who was also a member of the

Radcliffe Committee, which sat in Great Britain over a number of recent years. The author talked about the difficulty of using only bank credit, or the restriction of bank credit, as an economic weapon. He recognizes that in Great Britain, as in Australia, the banking system rules over a smaller proportion of the economy in 1961 than it did in 1931. He recognizes also that in many respects credit restriction is not a selective enough instrument. He makes an analysis of advances made by his bank - I have no comparable figures for Australian banks - and he says -

By number, 98 per cent, of the banks’ borrowing customers were in the smallest of the ranges chosen-

That is the range covering overdrafts of from about £1,000 to £10,000- but accounted for only one-third of the money lent. The remaining two-thirds of the money went to the 2 per cent, of larger borrowers.

I suggest that this kind of pattern applies in the Australian economy, and surely, when it comes to restricting credit, it is easy to cut down on the small people, while it is quite dangerous from a bank’s point of view to cut down in the same proportion on the big people. The instrument is also, I suggest, a blunt instrument. I repeat that what is being attempted in this country is a cutting down of the flow of imports. Yet this Government, in our view, discards the only selective instrument capable of doing the job, relying on the blunter instrument of bank advance policy.

Then we have the gimmicks that were introduced to us yesterday and which are, we are told, designed to encourage export trade. Again it seems that an argument is going on in the Cabinet about this matter, because some people say that if these measures work at all the principal beneficiaries will be large companies like General MotorsHolden’s Limited and Broken Hill Proprietary Company Limited. Another point that this Government does not seem to grasp is that when the motor vehicle industry is expanding in Australia, as it is at the present time, it must reduce the capacity of a show like the Broken Hill Proprietary Company Limited to export, because it uses more steel inside the Australian economy. Yet the principal beneficiaries under this scheme will be these two animals that eat each other.

Have a look at the annual report that is sent out by General Motors-Holden’s Limited and you will find that the wages bill of that company is in the region of £25,000,000 to £30,000,000. If we indulge in a quick mathematical exercise we find that pay-roll tax on a wages bill of £25,000,000, at 6d. in the £1, comes to about £600,000. As I have said, these companies would be the principal beneficiaries. But if General Motors-Holden’s Limited so ordered its policies that it was able to have the whole of this pay-roll tax abated, docs any one think that that would have a significant impact upon what is the real problem so far as Australia’s balance of payments is concerned?

I want to cite certain figures to the House. They are taken from statistics published in the Reserve Bank of Australia Statistical Bulletin for November, 1960. I have endeavoured to get an overall picture of the position of Australia’s balance of payments during the last five years for which figures are available, the period from 1955-56 to 1959-60. In that period Australia paid out in accumulated profits, in dividends and in interest to overseas investors in Australia the large sum of £487,000,000. In the same five-year period the deficit on our visible trade picture - that is the excess of imports over exports - amounted to a further £268,000,000. making an accumulated outgoing over the five years of £755,000,000. This Government looks only at one barometer in interpreting the position of its overseas funds. It looks only at the barometer of London funds, and so it consoles itself with the thought that despite this colossal adverse balance of £755,000,000, it appeared that the London funds had risen by £83,000,000. But why had the London funds risen by this amount? They had risen because of the increase of direct investment in Australia - that is, foreign ownership of economic activity in Australia - by £453.000,000.

Now we see the new trend, which this Government should be alarmed about, because to a large extent it is speculative. Investment in existing Australian activity - not pioneering new shows, but burrowing and buying into old ones - amounted to £299.000,000. The total of overseas investment in Australia, then, amounted to £750,000,000, and still the Government, through various international agencies, borrowed something like £100,000,000. In this way we paid nearly £268,000,000 more for imports than we earned from exports because we increased the toll that we pay to overseas investors. This is not something that has been happening only in the last few months nor even since the colossally stupid decision to remove import controls in February last year.

To-day, the Acting Prime Minister has said that our real problem is related to bulk primary products. I agree with him. If Australia were obtaining more for its wool than it has been getting we might be able to have this policy of squander. But we cannot have a policy of squander while we fail to grapple with the real problem. I do not like being pessimistic about this sort of thing but I think we are entitled to ask how long this deterioration can go on. How long can we continue with a situation in which the only people whose backs bear the burden are people on wages and other fixed incomes? The Government does nothing about the price policy of the large undertakings which are the principal source and generator of internal inflation. The Government does nothing but send somebody to the Commonwealth Conciliation and Arbitration Commission to suggest that it would be a calamity if the worker were ever to get back to the point from which he had slipped during the previous twelve months. Then the Government claims in this place that Australia has never had it so good!

I agree again with the Acting Prime Minister that inflation is not a good thing. But he does not realize - or does not recognize - that inflation continues because inflation is a good thing for some people. Inflation is a good thing for those who control prices and push their own incomes up; but it is a bad thing for those people whose incomes are controlled through the machinery of industrial tribunals and for people on fixed incomes such as pensioners. They are lucky if they ever get back to the point from which they slipped. The easiest section of economic activity to control is that which comprises large undertakings. The record of large organizations such as General Motors-Holden’s Limited and the Broken Hill Proprietary Company Limited shows that patriotism is not enough to make them pursue a policy in the interests of Australia. They are making huge profits.

They could earn foreign exchange but they prefer to get the most they can from the local market.

I do not think that the tiddly little measures on which the Government is pinning its hopes face up to the fundamental problem. Everybody here, particularly members of the Australian Country Party, knows that for a number of years the major source of our export earnings must be wool and wheat and base metals. Gimmicks such as sending motor cars or machinery to Hong Kong or Asia do not touch the basic problem. The Labour Party has taken a fundamental step here to-day. It has moved a no-confidence motion because it believes that the Government which, unfortunately, continues to occupy the treasury bench has no comprehension of the difficulties that face Australia economically, both internally and externally. It is true that there is the problem of inflation internally, even though we face economic recession at the same time. The external problem has to do with the balance of payments. But this Government, in the face of economic adversity, adheres to ancient dogmas and is prepared to throw away the only sensible weapon that can grapple with the problem. We say that a government so acting is no longer worthy, if it ever was worthy, of the confidence of the people of Australia.


.- Mr. Speaker, once more we have heard a diatribe against the Government’s economic policy - the sort of stuff that is rolled out year in and year out. We are still waiting to hear what the Labour Party would do if it were in office. This is important because there is one thing which history shows that the Labour Party will not do, and that is to take savage measures to cure inflation. When the Leader of the Opposition (Mr. Calwell) began his speech this morning he resorted to the old Labour Party myth that the Australian economy in 1949, when Labour left office, was sound. At that time, the rate of price increases was about 10 per cent. Apparently the Labour Party regards 10 per cent, inflation as reflecting a sound economy, but some of us are old enough to remember a few things such as blackouts, shortages of goods and petrol rationing.

What is the answer? What is traditionally the only answer of the Labour Party for inflation? Price control! When Labour lost the referendum on price control it lost its policy. No other policy to restrain inflation has ever emanated from the Labour Party. During the war prices were fairly stable because the Australian people were fighting as one, and conditions were abnormal. But as soon as the natural life force of the economy came into being after the war there were catastrophic shortages and Labour had no answer except further controls.

The honorable member for Melbourne Ports (Mr. Crean) played on the word “ controls “. Everybody knows that some controls are necessary, but the important questions are, “ To what degree? “ and “Of what?” That is the essential difference. An economy may be anything from a completely free economy to a completely controlled economy. The American economy is probably the nearest approach to a completely free economy, but it, too, has many controls and it always has had them. At the other end of the scale is the Soviet economy. Of course, we have controls! But in regard to the extent of controls and the method of control there is a very big gulf between the political parties.

So far, from the Labour side, only one suggestion has come as to what can be done to cure the current economic problem. Labour would re-impose import controls. It would cut off imports. We can certainly believe that. A lot of people imagine that the balance of payments problem can be solved simply by slicing off imports. They say, “We are just in a balance-of-payments crisis “. But to any one who looks carefully at the rate of increase in prices last year, which was between 4 per cent, and 5 per cent., and the rate at which they were obviously going to increase had the Government not taken these measures, it is obvious that the main purpose of the measures is not to meet the balance-of-payments crisis but to prevent inflation from getting out of hand. In a world in which public opinion rightly demanded full employment there must always be a very difficult course for any government to steer between full employment, on the one side, and inflation and undue price increases on the other. To steer a skilful course is something which no country has yet achieved anywhere.

Some countries have experimented. They are feeling their way. They learn a few things as they go along.

The Leader of the Opposition may, indeed, point to the fact that our prices have increased more than those of other countries have done and our level of unemployment has been far lower than that of other countries. The very fact that the ideal of full employment is pursued so ardently and so consistently makes the task of restraining inflation extremely difficult. In this instance, we have reached a position at which inflation appears to be a real danger. Allied to the problem of inflation, of course, is a balance-of-payments crisis. The two things go together. If demand is high, because of over-full employment and high incomes in Australia, balance-of-payments difficulties result.

Such difficulties are common to every country, and no country has yet evolved a technique by which, if the balanceofpayments position is deteriorating and inflation is increasing, you can take just so much action - no more and no less - in order to get particular results. There cannot be any quantitative relation between what is done as a policy and the exact effects of that policy. Take the motor car industry as an example. No one can do other than regret the most unfortunate effect on individuals of their becoming unemployed when adjustments take place. But does any one in this House seriously think that the Australian economy could afford a rate of increase in imports of motor cars commensurate with the rate in the September quarter of last year, when the rate of imports represented an annual increase of 33i per cent. - from about £150,000,000 to more than £200,000,000? The flow of imports for this industry caused steel shortages and difficulties in labour supplies over a wide range of Australian industry. Does any one suggest that we could have gone on with the motor car industry continuing to import at that level?

In circumstances such as these, we have to decide what to do. Any responsible government, whatever its political colour, would have had to make that decision, because the Australian economy could not stand the flow of imports for the motor car industry. What is done to correct this? A tax is increased. The sales tax is an obvious choice. Probably, any government would have done what this Government has done. Could any government which increased a tax or applied credit restrictions say precisely what effect such a measure would have? Could it say that sales of motor cars would be cut exactly by so many thousands to a specific figure?. The only thing one can do is head in the right direction, adjust one’s measures as necessary, and tailor them to suit the situation. Certainly, the motor car industry was cut back very sharply indeed. Any adjustment made should not be taken too far, and the restoration of the previous level of the sales tax on motor vehicles when the additional tax had done its work extremely well was just plain common sense.

Similar considerations apply to the credit restrictions. Here again, the choice of the right action is not easy. Anybody knows that if the supply of money expands too quickly, inflation results and prices rise. If the supply of money is cut down, the reverse happens. But nobody anywhere has yet been able to establish that if you reduce the supply of money by. say, 5 per cent., prices will fall by 5 per cent.; or vice versa if you increase the supply of money. All you can do is head in the right direction.

These things are intrinsic in economic policy. Unless we impose a gaol-like system under which we can control individuals in the day-to-day detail of their activities, thereby rendering them no longer free to make their own decisions over a large field of activity, these mistakes will be made. We cannot help it. If the measures taken have too sharp an effect in some respects, those measures are naturally trimmed back.

The intensity of the current credit squeeze results from the previous expansion, among other factors. That is admitted quite freely. There is now in our banking system a weakness which makes central bank control very difficult to achieve. That weakness is our overdraft system under which limits are granted and drawn upon, on the average, only to about 55 or 60 per cent. Under this system, if credit is to be contracted, you cut down the limits. But you cannot control everybody who has a right to sign cheques within the limits previously established. This was really a basic cause of the huge increase in bank advances between February and November of last year. We can conclude only that they were increasing at a frightening rate.

What does the community want to do about this? Does it want to go on with bank advances increasing at that rate? Will it not do anything about the supply of money? Does it want an increase in prices in one year of 15 or 25 per cent, instead of 5 per cent.? If a government is to cure these economic ills, it has to do some pretty nasty and unpleasant things. Members of the Australian Labour Party and many people outside this Parliament talk as though these are the kind of -things that governments enjoy doing and that their supporters enjoy being made the local scapegoats for. These things are very unpleasant, but, on the whole, as time goes on, the more responsible members of the community will become increasingly reconciled to the fact that if the measures taken by the Government, or similar measures, had not been taken, disaster would have ensued. Even the wildest critics of the Government’s measures have not suggested that it should have done nothing and that it should just have let the whole situation rip.

With respect to not only the balanceofpayments situation but also the internal condition of inflation, such critics, like members of the Australian Labour Party, are very silent about what they would do, except for one thing: They would reimpose imports control. Many interests are bound up in imports. There are many people who dislike the draught of competition. When an economy has been subject to imports control for so long as ours was and the controls are removed, no government finds it easy to estimate what will be the precise effects on different sectors of industry. But let us at least remember that 75 per cent, of our imports bill is incurred in servicing industry directly in one way or another. If you reduce imports without taking corresponding measures to reduce internal demand, you will get shocking inflation. The measures taken in February of last year to restrict imports would have done their work well by now if the volume of bank money had not increased. There is nowhere in the world any set of magicians with any particular expertise who can predict exactly what the effects of measures such as these will be. All we can do is watch the situation and do the commonsense thing.

