House of Representatives
9 May 1961

23^rd Parliament · 3^rd Session

ANNIVERSARY OF PARLIAMENT
CANBERRA RENTALS
- Petition
QUESTION
- PAPUA AND NEW GUINEA
QUESTION
- AUSTRALIAN ECONOMY
QUESTION
- HOUSING FINANCE
QUESTION
- TELEVISION
QUESTION
- SKELETON WEED
QUESTION
- CANNED CHICKEN
QUESTION
- SECURITY
QUESTION
- AUSTRALIANS STRANDED OVERSEAS
QUESTION
- AUSTRALIAN AIRLINES
QUESTION
- UNEMPLOYMENT
QUESTION
- COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION
QUESTION
- DEPARTMENT OF HEALTH BOOKLET
QUESTION
- HOUSING FINANCE
QUESTION
- CONSTITUTIONAL REVIEW COMMITTEE
QUESTION
- LONG SERVICE LEAVE
QUESTION
- WOOL
QUESTION
- LONG SERVICE LEAVE
QUESTION
- TELEVISION
QUESTION
- VOTING RIGHTS OF AUSTRALIAN ABORIGINES
QUESTION
- DEPARTMENT OF HEALTH BOOKLET
QUESTION
- IMMIGRATION
QUESTION
- DEPARTMENT OF HEALTH BOOKLET
QUESTION
- OVERSEAS LOANS
QUESTION
- GOVERNOR-GENERAL,
QUESTION
- BANKING
ANNIVERSARY OF PARLIAMENT
QUESTION
- TASMAN EMPIRE AIRWAYS LIMITED
ASSENT TO BILLS
QUESTION
- INTER-PARLIAMENTARY UNION
CONCILIATION AND ARBITRATION BILL 1961
STEVEDORING INDUSTRY BILL 1961
DEFENCE PAY BILL 1961
- Second Reading
CELLULOSE ACETATE FLAKE BOUNTY BILL 1961
TARIFF PROPOSALS 1961
- In Committee of Ways and Means:
- Customs Tariff Amendment (No. 1)
- Customs Tariff Amendment (No. 2)
- Customs Tariff Amendment (No. 3)
- Customs Tariff Amendment (No. 4)
- Customs Tariff Amendment (No. 5)
- Customs Tariff Amendment (No. 6)
- Customs Tariff Amendment (No. 7)
- Customs Tariff (Canada Preference) Amendment (No. 1)
- Customs Tariff (New Zealand Preference) Amendment (No. 1)
- Customs Tariff (New Zealand Preference) Amendment (No. 2)
- Ordered -
CUSTOMS TARIFF BILL 1961
- Second Reading
CUSTOMS TARIFF (CANADA PREFERENCE) BILL 1961
- Second Reading
CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL (No. 1) 1961
- Second Reading
APPROPRIATION BILL (No. 2) 1960-61
- Second Reading
APPROPRIATION (WORKS AND SERVICES) BILL (No. 2) 1960-61
- Second Reading
SUPPLY BILL 1961-62
- Second Reading
SUPPLY (WORKS AND SERVICES) BILL 1961-62
- Second Reading
BILLS RETURNED FROM THE SENATE
ADJOURNMENT
- Australian Airlines - Swine Fever - Importation of Canned Food
ANSWERS TO QUESTIONS
- Immigration
- Movement of Tradesmen to New Zealand
- Department of Immigration Pamphlet
- Aborigines
- Overseas Reserves
- Export of Motor Vehicles
- Papua and New Guinea
- Frozen Foods

– My question is directed to the Minister for Territories. I ask whether Dr. E. J. Wright, Assistant Director of Medical Training in the Papua and New Guinea Department of Health, expressed the aim of the Administration in Papua and New Guinea when he said, concerning the Papuan Medical College, that it was the purpose - to establish to university standards, a medical college and teaching hospitals together with nursing and ancillary medical services of the standard required to supply adequately the medical needs of the country.

Is it the aim of the Administration to raise the entry requirements from the equivalent of the Intermediate to the equivalent of Matriculation? If so, can this aim be achieved if the basis of teaching recruitment policy for the schools of Papua and New Guinea is to be the selection of men and women from Australia at standards of education much lower than those required for teachers in the States and with a training period much shorter?

Mr SPEAKER:

– Order! The honorable member should ask his question.

Mr BEAZLEY:

– Could the teaching programme be reconsidered and the recruitment of qualified teachers in the States commenced?

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I am not quite sure that I followed the whole of the convolutions of the honorable member’s questions; but the Government’s policy, which has been clearly announced, not by the officers of the Government but by the Government itself, is to establish medical education in the Territory so that eventually the Territory will be able to staff the whole of its medical services. Of course, the honorable member will recognize that the limits to medical training are set by the availability of candidates with a sufficiently high standard of basic education; but as candidates come forward qualified to embark on higher courses of medical education, that medical education will be provided for them in the Territory. I do not think there is a direct relationship between the latter part of the honorable member’s question and the earlier part. Our major problem in the Territory at present is that, because of the fact, perhaps lamentable, that for many years education was not given the priority it deserved, we do not have large enough numbers of children in primary schools able to produce a high enough annual quota of children capable of taking higher education. The programme to which the honorable member referred was a programme designed to give village education at an elementary level in order to build up the number of children undergoing primary education, and thus increase the annual quota of children capable of taking higher education.

page 1592

QUESTION

AUSTRALIAN ECONOMY

Mr McCOLM:
BOWMAN, QUEENSLAND

– My question, which is directed to the Treasurer, concerns the public interpretations that have been given the Treasurer’s recent statement to the House in relation to borrowings from the International Monetary Fund. These public interpretations are to the effect that the stringent credit controls introduced last November will continue until June, 1962. Are such interpretations correct, or is the proper interpretation of the agreement with the International Monetary Fund that the Government, having regard to its own accepted and stated obligations to maintain economic stability and, as far as possible, to avoid inflationary tendencies, is free to apply the Government’s policies, including increase of credit facilities, to the community?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– There have been various public interpretations put upon the statement, and I confess that I have not yet caught up with all of them; but honorable gentlemen who studied the document in its detail will recall that there was a preface to the passage in which the Commonwealth Government indicated its policies. We clearly stated that they were to relate to the conditions as we saw them at this time, and it was apparent that the Government retained the right to determine the policies which it felt to be necessary in the national interest for Australia’s circumstances as they developed. Before the House rises, I hope to say something rather more detailed on this matter; but I regret that some of the interpretations have been given such flamboyant treatment, with the effect of quite unnecessarily, in my judgment, disturbing the minds of those who are not so close to the details of these matters as we are.

page 1592

QUESTION

HOUSING FINANCE

Mr ERWIN:
BALLAARAT, VICTORIA

– I ask the Treasurer whether he can do anything to expedite consideration of applications to the Commonwealth Bank by housing co-operative societies for advances so that the allocation of moneys can proceed speedily.

Mr HAROLD HOLT:
LP

– I have previously said that it is the Government’s desire to increase to some degree the amount of housing activity in various parts of the Commonwealth. In furtherance of that objective, consultations are taking place to-day between officers of the Treasury and officers of the Reserve Bank of Australia. When I am in a position to make a more detailed statement, I will do so.

page 1592

QUESTION

TELEVISION

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

– I ask the PostmasterGeneral whether his attention has been directed to the following advertisement, which appeared recently in the Adelaide press: -

Be ready for the new T.V. stations. You must have thirteen channels to receive all the new channels.

– Can the Minister foi External Affairs assist in any way the fourteen Australian timber workers who are stranded on the Dutch island of Adi, which is 40 miles from Hollandia? To illuminate my question, I inform the right honorable gentleman that these men were working for an Australian company which has gone into liquidation. They are living now on fish which they catch themselves, and on an occasional meal of pork when the natives kill a pig. They have no fresh fruit and no medical supplies. Some of them are sick from malaria and other tropical diseases. The Dutch patrol vessel no longer visits the island, and the company cutter is in Darwin under distraint for debt. The men are owed many weeks’ wages and their wives and families are enduring great hardship as a result. Will the Prime Minister approach the Dutch authorities so that rations and medical supplies can be sent immediately to these men? Will be consider the credentials of companies similar to Adi Timber Limited, which induce Australians to work abroad in remote islands and then leave them stranded and starving?

Mr SPEAKER:

Mr BUCHANAN:
MCMILLAN, VICTORIA

page 1599

ANNIVERSARY OF PARLIAMENT

Mr CALWELL:
Leader of the Opposition · Melbourne

– by leave - I desire to associate every honorable member whom I have the honour to lead with what the Prime Minister (Mr. Menzies) has said about the future of this country, and about this Parliament, on this, the sixtieth anniversary of the first meeting of the Commonwealth Parliament, and the thirty-fourth anniversary of its first meeting in this, the National Capital. We all look forward with hope and expectation to a greater Australia, growing before our eyes. We all agree, of course, that the Australia of to-morrow will be even better, in the lifetime of our children, than the Australia we have known, and we hope that in the time of our grandchildren Canberra will equal Washington in importance, as the centre of a very great nation.

page 1599

QUESTION

TASMAN EMPIRE AIRWAYS LIMITED

Mr TOWNLEY:
Minister for Defence · Denison · LP

– by leave - As honorable members know, the Minister for Civil Aviation, Senator Paltridge, had discussions in Australia from the 27th February to the 3rd March, 1961, with Mr. J. K. McAlpine, the Minister in charge of Civil Aviation, New Zealand, on the general question of civil aviation relations between Australia and New Zealand. In those discussions the future of Tasman Empire Airways Limited was considered, and Mr. McAlpine and Senator Paltridge were able to reach agreement upon arrangements which they jointly recommended for adoption by their respective Governments. Those recommendations have now been approved by both Governments.

Under the arrangements the Australian Government has agreed to sell its half share in Tasman Empire Airways Limited to the New Zealand Government for £A.1,014,250, or £NZ.811,400. The purchase price represents the par value of the 811,400 £NZ.l shares which Australia held in T.E.A.L. The sale will have effect from the 1st April, 1961, although payment need not be completed until March, 1965. The agreement does not envisage the sale of T.E.A.L. to “ any outside interest “, and this Government understands that the New

Zealand Government has rejected the offer by Ansett Transport Industries to purchase T.E.A.L. As part of the new civil aviation arrangements between the two countries, Australia and New Zealand will also conclude an Air Services Agreement which will give Australia’s international airline, Qantas, rights to fly to ar.d through Auckland, Wellington and Christchurch. The New Zealand Government-owned T.E.A.L. will be given rights to fly to and through Sydney, Melbourne, Brisbane and Norfolk Island. The Air Services Agreement will be supplemented by a commercial arrangement between Qantas and T.E.A.L. designed to safe-guard T.E.A.L. ‘s financial position while permitting competitive operations between T.E.A.L. and Qantas across the Tasman. In this regard it has been agreed that T.E.A.L. may carry more than half the traffic on the Tasman.

As I mentioned earlier, the arrangements agreed upon between the Australian and New Zealand Governments do not envisage the sale of T.E.A.L. to “ any outside interest “ and I should inform the House that it is part of these arrangements that if, at any time after the sale of its share in Tasman Empire Airways Limited to the New Zealand Government, the New Zealand Government decides to dispose of any part of its holdings in T.E.A.L., then the Australian Government would have the option of withdrawing from or renegotiating the arrangements now approved by both Governments.

Tasman Empire Airways has operated air services on the Tasman for 21 years. Originally the airline was owned jointly by the Australian, New Zealand and the United Kingdom Governments, but in 1954 these arrangements were changed and the Australian and New Zealand Governments became joint owners of the airline, each with a 50 per cent, interest. With the rapid and impressive development of international aviation and the introduction of jetpowered aircraft on the world’s air routes, it was becoming increasingly clear that continuation of our 21 -year-old joint ownership of T.E.A.L. was no longer appropriate. The two Governments therefore agreed that in the circumstances the New Zealand Government should assume complete ownership of its own international airline and that the traditional co-operative arrangements in civil aviation between Australia and New Zealand should take on another form. This will be by means of co-operative commercial arrangements between Qantas, owned by the Australian Government, and T.E.A.L., owned by the New Zealand Government. In the same way as Qantas has gained benefits from close association with other Commonwealth airlines, particularly in its early development, so we have agreed to assist T.E.A.L. in a similar way while fully protecting the rights of Qantas.

As I have mentioned, the operation of Tasman services for many years was a matter in which the United Kingdom Government, through its partial ownership of T.E.A.L., had a financial interest. The Australian and New Zealand Governments realize that in due course United Kingdom services at present operated to Australia by B.O.A.C. under co-operative arrangements with Qantas will extend into the Pacific area and the new arrangements between Australia and New Zealand recognize this likely development. As to the question of whether other foreign airlines may, in the future, operate on the Tasman, as far as the Australian Government is concerned, this will depend on air service agreements between Australia and other governments involved. Of course, complementary arrangements by such governments’ with New Zealand would also be required. I should emphasize, however, that there is nothing in the new arrangements between Australia and New Zealand which limits the freedom of the Australian Government, or that of the New Zealand Government, to negotiate such air service agreements.

The Australian Government believes that the new arrangements between Australia and New Zealand will be of great benefit to both Qantas and T.E.A.L. The travelling public will also have the benefit of competitive choice between the services of the governmentowned international airlines of both countries which will now operate across the Tasman in close co-operation. The new arrangements are expected to result in an overall expansion of air services between Australia and New Zealand.

page 1600

ASSENT TO BILLS

Assent to the following bills reported: -

Sales Tax (Exemptions and Classifications) Bill 1961.

Sales Tax Bills (Nos. 1 to 9) 1961.

Northern Territory Supreme Court Bill 1961.

Marriage Bill 1961.

page 1600

QUESTION

INTER-PARLIAMENTARY UNION

Mr IAN ALLAN:
Gwydir

– by leaveThis year’s meeting of the InterParliamentary Union Council, known as the spring meeting, was held in Geneva between the 3rd and 9th April. The Australian group was represented by Senator J. Armstrong and myself. Prior to the meeting, I visited the offices of the British Group in London and the permanent secretariat of the union in Geneva, in order to establish contact with some of the members and officials of the organization. The meeting itself was held in the Palais des Nations, the old League of Nations building, and it was attended by some 200 delegates from 60 countries.

Proceedings began with consideration of draft resolutions and memoranda which had earlier been submitted to the executive of the union. The documents had been volunteered by a number of national groups, and referred to topics which came under one or another of five headings. These headings represented the five permanent study committees, the first dealing with political and disarmament questions, the second with parliamentary and juridical matters, the third with economic and social matters, the fourth with cultural affairs, and the fifth with problems relating to the non-self-governing territories.

Since it was necesary for at least two study committees to be sitting simultaneously, Senator Armstrong and I were compelled to separate for much of the time, and to compare notes as the opportunity offered. This system worked quite satisfactorily, but it was at times difficult to follow the thread of a particular debate from one day to another. Another problem arose when I was appointed to a drafting committee dealing with non-self-governing territories. However, in the final two or three days, when the draft resolutions were returned to the study committees, and when these resolutions went on to the full council for ratification, the Australian delegation was able to make several modifications and minor amendments.

The agenda eventually approved for the next full conference of the union, which is to be held at Brussels between the 14th and 22nd September, is as follows: -

The Way to Peace: (a) principles which should guide States in their mutual relations for eliminating international tension and preserving peace; (b) methods of reinforcing the United Nations so as to consolidate its work in the maintenance of peace; (c) principles governing the political development of non-self-governing territories so as to lead them towards independence and democracy through the elimination of colonialism.
Effects on world trade of the policies followed by the regional economic communities.
Parliamentary control of international organizations.
The evolution of countries in process of development: (a) the strengthening of international assistance in the economic sphere so as to promote the growth of underdeveloped and newly independent countries; (b) problems of education and of vocational, scientific and technical training in countries in process of development.

The main impression which I carried away from this meeting was that it is regarded very highly indeed by the Communist bloc countries as a means of influencing opinion in the newer democratic States. With the achievement of independence by a number of African and Asian peoples in the last few years, the balance of voting power, both in the United Nations and in this parliamentary assembly, has moved towards these newer countries. It seemed evident to me that the Communist group at the union meeting was making a strong bid to sway this vote in its favour, both because of the propaganda value of a favorable vote, and because support for a Communist argument by a parliamentarian could be worth more than support coming from any other quarter. If my judgment is right, then it is plainly necessary for

Australia, through its representatives in the union, to play a full part in the proceedings of this organization, and do what it can to preserve the integrity and stability of the independent countries. It would perhaps be an advantage for the Australian group to submit its own proposals to the executive of the Union for debate at the next council meeting in 1962. In so doing, Australia could be in a position to play a more active role than in the past, and state her own national viewpoint more forcefully.

Again, I think it would be most useful if Australia were to issue an invitation to the Inter-parliamentary Union Council to hold its next spring meeting in Canberra. It would be out of the question to stage a full conference here because there is not nearly adequate accommodation for the 800 or so delegates who attend that function. However, a council meeting would be well within our compass, and the value of bringing parliamentarians from the four corners of the world to our country for a debate on world issues would surely off-set the small cost it would entail.

The Inter-parliamentary Union is an organ for influencing opinion in the parliaments of the world through the exchange of ideas. It claims credit for having laid the foundations for the League of Nations, the International Court of Justice and the United Nations. It is now in its fiftieth year of existence, and appears to be as vigorous to-day as it ever was in the past. Since the Communist countries regard it as a valuable propaganda medium, each of the democracies must also prize it as a means of re-inforcing and extending the way of life which gives dignity, hope and freedom to the individual.

page 1601

CONCILIATION AND ARBITRATION BILL 1961

Motion (by Mr. McMahon) agreed to -

That leave be given to introduce a bill for an act to amend the Conciliation and Arbitration Act 1904-1960.

page 1601

STEVEDORING INDUSTRY BILL 1961

Motion (by Mr. McMahon) agreed to -

That leave be given to introduce a bill for an act to amend the Stevedoring Industry Act 1956-1957.

page 1602

DEFENCE PAY BILL 1961

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

That leave be given to bring in a bill for an act to validate certain Payments made to or in respect of Members of the Defence Force and to Persons employed in a Civil Capacity under the Naval Defence Act 1910-1952.

Bill presented, and read a first time.

Second Reading

Mr CRAMER:
Minister for the Army · Bennelong · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to validate certain payments made to or in respect of members of the Defence Forces and to persons employed in a civil capacity under the Naval Defence Act.

Between the two world wars, rates and conditions of pay and allowances for members of the forces were reasonably stable and were incorporated in regulations. Creation of the post-second war forces and approval of a new pay code which differed substantially from that which applied pre-war, required the making of new regulations. Each of the three services did have regulations made, but for a variety of reasons amending regulations fell behind the frequent changes in rates and conditions of pay and allowances which have occurred over the last decade or so.

Although the regulations did not keep pace with events, all payments to members of the services have been made with the authority of the Government, and the necessary funds have been appropriated by Parliament.

The lack of authority in the form ot regulations for these payments has been a matter of very real concern to the Ministers and departments concerned, and, in an endeavour to remedy the position, regulations were made last year which set out to supply the necessary authority retrospectively in a short and simple form. These regulations were disallowed by the Senate. In brief, the grounds for disallowance were stated to be that the period was so lengthy and the sums involved so large that the payments should be covered by act of parliament rather than by regulation.

The disallowance of regulations by the Senate meant that two steps were necessary to put the position in order. First, action had to be taken to bring up to date any regulations covering pay and allowances which were still behind-hand. Secondly, a bill was necessary to obtain parliamentary authority for the validation of past payments.

On the first point, all the necessary regulations have now been made by the Executive Council. To achieve this in the time available, it has been necessary, I am bound to point out to the House, to depart from the assurances given to both Houses of Parliament, that all regulations will be settled by the Parliamentary Draftsman prior to their submission to the Executive Council. With the agreement of the Attorney-General, the regulations have been drafted by the departments concerned and submitted to the Executive Council by the responsible Ministers. They are now being looked at by the parliamentary draftsman to ensure they are in order, and if they are not, any necessary amendments will he prepared. This departure from the assurances I have mentioned was only authorized by the Attorney-General in view of the special circumstances prevailing, and because compliance with the assurances would have delayed still further the making of the necessary regulations.