When we talk about imports control, let us not forget the evils that existed when such control operated. We recall the cosy little parties of people with nice monopolies in certain lines who added about 15 or 20 per cent, to their prices simply because they had begun importing earlier and happened to have import licences, whereas others had not. That sort of thing is implicit in imports control. Whatever we call it and whatever we do to enforce it, a rational system introduces all kinds of anomalies and unfairness, resulting in general dislocation. If we re- impose imports control, we shall go back inevitably to that kind of situation. Let us not forget that. Far too many people forget too BaSil, what went on under imports control. They may become a little alarmed about the balance of payments and they may conclude that the re-introduction of imports control would remove objectionable features of the economy which have developed over the years, but we should make every endeavour to avoid re-imposing direct control over imports if we can.

There is one vital respect in which the Government is not master of the economy. The honorable member for Melbourne Ports suggests that the whole trouble arises because of a pricing policy adopted by a number of big concerns. That practice may be followed and we all know that to some extent it is; but keep this matter in perspective. These big concerns - these nasty people who are so unpopular with the Australian Labour Party - that have done so much to build up the Australian economy in their own sector are only a small portion of the whole. If we periodically jack up the whole of the incomes through the Commonwealth Conciliation and Arbitration Commission, increasing incomes when clearly there are no roods to buy commensurate with those increases, we will have a difficult situation to handle.

A large part of our trouble now arises because the extra income let loose in 1959 is gradually working its way through the system. These measures the Government is taking will certainly adjust the system. However, it is impossible in the course of doing so to avoid very unfortunate effects on large numbers of people. But if we now have a big increase in the wage structure and all our costs go up again, the results may be regrettable. It is all very well to say that General Motors-Holden’s Limited and other large concerns can absorb the increases. To some extent they are able to do so, but the vast majority of employers, including those in the wool industry and other major exporting industries, cannot absorb any further increases. If we continue with this process whereby the Government must continually inject a huge extra amount into the income system, it will become virtually impossible to contain a large measure of inflation.

Nobody can be sure that these measures will work, but if in face of this we get a large increase in incomes, our position will become most serious. However, provided every one is sensible and people do not allow talk to lead them into making the kind of decision which progressively leads to a depression, when everybody feels uncertain and restrains activity, we will be all right. People should examine the situation as it exists in reality and not in the atmosphere that is created by gloomy talk of bankruptcy and odd troubles here and there, because if people keep their heads they will realize that what we are passing through basically is a severe shake-out. If we proceed sensibly, we will come through, and come through before the end of this year.


.- The honorable member for Wentworth (Mr. Bury) referred to a remark made by the Leader of the Opposition (Mr. Calwell) when he commenced his speech. The Leader of the Opposition said that the Menzies-Fadden Government inherited a sound economy from the Chifley Administration. This statement was ridiculed by the Treasurer (Mr. Harold Holt), who laughed when it was made. The honorable member for Wentworth has declared definitely that this statement is a myth which the Australian Labour Party endeavours to perpetuate. I have before me the Budget speech delivered in October, 1950, by the Right Honorable A. W. Fadden, M.P., Treasurer of the Commonwealth. Tn that Budget speech, he said -

Australia at the present time is in the midst of a vast and many-sided movement of expansion . . .

He added that the faith is held almost universally in Australia and by many people abroad, that this country is capable of immense progress in the coming years. The speech continued -

Under the stimulus of these ideas, governments and all their connected authorities are pushing on with large programmes of works to provide power, fuel, water, transport, housing, hospitals and schools for a larger population and a more highly developed economy. Private firms, in all branches of production, are increasing their present capacity or launching new projects to meet the wider demands of the future they foresee. Immigrants are pouring in from overseas, eager to try their fortunes and build new lives in this country. Immense amounts of capital are coming here, a great part of it for permanent investment.

In times like these, real and substantial progress is always made. Population grows, industries are built, new resources are opened up; and these are permanent gains.

He continued -

At 30th June this year, the total international currency reserves of Australia stood at £650,000.000 … the total cannot be regarded as excessive for our requirements.

The amount of £650,000,000 bequeathed by the Labour Government to the MenziesFadden Government in overseas funds could not be regarded as excessive for our requirements. He went on -

If we are to obtain the still greater quantity of imports we need, it is important that we should have adequate international reserves against the contingency of a fall in our export earnings or a reduction of the inflow of capital.

Within a year, those overseas funds had increased to £803,000,000. That is the picture, given by a former Treasurer of the economic position of Australia when the Labour Party left office.

What is the position to-day? We have unemployment, a growing shortage of houses, insufficient hospitals and inadequate educational facilities. The only major development work in progress is the Snowy Mountains scheme, which was commenced by the Labour Government. Investors show a lack of confidence in the future of Australia, and in order to secure funds we have to increase the ra*e nf interest offered to investors. Even increased interest rates are not sufficient to obtain the amounts (hat were obtained in the days of Mr. Chifley. In order to obtain funds overseas, we must offer a higher rate of interest and better terms on the stock exchanges of New York and other centres than were ever offered by this country before. That is the position to-day and, to use the words of the Prime Minister (Mr. Menzies), we are facing international insolvency. If in March. 1952, when our overseas funds exceeded £360,000,000, the Prime Minister was entitled to say that this country was facing international insolvency, then with the figure at about £300,000,000 now and with a prospect of it decreasing considerably in the future, international insolvency again stares this nation in the face.

What is the position with our overseas funds? In 1948-49, we imported £415,000,000 worth of goods. Invisibles amounted to £145,000,000. We exported £531,000,000 worth of goods and received payments from overseas in other ways of £61,000,000. We had a profit on our overseas operations of £32,000,000. In 1959-60, our imports were worth £923.000,000. our invisibles £423,000,000, our exports £926,000,000 and other receipts £173,000,000. Our adverse trade balance for this period was £243,000,000. For the first eight months of 1960-61, we imported £755,000,000 worth of goods, while our exports totalled £573,000,000. For the corresponding period last year, our imports totalled £582,000,000, and our exports £618,000,000. It will be seen, therefore, that the position this year has deteriorated by £218,000,000, as compared with the corresponding period for last year, and I emphasize that this figure does not take into account the invisibles, which must be immensely greater this year than they were last year, because the increased volume of imports must mean higher freight payments, and freight charges have increased greatly during this year. I venture the opinion that whereas, without invisibles, our balance is down by £461,000,000 this year, as compared with £243,000,000 last year, our total adverse balance of payments for this year will be nearer £700,000,000 when invisibles are taken into consideration. It cannot be denied that we are in a state of international insolvency. Despite this, the Minister for Trade (Mr. McEwen) says, “ But we can draw money from the International Monetary Fund “. Certainly, we can. but what does that mean? When he was speaking, the Minister sought to have us believe that Australia had a considerable sum of money tucked away in a fund somewhere overseas, and that we should be merely drawing out money that we had already saved. The fact is that we have contributed only a certain percentage, sufficient to give us the right to draw on the international fund, and that any money we draw from that fund will be borrowings upon which interest will have to be paid. Unless we can induce private people overseas to pour money into Australia in the form of investment in our industries, we shall not be able to pay our debts. We can get out of our difficulty only by obtaining loans or encouraging a heavy inflow of private capital. If we have heavy investment of private capital in our land and industries, it simply means that our assets are being sold bit by bit to overseas investors who will levy their toll upon the work and industries of the Australian people. The dividends will have to be paid in the form of produce or exports, and the amount that we are able to export just cannot cover the demands.

I remind honorable members that hitherto we have exported huge amounts of goods for which we have received record prices. We warned the Government repeatedly that record prices, and freedom from droughts, famine and other disasters could not continue, and that inevitably we would have leaner seasons, that inevitably we would obtain lower prices for our commodities overseas, and that the amount of money coming from overseas and expendable within this country would be about one-half, or perhaps only one-third, annually of what we have been spending during the eleven years for which this Government has been in office. We warned the Government that when that day arrived, then, in place of inflation and a spending spree, there would be restriction of activity, deflation and its attendant unemployment. Already unemployment is growing. In my electorate alone, the bricks are piling up in the brickyards and men are being dismissed from the brickworks. The rope and cordage factory has already dismissed employees, and the building trade is putting off hands. Because they have dismissed their employees through lack of funds, the productivity of these industries will be further restricted, which will mean that they will have to dismiss still more of their workers. The final result can only be the destruction of what confidence the people may have in the ability of the Australian economy to withstand the stresses to which it is being subjected.

The troubles with which we are faced are not those caused by such national disasters as famine, flood, bush fire, the destruction of our national assets or the destruction of crops by pests. Every difficulty confronting us to-day is manmade. Every difficulty with which we have to contend has resulted from the operations of the Government now in office. As I said before, never in the history of this country has our productivity been so great, never before have we seen such high prices; yet in this period of our greatest prosperity this Government has created and allowed to accumulate difficulties and circumstances which will place upon future generations an intolerable burden of overseas loans and indebtedness. What could the Government have done? Right throughout its period of office it has bungled every issue. We have what is called the Japanese Trade Agreement, in respect of which, of course, members of the Country Party say, “What a glorious achievement by the Minister for Trade “. But what happened? Australia had adverse trade balances with nearly every country in the world, with the exception of Japan, and the Minister for Trade (Mr. McEwen) came to this Parliament and said, “ I am fixing a trade treaty with Japan so that I can reduce the favorable trade balance that Australia has with Japan “. He said, “ That is fair to Japan. Why should Japan buy vast quantities of goods from us if we do not buy vast quantities of goods from Japan? “ That is all right, tout before exacerbating our position in relation to that country should he not first have said, “ There are countries in the world such as the United Kingdom and the United States of America that sell vast quantities of goods to Australia - vaster quantities of goods than Australia sells to them - so let us equalize that first and say to these people, ‘ Either you buy more from us, or we buy less from you ‘ “? Obviously, any intelligent community would first regulate its trade with countries that were buying very little from us, but from which we were buying considerable quantities, before starting to buy much more from countries like Japan, which already was buying more from us than we were buying from it.

The result is that to-day we are in difficulties and in ten years we have spent over £1,000,000,000 more than we have earned. Of course that creates prosperity, but ultimately, when we have to pay back that £1,000,000,000, plus interest, we will find ourselves in very grave difficulties.

The people of Australia see themselves faced with a terrible balance-of-trade disability. They see goods flowing into this country in vast quantities, and members on the Government side of the House say, “ Yes, we have to have these goods. They are necessary to our development.” I went into a major retail clothing store in Melbourne recently and saw racks of suits of clothes extending as far as from where I stand to the other side of this chamber. Those suits were manufactured in Italy and were priced at from £40 to £50 each.

Mr Killen:

– Did you buy one?


– No. Is that necessary for the development of this country? In effect, the Government permits unemployed tailors in Italy to come to this country and then allows the importation of suits of clothes which they previously made in Italy and so ensures that such persons coming from Italy shall remain unemployed in Australia! Clothing is not the only thing which is coming into this country in vast quantities. Boots and shoes, worth hundreds of thousands of pounds, made in Italy and Czechoslovakia are flooding into this country, as well as all kinds of exotic foodstuffs from other parts of the world. Tobler’s chocolates are seen in great quantities at every major aerodrome in Australia. They are probably very good chocolates. We should not import vast quantities of goods, such as suits made in Italy or in the United States of America and vast quantities of ties made in America, which are now to be found on store counters in every capital city of Australia.

The importation of such goods would be bad enough if our overseas balances were in a flourishing condition, but they are not. Yet the Government allows these importations; and we have the absurd statement by the honorable member for Wentworth (Mr. Bury) that controls can be applied to prevent such importations. What does he call the credit squeeze? Is that a control or a restriction of the quantities and kinds of goods that can be imported? In reality the banking institutions say, “ We are going to issue credit and determine not merely how much credit operates in this country but also the channels into which it flows. We are not going to determine how much currency is expended throughout Australia, but we will determine, to a great extent, the things upon which it is spent.” That is private control of the operation of industry in this country. It is control by bankers in the interests of the banks in order that higher rates of usury can be maintained - 10 per cent, and upwards - with the sky the limit so far as rates of interest are concerned. It was Sir Francis Bacon who said, “ The tooth of usury biteth too much; it must be grinded “. If this Government continues to permit investment corporations to guarantee 20 per cent, interest - some have been unable to honour such a guarantee - and others to guarantee 12, 15 or 19 per cent, interest, and if it continues to permit industries and retail stores in this country to pay dividends of 18i per cent, or 20 per cent, to money lenders who invest their money in their undertakings!-


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


.- When my friend, the honorable member tor Scullin (Mr. Peters), quoted Sir Francis Bacon’s reference to the biting tooth of usury I closed my eyes. Imagination is a wonderful thing. I came to the conclusion that if one closed one’s eyes firmly enough one could picture the honorable member as a wild and thoroughly stirred-up dragon about to savage one. Then I opened my eyes; the illusion was shattered and I saw a thoroughly stirred-up political mouse. My friend has spoken with great modesty, but that is to be expected because he supported a case deserving of modesty. He supported a motion of no confidence in the Government proposed by the Leader of the Opposition (Mr. Calwell). If one looks at the motion it not only is remarkable for what is in it but will be remembered for the remarkable way in which it was put to this House. Never was there a political leader so politically confused as to what he would do if given the reins of government to-morrow. When he stood at the despatch box this morning we saw a thoroughly confused Leader of the Opposition. I did not put down all the absurdities he indulged in but tried to cull those that had some amusement value.

He said, “When we went out of office in 1949, the economy of this country was soundly based”. If that is basically the case, and it is based upon objective criteria and is not subjective nonsense, why did the Australian people vote so overwhelmingly against the government which, according to the immodest claims of the Leader of the Opposition, had put the Australian economy on a sound basis? Every one in this House and, I should imagine, many millions outside will recall the terrible mess into which the government of which he was a Minister, of sorts, got the affairs of this country.