The bill now before the House is designed to meet the point of view that validation of past payments should be by act of parliament. The Government has decided to keep the bill to the simplest of terms. It provides that all payments made during the period between 7th August, 1947, and 31st March, 1961, under, or in pursuance of, financial instructions issued by the service departments or boards, shall be deemed to have been lawfully made. I should again mention that these financial instructions all had their origin in, and conformed to, Government approvals for rates and conditions of payments.

The bill has been drafted so as to cover payments made to personnel employed by the Department of the Navy under the Naval Defence Act, as it was found on examination that certain aspects of the regulations covering the pay of these persons were out of date in a similar manner to the regulations governing service pay.

If the bill were to spell out all the details of rates of pay and allowances and their conditions of payment, it would be a long and complicated measure. In the matter of pay alone, there were 26 variations in rates of pay involving all ranks and trade groupings in the services. These were brought about by cost of living adjustments, reviews of the pay code, marginal adjustments and so on, and were frequently associated with changes in allowances. Allowances and other conditions of service include such matters as marriage allowance, deferred pay, increments, specialist qualification pay, furlough and a wide variety of other matters, the rates and conditions of payment of which varied from time to time during the period in question. To include all these in detail would involve literally hundreds of pages of printing.

For the future, directions have been issued by the Government that payments will not be made in advance of the making or amendment, as appropriate, of the necessary regulations. 1 commend the bill to the favorable consideration of the House.

Debate (on motion by Mr. Barnard) adjourned.

page 1603

CELLULOSE ACETATE FLAKE BOUNTY BILL 1961

Message recommending appropriation reported.

In committee (Consideration of Administrator’s message):

Motion (by Mr. Osborne) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Cellulose Acetate Flake Bounty Act 1956-1959.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Osborne and Mr. McMahon do prepare and bring in a bill to carry out the foregoing resolution.

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

Second Heading.

Mr OSBORNE:
Ministerfor Repatriation · Evans · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Cellulose Acetate Flake Bounty Act to enable the operation of the bounty to be extended by proclamation to a date not later than 31st December, 1961, and allow the bounty to be ended before that date, should this be desired. The question of continued assistance to the industry was referred to the Tariff Board on 28th July, 1960. Public inquiries have been held but the board has not yet presented its report. The Government considers it reasonable to continue the benefits of the bounty until it has examined the recommendations of the Tariff Board. Hence the proposal in this bill that the bounty may be extended by proclamation to 31st December, 1961.

The Cellulose Acetate Flake Bounty Act provides for a bounty of10d. per lb. on cellulose acetate flake produced in Australia and sold for use in the manufacture of textile rayon yarn for six years ending on 30th June, 1961. C.S.R. Chemicals Proprietary Limited is the only applicant for bounty. The company has received bounty payments in respect of flake sold during the year ended 30th June, 1956, amounting to £99.489, for 1957, amounting to £113.258, for 1958, amounting to £100,981, for 1959, amounting to £124,286, and for 1960, amounting to £120,033. For sales during the six months to 31st December, 1960, the company has received £73,603.

The principle of assisting cellulose acetate flake production by bounty rather than import duties was adopted in 1956. The bounty was designed to avoid imposing additional costs on this basic material essential to the Australian rayon textile industries. The proposed amendment will enable the present assistance to be continued until the Tariff Board’s report has been received and considered by the Government.

I commend the bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

page 1603

TARIFF PROPOSALS 1961

In Committee of Ways and Means:

Customs Tariff Amendment (No. 1)

Consideration resumed from 16th March (vide page 363), on motion by Dr. Donald Cameron -

That the Schedule to the Customs Tariff 1933-1960 be amended as set out in the Schedule to these Proposals . . . (vide page 363).

Customs Tariff Amendment (No. 2)

Consideration resumed from 16th March (vide page 364), on motion by Dr. Donald Cameron -

That the Schedule to the Customs Tariff 1933-1960 be amended as set out in the Schedule to these Proposals . . . (vide page 364).

Customs Tariff Amendment (No. 3)

Consideration resumed from 16th March (vide page 364), on motion by Dr. Donald Cameron -

That the Schedule to the Customs Tariff 1933-1960 be amended as set out in the Schedule to these Proposals . . . (vide page 364).

Customs Tariff Amendment (No. 4)

Consideration resumed from 16th March (vide page 365), on motion by Dr. Donald Cameron -

That the Schedule to the Customs Tariff 1933-1960 be amended as set out in the Schedule to these Proposals . . . (vide page 365).

Customs Tariff Amendment (No. 5)

Consideration resumed from 23rd March (vide page 564), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the sixteenth day of March . . (vide page 563).

Customs Tariff Amendment (No. 6)

Consideration resumed from 23rd March (vide page 565), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals introduced into the House of Representatives on the sixteenth day of March . . (vide page 565).

Customs Tariff Amendment (No. 7)

Consideration resumed from 18th April (vide page 929), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff 1933-1960, as proposed to be amended by Customs Tariff Proposals, be further amended as set out in the Schedule to these Proposals . . . (vide page 929).

Customs Tariff (Canada Preference) Amendment (No. 1)

Consideration resumed from 16th March (vide page 369), on motion by Dr. Donald Cameron -

That, on and after the seventeenth day of March, One thousand nine hundred and sixty-one - . . (vide page 365).

Customs Tariff (New Zealand Preference) Amendment (No. 1)

Consideration resumed from 16th March (vide page 370), on motion by Dr. Donald Cameron -

That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1960 be amended as set out in the Schedule to these Proposals . . . (vide page 370).

Customs Tariff (New Zealand Preference) Amendment (No. 2)

Consideration resumed from 18th April (vide page 930), on motion by Mr. Osborne -

That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1960, as proposed to be amended by Customs Tariff (New Zealand Preference) Proposals introduced into the House of Representatives on the sixteenth day of March . . (vide page 930).

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– The tariff proposals which the committee will be considering now relate to proposed amendments of the Customs Tariff 1933-1960, the Customs Tariff (Canada Preference) 1960, and the Customs Tariff (New Zealand Preference) 1933-1960. These are the proposals that I moved in committee on 16th and 23rd March and 18th April. With the concurrence of the committee, and so that honorable members will have greater freedom in debate, I suggest that Customs Tariff Proposals Nos. 1-7, Customs Tariff (Canada Preference) Proposal No. 1, and Customs Tariff (New Zealand Preference) Proposals Nos. 1 and 2 be taken together.

Motions - by leave - taken together.

Mr OSBORNE:

– In the main, the changes are based on recommendations made by the Tariff Board or by a deputy chairman of the Tariff Board. There are two amendments not associated with the Tariff Board report. They concern electrical discharge lamps and cotton blankets and blanketing. As a result of international negotiation a lower intermediate tariff rate is being adopted for sodium and mercury type discharge lamps. The amendment in relation to cotton blankets is of an administrative nature to remove an anomaly which differentiates between woven blankets, on the one hand, and knitted, crocheted or lock-stitched blankets on the other hand. I commend the proposals to the committee.

Questions resolved in the affirmative.

Resolutions reported.

Standing Orders suspended; resolutions adopted.

Ordered -

That Mr. Osborne and Mr. McMahon do prepare and bring in bills to carry out the foregoing resolutions.

page 1605

CUSTOMS TARIFF BILL 1961

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

Second Reading

Mr OSBORNE:
Minister for Repatriation · Evans · LP

. -I move -

That the bill be now read a second time.

I do not propose to add anything to what was said when this proposal was introduced.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1605

CUSTOMS TARIFF (CANADA PREFERENCE) BILL 1961

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

Second Reading

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– I move -

That the bill be now read a second time.

As with the other bill that we have just passed, the reasons for the alteration of the tariff were made clear when the proposals were introduced and no further remarks by me are called for at this stage.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1605

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL (No. 1) 1961

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

Second Reading

Mr OSBORNE:
Minister for Repatriation · Evans · LP

– I move -

That the bill be now read a second time.

As with the last two bills just passed by the House, the reasons for amendment to the tariff were made clear at the time the proposals were introduced, and the bill does not call for any amplication at this stage.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1605

APPROPRIATION BILL (No. 2) 1960-61

Second Reading

Debate resumed from 2nd May (vide page 1301), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr CREAN:
Melbourne Ports

– Mr. Speaker, this bill provides for the appropriation of a further sum of £57,143,000 from the Consolidated Revenue Fund. This is in the nature of a supplementary estimates bill, but one item in it is of some significance. It makes provision for appropriation to the Loan Consolidation and Investment Reserve of £40,000,000. This is the principal item in the bill - the greatest single appropriation provided for in it - and the existence of this item affords honorable members an opportunity to go to the root of the economic problems of the Australian nation because, to some degree, they all are bound up in this. The Treasurer (Mr. Harold Holt), in his second-reading speech, stated -

At this stage, it appears likely that receipts of the Consolidated Revenue Fund could exceed expenditures from the fund by more than the £125,700,000 originally estimated.

It will be remembered that when the Budget was presented, in August last, one of the prongs of the Government’s policy was that this year there should be a Budget surplus, and in August last that surplus was estimated at £125,700,000. According to indications of the Government’s revenue since, unlike the revenue of some individuals in the community, the Government appears likely to have £40,000,000 more in its surplus than it thought, and the surplus, instead of being £125,700,000, is now expected to be about £165,000,000. Accordingly, the Treasurer told us -

An additional appropriation is therefore sought for payment to the Loan Consolidation and Investment Reserve of an amount up to £40,000,000 over and above the £125,700,000 provided for in the Budget.

These days, Mr. Speaker, as is known, the policy that a government pursues in its budget - its fiscal policy - has a lot to do with the economic destiny of the community. As the Treasurer himself has pointed out, this arm of policy does not work in isolation but works in conjunction with monetary policy. Increasingly, it seems to be thought that in economies like that of Australia monetary and fiscal policy need to be buttressed by other weapons. Since the last Budget was presented, we have seen, a number of steps taken by the Government by way of second thoughts after that Budget. Some of them may be classified as fiscal devices, but they really represent a selective form of economic control. At least, these measures represent a recognition by this Government that monetary policy and tax policy, working alone, often are instruments which are too blunt to obtain the required results in an economy such as ours.