Then he devoted himself to an attack upon controls. Surely to heaven human memory, imperfect as it may be, can at least recall the plethora of controls that were launched by a Labour government, cultivated by a Labour government and maintained by a Labour government in the very teeth of bitter opposition throughout Australia. Then the Leader of the Opposition turned to import controls and sneeringly stated that since we have been in office we have imposed import controls for, I think he said, six or seven years. No government - at least on our side of politics - maintains import controls needlessly. They are maintained because of the exigencies of the time. But then, after having criticized this Government’s maintenance of import controls at a critical time, the honorable gentleman said that we must either increase exports or reduce imports and, in fact, that we must stop the flood of imports into this country. He demolished his own argument because if to-morrow, by some queer twist or some quirk of fate a Labour government were returned to office, import controls would be re-established; and not in any discriminatory way but with the full rein of savagery.

It is no use ignoring this. What the honorable gentleman ignored, and what has been ignored so far by every critic of the Government’s policy is the phenomenal change in overseas prices on which this country depends. This morning the Minister for Trade (Mr. McEwen) showed in clear and eloquent language the dramatic drop in overseas prices. No government has an instant control over this circumstance. Governments can negotiate and governments can resort to temporary devices, but what we earn depends upon the price that people overseas are prepared to pay for our exports. But not one of the critics has a thought in his mind. As a former Treasurer of the Commonwealth stated on one occasion, the Labour Party when in office held the economic destiny of this country in the collective hollow of its head.

Then to wind up his speech the Leader of the Opposition made a host of prophecies. Some of them, of course, were plainly stupid. Surely the country is accustomed to the honorable gentleman’s flair for prophecy. One could quite accurately and, I believe, fairly describe him as the caretaker and the patron of a whole museum of prophecies. If you look at the prophecies that he has made you can only come to the conclusion that he is the perfect underwriter of gloom. If the honorable gentleman ever left politics there would be no doubt about his ability to get a job as a professional entertainer at a wake. Every prophecy that he makes has about it a touch of despondency and gloom. Let us look at the record. In 1949 the present Leader of the Opposition said -

Compulsory military training will shatter the Australian economy.

In 1950 he stated -

The Menzies Government probably will not last a year and a crisis will certainly come within eighteen months.

In the same year he prophesied -

That the Australian £1 will be revalued whether the Country Party likes it or not is quite certain.

It will take place after this season’s wheat and wool crops have been sold.

Then in 1951 the honorable gentleman gave out this gem of advice -

Do not save money because the position will become desperate. A lot of people will not have any Christmas.

In March, 1951, he asserted in this Parliament that the Menzies Government would not want a double dissolution and would never face Parliament again as a government. Two days later the Prime Minister obtained a double dissolution from the

Governor-General and we came back to office. Again in 1951 he said -

The Defence Preparations Bill will be blownout when challenged in the High Court.

In 1952 he stated -

Australia is heading straight into a depression.

In the same year he predicted a 12s. rise in the basic wage, and the rise on that occasion was only 4s. In January, 1953, he asserted that within a year there would be six State Labour governments, and in July of that year he said that when the Korean armistice came there would be a drop of hundreds of millions of pounds in the following year’s wool cheque. This is a remarkable record for the leader of a party that aspires to run the affairs of this country, and I believe that this record should be marked, not by some petty observance but at least in modest limerick form. Here it is -

From Melbourne a prophet and seer Makes predictions both doleful and dreer. He has plunged us in gloom With forecasts of doom And no Christmas pudding or cheer.

At politics our prophet has played “ Depression “ being his stock in trade. We’ve read Jeremiah And also Isaiah, But Arthur leaves them in the shade!

He says, “Bob will be taking the toss And I’ll be Australia’s new boss “. But the electors all know, And will certainly show, That Arthur’s no prophet - butloss.

My friend, the honorable member for Corangamite (Mr. Mackinnon) has said that the honorable gentleman could not tip a winner. I say to the House that if the Leader of the Opposition attended a country picnic race meeting and there was a walkover he would take a tote ticket on the horse ridden by the clerk of the course.

It is a matter of profound regret that the Opposition cannot look seriously at what has happened in Australia during the last ten years and that it cannot examine critically and, above all, honestly the basic issue of development. Development has become an article of faith of this Government and, I should imagine, of the majority of Australians. Of course, there are two approaches to the question of development. We can proceed at a comfortable rate not overtaxing our resources in any way. We can bring in 60,000 or 80,000 people a year to this country, or we can have a rapid rate of development and bring in 100,000 or 125,000 people a year. Very broadly, the goal is a greater Australia and we all should see that that goal does not become the great delusion.

It is essential, not only for this Parliament but also for every person outside, to realize the connexion between this pace of development and the economy of the country. My friend the honorable member for Wentworth spoke about that aspect this afternoon. This country needs a rapid rate of development, not because of some defence consideration because modern weapons of war have rendered that quite nugatory. The personal motto of Lord Baden Powell, one of the great humanitarians that this world has known, was “ Look wide “. Now is the time for the Parliament and for the people of Australia to look wide to see what is happening in the world and then to decide what our course of action should be in relation to the world’s problems.

The growth in world population can only be described as startling. In the centuries from the time of Christ to the death of Elizabeth I., the world’s population doubled. Between 1960 and the end of this century, the world’s population will double - in a mere 40 years! One-quarter of the world’s people to-day eat more than half of the world’s food. Whereas here in Australia our standards of living have been rising consistently, the standard of living of many millions of people has been dropping perceptibly over the last ten years. All this cannot be added up in any neat, economic contention. It comes back to a basic moral obligation, because this country cannot escape its geography, and no country to-day can live in social and economic isolation. Those countries - and Australia is one of them - with industrial knowledge and potential must use that knowledge and must exhaust that potential.

Sir, I believe with, I would hope, understandable conviction, that this cause is not resting upon some political idea. I believe that it rests upon a very firm and broad principle of fundamental morality. If you look at the effort that has been displayed by the Australian people since the end of World War II., you see a consciousness of the sort of thing I have been talking about, because we have brought to Australia, since the end of World War II., more than 1,000,000 people. It is obvious, surely, that you cannot bring into a country 1,000,000 people without imposing on that country great strain and a host of burdens. We have not got unlimited resources. If you take the burdens that have been put upon us, if you take the dislocations that have occurred here and there and put them together, they represent something quite trifling compared with what has gone on in most countries since the end of the war. Tn the last ten years development in this country has been phenomenal. I am not speaking of production of golf balls, as one newspaper, I regret to say, did. It seems to have a pathological affection for rooting out some miserable little thing and playing it up as the be-all of the problem. I am talking about basic development in Australia, and basic industries.

I shall give the House some figures. I am sorry if I weary honorable members with them, but I believe that they deserve to be ventilated. In 1949, we produced 14,483,000 tons of black coal; in 1960, we produced 20,400,000 tons. In 1949, we produced a little over 1,000,000 tons of pig iron, and in 1960 we produced 2,600,000 tons. Ingot steel production in 1949 was 1,178,000 tons, and in 1960 it had risen to 3,500,000 tons. Production of steel blooms and billets in 1949 was a little over 1,000,000 tons, and last year it was 3,100,000 tons. In 1949, we produced 9,000,000.000 kilowatt hours of electricity, and in 1960, 23,300,000,000 kilowatt hours. In 1949, we produced 1,100,000 tons of superphosphate, and last year we produced 2,380,000 tons. This is typical of the evidence that you find if you make an inquiry into what has happened in Australia.

The position is very similar in relation to consumer goods. In 1949, this country produced 145,600 refrigerators, and last year it produced 241,000. In 1949 we produced 65,700 vacuum cleaners; last year the figure was 95,700. The total production of washing machines in 1949 was 6,500, and last year it was 200,000. The standard of living in Australia has improved tremendously. It has improved not only in terms of consumption of consumer goods, but also in a variety of other ways.

I hope that the House will be patient for a moment or two so that I may give a further illustration of this. In 1949, the number of persons per dwelling unit in Australia was 4.1. To-day, even though we have brought to Australia 1,000,000 people, the number of persons per dwelling unit in Australia is down to 3.5. In 1949, there was one telephone for every 10.7 people, but in June of 1960 there was one telephone for every 4.75 people. You could go right down through television receivers and motor vehicles generally and find the same picture. Whereas in Australia to-day we have some people, who I do not necessarily criticize, who will take part in go-kart exhibitions and will spend money, time and effort in producing go-karts, it is useful to recall that not very far away from this country there are millions of people who are having for their week’s food what we would consider to be a daily ration.

The statistical record shows that Australia’s performance over the last ten years has been remarkable. It is a performance of which any government could be proud, and of which the whole of Australia can be proud. I heard some criticism about housing this afternoon. Bless my heart and soul, look at the record again! It speaks for itself. The position regarding war service homes is an illustration of what has been done. In the 31 years for which the war service homes scheme has operated, 62,900 people were helped with housing in Australia, and this year 147,000-


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

Smith · Kingsford

– I listened with interest to the honorable member for Moreton, but I listened in vain for some facts about the state of Australia to-day. After eleven years of anti-Labour government we have again reached the cross-roads. The Australian people, shocked and bewildered by the way in which things are going on, especially as a result of the restrictions that were imposed on 15th November, 1960, by this pathetic crew which calls itself a cabinet, are still more bewildered than ever by the actions of the Prime Minister (Mr. Menzies) since last November. They are bewildered by the tactics employed by the Prime Minister and the Treasurer (Mr. Harold Holt) - the Prime Minister in particular - in cancelling the sales tax increase on motor cars. The increase of the sales tax on motor cars, followed by its cancellation shortly afterwards, is one of the actions that have bewildered the people. The Prime Minister announced this cancellation despite the fact that the Treasurer had given an assurance that everything was O.K. It is clear that as a result of the Government’s policy the position is becoming worse than ever. Is there a bigger muddler than the Prime Minister has always shown himself to be? Back in 1940, when this country was in danger, he walked out on it. Now he is muddling again and worsening the position still further. He announced the cancellation of the increased sales tax on motor cars within 24 hours of the Treasurer’s endorsement of the policy under which the tax was increased. Did not the Treasurer tell members of an Australian Council of Trade Unions delegation that the position could possibly worsen before it improved? Is it any wonder that the people of Australia are really upset? The people could never have thought that a so-called business-like government would make such a muddle of the management of the country and its affairs.

Could the Prime Minister’s sudden decision to remove the increased sales tax on motor cars have been prompted by the deputation of international money lenders who arrived in Australia, came direct to Canberra, summoned the Prime Minister into conference - and you have to be somebody to summon the Prime Minister - and told him at that secret conference what he was to do? All the involved arrangements that had been made for the Prime Minister to go to London for the Conference of Commonwealth Prime Ministers were thrown overboard. Why did the Prime Minister suddenly go to America instead, upsetting all the arrangements that had previously been made? Let me remind the House of a slip of the tongue that the Prime Minister made at a television interview at Mascot airport. Perhaps the Prime Minister was looking down the neck of a bottle of John Haig whisky, and got himself into such a state that he made this slip.

Mr Howson:

– Which way are you looking?


– I am looking down the neck of the whisky bottle with the Prime Minister. 1 make no apologies for saying that he often looks down the neck of a bottle of whisky.


– Order!


– Why should 1 have to apologize for the truth?


– Order! the honorable member’s remarks are out of order.


– Being a teetotaller, 1 think I have the right to criticize.


– Order! The honorable member’s remarks are out of order.


– Well, I will say that he could not have been looking down the neck of the whisky bottle that day. In answer to a question by the interviewer as to what he was going to say to President Kennedy, he replied, “We will leave President Kennedy to do all the talking “. I ask again: Why was he called to America? Was it because of the precarious state of our dollar position? Is it a fact that we owe 900,000.000 dollars to America? Why were the import restrictions lifted? Why was America so adamant on the lifting of restrictions on imports from the United States. Japan and Canada? Everybody knows that industry in Japan and Canada is controlled by American financiers. I suggest that our Prime Minister was told to do as he was bid.

We are now approaching a crisis in this country, whether honorable members opposite like it or not, and this crisis is coming because of the actions of our pathetic, unbusinesslike, mismanaged government. What has happened that has resulted in out Prime Minister and our Treasurer holding different views and doing different things?

Mr Turnbull:

– They have not given different views.


– The honorable member for Mallee says they do not hold different views. Did *no** the Treasurer tell the Australian Council of Trade Unions’ representatives certain things. ?nd did not the Prime Minister throw those statements overboard 24 hours later? Those who remember other crises in the Australian economy will not forget how the interests of overseas bondholders were looked after by foreign ambassadors. Who could forget, for instance, Otto Niemeyer and his actions in the early 1930’s? I was one of his victims, and as a result I was ten years out of work and on the dole, getting a weekly dole ticket worth 14s. 2d. - which would be equivalent to the £3 a week that is paid by this Government to the unfortunate unemployed, taking into account the change in the value of the £1.

Mr Turnbull:

– Did you say you were ten years on the dole?