This afternoon, I want to deal with one or two points of the Government’s policy and contrast the sort of complacency, in a sense, with which certain problems are faced up to in Australia with the attitude adopted towards problems of the same kind in other countries where circumstances are not really dissimilar. Last Thursday, the Treasurer made a statement explaining the reasons why the Government had borrowed from the International Monetary Fund 175,000,000 United States dollars or £78,125,000 Australian, with a stand-by arrangement, as he described it. under which a further 100,000,000 United States dollars or £45,000,000 Australian could be borrowed if necessary. Criticizing this situation, the Opposition pointed out that the arrangements made have served only to pinpoint the difficulties being experienced by this country with respect to its balance of payments and suggested that this position has arisen because of the Government’s failure to grapple with the situation which was presented to it. The Opposition also hinted, as had been hinted by way of questions some days earlier, that certain strings were attached to the borrowing of the sums mentioned - strings which, in a sense, restrict what may be termed Australia’s economic sovereignty. The Treasurer tried to imply that that was not so.

If any individual borrows from a bank, he does not borrow always on his own terms. Some restrictions or conditions generally are placed on his borrowing. This is a transaction internal within the economy, but the position is not altogether different where a country borrows from an international institution. The only thing is that-

Mr Killen:

– Is this really borrowing?

Mr CREAN:

– It is certainly borrowing, because if you do not repay it you will be in some difficulties, and that would be the sort of position that would apply as between borrower and lender. I should think that it could accurately be characterized as a species of borrowing. I suggest that not only do you have to pay it back, but before you get it you have to subscribe to certain conditions. Some of my colleagues will develop this point in some detail later, but I should like to bring to the attention of the House a statement contained in a recent pamphlet published by the International Finance Section. Department of Economics, Princeton University. It is one of a series called, “ Essays in International Finance “, and it bears the date March, 1961. The title of the pamphlet is, “ The International Monetary Fund: Its Present Role and Future Prospects “. The author is Brian Tew, who, I think, originally was a product of an Australian university, and who is now abroad.

Mr Bury:

– He came here, and is now Professor of Economics at the University of Nottingham.

Mr CREAN:

– I accept that. In this pamphlet, writing of the operations of the International Monetary Fund, he says that the situation in that fund is very much different since 1956 from what it was prior to then. In commenting on the changed role of that institution, he says -

Lastly, the events of December, 1956-

That was when Great Britain made an approach to the fund - established the precedent that sovereign states, and even very important ones, have to be prepared to agree to conditions when obtaining large-scale access to the Fund’s resources.

He quotes from an address given by Mr. Per Jacobsson, the chairman of the institution, delivered to the International

Chambers of Commerce on 23rd April, 1959 - not very long ago - as follows - . . assistance obtained by the United Kingdom in December 1956 was granted on the basis of a declaration by the British Government that strict financial and credit policies would be pursued; that quantitative restrictions would not be reimposed, and that the value of the pound sterling would be maintained. It has become a regular feature of all important Fund transactions that the governments receiving assistance inform the Fund about the policies which they intend to follow.

This has been done by the Government of Australia recently. The footnote which Mr. Tew has attached to that comment is, I think, of some significance. Referring to Per Jacobsson’s reference to Britain’s position in relation to the Fund in 1956, Mr. Tew wrote -

Britain’s declaration to the Fund in 1956 amounted to no more than a declaration to pursue policies already adopted on their own merits- and again, it conceivably could be a justification by the Australian Government that it has not been tied in any way by any conditions imposed by the International Monetary Fund, because it has already adopted the policies concerned - but even so it presumably committed her to avoid changing these policies except after prior consultation with the Fund.

I do not want to pursue the question in great detail, because others will go into it more precisely; but it has to be recognized that there was some reluctance on the part of Australia to go into either the International Bank for Reconstruction and Development and the International Monetary Fur.d because it was felt that adherence to those institutions might in some way in future circumscribe Australia’s economic sovereignty. And there is not any doubt that implicit in what has been adopted as the procedure since 1956 is the fact that countries which want to borrow - of which Australia is the current example - have to commit themselves beforehand to certain economic policies, or outline what their economic policies are, and those policies cannot be varied without some prior consultation with the fund. That is all that is sought to be pointed out by this side of the House and the press, but the Treasurer seems to be a little sensitive about it, and states that there are no strings attached to the borrowing. I suggest that that state ment is not a factual presentation of the circumstances as we find them. We have borrowed and, in certain circumstances, will be in the position to borrow further. In order that that loan might be consummated a statement had to be prepared by the Commonwealth Treasury stating what Australia’s present economic policy was. and stating even what policy would be followed up to the end of the next Budget year - that is, to the end of June, 1962. By precedent, and judging from the present method of working of the International Monetary Fund, there may be no change in Australia’s present economic policy without prior consultation with this international body.

That is the only point I want to make at this stage with regard to that, but the basic fact that should not be lost sight of is, why does Australia have to have recourse to this borrowing at all? This goes back again to internal circumstances in our economy which are largely of the Government’s own making. The most sorry feature is that for the last several years our annual imports have greatly exceeded our annual exports in value, and the difference has been made up by capital inflow. That position of excessive imports has been aggravated since February, 1960, by the Government’s incredibly stupid decision to remove import controls. Again, you get some rather curious arguments raised here with regard to the question of imports. It was even suggested that the relaxation of import controls was an anti-inflationary measure, which would help to lower prices in Australia. The other day, in his submission to the International Monetary Fund, the Treasurer stated that some importers were actually importing certain goods even though the prices of these goods were higher than the prices of similar goods available in Australia. I should like some member of the Government to argue seriously that anybody believed that removing import controls would help to lower prices in Australia, because such an assertion has not been borne out. I would like to hear of any examples of that phenomenon, if it has occurred.

The second argument that is sometimes advanced is that, having this excessive volume of imports, <and having also a capital inflow, has allowed diversity to occur in the Australian economy which could not have occurred otherwise. Again, this is an arguable thesis, and I would call the attention of the Government to the remarks contained in a recent report from the Bank of Canada. Canada in many ways has a not dissimilar economy from ours. It has a reserve bank similar to ours, and every year its governor publishes a very comprehensive report. The report for the calendar year 1960 bears the date 26th February, 1961 - a comparatively recent date. It is signed by Mr. J. E. Coyne, as governor of that institution. He points out that a similar situation exists in Canada to that which obtains in Australia. He is very sceptical about this question of imports. He argues that some of the imports into Canada have been prejudicial to the development of the industries of that country. I suggest that the same circumstances obtain here. I hope that members will see the link between this question of imports and the provision of future employment in Australia. Mr. Coyne said -

Undoubtedly, one important reason for the slow rise of employment in goods-producing industries, and the decrease in the case of agriculture-

Again, not dissimilar to Australia - has been the great input of capital in the form of machinery and equipment - mechanization and automation. Unfortunately for employment in Canada, a very high proportion of such machinery and equipment has been imported from other countries, instead of being researched, developed and produced in Canada and providing a “ growth industry “ for Canada in terms of employment and technological progress.

That is his first observation on this very important question. I hope to be able to link up these propositions, the second of which he states on page 12 of the report as follows: -

It would appear that our present economic problems derive in part at least from excessive concentration on physical investment and unbalanced investment in earlier years.

He has suggested, in other words, that it would have been better to have lost some of the private investment in Canada and to have had a degree more of public investment, particularly of “ investment in human capital which can, at times, do more for growth of output than investment in physical capital “. Again, I suggest that the same sort of circumstances apply here. A lot of people have been happy because they have seen foreign investment choosing its own field and providing employment in Australia. But perhaps it has been done to the detriment of increasing the capacity of our own technical students in the next few years and of developing this country more suitably. Again, I think that is a valid observation. The report also contained the following observation: -

The view that Canada could not have enjoyed sufficient economic growth without this vast increase in foreign investment in Canada, and that the Canadian standard of living would have been much lower if we had not had this vast increase in foreign investment in Canada, appears to me very questionable.

I cite this proposition only because I do not think that any one could, by any stretch of the imagination, suggest that Mr. Coyne, the Governor of the Bank of Canada, is a socialist agitator or that he reflects the Labour point of view. He has made very significant utterances about the over-all pattern of development of the economy in Canada, pointing out that the situation in regard to imports is not a very happy one. He says that the situation has very few historical precedents because no other country of comparable maturity has had anything like so large a deficit sustained over so many years. I suggest that similar circumstances exist also in Australia.

Over the last seven to ten years wo have had almost a chronic deficit in our overseas accounts which has been made good by borrowing. We have had either direct investment by foreigners in our industries or we have borrowed through the International Bank for Reconstruction and Development or the International Monetary Fund. That can have serious dangers, as the Governor of the Bank of Canada warned that it could have for his country. The important point which is often overlooked is that in taking this course you fail to grapple with the structure of problems as they exist in your own economy. I think that we are getting to that stage in Australia.

This is borne out by the employment figures contained in the most recent issue of the “ Treasury Information Bulletin “, which covers the three months, January to March, 1961. Some very critical features emerge from the contemplation of employment statistics as published in this bulletin.

– He may have overestimated a little bit; but I suggest that the Treasurer has underestimated the degree of illness in the Australian economy at the moment, and it is time he looked more closely at the situation. 1 again direct his attention to an article which appeared in a recent issue of the “ Economic Record “, which is the publication of the Economic Association of Australia and New Zealand. In the December, 1960, issue of the “ Economic Record “ there was an article by Mr. Burgess Cameron, a research student at the University of Canberra, entitled “ The Anatomy of High Employment “. In it Mr. Cameron makes an analysis of how employment has grown in Australia from 1947 to 1958, and the categories in which the employment has been found. He says -

It will be noted that in these three periods- that is from 1947 to 1950, from 1950 to 1954 and from 1954 to 1958- factory employment absorbed respectively 31 pei cent., 37 per cent, and 31 per cent, of the estimated rise in employment.

That is the point - in the past, factory employment has been the greatest single absorber of labour in Australia; yet in the last quarter it shows a decline, Mr.

Cameron goes further in his article and points to particular industries which he suggests ought to be the ones that we can look to in the future for the greatest absorption of employment. He says -

In the period 1954 to 1958, the growth ot factory employment and hence, substantially, the growth of total employment, depended primarily on the heavy industry pace-makers - engineering, chemicals and paper. At the time of writing (April 1960), it appears that this is still true.

But the situation in April, 1961, is that the paper industry in particular is facing a decline of employment in Australia; and I doubt whether the engineering industry or the chemical industry would show an increase.

It is all very well to argue about a dead level of employment in Australia, but we do not have a dead level. We have to have an increasing level of something of the order of 100,000 or 120,000 new jobs each year, and the majority of those jobs have to be found in heavy basic industry, in the sort of factories which employ large numbers of people. But what is the situation? Again, the Treasury Bulletin shows that in the January-March, 1961, quarter employment in larger private factories, including practically all private factories with 1 00 or more employees and a large section of those with between 50 and 100 employees, decreased by 2.6 per cent. In factories other than food factories, employment decreased by 4 per cent. Those facts point to a very critical situation so far as the future employment potentiality in Australia is concerned. Yet the very policy which has helped to bring that situation about is to be continued in this country until June, 1962.

There has to be some change in the Government’s attitude. It is all very well relying on the theory that certain monetary and fiscal measures that are taken will produce certain results. The measures which the Government has taken have produced unfortunate results for large numbers of Australians and if they are continued they will produce an even greater deterioration in our economic situation. It is all very well for the Government to crow about the last ten years of achievment; they have not been an unmixed blessing. Those years have been characterized by inflation and, as the Opposition has pointed out, inflation is the stealthy robber. It is Robin Hood in reverse - stealing from the poor and giving to the rich. It penalizes those on fixed incomes or slowly rising incomes and gives premiums to the profiteer. That has been the situation which has prevailed over a good part of the last ten years; and the Government has not taken appropriate fiscal measures in the right places to see that a little justice is done through the taxation structure to reduce or redress the inequity that inflation has wrought over the years.

In Australia at the moment we have a situation in which during the past quarter another source that we look to to buttress our employment - the building industry - shows an unfortunate decline when measured against comparable periods. The Treasury Bulletin, at page 25, shows the number of new houses and flats commenced in the March quarter of 1961 at 19,928. To get a comparable situation we have to see what the March quarter of 1960 was as against the December quarter of 1959. The March quarter of 1960 showed commencements at 22,569 and the December quarter of 1959 showed 21,900 commencements. In other words, there were 700 more commencements in the March quarter of 1960 than in the December quarter of 1959. But in the March quarter of 1961 the figure was 19.928, and in the previous December quarter it was 23,594, or 3,600 more. In other words there has been a deterioration on a quarterly basis of something like 4,000 dwellings or something like from 16,000 to 20.000 houses per annum, a slump of one-quarter of the potential building activity in the past. This flows largely from the credit and economic measures pursued by this Government. It is impossible, in the limited time, to cover all these ills, just as it will be difficult for the Government to look back over the last eleven years and try to rescusitate the good. The people at the moment are more obsessed by the ills of the last quarter and the next quarter than they will be gratified about the results of the previous ten years. You cannot continue to live on the past politically. Politics seems to be a field where there is more emphasis on the present and the future than on the glories of the past; and that is probably a good thing. It is probably a salutary feature. However, I suggest that the Government ought not to be complacent. I have cited particularly its failure to grapple with Australia’s overseas trading position and its action in putting the country in pawn by borrowing either from private individuals or from financial institutions.

I have also pointed out the Government’s failure to look at the employment structure in Australia, and to see just how “Vulnerable we are, depending for continued absorption in employment of people wanting jobs on growth in the manufacturing field particularly. After all, the most outspoken critics of the Government at the moment are the manufacturing interests. I think that occasionally they themselves are open to a degree of criticism, but at least on this occasion they have realized that something is wrong with the state of Australia, or with the six States of Australia. As the Government wants to take credit for what it claims to have done in the past, I believe it should also accept a little bit of obloquy for the kinds of difficulties in which we find ourselves at the moment.

Another matter on which I want to dwell for a moment or two concerns the loan market as we find it in Australia in 1961. I have before me the issue of the “ Australian Financial Review” for 4th May, 1961, which gives the terms for the next Commonwealth Loan. An interest rate of £5 7s. 6d. per cent, is provided for securities maturing in February, 1981, £5 8s. 6d. per cent, for securities maturing in August, 1970, and £5 9s. 2d. per cent, for securities maturing only .two years hence. I believe there is some call for an explanation why the short-term rate on Government securities should be higher than the long-term rate. This seems to me to represent a reversal of all currently accepted practice.

Mr Harold Holt:

– It is unusual for Australia, but not for other countries.

There being no objection, that procedure will be followed.

Mr BLAND:
Warringah

.- Every one knows that the debate on a Supply Bill traditionally provides an opportunity for honorable members to seek redress of grievances. To-night -we have heard a characteristic speech from the honorable member for Melbourne Ports (Mr. Crean), who has indicated that his grievances are connected with Australia’s relations with the International Monetary Fund, and the consequences that flow from the operations of that fund. That subject will be debated when the statement presented by the Treasurer (Mr. Harold Holt) on that subject is being discussed in this House, and the arguments of the honorable member for Melbourne Ports will be answered during that debate. What the honorable member has had to say has had nothing whatever to do with the Additional Estimates that are now before us. I am concerned with the Additional Estimates and not with the problems that the honorable member has been raising.

The Treasurer budgeted last year for expenditure of £1,616,000,000. That was a record Budget and the amount involved was about £150,000,000 greater than the amount in the previous year’s Budget. The Treasurer bargained for a surplus of about £150,000,000, and because the revenue has been so buoyant he has decided, in these Additional Estimates, to make available a further £40,000,000 for the Loan Consolidation and Investment Reserve. This is simply a reflection of the buoyancy of the revenue of the Commonwealth.

As I have said, this is a debate on the Additional Estimates. One may ask why we have Additional Estimates at all. The Additional Estimates are a challenge to the integrity of the estimating of the public servants and other advisers of the Government. If their estimates are accurate the Treasurer can budget along a certain line. If, on the other hand, they are not, he may be faced with some difficulties when he approaches the end of a financial year. There are three different reasons for the provision of Additional Estimates. The first is that the amount needed for the ordinary activities of the Government may have been under-estimated. Secondly, unforeseen conditions might have arisen, and for which provision has to be made. Thirdly, although it may have been known that certain liabilities were going to accrue, the exact details may not have been known. So you have then an apportunity to make provision in the Additional Estimates for those things that you knew you had to meet, but the details and amounts of which you had no understanding.

Let us go back to the three different categories under which you underestimated what you needed. If honorable members look at the statement of the Treasurer that has been presented, as well as the bills before us, they will find that the total amount extra the Parliament is asked to provide for 1960-61 is £57,000,000. Of that £57,000,000, no less than £54,206,000 represents Additional Estimates for the

Public Service itself. That is to say, departmental estimates for 1960-61 show that an amount of £54,206,000 is needed to meet such things as salaries or payments in the nature of salaries or some general expenses. That is an example of what I am saying about the accuracy of estimating. When we are dealing with a Budget of £1,616,000,000, some might say that a requirement of £54,000,000 for additional expenditure represents fairly accurate estimating; but my own feeling is that these are estimates that should not have been put on the Additional Estimates at all. They should be added to the Budget for next year. These amounts should be provided in the 1961-62 Estimates and not in the 1960-61 Estimates. These are amounts that are to be paid by 30th June. They should not be included in the expenditure for this year but in the Estimates for next year because these are things that could easily wait for further treatment.

On the other hand, the other Estimates covering unforeseen expenditure include such items as relief for the Congo and assistance to the Australian National University following the fire that occurred there. These are things that must be dealt with at the time and cannot be postponed. They amount to only a few millions of pounds it is true, and they are legitimately included in the Additional Estimates for this financial year. So also are amounts which are needed for the satisfaction of contracts in connexion with purchases for Qantas or Trans-Australia Airlines. These are items which must be met in this financial year.

The statement that the Treasurer has made gives an indication of the amounts that the Government has needed for Additional Estimates over the past few years. The figures I have taken from the bills that have been presented show that the amounts were £57,000,000 in 1959, £60,000,000 in 1960 and £57,000,000 in 1961. Departmental estimates in connexion with these deficiencies were £54.000,000, £54,000,000 and £54,000.000 and a few odd thousands in the respective years. That indicates a pattern that the Treasury seems to have followed in providing for salaries and payments in the nature of salaries. If the Estimates did not run to about the required sum, the extra amounts needed were included in the Additional Estimates in this way.

I do not wish to say anything about works and services except that I hope that the money that is being voted in connexion with works and services will be put into circulation quickly. I would like to see expenditure hastened on such proposed works as railways in South Australia, the east-west roads and north Queensland roads and so on, because such expenditure will help to relieve the unemployment which has been developing. I have found - and I am sure those who have examined the Estimates and Budget Papers carefully will agree - that there has been a distinct improvement over the years since I became a member of the Parliament in the manner in which the Estimates are presented and in the accuracy of the presentation, too. I believe that is attributable to the work that the Public Accounts Committee has done and to the willingness of the Treasurers over the years to accept what the committee has recommended.

Mr PETERS:
Scullin

.- I wish to speak about a matter that I think is of the gravest importance. The chief official of the Australian Treasury went abroad recently and made arrangements with the International Monetary Fund for a drawing of £78,000,000 and a stand-by credit of £45,000,000. No one can deny that that was a most important financial operation. The Treasurer (Mr. Harold Holt) made a statement on the arrangements to the House on Thursday, 27th April. The statement was on a matter of such importance that there is no doubt it was prepared with the assistance of senior Treasury officials. There was no reason to believe that it was not to be the only statement that was to be made to this Parliament or to the people of Australia. It was remarkable for the things that it did not reveal. It did not make clear that the drawing was a loan bearing a service fee and interest. The conditions of repayment were not announced. How. when and where Australia would secure the money to make repayment was not stated. It is hard to believe that neither the Treasurer nor his officers thought that the Parliament or the people would desire details of this important transaction. Apparently the attitude was: The less the Parliament and the people know about this matter, the better for the Government.