– Yes. For four years out of the ten I was boycotted by the Metal Trades Federation. The honorable member for Fawkner (Mr. Howson) is interjecting. I remind him that Otto Niemeyer said to gentlemen like him, “ Australia has to stew in its own juice “. People like the honorable member and the honorable member for Mallee took it on the chin without protest. Then we heard Lord Bruce, Stanley Melbourne Bruce, a fellow conspirator of our present Prime Minister, tell the world that Australia would have to become accustomed to unemployment. That gentleman now sits in the House of Lords, where our present Prime Minister aspires to sit in the very near future, after he has done the bidding of the foreign bondholders.

Mr Costa:

– The people will kick him out at the end of the year.


– Thank you for reminding me of that. We all remember how Bruce was given the boot at the following elections and Scullin became Prime Minister.

Recently our Prime Minister was asked by interviewers to comment on the alarming drift in the finances of the country. He replied in a flippant manner, “ I am more interested in how many runs the West Indian cricketers can make”. What a Prime Minister! When asked to comment on sackings by General Motors-Holden’s Limited and the Ford Motor Company of Australia Limited, he said, “ Let us keep our fingers crossed “. I hope those remarks will be remembered by the 30,000 people on the coastal strip in Queensland who are unemployed, from Cairns down to Bundaberg. 7

Mr Murray:

– There are fewer unemployed in the electorate of Herbert now than there were three years ago.


– Never mind about that. I would ask those 30,000 people in Queensland to bear in mind that the Prime Minister wanted them to keep their fingers crossed and see how things went. When they go hungry to bed they should remember our Prime Minister.

Let us see where the Treasurer stands. I believe, first, that he should be stripped of the title “ Right Honorable “. After the humiliation caused him by his Prime Minister he would tender his resignation if he were any sort of a man. How can we expect individuals of that kind to manage the housekeeping of this country? No wonder our economy has got into such a muddle. The Treasurer’s aspirations to the Prime Ministership must now, of course, remain a long-cherished dream. He must be written off as an also-ran. He has failed dismally. He had a wonderful opportunity to show his capacity for leadership, but he failed to do so, and his back-benchers are now waiting for the day when they can tell him where he gets off. He has thrown away his opportunities because he bowed the knee to the arrogance, the vanity and the contemptuous attitude of our Prime Minister.

Let us analyse the background1 of this crisis. Our very weak Cabinet just cannot face the situation squarely. Its members have not the stomach to tackle a crisis when it occurs. We see a dangerous and even critical situation. The problems that have arisen must be solved, and they must be solved quickly. The Labour Party has warned this House and the Government itself time and again of the inevitable results of its mismanagement. Unfortunately, the Government’s leaders are only too happy to hand over the reins of government to senior officers of the Public Service while they enjoy trips around the world and cocktail parties at home - here we come to the whisky bottle again, Mr. Deputy Speaker - dinner parties, afternoon teas and so on. These are well-known facts, of course, and particularly true is my reference to the whisky.


– Order! I do not think the honorable member is in order in pursuing that line of discussion. He is not to continue in that fashion.


– I simply make a comment that whisky has an effect-


– Order! Is the honorable member querying the Chair?


– I have illustrated the weak mentality that is typical of top bureaucrats. They can go around Canberra on their merry way and experiment with their pet theories which ultimately end in bankruptcy for the nation. One has only to listen to the bureaucratic nonsense of Sir Douglas Copland, one of the favorites of the daily press, in order to realize the truth of what I say. He can always get plenty of space for articles. Does he believe that the people of Australia forget that he was one of the architects of the 1930 depression when he slavishly followed Sir Otto Niemeyer around Australia, morning, noon and night, preaching the doctrines espoused by the same Sir Otto Niemeyer?

Why have not the people been told the reason for the Government’s failure? I challenge denial of the statement that we are bankrupt, especially in the dollar area. We are down and we cannot get up. We must do the bidding of the overseas bondholders. I challenge the Treasurer to tell me how many dollars we owe to the United States of America. Are we paying 6 per cent, on the dollars that we owe? Are we paying 6 per cent, on the 6 per cent, that we must pay for the dollars? This is like a dog chasing its tail. If the present trends continue our economy must inevitably end at the bottom of the drain. Have we asked for time to pay? Will the Treasurer tell me that? Have we agreed to lift all import restrictions in consequence? Have we asked the pawnbroker to be lenient? Have we said that we will make it up in some way - that we will lift all import restrictions? Why is the Treasurer so stubborn on this point? Is it because he is contemplating the negotiation of further lone-term loans for development, so to stall off the da of reckoning? Surely the Treasurer must note with dismay the ever-increasing quantity of imports coming into Australia, particularly from the dollar area.

I should like to emphasize this pointStatistics show that the United States of

America and Japan supply the major part of Australian purchases. In the first seven months of 1959-60, Australian exports to the United States, according to the Commonwealth Statistician, amounted to £49,200,000. Imports from the United States amounted to £77,300,000. In the first seven months of this financial year exports from Australia to the United States of America have fallen to £37,200,000, a drop of £12,000,000 and our imports have risen to £131,100,000! This has left a trade deficit for seven months of the year 1960-61 of £98,400,000.

I challenge the Treasurer to deny these figures. Does the Treasurer not realize that this is awfully bad housekeeping? What housewife in the country could go out with £10 to spend and buy goods worth £25? How would she stand at the end of a week? You do not have to go to Oxford, Harvard or any top university to know the answer to that. An honorable member opposite has interjected that the housewife could use hire purchase. That shows his mentality. If you cannot pay, borrow! That has been the attitude of the Government over the years.

Let us consider Japan. Australian purchases from the Japanese in 1959-60 amounted to £22,700,000. Lo and behold, in 1960-61 our imports from these, our enemies in the last war, rose to £45,100,000, a jump in twelve months of £22,400,000! This is the penalty of the Menzies blight. Now let us go across to Canada. The Government has helped a Canadian enterprise to establish a plywood mill at Bulolo in New Guinea. That enterprise really represented American big business. In seven months of 1959-60, goods worth £10,800,000 were exported to Canada. But we bought back from Canada, which is in the dollar area, imports to the value of £28,000,000, resulting in a deficit of £17,000,000 in respect of Canada which is only a small country.

Why is the Government always bending the knee to the United States of America? Has the almighty dollar some sort of influence on the Cabinet? Has it got the Government in? Can we not find on the Government benches one good Australian with the stomach and the national spirit to stiffen the backs of the weak Government and do something to save our country before it is too late? Let us be real. There is no national spirit on the Government benches. We are rushing to national extinction and if the people of Australia do not awaken it will be too late. One gets sick and tired of reading in the columns of the daily press endless references to America. Can we find in such references, any solace?

The honorable member for Moreton (Mr. Killen) said that the state of affairs mentioned by the honorable member for Scullin (Mr. Peters) was an illusion. Is it an illusion that in New South Wales, 33 north coast timber mills have closed down? The honorable member for Cowper (Sir Earle Page), who is interjecting, but who knows what I am saying to be true, was a very weak member of the Government. From the timber mills that I have mentioned, 500 men have been laid idle. The Victa mower factory at Milperra, New South Wales, has dismissed 200 men. Courtaulds at Raymond Terrace, New South Wales, have dismissed 35 workers. One hundred employees of the Burlington mills at Rutherford have been dismissed. All these dismissals have been caused by the Government’s policy of lifting import restrictions, according to Mr. R. H. Erskine, M.L.C., secretary of the Textile Workers’ Union. He said, further, according to this morning’s paper, that 60,000 members of his union faced the danger of heavy retrenchments or of having only four days work a week. The Federal secretary of the same union, Mr. Loft, said in Melbourne -

Two thousand textile employees throughout Australia have lost their jobs this year through the Government squeeze.

As a result, he said, the industry was losing skilled and semi-skilled employees who could not easily be replaced if stability returned to the industry.

Because of the Government’s economic measures, retail stores will not purchase local manufactures. Why? The reason is that they are getting cheap imports from all parts of Asia, and especially the countries of South-East Asia, and from cheaplabour countries elsewhere throughout the world. The Australian Country Party subscribes to free trade in all six States in Australia. I should like to remind the Treasurer that each of these workers who has become unemployed is a member of a family. Some are brothers, some are fathers and some of them doubtless are mothers of families. Many families have lost the income provided by the breadwinner. I notice that some Government supporters laugh, but this is not a laughing matter. I realize that members of the Country Party and the Liberal Party of Australia like to laugh at the misery that this Government has caused, because they have no realization of the far-reaching effects of unemployment. They do not know how the tide of unemployment rolls on and on. I have experienced it, and I know only too well.

Recently, the president of the Trades and Labour Council in Brisbane announced that there were 30,000 unemployed in Queensland along the coastal strip alone. Let Government supporters go back to their electorates and try to remedy the situation. These figures make one shudder at the damage being done to so many good Australian homes. It is something that we can never forget. This is the tragic result of the Government’s actions. We see here the results of the blight on the people of Australia that this Government constitutes. This is the tragedy of Liberalism, led by the Prime Minister, in association with the Country Party, which was formerly led by the right honorable member for Cowper and is now led by the Minister for Trade (Mr. McEwen).

What do members of the Liberal Party and the Country Party intend to do in their own electorates to repair this damage, especially in Queensland? We hear from them not one word of protest. However, their time is running out.


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


.- Mr. Deputy Speaker, first of all, I should like to congratulate the Acting Prime Minister (Mr. McEwen) on the bold statement of development policy that he gave to this House last evening and this morning. I should like, also, to pay tribute to the honorable member for Higinbotham (Mr. Chipp) and the honorable member for Calare (Mr. England) for their maiden speeches, which gave very great promise for their future development as members of this House.

The Leader of the Opposition (Mr. Calwell) has once again come forward with the usual sort of motion in which he blames the Government, and especially the condition of our trade balance under its administration, for everything that is bad in our economy. He never says a word about what is good. We all know, of course, that when we have a good trade balance, it is due to the intelligence and skill of our primary producers who provide some 80 per cent, of our total exports in order to earn overseas funds and give us a favorable trade balance. It is well worth our while to thank our primary producers a little for their efforts.

On this occasion, the Leader of the Opposition has raised as fresh points of attack many points which are really the same old ones that he usually takes up. I propose this afternoon to say something about one action of the Australian Labour Party which has done a very great deal to cripple the development of this country. I refer to the imposition of the uniform tax system. 1 hope to show very clearly that national development, which, under the terms of the Australian Constitution, is essentially a State function, is being hamstrung by the manner in which the uniform tax system is applied. Unfortunately, there is here an analogy to the act of scrambling an egg. Once it is scrambled, one cannot restore it to its original state. We need some constructive method by which we can permit the States to exercise their constitutional function of developing this country as quickly as possible and as quickly as it needs to be developed.

I wish to deal briefly with the subject of the trade balance, which seems to worry the Opposition so much. A young country like Australia, which seeks to increase its population and promote development, cannot depend entirely on its own resources any more than a youngster in a family can expect to clothe and feed himself. The youngster needs assistance from his family. That is exactly the situation of a young, growing nation like Australia. We need outside aid. We have only 10,000,000 people. Fifteen years ago, we did not have nearly so many people to undertake the development of this country. It is worth our while to look at what has happened in countries which have had problems similar to ours - a huge area and only very few people to promote its growth and rapid development. The best example to which we can look is that of the U.S.A., which has roughly the same area as has Australia and which passed through the same primitive stage of development in similar circumstances. The situation of Australia has many analogies with the situation 01’ the United States in earlier years.

In the first 56 years after the American colonies united, they managed to increase their total population from 5,000,000 to 20.000.000. We, 60 years after federation, have increased our population from 4.000.000 ‘o 10,000,000. That is not such a bad effort in these days of difficult migration. During practically the whole of the first 56 years of the American union, there was an adverse balance of trade of an average of something like 11.000,000 dollars a year, because the new nation was attracting people, money and goods from other countries. What happened in the next twenty years? Because of the great population that the United States had managed to build up previously, it was able almost to b° lance its trade. The American people hen turned to the problem of developing the country as a whole, and in the next 25 years the population rose from 20.000.000 to 40.000.000. During that period, there was a continuous excess of imports over exports which averaged something like 64.nno.000 dollars a year. Did we then find in the United States Congress every year the sort of belly-aching that we hear in this Parliament, not because our trade has declined by a few million pounds, but because the balance is not as favorable as before? There are still overseas balances of £200.000.000 or £300.000.000 between us and the of the precipice, as it were. And even if all that goes, we shall probably have some friends who will stand by us.

Mr L R Johnson:

– Under the administration of this Government, we shall not have any left and the right honorable gentlem~n knows it.


– I shall deal with the honorable member later.

The American people dealt with their problems. They got the people and the money and developed their country, and for another 40 years they maintained a favorable balance of trade. When the First World War broke out in 1914. Chey , were able. because of the development that they had already undertaken in their country, to wipe out the whole of the foreign debt of the United States. It is worth our while to remember what the Americans did at that time in order to ensure that they would get the increased population and development and the wealth that they needed. They continually formed new states - two in every ten years. They actively encouraged immigration and the entry of foreign private capital, as well as the borrowing by the government of the funds that they desired for its purposes. I venture to suggest that we shall have to follow a path similar to that taken by the United States of America if we desire to get in this country the enormous population that we need. We face a tremendous task in getting our population up to 30,000,000 or 40,000,000 in the next twenty or 30 years, but such a big population is essential to us. If we do not get it, we shall never be able to hold this country.