On that Thursday evening, during the adjournment debate, I suggested that further information was necessary. The next day, Mr. G. K.. Bain, Director of the Sydney Chamber of Manufactures, said the borrowing highlighted the serious imbalance in Australia’s external trade. He called on the Treasurer to say when Australia could make repayments to the International Monetary Fund. He asked on what optimistic assessment of the country’s balanceofpayments position the Treasurer based Australia’s ability to repay. On the same day, the Federal Director of the Associated Chambers of Manufactures, said Australia would have a trading deficit this year of more than £400,000,000 and he added-

Finally, the question we must all ask is: how and when will Australia repay this short-term borrowing of £78,000,000?

Members of the Opposition generally demanded more information. Then last Thursday, the Treasurer elaborated his first statement. He repeated the statement that he had made previously that the Government had no real anxiety that this £78,000,000 was necessary. It was being drawn from the International Monetary Fund because - and these are his exact words -

The Government believes it only prudent to put quite beyond doubt the strength and liquidity of our overseas resources in the period ahead.

The £78,000,000 is being borrowed. A service charge of one-half per cent, is being paid upon it together with interest of some millions of pounds, cot because the money is likely to be needed but just to be on the safe side. Our credit with the rest of the world, so the Treasurer says, is better than ever before. Why then should we not wait until we need this money before we borrow or draw it, and thus save the service charge and the millions of pounds of interest that are being unnecessarily expended merely to be on the safe side? The drawing of this money that might not be needed does not merely commit Australia to the payment of immense sums of money; it also obliges this country to adopt economic policies laid down by the controllers of the International Monetary Fund. These include the continuation of the credit squeeze, the balancing of our budget, the nonimposition of import restrictions and the preven tion of rising, costs generally. Those conditions are specifically and definitely stated in the memorandum. What a position this is! With the credit squeeze restricting, the expansion of both primary and. secondary industries, how can work be assured for our increasing population and for the migrants coming here? Further, the provision of homes and public facilities may be restricted and the improvement in our social services prevented. That social services will not be improved is certainly implicit in the balancing of the Budget. All these conditions are to be imposed in order that we may be able to pay our overseas debts; yet the Treasurer has the audacity to tell the House that the willingness of the International Monetary Fund to enter into arrangements such :s these with Australia is proof of the soundness of the Australian economy! The more I learn of the arrangements made with the International Monetary Fund, the more I appreciate why the Treasurer has endeavoured deliberately to keep the people in ignorance of these details.

Will the arrangements entered into by the Government contribute in any way to the re-establishment of the timber and textile industries or of any other industry that has been damaged by either the credit squeeze or the flood of imports? Certainly not! Will they so develop any of our secondary industries as to make them big exporters? Certainly not! Will they do anything to enable Australia, in the near future, so to increase primary production that the total export income earned from this source will exceed what we have enjoyed hitherto? Again, the answer must be “ No “. With the continuation of the credit squeeze no one but a lunatic would prophesy that, during the five-year period of this £78,000,000 loan, our exports will return to us hundreds of millions of pounds more each year than they do now. And that is what is necessary if the position is to be remedied. Even the Treasurer admitted, at the export convention that was held in Canberra a short time ago, that within five years we must increase our total export income by £250,000,000. If it does not increase by that figure, the only way by which we shall be able to pay our way will be to obtain more loans. When we seek those loans, will our creditors say: “ You must balance your budget. You must not interfere with imports. You must prevent increases in wages, and you must prevent social services from becoming more costly “ ? No, the terms imposed will be much harsher than that. They will resemble those imposed by Niemeyer and Professor Gregory who, during the depression period, visited Australia on behalf of the big financial institutions, and said that the Australian economy must be so moulded as to ensure first the payment of our overseas debt and, secondly, the safeguarding of the interests of the people. The first requirement was repayment of the overseas debt. lt is reported that the Commonwealth Government is looking around overseas for loans in London, New York and elsewhere, and that Australian State governments are endeavouring to secure the investment of overseas capital in Australia. If they succeed, our position will be alleviated temporarily, but only at the cost of greater difficulties in the future, and the not too distant future at that. What, then, should we do? The Treasurer said to-day that no reference had been made to the previous history of this Government, that no reference ihad been made to what he called the glorious period of the last eleven years. I have said before in this House that the complaint from whichthis country suffers is overspending overseas. I repeat that assertion now, andsupportit by referring to the story which is to be gleaned from a perusal of the official national income and expenditure papers presented to Parliament with the Budgets from 1952 up to the present time. Each year those documents have contained a Table V. headed, “Balance of International Payments on Current Account”. Until 1957, the last item under that heading was, “Net increase in indebtedness to the rest of the world “. In 1957, its name was changed to “ Surplus on Current Account “. There was a surplus as at 30th June, . 1957, but every year since then there has been a deficit on overseas trading, yet the item concontinuesto be, “ Surplus on current account “. The heading, “ Net increase in indebtedness to the rest of the world “, is a clear description of what is covered. “ Surplus on current account “ is not. That beingso,I shall use : theterm, “ Net increase in indebtedness to the rest of the world “. In 1951-52, the net increase in indebtedness to the rest of the world was £579,000,000.

In 1953-54, it was £17,000,000. In In . 1954-55, it jumped to £259,000,000. By 1955-56, it was £238,000,000 and in 1957- 58, it dropped to £177,000,000. In 1958- 59, it increased to £187,000,000, and by 1959-60, it was £243,000,000. The total increase in indebtedness to the rest of the world for the years mentioned was £1,710,000,000. The only two years in which there were reductions in our overseas indebtedness were 1952-53, when the figure was £192,000,000, and 1956-57, when it was £90,000,000. The net total increase in indebtedness to the rest of the world in the period from 1951 to 1960 was £1,418,000,000 and, by 30th June, 1.961, that figure will be increased by well over £400,000,000. Thisfurther increase of £400,000,00.0 in our overseas indebtedness will not increase our capacity to meet our obligations overseas any more than did the increase of £579,000,000 in our indebtedness in 1951-52, nor will it increase our capacity any more than did the increases in any of the years that went to make the total of £1,418,000,000 up to 1960. The further increase of £400,000,000 in our overseas indebtedness will not lead to such an increase in Australian production as will make us any better able to meet our overseas indebtedness than we were before the additional liability was incurred. Therefore, I ask the New South Wales director and the federal director of the Chamber of Manufactures how we shall repay thatnew shortterm debt and all our other overseas debts. They can be repaid in two ways. First, we canreduce our spending overseas. The longer that we delay the reduction, the greater the reduction must become. That is obvious. Secondly, we can obtain new loans to pay off the old loans. The International Monetary Fund, when granting theloan of £78,000,000, laid down conditions that mean : a curtailment of our right to self-government.

Some time ago the Minister for Trade (Mr. McEwen) pointed out to the House that at least £600,000,000 worth of imports a year was essential for the maintenance of the industries that then existed and,of course, the preservation of the employment that those industries provided. He stated also that if that amount of imports was reduced there would be a corresponding reduction in industrial activity and an increase in unemployment. In other words, £600,000,000 worth of imports each year is necessary to provide employment. In 1960 our commitments overseas, in addition to our imports, amounted to £423,000,000. This amount represents invisibles such as freight, insurance, interest on loans, dividends and numerous other small items. Therefore, we must expend at least £1,000,000,000 every year to secure the absolute bare essentials for the maintenance of our industries. But our industries continue to expand and children leaving school and immigrants from other countries continue to seek employment, so the amount of our imports and the cost of invisibles continue to rise. The Treasurer faced up to this issue when speaking at the export convention which was held recently. He stated that within the next five years we must increase our exports by £250,000,000 annually.

It should be crystal clear to every one that, no matter what the International Monetary Fund authorities state, we cannot afford non-essential imports. We cannot afford a loan that has a condition providing for the free flow of such imports into Australia. What then should Australia do to prevent international bankruptcy? We should apply selective import restrictions. The Minister for Trade, by means of the Japanese Trade Agreement, has reduced our favorable trade balance with that country. He should arrange immediately to reduce the unfavorable trade balances that we have with the United States of America, the United Kingdom and other countries. Instead of reducing our favorable trade balance with Japan and saying, in effect, that although we are selling less to Japan than Japan is selling to us we shall nevertheless increase our imports from that country, we should say to those countries that are purchasing less from us than we are purchasing from them that unless they increase their imports from us we shall reduce our imports from them. We should do as Japan has done. We should submit investment money from overseas to a very close scrutiny and ensure that only so much overseas investment comes to Australia as is necessary for our development. We should not allow overseas investment which will be used to create competition for, and eventu ally to destroy, our existing industries merely for the sake of paying dividends to overseas investors. If there is to be any credit squeeze or direction of investments, it should be such as will provide for a channelling into primary production, home building and other industries of the monetary resources that we have in Australia. It should not be available for use in land and business speculation and for providing immensely high interest rates for hire-purchase organizations and higher dividends for investors who do not assist our real development in any way.

I regret to say that we must take stock temporarily of our immigration policy to prevent immigration adding to or causing unemployment. Taxation should be levied at a higher rate than at present on income derived from speculation, dividends and profits rather than on income derived from personal exertion.

These are some of the means by which our industries and our employment opportunities can be expanded to meet the needs of our increasing population and to maintain our solvency overseas. It is no exaggeration to say that this Government’s policies have led to insolvency abroad and economic disaster at home. During the speech of the honorable member for Melbourne Ports (Mr. Crean) I heard interjections to the effect that he had said all these things before. Yes, we have said them before.

Mr Anderson:

– Year after year.