I will set out what 1 believe we need in this country to ensure that we will hold it. I am very glad to know that the Acting Prime Minister last night and to-day outlined a very forceful development programme which breaks a great deal of tradition. I think this tradition has been bad because it has always said that the Commonwealth could not help in any of these matters unless they were interstate matters. I am glad that that idea has been abandoned. It is very good for the Commonwealth to be concerned in these matters: they are really national matters. I hope to show later that we could get all the governments. Commonwealth, State and local governments, into a partnership as we have done with the Australian Loan Council, the Australian Agricultural Council and other organizations which were brought into being by me many years ago. They enabled us to forget the constitutional difficulties if we could not remove them. I am all for removing them at the earliest moment, but I am much more concerned with saving this country by rapid development.

Our first need is for more people. We need good migrants. It seems to me that one of the best ways to attract the better class of migrant is to concentrate on obtaining married migrants. I am sure that they will be better and more satisfied than the single man or woman who comes here. If we can bring migrant families here, they will be much ‘better satisfied. If we are to bring families here, the first essential is the provision of houses. There seems to me to be an extraordinarily good opportunity at this time to build houses when there is an excess of timber in the saw mills operating in the area I represent. Questions asked by other honorable members would suggest that there is an excess of timber in other areas as well and mills will be shut down. That is really a policy of despair. 1 urge most strongly that we build houses in advance, if necessary. They will be the best assets that we can have because we will be able to get better migrants to come here if housing is readily available for them. If we provide houses, I am sure we will be backing a winner and not a loser. This would be especially so if we built timber houses, which apparently now are built only by people in outback areas, provincial cities and country towns. This would enable us to be ready for widespread decentralization in areas where there would be much more home life, where travel to work does not occupy as much time as it does in the large cities and where the children can see the parents much more readily than they can in the large cities.

We must ensure that our transport systems are improved. Federal aid for roads has proved to be a good scheme and has provided material assistance throughout Australia, but there are many areas where the roads are very bad indeed. A car does not last very long if it is driven over them constantly, and the cost of transport increases because of this factor. We should not restrict ourselves merely to an improvement of the road system, but I venture to say that we must begin to use the great oceans that surround us. We are in a better position to engage in world trade than is any other continent. The best country in Australia lies within an area stretching inland only 300 miles from the ocean. Sir George Buchanan pointed out many years ago that this nation had the best opportunity for world trade that he had ever seen, because all its important regions were right on the ocean.

It is essential that we develop our water resources. This is the most important point of all, because water is necessary for home use, for town water supplies and sewerage, for irrigation and for secondary industries. Many thousands of gallons of water are needed to make a ton of steel or paper. The development of our water resources could eliminate the two great plagues of drought and flood that have cost us many thousands of millions of pounds since our race has occupied this country. The Commonwealth Scientific and Industrial Research Organization estimated that in the 1945-47 drought the loss in wool alone was about £600,000,000. In the 1942 drought half the sheep population of Australia died, and in Queensland about 80 per cent, of the cattle died. This was not merely a loss of the cattle; in many instances the breeders were lost. We lost the female cattle that would have given progeny, and it took 40 or 50 years to recover our position of animal population.

It is absolutely essential that the States should be able to deal with this question of water resources, and this is where uniform taxation hits the States hardest. The formula that was adopted at the beginning seemed fair enough when Mr. Chifley introduced it. It provided that the amount paid to the States would increase in proportion to population growth. However, it was found that this arrangement was not ideal. The population increase was about 2 per cent., but the production increase was about 8 per cent., and it is from production that income tax and most other taxes come. The Commonwealth, because it collects income tax an-J other taxes, receives very much more benefit from increased production than the States ever do. We find, therefore, that the States are in a hopeless position because of the works they must undertake, especially in the supply of water.

I should like to give some instances of this. I mention first the Mareeba water irrigation scheme in Queensland, where they irrigate several thousand acres of tobacco. The State government has spent about £12,750,000 on this water scheme and the amount of tobacco grown has increased from about 1,500,000 lb. to more than 6,000,000 lb. The increased production of tobacco last year was worth, in short, some £4,000,000. This had two effects. First, it reduced the amount of tobacco imported; and, secondly, it increased the taxation collected by the Commonwealth by £1,600,000. Some 40 per cent, of the additional £4,000,000 went to the Commonwealth in excise and other taxes, and the State received only £400,000, which is about half the interest on the capital provided for the water development.

It seems to me that the time has come, if we really mean to carry out this ambitious scheme announced by the Acting Prime Minister and to do something worth while, when we should get busy and conserve fully the water resources of Australia. I suggest that we should follow the American example. The Americans, of course, relatively have much more water than we have, but they have come to the conclusion that a partnership between Federal, State and local authorities is necessary to control and develop water resources. Although there is no uniform taxation in America, the Federal Government receives the largest share of taxation. As a result of their examination, they have decided that the Federal Government should find the whole of the cost of the head-works associated with water conservation and water-power development, that the States should find the cost of the channels, and the local authorities should deal with those matters associated with putting the water on the farms. The Federal Government finds the cost of the head-works without interest and without redemption; there is no question of the money being paid back.

Under our system of uniform taxation, we first give a certain amount to the States according to the formula. Then we raise quite a substantial amount from the people by taxation and lend this to the States. We charge the States not merely interest but also sinking fund payments on it, though it has never been a debt at all. At present, I think the States are paying £104,000,000 in interest on their debt. Fifteen or twenty years ago, they were paying about £30.000,000. The increase has been tremendous.

I have tried to do something about this problem and to-morrow I will deal with it at a big water conservation job in Orange, which will be attended by a very representative group of people. T have already looked at the whole of Australia and 1 have exact information of the losses that have occurred as a result of lack of water, and I hope that all honorable members will help to get something worthwhile done to solve this problem. As examples of losses that can occur, I refer to two dams recently completed in New South Wales. The first is the Glenbawn dam on the Hunter River, work on which was commenced about 30 years ago. Although the original estimate for that dam was £1,500,000, the final cost was £13,000,000, with the result that, instead of costing from £3 to £4 an acre foot, the water is costing the farmers £34 an acre foot and the authorities are now experiencing some difficulty in obtaining enough finance for the construction of channels to reticulate the water over the land instead of allowing it to run away down the Hunter River. The second is the Keepit dam, which cost £13,000,000 to construct although the original estimate was £1,340,000. This will make the water too dear to use. In the final analysis, this Parliament is the real defender of Australia, and I urge it to insist that the Government ensure that the waters of all the large rivers from the north to the south are harnessed so that we may settle people on the land, increase production and reduce the risk of loss from drought. If we do that, it will be possible for us to save millions of pounds by way of interest and so avoid heavy adverse trade balances. In conclusion, let me say that I first became interested in this scheme about 40 years ago, and I want to see the work completed before I die.


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


.- I rise to support this censure motion, and in doing so feel confident that I have the backing of at least 65 per cent, of those people in Australia who have the right to exercise their franchise. It is always refreshing to listen to a speech by the honorable member for Cowper (Sir Earle Page), and I was most interested in the references he made to this Government’s obligation to house both the citizens of Australia and the migrants coming here. It is pleasing to know that at least one member of the Government is prepared to admit that the Government’s credit squeeze is having a disastrous effect upon an already acute housing position.

The Government has offered many excuses for introducing its credit squeeze. Only recently, while in Queensland, I saw in the Queensland press a statement by the Treasurer (Mr. Harold Holt) in which he blamed the banks for placing the Government in the present invidious position in which it finds itself. I noticed also that the Minister for Supply (Mr. Hulme) attacked the retailers for buying all these luxury goods that are coming into the country. But forgot to mention that the Government –] -I have prevented all this by re-imposing import restrictions. The further the position deteriorates, the more frantic does the Government become in making excuses designed to placate the people and have them believe that all is well. But not one member of the Government can deny that the recent drastic growth in unemployment, increase in bankruptcy and collapse of the home-building industry are all due to this vicious credit squeeze. To-day, the Acting Prime Minister (Mr. McEwen) said, “ The economy of this country is affected by the winds of change “. It would have been more appropriate if he had said that the economic policy of this Government is a torpedo of disaster. There can be no denying that the policy now being applied by the Government represents a complete somersault from what both the Prime Minister (Mr. Menzies) and the Treasurer advocated in February and August last year. Further, it cannot be denied that the Government hastily imposed blanket restrictions on the nation without first considering what effect such action would have on certain industries.

I say without hesitation that this credit squeeze has hit hardest the very industry which the right honorable member for Cowper has just declared that we should foster - the building industry - and this in the face of all the Government’s boasting about prosperity unlimited. Only as recently as February, 1960, the Prime Minister had this to say -

Much that is going on in industry, trade and construction is undoubtedly sound and beneficial. We do not want to check or impede this.

Can any member of the Government say with any degree of honesty or sincerity that industry, trade and construction have not been checked or impeded by this Govern ment’s financial restrictions? He certainly cannot! On 16th August, 1960, the Treasurer said - lt is common ground with all of us that we want to see a strong and continuous growth of population and industry, rising standards of living, full employment of labour and such a degree of stability as will promote those aims and safeguard the share in the gains of progress to which everyone is entitled.

How can we hope to cope with a continuous growth of population if we are not prepared to provide the people with decent living standards and homes? How can the Government expect to improve standards of living if it alters its economic policy continually? Again, how can every one share in the gains of progress while unemployment is becoming rampant in the community?

I turn now to the other side of the picture and say at once that I propose to address myself mainly to the subject of housing. At times, 1 have heard mention in this House of economic priorities. I have no hesitation in saying that it is essential to the welfare of any community that first priority be given to the provision of cheap money for home building. I want to see finance made available on terms that the worker can afford, and a virile and unrestricted housing programme. A properly controlled home building programme would overcome many of the economic problems which face us to-day.

I shall now refer to some of the trends that have been apparent in our community over the last two years. The current economic squeeze was not just brought down in November but had been apparent in the community for a long time previously, lt has been insidious, creeping on industry and home building and affecting those people who want to build homes. It has now practically destroyed them. On 27th October, 1960, the Deputy Director of the Housing Commission in Victoria, Mr. Gaskin, appeared before a parliamentary committee which inquired into the distribution of population. He was asked how the Housing Commission would fit into a plan for decentralization and he said the commission did not at present have the money to satisfy the demand that would come for new houses with the establishment of new industries in country areas. He said that the allocation of funds to the commission had been substantially reduced in recent years, money being diverted into other channels, and that expansion to-day could be achieved only at the expense of a decrease elsewhere in the housing programme. That was on 27th October, 1960. Yet, in spite of the fact that the State housing instrumentality gave those facts to a parliamentary committee, this Government saw fit to impose an economic squeeze which has cut the ground from under the feet of home builders and has practically destroyed the building industry throughout Australia. As members of the Government may want to deny that fact, I will read later from submissions made to the Liberal Premier of Victoria by the Victorian Home Builders Conference on 28th February, 1961.

Let us come now to the present day. This Government states that the economic squeeze has not done anything to hurt the worker or to hurt industry, but in “The Sun “ to-day we read these headlines: “Textile Crisis Claimed, 1,000 lose jobs”, ; Carpet Mill Puts 160 Off”, “ Meat Industry Dismissals “, and “ Seven Timber Mills Forced to Close “. What a shameful contradiction! What an indictment of a government which goes round the country talking of prosperity unlimited! Let us look at how this credit curb is hurting the building industry. In the Melbourne “ Herald “ of 31st January last, we read -

One builder said that unless the Government acted to allow first mortgage money to be freely obtained the position must become worse.

Tn the Melbourne “ Age “ of 21st November, 1960, we read -

Prospective home builders were being advised that it was a bad time to build and were cancelling their plans to do so.

That statement was made by the general manager of Contemporary Homes Proprietary Limited, Mr. R. V. Fenwick. It was said that home builders were cancelling their plans to build and that the construction of houses had dropped by 50 per cent. I will now quote the Liberal Premier of Victoria, Mr. Bolte, and surely no one will suggest that he would tell lies or that he would say anything to hurt the Federal Liberal Government. But he has been forced by circumstances to say these things. In the Melbourne “Herald” of 1st February last, he is reported as having said -

The housing industry is the key to the overall economy.

Even Mr. Bolte could realize that fact, but the Commonwealth Government’s economic and financial experts do not even know it. Mr. Bolte continued -

Unless it is healthy, sound and progressive, you can run into untold difficulties.

The report continues -

The Minister for Housing, Mr. Petty, said to-day that the easing of housing finance within the next month or so was essential to avoid not only unemployment in the building industry, but deterioration of Victoria’s acute housing position.

I give Mr. Petty and Mr. Bolte credit for telling this Government those things for some considerable time. Members on this side of the House have been telling the Government those things also, but nevertheless it has seen fit to put a blanket restriction over this country without even trying in a small way to cushion its impact on home building in Australia.

I said I would give some indication of the position in Victoria. I refer now to a submission put to Mr. Bolte on 28th February, 1961, by the Victorian Home Builders’ Conference. It reads as follows: -

The Victorian Home Builders’ Conference wishes to make the following submission in relation to the present crisis in the home-building industry and its ancillaries in Victoria.

Yet this Government claims there is no crisis. The submission continued -

We wish to emphasize that members of the Conference are largely concerned with contract home building and are not involved in the speculative field. Ninety-five per cent, of their work in housing would be on a contract basis. The crisis in the industry has reached a point where mass unemployment must occur unless remedial action is taken to ease restrictions on long-term housing finance. Tt is estimated that 150,000 people throughout Victoria depend for employment on the building and supply industries.