Mr PETERS:

– We have said them year after year. In 1950 I asked the Prime Minister (Mr. Menzies) whether it was not desirable, at a time when our export prices were higher than ever before and when our exports were greater in quantity than ever before, to protect and build up our overseas reserves rather than to dissipate them on the import of non-essential and luxury items. Through the years we have claimed that a period of prosperity is when a nation should become a creditor rather than a debtor nation. When a country has record crops and receives record prices it should not borrow overseas any money other than that which can be used to provide in this country the products that can be sold overseas to meet the instalments on the loan. Overseas borrowings are justified only if they produce something over and above the dividends that must be paid to the investors. When the value of the production resulting from funds raised by overseas loans is less than the cost of servicing the repayments of and interest on the loans, the borrowers are guilty of actions detrimental to the interests of Australia.

I issue a warning. I do not hesitate to say, although people may call me a Jeremiah, that this Government has continually trodden the road that leads to disaster, and disaster is now not nearly so far away as it was in the days when we who belong to the Australian Labour Party first raised this subject in this House. Disaster faces us because we resort to borrowing money in order to pay debts and interest on those debts instead of borrowing to buy goods and to produce wealth. Squandering or dissipating borrowed money on luxury goods is bad enough, but we are borrowing money in order to pay interest on and instalments of repayments of money that has already been frittered away.

Mr CHRESBY:
Griffith

.- Mr. Deputy Speaker, as usual, the Opposition is riding its own hobby horse and attacking profits, interest and overseas investments. It still lives in the days of the Tolpuddle martyrs, if we are to judge by its political thinking.

Mr Cash:

– Where is Tolpuddle?

Mr CHRESBY:

– I suggest that the honorable member ask Dr. Evatt, the onetime Leader of the Opposition. He is always talking about the Tolpuddle martyrs.

I think it is time we examined a little of the background to the situation of the present day. Earlier to-day, the Prime Minister (Mr. Menzies) reminded the House that to-day is the sixtieth anniversary of the first meeting of the Parliament of the Commonwealth of Australia, lt is interesting to note that on this sixtieth anniversary of our Parliament, we are in the process of considering an additional supply to Her Majesty the Queen of £57,143,000 as an addition to the Budget Estimates. A reading of the records of the First Parliament makes it obvious that the members of that Parliament would never have thought that within 60 years we would have been asked to approve so large an additional appropriation.

A lot of things have happened in the last 60 years, and I think it is well that we retrace the events of those years briefly in order that we may have a clear picture of what the future holds for us. This Parliament first met in what were known as the horse and buggy days. Aviation had not really begun. The Wright brothers had not got their first machine into the air. Jet aircraft, electronics and science generally were something that the people did not hear of then. Jets, of course, were not thought of in those days. Electronics was in its embryonic stage and people who mentioned it were laughed at and regarded as being fit to be inmates of an asylum. What has happened in the past 60 years since the first meeting of this Parliament that we celebrate to-day? Let us take the events one by one, because they are important as pointers to what will happen in the future.

First, there are the developments in aviation. We all know the story of aviation. We know that as late as the beginning of World War II. we were flying machines of types which we regarded as terribly modern. Then, with the war and the development of weapons of war, came jet aircraft. To-day, we ride through the skies in our international airliners at speeds of 600 miles an hour or more. We have progressed so far that two countries have put men into space and brought them back to earth safely. We have reached a stage at which we are achieving most amazing things in the field of medicine. When the first Commonwealth Parliament met, operations on the brain, heart and lungs, involving the opening of the cavities of the body and perhaps even removing those organs for a brief time and replacing them, and similar surgical procedures, were deemed to be utterly impossible. To-day, they are completely commonplace. The immediate future offers in the field of medicine and surgery the possibility of replacing wornout parts of the body. These developments open up new vistas to us, Sir, and not a future of gloom and doom as is being predicted by Opposition members.

Then we come to the field of electronics. What will happen there? Many of the honorable members who are now present in the chamber saw in this building last week a documentary film on electronics which, showed us what is possible in the present and the portents for the future. We saw depicted the present development of the electronic brains manufactured by the International Business Machines organization, some of which we already have in Australia. We saw demonstrated- a computer which can make more than 400.000 calculations in. two and one-half seconds. This is an extraordinary development. Great developments such as these in science and technology have a great impact on our fiscal policy.

Let us now consider the question of free enterprise. We on this side of the House have, said and believed that we favoured free enterprise, and we know that the Opposition, adopts as its principle, “ More and more, nationalization”. We do not seem to realize that in the development of free enterprise we have passed beyond, the stage at which we had purely privately owned monopolies to a stage at which we have monopolies constituted by publicly owned companies in which increasing numbers of the workers invest and receive financial benefit from the profits. More and more Australian workers are taking part in investment in this way and’ deriving dividends. But this is not enough. This trend will increase, but the character of industry and private enterprise is changing. The reason, for the change is that up-to-date scientific and technological methods and developments in the field of production require the use of more and more kinds of machinery and equipment, the cost of which is so great that ordinary private firms could not possibly hope to meet it. Consequently, this machinery and equipment becomes more readily usable only under the control of big public companies. This can be demonstrated by reference to the mining industry. North Broken Hill Limited put down a 4,000-foot shaft on which it spent more than £4,500,000 before it obtained one ton of payable ore. No normal private company could possibly hope to amass the capital necessary to embark on undertakings on so great a scale. So the whole character of industry is changing.

As it becomes increasingly necessary to use more and more financial resources as a- result of the developments of science and technocracy, the conditions and hours of work and the use of workers change. I prefer to use the description “ people working in industry “ rather than the word “ workers “ as used by the Opposition. 1 have said in this chamber on one or two occasions previously, and I reiterate now, that, as Professor Soddy said in 1928, on Mondays, Wednesdays and Fridays scientists are hard at work inventing new laboursaving devices to shift the burden of toil from men to machines, and on Tuesdays, Thursdays and Saturdays stupid politicians are trying to invent new ways of putting men back to work again. Whether we like it or not, we face the fact that completely full employment will become an utter scientific impossibility. And we are not studying the factors that we need to consider if we are to tackle successfully this situation which science has brought upon us.

We ought to recognize the fact that the whole genius of man has been directed to the production and distribution of goods and services with a maximum of efficiency and a minimum of effort. The whole purpose has been to put more and more men out of employment. That has been the basis of scientific development and of man’s ingenuity. Yet we hold up our hands in horror and say: “ This is a dreadful thing. The nasty Menzies Government has been responsible for it all. It is putting people out of work.” What complete and utter rot that. is. We- have reached a stage at which, with the impact of science and technology on employment, it will become increasingly difficult to find jobs for unskilled labour, because no unskilled jobs will- exist in industry.

Only recently I referred in the House to the problem posed by Australia’s known water resources. I pointed out that with, out an. increase in our presently known water resources the. possibilities of industrial expansion in Australia are limited to only three areas - the Sydney area, the Melbourne area and perhaps the far north of Queensland in the 100-inch rainbelt. I pointed out that by 1970 unless South Aus. tralia can. find new supplies of water that State will face the terrific question of whether it wants to keep its secondary industry or its primary industry, because it will not have enough water supplies to feed both types of industry. I want to stress again that unless we spend more money on finding and developing water resources in

Australia the Opposition can preach till it is black in the face about Australian money going overseas, and unemployment and everything else, and it will not matter. We are faced with the twin facts that the developments of technocracy are impinging upon the degree of employment available in industry by making manual work less necessary and that we will have to concentrate our industries in two or three places along our coast. That is the real problem which faces this country, and I believe that the Opposition does a very grave disservice to its supporters - the members of the trade unions - when it indulges in a lot of idle talk about the Government’s responsibility for unemployment, because its claim in that regard is not scientifically true.

Why are men being put out of work in industry? The simple answer is that for industry to remain solvent it must get back its costs. To do so it must sell its goods, and to sell its goods in competition with others it has to reduce prices. One of the major costs of production is the cost of labour so, in order to reduce costs of labour, industry has to introduce new methods of production. The whole trend of recent broadcast and other forums on technology and labour has been concerned with the problem of cutting down labour costs. Participants in such forums talk of the need to use science in order to do this. Unless Australian industry took advantage of the increased role of science Australia would go under. We must take advantage of every technical and scientific advance in order to develop this country. We must use science and technology to increase our water resources. I think that it is plain childish to use unemployment as a political football, in view of what is happening to industry in this age of technology.

We have also to consider seriously the need to review our whole concept of social services. I believe that it will not be long before we will have to face this issue, and we will have to apply a certain amount of ingenuity to solving the problem that will arise. I do not know how we shall proceed to do it, but I think that both sides of the Parliament .have to give very serious consideration, above .and beyond stupid party warfare, to the problem of social services. I say quite bluntly and definitely that we will have to face some day the need to institute some form of national retiring allowance for unemployable people because soon, with the development of science, a man of 60 or 70 years of age may still be so young as to be employable. Such people might object to being cast out of employment to make way for younger people, and claim that their experience should give them preference. We have all heard such claims before. The your.g people, on the other hand, with wives and families to keep, will take the opposite view. Because longevity is on the increase this is an issue that we will have to face some time. At the same time as longevity is increasing our employable work force science and technology are reducing the number of people needed in industry. We may overcome that problem temporarily, but temporarily only, by shortening hours; but a shortening of hours would mean an increase of costs. At a time when industry is forced to expend large sums of money in order to take advantage of the developments of science and technocracy the more we reduce working hours the more industry will have to reduce its costs in other directions in order to recover its total outlay. To do so it will have to reduce the number of people it employs. This is a vicious circle, as honorable members will realize.

These are real problems which are not being properly dealt with in the debates in this .House. What we hear in this chamber are accusations and claims about who is politically right and who is politically wrong, but we are ignoring the basic problems of the nation. Year after year more and more children are leaving school and seeking employment. Nowadays we are gradually recognizing that the future lies with the trained and skilled worker and, where possible, the university graduate. So we face the position that within the next ten years, at the most, with minor exceptions the employment market will be open only to highly trained men. This means that we have to spend a tremendous amount of money on education, and also a tremendous amount on social services. Where are we going to get all this money? The Opposition suggests that we hit the big man for more money. Honorable members opposite are living away back in the days of the Tolpuddle martyrs and the so-called capitalists. Do they not realize that there are more little capitalists now than there ever were? Most men and women in Australia - and, I bet, many members of the Opposition - invest a little money in shares. Unit trusts and such facilities open the way for this kind of investment by little people, and the money invested goes into various types of industry and development. So even members of the Labour Party and the trade union movement, whom honorable members opposite claim to represent, are capitalists these days.