Yet the Government tries to tell us that all is well within the building industry. The submission continued -

Seventy-eight thousand of these could find their jobs in jeopardy if steps are not taken to help the recession-

Prosperity unlimited! Prosperous Australia! We read, further -

The present crisis is a result both of the more selective and restrictive attitude to housing finance adopted by State lending authorities last year, and of the Federal Government’s current credit restriction policy. The Victorian Home Builders’ Conference is strongly of the opinion that a revival of the home building industry can only be brought about by an early easing of restrictions on long-term housing finance.

That is something of which we on this side of the House have been trying to convince the Government for some considerable time. We saw what was going on and we knew it needed only a push for the whole thing to collapse altogether. The Victorian Home Builders Conference said further that the position of the building industry has been steadily worsening since early 1960 when long-term finance began to dry up, all due to the tight credit restrictions imposed on this country. The submission of the conference to Mr. Bolte continued -

Not only were the State and Commonwealth banks conservative in their housing loan allocation, but about that time most of the large insurance companies decided, by policy, to withdraw temporarily from the long term housing mortgage field. At the same time, there was very little money coming from the government-sponsored Homes Finance Trust. Co-operative housing societies and permanent building societies had virtually dried up as sources of housing funds.

That is the background, and it is a sorry tale. The submission continued -

Builders therefore in the latter period of 1960 were relying almost entirely on long term monies from the Commonwealth and State banks. Because of the ceiling of £2,750 on these loans and because of the necessity to trade on as low a deposit as possible, builders developed a rather complex system of second mortgage monies procurement during 1960.

The source of most of this money was the hire-purchase companies. Members of the Opposition have been telling the Government repeatedly that people have been forced to obtain money to build homes from the hire-purchase companies which has meant that instead of paying 5 or 6 per cent, they have had to pay 10, 12 and even 15 per cent, interest. The honorable member for Parkes (Mr. Haylen) had the personal experience of approaching an insurance company on behalf of a client and being told that he could have as much money as he wanted at 15 per cent. Let us read further -

Their position became quite serious in November when Mr. Holt announced measures to further curb the use of credit. Many builders who had been experiencing the boom had been caught in circumstances peculiar to their own operations.

No truer words were ever spoken. Circumstances in the building game are peculiar and can only be safeguarded by good legislation. This Government has had the opportunity to do so but has failed. U stands indicted for being responsible for the collapse of the building industry. The report further informs us -

A number of major home-building organizations in Melbourne - United States Constructions, Evandale Homes, Southern Constructions, Clayton Timber and Trading and Hancock Constructions Proprietary Limited- companies which, incidentally, are located in the electorates of Liberal members who, if they were sincere and honest, would be concerned at what has been going on - have been so concerned at the situation that they have formed the Interim Council of Victorian Home Builders’ Conference. These organizations between them build 75 per cent, of “ estate “ homes in Melbourne and probably upwards of 50 per cent, of all homes in Victoria. Each of them operates on the basis of developmental moneys, institutional loans and second mortgages. Each of them was in a rapid state of expansion which precluded any chance of liquidity. Each relied heavily on the provisions of second-mortgage finance from hire-purchase companies.

The building industry, as is traditional in Australia in boom periods, is in the vanguard of development and is therefore particularly vulnerable to economic trends.

The building industry affects a host of ancillary industries ranging from sawmilling through to hardware manufacture and, as such, affects the work force which could be estimated at over 150,000.

Now let us look at the summary which is in these terms» -

The building industry in Victoria has reached its lowest ebb for some years.

Yet we are prepared to carry on an intense immigration programme!

Private home construction, particularly by the estate or “brandline” building companies, has virtually stopped. Some companies report an 80 per cent, drop in housing “ starts “ over the past six months, others a 100 per cent. fall. The recession is making itself felt throughout the industry’s suppliers and ancillaries.

Suppliers of construction and furniture timber, bricks, plaster, glass, windows and hardware are cutting production as demand dwindles. Six major and medium-sized estate builders say they will have put off more than 3,000 men by the end of February. It is known, however, that 300 limber workers have also lost their jobs, and retrenchments have been made by a number of employers in building’s ancillary industries. A major window unit manufacturer has put off 41 of a staff of 141.

What a tragic state of affairs, and this Government continually tries to tell us that all is well in the community and that we have prosperity unlimited! Now comes the most damning part of all -

More than one building company in Melbourne faces early financial extinction unless remedial action is taken to revive the industry.

That has already happened. Some of the companies that I have mentioned have already become bankrupt, and those bankruptcies and the miseries and disorders that follow them can be laid at the door of this Government.

I shall now cite some statistics relating to home building. In August of last year Evandale Estates Limited started nineteen homes. In February of this year the number had dropped to two. Clayton Timber and Trading Proprietary Limited started 28 homes in August last year but none in February of this year. Hancock Constructions commenced eight homes in August last year but has had none since December, 1960. Southern Constructions which is now out of business, commenced 33 homes in August last year but none in January and February this year. U.S. Constructions commenced 41 homes in August, 1960, but none in January and February, 1961. The report then goes on -

In the July-September quarter 63 housing permits were obtained. In the October-December quarter there were seven permits and out of a work force of 90 in the July-September quarter only 60 remained in the latter quarter. This quarter no permits were issued.

The report informs us that there has been a 60 per cent, drop in the industry since February, 1960, and in the week 19th to 25th February, 1961, there was a 20 per cent. drop. Yet this Government tries to tell us that all is well!

In February, 1960, 800 building permits were taken out, but by the second week of February, 1961, there were only 168. Castley Brothers, of Oakleigh - a Liberal electorate - reported that between September and November last year their wage bill was £16,500 a month, but in January and February of this year it was only £10,000 a month. I have been informed that the Hilton hotel organization, the vast American international hotel chain, has dropped its £32,000,000 expansion scheme in Australia. This indicates the lack of confidence that the Government’s economic policy has created, not only in Australia but also beyond our shores.

I do not have the time at my disposal to give the House many more facts which would convince Government members that it is time they stopped trying to fool the people.


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


.- The honorable member for Gellibrand (Mr. Mclvor) has had a lot to say about the position in the building industry, and although we do not accept everything that he has said, particularly as the information he gave has been collated by a body which manifestly and quite rightly is pushing its own barrow, we on this side of the House would not deny that one of the objectives of the Government’s policies announced last November was to reduce to a reasonable level the activity in the building trade, particularly in relation to non-residential building. A close examination of the facts and statistics which all Opposition members could obtain if they wished, makes it manifest that the building industry prior to November, particularly in the nonresidential field, was one of many using more than its share of our resources. Because it was doing that, and because there were many other industries in Australia equally important which were going without as a result of the bidding for scarce resources which was forcing up prices and costs everywhere, action had to be taken.

The honorable member for Gellibrand (Mr. Mclvor) had nothing to say about the effect that this over-activity in the building industry was having in pushing up prices of houses and prices of land so as to put homes completely out of the reach of prospective home owners, or causing home owners to be loaded with a burden of debt that they would have around their necks for the rest of their days. We have had the spectacle to-day, since the Leader of the Opposition (Mr. Calwell) launched this no-confidence motion, of members of the Labour Party sitting opposite literally drooling at the expectation of mass unemployment. You can see them sitting there with their eyes closed imagining long queues of unemployed outside Commonwealth employment offices. They know, Sir, that they are so bankrupt of policy and constructive ideas that that situation is the only situation in which they are ever likely to get back into office. So they contemplate the magnificent spectre of large-scale unemployment, hoping for it. praying for it almost every hour of the day. I should think that even to the Opposition the record of this Government over the last eleven years would be convincing enough - would have convinced them that the situation that they fondly hope will come about, so that they will be able to enjoy the fruits of office, will not come about. And it will not come about because in the last eleven years, while this Government has been in office, as the Acting Prime Minister (Mr. McEwen) said this morning, employment in Australia has been generally, and on the average, higher than during any similar period in our history, particularly in peace-time. What is more, as the right honorable gentleman also pointed out - and it is worth repeating - in every year since this Government has been in office the level of employment in Australia has been higher than the level of employment in a number of other important countries; in fact, higher than the level in almost any other country in the free world.

Much has been said about the Government’s stop-and-go policies. I find this kind of criticism quite extraordinary. We expect it from the Opposition, because it is the manifest duty of the Opposition to oppose. Therefore, honorable members opposite seize on any little crumb. They coin such phrases as “ stop-and-go policies “. They really know better, but there are many people outside this House who appear not to know better, who appear not to be conscious of the fact that Australia is one of the world’s principal trading countries, a country which exports a greater part of its (gross national product than almost any other country does. That proportion has varied from 10 per cent, to 27 per cent, in the last ten years or so. This series of ups and downs must have affected the internal situation of Australia.

The Opposition knows also that, as my friend the honorable member for Moreton (Mr. Killen) pointed out in a really splendid speech this afternoon, we are maintaining, as a deliberate act of policy, an immigration programme almost unequalled, in proportion to population, by any other country in history. What is more, we are maintaining that immigration programme at the national demand of the Australian people. This, like our overseas situation, makes it very difficult to ensure stability in the Australian economy.

The Opposition also knows that, as 1 said previously, we are committed in this country to a full employment policy. I have just informed the House how successful we have been in maintaining that policy over eleven years. The Opposition, in its heart of hearts, and when it is being sincere, knows quite well the difficulties inherent in that. As my honorable friend from Wentworth (Mr. Bury) pointed out earlier, there are difficulties in ensuring that the economy stays in balance so as to prevent inflation, when there is applied a policy of full employment.

It is often stated that other countries have had a lower rate of inflation than we have had. Canada and the United States are cited as examples. But the honorable gentlemen -opposite who use those two countries as examples never point out that in the last five or six years those countries have never had an unemployment rate that has fallen below 5 per cent. We have not had a rate of 5 per cent, in this country in any .one of the years over .that period. I think that this situation can be very well grasped if you imagine a person trying to cross Niagara Falls. If he could throw a nice, broad bridge over Niagara Falls he would have no difficulty in attaining his objective of getting to the other side. On the other hand, if he has to walk a tightrope, as Blondin did, he would have to sway from side to side in order to achieve his objective. If you have the broad bridge of unemployment to fall back on you have no difficulty at all in achieving your objective of cost stability; if, however, you have to walk this tightrope of full employment - a policy of which this Government has proved by its actions it believes in - then manifestly you have to change your tactics from time to time in order to stay on the tightrope and reach your objective on the other side. That is what this Government has done by taking the measures which it took in 1960.

In that year, Mr. Speaker, this Government, which I am proud to support, set out on a policy of ensuring cost stability in Australia. In February, 1960, it announced certain measures designed to achieve that objective. The House will remember that the Government intervened before the Commonwealth Industrial Commission. It remembers that the Government abandoned import licensing. I shall have more to say on that in a moment or so. The House will also remember that the Government issued instructions, through the Reserve Bank, for the application of credit restrictions, and announced that it intended to avoid a deficit budget. When the Budget was introduced the Government took other measures designed to achieve the same purpose. In fact, instead of budgeting for a balance, it budgeted for a surplus. In November last year the Government completed this process designed to ensure cost stability in Australia. On 15th November the Treasurer announced the measures which have been so fervently opposed by the Labour Party ever since.

What is the situation which makes these measures necessary? The honorable member for Melbourne Ports (Mr. Crean) tried this afternoon to throw cold water on the supply-and-demand explanation of inflation. Sir, despite the sophistication which he and the honorable member for Yarra (Mr. Cairns) and others have attempted to bring to this question of inflation, I believe - and I think most sensible people in the community believe - that the root cause of inflation is a situation in which demand and supply get out of balance, when the supply of goods and services and labour available is not sufficient to meet the demand. The same kind of situation can be seen at auction sales day after day; when the goods that are being sold are in short supply the prices go up. What has happened in Australia is as simple as that, and that is what has made necessary the Government’s endeavours to reduce costs. The demand for goods, services and labour in Australia has outrun, by a long distance, the supply of them.

What does one do when this situation arises? Obviously you can operate on both sides of the equation, the supply side and the demand side. One of the steps you can obviously take, if the two sides are out of balance, is to increase the supply. You can increase the supply of labour through the immigration programme, and you can increase the supply of goods and services by encouraging production. This has been the principal method adopted by this Government throughout its years of office. We have encouraged production to an astonishing extent. The honorable member for

Moreton (Mr. Killen) gave remarkable figures on that aspect of the matter this afternoon. During the last eleven years the Government has encouraged the expansion of the Australian economy and the development of the country, and has in this way achieved a balance between supply and demand.

There is another way in which it can be done, and it is the way in which the Labour Government endeavoured to do it until its last year of office. It ensured that demand and supply were kept in balance by keeping the economy in a strait-jacket. Obviously, if you direct all the elements of supply, the labour, the materials, the services and everything else, and ration them by a system of man-made controls to everybody, you will have no difficulty in controlling the situation. That is the Labour method. That is the method to which honorable members opposite have committed themselves in this House this afternoon. The trouble with that method is twofold. First, the economy will stagnate, as it did during the regime of the Labour Government; and secondly, the people will be subjected to restraints on their freedom which they should never have te endure in peace-time.

Another way is the way taken by the Government on this occasion to meet a temporary situation. In a period when you have great difficulties with your overseas balances, when you are trying to maintain an immigration programme and you are committed to a policy of full employment, it is sometimes necessary to call a halt and ease down on the demand side for a while until the supply catches up once again. That is what the Government has done on this occasion by the imposition of broad financial controls. This is not the first time the Government has done this. During the eleven years in which we have been in office there have been two other occasions when it has been necessary to take action of a similar kind. But all the time the Government’s principal method of correcting the imbalance between supply and demand, which is the fundamental aspect of an inflationary position, has been to encourage the increase of supply so that we can take off restrictions as quickly as possible. That is what the Government has done in the past and what it will do in the future.

One of the aspects of the matter that interest me is that the Labour Party is quite obviously, though not explicitly, committed to a policy which I would describe as a policy of creeping inflation. Obviously if you criticize as strongly as the Opposition has done, to the point of moving a motion of censure on the Government for actions taken with the avowed intention of achieving cost stability in the community, and if you present no alternative, then one can only assume that you acquiesce in a process of creeping inflation, or even more severe inflation. As the honorable member for Wentworth (Mr. Bury) pointed out, it was not creeping inflation in the last year of office of the Labour Government, but inflation at the rate of 10 per cent. In this regard let me refer to an admission made not by Opposition members of this House but at least by some of the critics of the Government. There is an economist by the name of Eddy who writes for the “ Sydney Morning Herald “ and the Adelaide “ Advertiser “.

Mr Cope:

– Not Eddie Ward?


– No, but on some points I think he would agree with the honorable member for East Sydney (Mr. Ward). This gentleman strongly criticized the Government for what he called its restrictive policies. He recommended that the Government should abandon them. He was much more honest than the Opposition in this House, because he said in this article that the implication of his criticisms of the Government involves “ continued creeping inflation “. He then went on to say -

This, I think, is the lesser of two evils, and could be partly met by compensating cases of hardship.

There is the position. The Opposition has, by implication, acquiesced in a picture of the future which gives an endless vista of creeping inflation, with slowly rising costs and prices. Many other members of the community outside this House also have by implication adopted the same position. At least Mr. Eddy is honest, as an economist, in pointing out that when he criticizes the measures taken by the Government in the interests of cost stability the alternative involves creeping inflation.

I want to know what would happen to this country if creeping inflation were allowed to develop, and particularly what would happen to the great export industries, the primary industries, particularly those which are dependent on world markets for their prosperity. Take, for example, the wool industry, which still provides a good deal more than 40 per cent, of our export income. What would happen to that industry if we acquiesced in creeping inflation in the future as we have done in the past? Let me remind honorable members that creeping inflation has become almost the settled policy of the Labour Party. If we continue in a situation of creeping inflation, involving constantly rising prices and costs, what will happen to the wool industry? God knows, inflation has had a serious enough effect on the industry already.

I should like to give the House some information about the industry taken from a recent survey made by the Bureau of Agricultural Economics. When the bureau produced these figures it took a base figure of 100 to represent average prices in the five years ended June, 1950. On that basis the index in 1959-60 for wages stood at 258, marketing expenses at 241, services and overheads at 219, living expenses at 210 and equipment and supplies at 208. There is not one element of the costs of woolgrowers and other primary producers who have to sell their products on world markets that has not risen in that period by less than 100 per cent. Some elements have increased by a considerably greater proportion. Yet the Australian Labour Party, and, by implication, many people outside it, including the great newspapers in their editorials, particularly the “ Sydney Morning Herald “, are specifically advocating a policy which would bring us down to bankruptcy by a policy of creeping inflation.

What is going to happen to the wool industry in those circumstance ? When members of the Opposition advocate this policy, are they prepared to see the Australian wool-grower give up his property and go off the land? [ do not believe they are. If they are not prepared to do that, they must do what Mr. Eddy suggests. That is, to make payments to compensate them for the effects of broad policies which would be imposed if a Labour government were in office. I do not believe that even a Labour government would be prepared to find the £70,000,000 that would be necessary to pay the Australian woolgrowers the economic price of 60d. per lb. this year. I do not believe that even the Australian Labour Party would be prepared to pay an additional amount over and above that £70,000,000 which would be necessary if the policy of creeping inflation that it so obviously advocates were brought into operation under a Labour government.

Because this Government - which I support - showed its determination during 1960 to do something about this problem of creeping inflation and constantly rising costs and prices and because it showed that it was a responsible government and was prepared to take unpopular measures to achieve the long-term overall prosperity of all, I fully support it in its actions and deplore the censure motion.


.- The honorable member for Barker (Mr. Forbes) concluded his address by referring to “ this responsible Government “. Undoubtedly, it is responsible for the sorry state of affairs the country is facing at present. There can be no doubt that it is fair to say that the Government has lost the confidence of the Australian people. I believe it has also lost the confidence of the majority of the members of this House. It has been very interesting to sit in this chamber to-day and listen to supporters of the Government speaking, especially the members of the Australian Country Party who, in their own way, have indicated their disapproval of the Government and the sort of things that they would like to see done to prevent a continuation of the policies that have characterized this Government’s activities.

For some considerable time, the Government has abdicated from the sphere of financial responsibility. It has preferred to deal with effects rather than causes. I believe that every honorable member is aghast at the way things have developed. There is an atmosphere of submission to the highest bidder in the country to-day. The people see the great benefits and persona! aggrandizement that comes from being an entrepreneur and a manipulator of money rather than some one who has some genuine record of worth in the country for the national benefit. That is the sort of thing that characterizes the present state of affairs. We have seen huge segments of our economy come under outside control, and the Government has lost interest in them.

There is a great resentment against the Government because of its failure to maintain economic stability. In recent weeks, this Government has set about creating unemployment artificially. The great ramifications of government which we have devised have become the monsters which, instead of serving our purposes, are now setting about consuming us. This country with great natural resourses so vast that unemployment seems impossible to contemplate is now becoming the subject of unemployment artificially created by this Government. It is incredible that business people in the community are unable to contemplate any economic stability which will enable them to expand their businesses.

There is great resentment .at the unemployment that has developed. Who knows what figure the army of unemployed has reached? Every honorable member can tell the House of factories closing down and the termination of building construction. The statistics are always dragging well behind, but no one will deny that the total of unemployed in Australia is well over 100,000 persons at present. Many unemployed workers will never register because the Commonwealth Employment Offices cannot satisfactorily cater for their particular type of employment.

There is great resentment against the Government because of the need for housing. We have lost our scale of values. Where is the attitude of first things first? This Government does not care that so many young Australians, and new Australians for that matter, have been denied the republicanism of an Australian fireside - the thing that has made this country so worthwhile in the past. To-day, thousands of young Australian families are separated and divided, living in shacks, garages and shanties.

Where can a young married couple borrow money at a reasonable rate of interest to buy a home? Is there any honorable member on the Government side who can say where young married couples can get finance to-day? We have deteriorated to a stage where the people’s money is denied to the people themselves. If you are a great entrepreneur, a speculator involved in the manipulation of money, or are engaged in speculative building you can get money, but the ordinary tax-payer is unable to get finance for a house in this year of grace, 1961. Only on Monday morning before I came to Canberra, I interviewed a yow g man whose family of six children is divided in three different houses. That is the state of the nation to-day.

Of course, there is great resentment at the Government’s failure to maintain a decent rate of national development and expansion. What is the Ministry of National Development doing? It is concerned with the atomic reactor and it is involved in the administration of the War Service Homes Division, but I have never heard the Minister for National Development (Senator Spooner) expound a well-devised national development programme which will ensure and guarantee the future of Australia.

Then, of course, there is great resentment at the way the balance of payments has deteriorated. To listen to the right honorable member for Cowper (Sir Earle Page) and others speaking to-day one would think that the balance of payments is not a matter of great moment. Of course it is. It has caused such great concern to the Government in recent months that the Government has brought down ill-considered economic measures. The Government has panicked and has caused a great loss of confidence to permeate throughout the Australian community. To-day’s newspapers contain a report that an investment organization, the Hilton group, is about to withdraw from this sphere of activities. There has been a great loss of confidence and it is becoming apparent that the culmination of twelve years of Liberal Party-Country Party coalition governments is going to have disastrous consequences for the people. The chickens are coming home to roost at last.

Since the new session of the Parliament commenced this week. I have been interested to hear the new resolutions of the Government and the way in which it proposes to embark on new projects to patch up things that are basically wrong. Its approach is belated. The Government has reached a crisis and it is trying to invoke new ideas. Tt is introducing proposals which cannot possibly have any substantial impact on the situation. We have heard proposals about the development of roads in the Northern Territory. That sort of thing has been advocated by all sections of the community for a long time and by members of the Opposition. We have had to wait twelve years for supporters of the Government to advocate the development of the Northern Territory. Of course, there has been recent reference to the need to promote overseas sales. So quickly is the Government turning out new schemes and ideas and throwing away the old ones that the plan which the Acting Prime Minister introduced last night was not even properly developed. He was faltering and looking for the finished proposition from the members of his staff. The ink was not dry on the paper. The plan was not even printed. He was pulling a rabbit out of a hat, but he did not know whether it was black or white. He had not quite finished the controversy that he was having with the Treasurer and other members of the Government. Heaven knows what this scheme of providing export incentives to Australian firms is going to do! There is no question that companies set up by investment from overseas will benefit tremendously. I am not terribly enthusiastic about giving General Motors-Holden’s Limited, for example, greater tax remissions than it has already. I am not interested in encouraging people to send so much meat overseas that there will be a great deficiency of meat in Australia and the Australian housewife will be faced, as she was a short time ago, with buying meat at a price well beyond her financial capacity. We get all these half-baked schemes.

There is a proposal to develop new port facilities. Opposition members have been contending for a long time that something should be done about this and the answer from the Government has always been that it is a State responsibility. Now it is shifting its ground. In 1961, faced with disaster, the Government is promising to put all these things into operation. Even encouragement for the tourist industry is proposed. For years people had been talking about the great tourist potential of Australia. The only ones who have denied it have been members of the Commonwealth Government. Now, they are at last going to look at this proposition.

The Government’s proposals are not bad in themselves, but they are half-baked. They are not properly developed and it is obvious that they are not part of an integrated scheme designed to overcome the financial difficulties with which the country is at present confronted. Nor are they designed to ensure that Australia’s great man-power and economic resources are directed in such a way as to bring the greatest possible benefit to the Australian people. The people who are benefiting as a consequence of the exploitation of Australian raw materials are in other parts of the world.

The Government’s proposals are a hotchpotch. Australia needs an overall plan of the type we are told has been adopted in the planned economies of other countries. Unless we face up to this on an organized basis, we will go down the drain very quickly. Only last November the Government was suddenly confronted with the monstrosity of its own misdemeanours. Apparently, it had not realized what was happening with respect to overseas balances. It had not recognized that our overseas balances were being dissipated. Suddenly, in November, the Government started to face up to the position. A great crisis hit the country and measures were immediately introduced of a type which caused great havoc in the community. Why was it not possible for the Government to watch the trend and to provide some check over a period?

The discovery that Australia was spending a lot more than it earned and would become insolvent unless the trend was checked almost threw the Government into a panic. I am quite sure that it has regretted many of the things that it foolishly did in November. It has already corrected some, such as the higher rate of sales tax on motor vehicles. Only in February last year the Government decided that the answer to the problem of the inflationary trenah - the matter which the honorable member for Barker (Mr. Forbes) has been talking about - was to lift import restrictions. In this matter, the Government rejected the advice of its Treasury officials - its advisers, its experts. Certainly, it rejected the advice of the Opposition. Business organizations of all kinds, including banks, told the Government that to abandon import restrictions was a ridiculous thing to do in the circumstances, but it went ahead. The Treasurer considered that this was the means by which the Government would be able to come to grips with inflation. He thought that this was the answer - to bring in goods from low-cost countries such as Japan. He took the view that if they came into competition with Australian goods it would force down Australian prices. It would weed out inefficient industries and deal a great blow at inflation. Clearly, that has not been the case. The Government should now be able to observe that what it hoped to do by lifting import restrictions has not been achieved and that the objective could better have been attained if import restrictions had been retained. There is no doubt that the Government did have some need to look at the inflationary trend which the honorable member for Barker has been talking about. There has been a great rate of inflation in this country - almost an unprecedented rate. I was interested, a short time ago, to look at the monthly bulletin of statistics provided by the statistical office of the United Nations. It is very interesting to see how Australia compares with other countries with respect to inflation. The United Nations statistical office has taken a base unit of 100 for the year 1953. Since 1953 we find that the index of wholesale prices has risen to 105 in Canada and to 106 in the Federal Republic of West Germany. In Japan the figure has stayed at 100. The figure for New Zealand is 110, for the Union of South Africa 107, for the United Kingdom 103 and for the United States of America 109. To demonstrate that Australia does not shatter records only in the Olympic Games, the figure for Australia went to 116. The consumer index figures are similar to those for the wholesale price index. Again taking a base figure of 100 in the year 1953, the consumer index figure for the United States rose to 111, for Canada to 111, for Germany 114, for Japan 115 and for Australia to 121. Figures supplied by our Commonwealth Statistician indicate that there has been an increase in the price of all groups of commodities in the six capital cities of almost 25 per cent, since 1953. You cannot blame the Labour Government for that. I am talking about the period from 1953 to 1961 when the Australian consumer price index figure rose from a base of 100 to 122.5. That is a level of inflation that no other country has experienced. It has been tolerated, if not brought about, by a Government which was elected away back in 1949 on a platform of holding the trend of inflation. Of all the methods by which the Government could have sought to curb rising prices, the most dangerous, the most speculative, the most inefficient and the most ineffective was the lifting of import controls. Yet, despite all the warnings, the Government lifted the floodgate of imports control. Nothing was substituted in its place, not even a gradual dampening down of available credit for imports.

Import restrictions were lifted in February of last year and bank credit rose by £190,000,000. How can you justify this situation in which a complete vacuum was left and no exchange credit system was introduced? The whole situation was left to chance. So the great flood of imports has raced on unabated. It has left in its wake, unfortunately, a large number of victims - the early victims of what might well become a great national disaster. Some Australian manufacturers, unable to compete with low-cost countries, have already gone out of business.

We are faced with a very real problem. The value of exports is falling rapidly and the value of imports has been increasing rapidly. Let us look at the international reserve picture of a short time ago. By the end of December, 1960, our reserves had fallen to £376,000,000 from £547,000,000 twelve months earlier. That is something to be concerned about. Our reserves had fallen by £92,000,000 in the three months to the end of September, 1960. They fell by £44,000,000 in the three months to the end of December, 1960. They have fallen at a rate which has never been known in the history of Australia. When we look at our exports position we see what a great fall there has been. In the first half of 1960-61, our exports were worth £54,000,000 less than they were in the first half of the preceding year. Obviously, something has gone bad in the State of Denmark.

What is the imports situation? In the same period, imports rose rifle exports were falling at a dramatic rate. The value of imports was £108,000,000 higher in the first half of 1960-61 than it was in the first half of the preceding year. On top of that, and to make the position worse, there are all the invisible payments, such as the £7,000,000 for freight, insurance and things of that nature. These are circumstances with which the Government has never been prepared to grapple. It has always allowed Australia to be held to ransom by the conference shipping lines which have exploited us and made great profits from us. The Government has never interested itself in resurrecting the Commonwealth-owned line of ships and ensuring that it did a decent job for Australia.

Let us have a look at the imports situation. Of 26 major categories of imports, nearly all increased in value in ‘the first half of 1960-61 compared with the corresponding period of the previous year. There were only a few exceptions. They included tea, which remained at the level of £7,000,000; tobacco, which went down by £2,000,000 to £6,000,000; and raw cotton, which remained at £3,000,000. Otherwise, the value of most of our imports moved in the way I have mentioned. Imports in the 23 other categories, the major categories, increased substantially. Those categories included iron and steel. Fancy Australia importing iron and steel! Our imports rose by 300 per cent., or by £24,000,000. It is difficult to understand that development.

Let us have a look at some of the figures of the Broken Hill Proprietary Company Limited. I have here a newspaper clipping which is headed - “ B.H.P.’s best year: Profit jumps 36i per cent.” It goes on to state -

Consolidated net profit rose a mighty 36.5 p.c. from £9.9 million to a record £13.5 million.

Why is it, in those circumstances, and since steel production is such a lucrative business, that we have found it necessary to import steel and to increase our exports to such an incredible extent? Clearly, if B.H.P. is not prepared to move into this field to a greater extent than at present, it is time that we established in this country a people’s steel industry to ensure that we can balance our budget.

It is interesting to have a look at the timber industry. Fancy Australia importing timber and increasing its timber imports by £7,000,000 in the half-year that

I have mentioned! We have heard Tasmanian representatives in this Parliament, such as the honorable members for Wilmot (Mr. Duthie) and Bass (Mr. Barmrd), referring to this situation. They have told us that timber mills all over the country, and especially in Tasmania, are closing. Where is the organization in that respect? This Government obviously stands indicted and condemned for having allowed the position to get completely out of hand. On the one hand, timber mills in Australia are closing, and concurrently and, simultaneously we are bringing in an additional £7,000,000 worth of timber in a half-yearly period.

If we look at other industries we see the same kind of anomalies occurring. Imports of yarns, textiles and wearing apparel have increased substantially. My colleague, the honorable member for St. George (Mr. Clay), has often told the Government of the way to avoid this great increase of imports. The increase of vehicle imports is unnecessary, and given the time I could demonstrate how this Government, if it had the ability, could avoid such increases. There have been great increases in the imports of rubber. The Government has done nothing to develop the production of by-products of coal and nothing about the production of synthetic rubber. Our rubber imports are growing at a great rate. So, too, are our imports of paper and board, which have increased by about 40 per cent, in each case in the period to which I have referred. The value of imports for the first half of 1960-61 was £561,000,000. The value in the first half of the preceding year was £429,000,000, so that there has been an additional £132,000,000 worth of imports.

I do not know why the Government should continue to call itself a government. It has stood idly by and allowed that situation to develop. After it has developed, after the gates have been left open and the stock have got out, the Government begins to pitter-patter about with a few remedies of an infinitesimal value which are not applied in a proper, efficient or organized way in any event. It is quite clear that the Government has lost the confidence of the Australian people. In the first half of 1960-61 we have seen a decline of some of Australia’s most im portant export industries compared with the corresponding period of the previous year. Exports of wool and sheepskins have fallen by £38,000,000, while exports of grains other than wheat have fallen by £5,000,000. Exports of meat have fallen by £19,000,000. No wonder the Australian Country Party is anxious to see something done about water conservation and the construction of roads in the north! Why have our exports of meat fallen by £19,000,000? How can the Government justify that situation while a third of the peoples of the world are starving? Exports of cheese, eggs, milk and cream also have fallen substantially. So, too, have exports of many other commodities, including fruit, the value of which has fallen by £2,000,000. The value of steel exports has fallen by £5,000,000.

That is the state of the nation, Mr. Speaker. Unfortunately, time will not allow me to indicate in more precise terms the manner in which the Government has betrayed the best interests of the people of Australia. There is no doubt that it has let us down very badly. We long to see an alternate attitude. We want to see installed in office a government which will be more than just a status quo government. We do not want a government which is just prepared to let things take their course. We want to see a planned economy. We need a Minister for National Development who will go into action and do more than look after the War Service Homes Division, which he does in a very unsatisfactory manner, anyway. We want to see great developmental projects in this country. The great deposits of raw materials lying in the ground must be exploited to full capacity. They must not be regarded as something to be exploited only by investors from overseas. They are the heritage and the birthright of the Australian people.

It is the responsibility of the Government to develop and exploit our resources and also to establish bodies such as the Snowy Mountains Hydro-Electric Authority. We want the Government to say, “Here is a great deposit of bauxite, of uranium, or of zirconium. We are going to organize its development in conjunction with the States and local government. We will set up a commission like the Snowy Mountains Authority. We will underwrite the scheme from Consolidated Revenue. We will say to 30,000 or 40,000 young Australians, Come to this great town we are building, where we have nice homes, good streets and decent schools for you’. We will underwrite this project, having regard to the undisclosed profits to be made from it.” That is the kind of programme to which we must resort if we are to ensure that Australia is not to rely on raw materials and primary industries to the same degree in the future as it has in the past.

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.

Debate (on motion by Mr. Pearce) adjourned.

page 137



– Pursuant to Standing Order No.17, I lay on the table my warrant nominating Wilfred John Brimblecombe, Esquire, to act as Temporary Chairman of Committees when requested to do so by the Chairman of Committees.

page 137


Parliamentary Function

Motion (by Mr. Freeth) proposed -

That the House do now adjourn.

East Sydney

– Since the Government apparently has not sufficient business to keep the House occupied until 6 p.m., I think that this is an appropriate time to criticize the recent extraordinary decision of the Cabinet to proceed this year with the function associated with the opening of the parliamentary session. Until recent years, it was not usual to have such a function annually, but to hold one this year seems to me to be most extraordinary. I remember that not so long ago, at about the time of the death of Lord Dunrossil, the Treasurer (Mr. Harold Holt) stated that on this occasion the function would be much more restrained than in the past. Nobody has explained what is meant by the term “ more restrained “. Does it mean that fewer people were invited to participate in this function? Is there to be any music: If music is to be provided, will it be mournful music in place of rock’n’roll? Is there to be any diminution of the quantity of food supplied to the invited guests - the privileged few who will be there? Is there to be any diminution in the quantity of liquor to be supplied at public expense to the privileged invitees?

Only this afternoon, I heard the honorable member for Moreton (Mr. Killen) talking about the misery and starvation that exist throughout the world. He directed attention to what he said was wasteful and extravagant expenditure in this country. It is rather remarkable that this Government, which is putting the economic squeeze on everybody else to-day, apparently does not intend to apply that squeeze to itself. Surely this reception is completely unnecessary this year. It can mean only that members and Ministers and some of the other people who want to display their fine clothes want to do so in a social atmosphere associated with the opening the the Parliament.

I think that this week’s deliberation in the Parliament - or, rather, the lack of it - has been absolutely wasteful. Let us examine the situation, and let us not forget that every member of both this House and the Senate is brought here at public expense - most of us by air. We arrived on Tuesday of this week, and the Parliament adjourned until the following day after a very brief sitting. Nobody questions that adjournment, because we all understand that it was brought about by a very sad occasion. But this meant that we did nothing at all towards the work of the Parliament on the Tuesday. We then sat on Wednesday afternoon and evening and will sit to-day until about 6 p.m.

I imagine that the ordinary people who are being squeezed so hard by this Government consider that on this occasion the Government should have set an example by curtailing this wasteful expenditure at a time when it is preaching to the community about the need for the curtailing of wasteful spending. I dare say that if any member of the Government has the audacity to reply to me, he will talk about the small expenditure involved in the conducting of this function. I do not know how much it will cost, but, judging by experience, I imagine that the cost will run into some thousands of pounds. I may be wrong about that. Nobody has told us exactly what expenditure will be involved. But that is not the point. Even if the cost were not a considerable sum, in the light of the Commonwealth’s total annual expenditure, the point is that, as I heard when I was a young boy, if we save the pennies, the pounds will look after themselves. I think it is about time that this Government, ins:cad of preaching and lecturing the people generally about the stringent financial situation that it claims exists, began to set an example to the rest of the community.

What sacrifice would the Government have made if it had forgone its function this year? Everybody knows that many people who attended functions such as this in the past have now begun to realize that they are worthless events. For example, when the Parliament was opened on Tuesday, the galleries in the Senate were nowhere near full, as they have been on previous occasions. There were many vacant seats. I think that was because lots of people have begun to realize that there is not much to these functions other than the providing of an opportunity for a few people to receive entertainment, drink liquor and eat food at public expense.

I hope that in the future the Government will take a different view about expenditure on such functions. We have heard members of this Parliament in the last three days - even anti-Labour members like the right honorable member for Cowper (Sir Earle Page) - talking about the closing down of timber mills, brick works and other industries, with workers being thrown out of work, because, it is said, the finance available for these kinds of activity has been curtailed. But the Government has done nothing to reduce worthless and wasteful expenditure of the kind to which I have directed attention. I take this opportunity of making my protest at the holding of the function that is to take place this evening, and I hope that there will be no occasion in future for me to voice a similar protest.

Minister for Territories · Curtin · LP

Mr. Speaker, the honorable member for East Sydney (Mr. Ward) has resumed both his place in this chamber and his customary role of a band-wagon chaser. We are very glad to see him back here restored to health, but it is a pity that he has chosen to discuss this matter. I think that one could give greater weight to his words if we could expect that he himself will not accept the invitation to this evening’s reception and that none of those who sit with him will accept the invitations that they have received.

Mr Ward:

– The Minister can guarantee that I shall not be there.


– We shall miss the honorable member’s company. May I, on behalf of us all, express our regret that he will not be present to join in the celebration of an important parliamentary occasion. These receptions, Mr. Speaker, as you yourself, as one of our Presiding Officers, know better than most, have become the traditional way of marking the opening of the National Parliament. I think that the honorable member for East Sydney has not had sufficient regard for that fact. This function celebrates the opening of the Australian Parliament.

In the course of any parliamentary year, the Parliament and its members receive from the Diplomatic Corps which has grown up in Canberra, and from participants in the official life that has developed here, a great deal of hospitality. This is one of the occasions on which the Parliament as a parliament tries to return that hospitality. Many of us as individuals play our own part in accepting and returning hospitality but there is only one occasion in the year on which, acting as a parliament, we invite people to join with us on a notable occasion.

Apart from that, there is a point that I think will appeal to all honorable members. The occasion of the opening of the Parliament is perhaps the one occasion in the year on which most of the wives of members of the Parliament are present in Canberra. I think I can say, without making too much of a cry of misery about it, that because the National Parliament meets at a location far removed from our constituencies - some of us travel across a whole continent to come here and others travel only a few hundred miles - during a great part of the year while we are carrying out our parliamentary duties, our wives become parliamentary widows, as it were. Not all the wives of members can accompany their husbands to the opening of the Parliament, but this is the one occasion on which most wives of members come to Canberra with their husbands, and 1 think it is quite fitting that on such an occasion we join with our wives and the wives of other members of the Parliament in a reception of this kind. It is something that belongs to the dignity of the Parliament and it provides an opportunity for the Parliament to return hospitality. The occasion is not one of great frivolity or excessive expenditure. It is a dignified and proper occasion which celebrates the national ceremony of the opening of the Parliament.

I feel sure that very few, if any, other members of this Parliament join with the honorable member for East Sydney in apparently rejecting an invitation to be present at this evening’s reception. The honorable member having rejected the invitation, he should not be so curmudgeonly as to cry out against the innocent pleasures of those of us who do not see anything improper in rejoicing together. He really ought to be more generous in his maturing years.

Question resolved in the affirmative.

House adjourned at 5.54 p.m.

Cite as: Australia, House of Representatives, Debates, 9 March 1961, viewed 22 October 2017, <>.