We have to face the problems I have mentioned, right now or in the very near future, and in doing so we have to give serious thought to several factors. We must consider having some form of national retiring allowance payable to people at an age that we shall decide upon. This will be necessary as more and more people become unemployed because we have reached the stage where machines are making machines which will make goods, with no manual labour required in the process. Recently in this building we saw a documentary film dealing with electronics. I ask honorable members to study the wonders of electronics, to go into the factories and see what electronics can do, and to think of the future effect of electronics on the people who work in those factories. What could happen if the green light were given to industry to go straight ahead, without restrictions, producing the maximum with a minimum of cost and utilizing every piece of electronic equipment available?

Mr Cope:

– What about-

Mr CHRESBY:

– Never mind about “ what about “. We have enough of that on the street corners at election time. If the course that I have mentioned were adopted the unemployment problem would be so terrific that no government, whether Labour, Liberal or Country Party, could survive it. Therefore I say that we have to have another look at these developments.

One of our first worries, if we are to develop this country, must be, not so much how much money we owe overseas, but how we can increase our water resources so that we can spread our industries and people and open up this vast land. Our immigration programme cannot be effective eventually if we have not a sufficient water supply. I have emphasized that and I shall continue to emphasize it because, although it may be a dry subject to some honorable members opposite who are interjecting, it is not a dry subject to those who are faced with the responsibility of having to develop Australia where there is insufficient water. I have dealt with health, and I have said that science will surely destroy private enterprise as far as the small man is concerned. This has nothing to do with politics. Science and technology will do it.

Unless we give our water supply a priority over everything else, tremendous problems will face us. If the Opposition is returned to office its members will not be happy about being in government when the water situation finally hits us because they will receive the kicks and be thrown out. Unless Australia’s water resources are greatly improved by 1970 we shall be in a terrible position. We will not be able to expand and develop rapidly despite all our theories.

The concentration of industry in relatively few areas brings with it attendant problems. When we find that industry cannot provide employment for all because it has not developed as we hoped, we shall be faced with great unemployment and social service problems in industrial areas. More and more people are continuing to congregate in these localities, with the result that there is less building space in which to construct more homes. Let us have a little more realism about these things. Let us try to make up our minds that we will deal with these issues on their merits, not in their political context.

I shall close on this note, dry as it may seem: You may make all the rosy plans you wish; you may develop all the lovely policies you like; you may hold out to the electors all the rosiest dreams of what they will get; but they will not get anything unless we take full cognizance of the impact of science and technology on industry, on employment and on the future of the children leaving our schools, and if we do not take full cognizance of the dire and dreadful situation that we are facing in regard to national water resources.

Mr DUTHIE:
Wilmot

.- The Supply debate gives a chance to range over a wide field of subjects related to the work of the federal Parliament. The main theme of the honorable member for Griffith (Mr. Chresby) apparently, was the need to harness for the benefit of Australia the water which is now running away to the ocean. I regard that as his most sensible suggestion. This Government has been in office for twelve long years - twelve years too long for the economy of Australia - but apart from the Snowy Mountains scheme, which was initiated by a Labour government, this Government has done practically nothing to irrigate Australia’s inland by tapping rivers and sending water into parched areas.

The honorable member’s speech was amazing, coming from the supporter of a government which has been in office for about twelve years. The Opposition feels that Australia desperately needs a national irrigation scheme. More assistance should be given by the Federal Government to State governments for their own irrigation schemes in order to increase production. This Government, in an airy-fairy way, talks about increasing our export trade by £250,000,000 a year. How can that possibly be done without more and more production of basic foodstuffs and how can more and more foodstuffs be produced without opening up more and more arable land? How can we exploit that land without water? Millions of gallons of water are flowing into the oceans, and large areas of land remain dry, parched and unproductive. The Opposition feels sure that at the next general election, it will be elected as a government and will then have an opportunity to examine this problem.

In Tasmania, a big irrigation plan is now being investigated by the Rivers and Water Supply Commission to utilize the water from the big Poatina power scheme, which is costing £30,000,000, in the Western Tiers, about 40 miles from Launceston. The idea is to bring this water northwards, in a zig-zag line, across the highest contours towards Launceston and through some very good land. The productive capacity of this land could be increased by 400 per cent, with irrigation. Here is a scheme that has everything. It is progressive and important. It would utilize water which runs into the South Esk River and then into the Tamar River.

If the Federal Government is sincere in its expressed desire to increase exports it must examine this scheme and see whether it could give a £1 for £1 grant to Tasmania to help get the scheme into operation within the next ten years. It is of no use merely to talk as the honorable member for Griffith talked just now. Millions of words have been spoken in this Parliament about the utilization of our water resources, but very little has been done. It is time that we made this a nonparty, national issue. We should inaugurate irrigation schemes throughout the parched areas of western New South Wales, Queensland and Victoria and even in my own State.

I want to refer, now, to the timber industry. On this side of the House, we intend to keep this issue before the Government until it is shamed into doing something for that industry, and also for the home-building industry. My colleague, the honorable member for Braddon (Mr. Davies), who is with me at the present time, made a splendid speech on Grievance Day, last Thursday, and the honorable member for Bass (Mr. Barnard) also spoke on this issue. When we Tasmanians take up a matter we do not let it rest; we do not just have one go at it and then give up. We keep moving on the problem all the time until the Government either gets sick of hearing us or does something about it. It will probably try to get us out of the Parliament. My colleague, the honorable member for Braddon, had this to say -

The Australian Broadcasting Commission, a government instrumentality, conducted a survey on 24th April which showed that the situation in the timber industry is very grave and is worsening daily. This survey revealed that in Queensland, New South Wales and Victoria alone, 103 timber mills have been closed and more than 2,300 workers have been dismissed.

That is the picture of the eastern side of Australia and of the tragic decline in this very fine industry. We have raised the matter in this Parliament at question time, during the adjournment debate and on Grievance Day and in the debate on the Supply Bill, but we have received absolutely no encouragement from the Minister for

Trade (Mr. McEwen). He said, in effect, “ We will see if we can get an emergency tariff regulation to restrict imports for a certain period to carry the industry over this particularly bad time “. All the facts were given by the industry to the department, but the answer was, “ No. The evidence is not sufficient for us to take this to the Tariff Board.” So the timber industry was knocked back again with a sledge-hammer blow, and the position has become worse since then. I have information from the manager of the Tasmanian Timber Association, Mr. T. Brabin, some of which is very vital to the question on hand. It shows that about 2,000 timber workers in Tasmania have been affected by the slump in the timber industry. That would be 40 per cent, of the force of timber workers on our island.

Mr Chaney:

– Did you quote the figures for Western Australia?

Mr DUTHIE:

– No. I have not the figures. There have been 2,300 timber workers actually dismissed in three States. In Tasmania about 800 have been dismissed and there are nearly 1,000 on part-time with two days off a week, taking home £8 a week instead of £15 a week. So nearly 2,000 of our timber workers are affected by the credit squeeze on this industry; that is about 40 per cent, of the work force in the industry.

Mr Cash:

– Can they not get work elsewhere?

Mr DUTHIE:

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

Mr FAILES:
Lawson

.- The honorable member for Wilmot (Mr. Duthie) has taken advantage of the debate on the Supply Bill to air his views on matters that relate principally to his own State of Tasmania. He chose timber for his principal subject. I believe it is quite correct that the timber industry is not able to produce as much now as it has done at various times. There are certain reasons for that. The honorable member attempted to lay the blame at the door of the Commonwealth Government, mainly because of the lack of import controls. It has been stated frequently in this House and is fairly well known to the public, I think, that import controls were never intended to act in replacement of the tariff. The tariff is the method by which Australia has always protected a local industry. Quite recently, the Tariff Board issued a report in which it refused to recommend any increase in the tariff on timber for many reasons. One of them was that the Australian industry could not supply the demands for timber, and consequently some timber was always imported.

Those of us with some knowledge of timber know also that Oregon and timbers of that sort are used in preference to other timbers, and as Oregon pine is a timber of remarkable virtue, it has been imported for a great many years and is still being imported. Consequently, the Tariff Board has indicated that the timber industry is able to stand on its own feet with the protection that it now enjoys.

One point the honorable member for Wilmot has overlooked is that in one State alone, the great obstacle to the success of the timber industry for many years has been the imposition of royalties and the level of freights. This has been emphasized quite recently in a statement comparing the freights charged in New South Wales to deliver timber to Sydney and those charged in Victoria. It was shown that, mile for mile and ton for ton, New South Wales carried an unreasonable burden of freight costs on timber delivered from the mills to the city. I live in a timber area, and to my personal knowledge, royalties have been a bone of contention in the timber industry for a great many years.

I do not say that the State does not need the royalties it charges. I do not say the State is unreasonable in its charges; but the fact is that when it charges a particularly high royalty, that is one of the burdens that the timber industry has to bear. If it did not have to bear that burden, I believe it would have been in a position to-day to stand the adjustment required at a time like this when the industry is going through a rather difficult period. So those two items should not be overlooked when we consider the position of the timber industry, and all the blame is not to be laid on the measures that have been introduced by the Commonwealth Government.

I admit that some reason for the position in the timber industry accrues from the measures we have taken, but on the other hand if those measures had not been taken, the most disastrous effects might have been felt not only in the timber industry but in every other industry in Australia as well. The Commonwealth Government, understanding this position, adopted certain economic measures of which we are well aware.

The debate to-night is on Supply. Two items which are brought forward are the Additional Estimates of expenditure for general purposes and the Additional Estimates for new works and capital works and services involving capital expenditure. In introducing these bills, the Treasurer made two statements. One was that the purpose of the bills was to obtain parliamentary authority for certain expenditure for which provision was not made in the 1960-61 Estimates. I will not weary the House by going through them, but honorable members will notice that provision is made for a number of items including an amount for cattle tick eradication and control, grants towards the building of homes for the aged, the Commonwealth scholarship scheme, a contribution towards the United Nations Force in the Congo and other purposes. These are items which have cropped up since the introduction of the Budget in 1960, and for which additional funds will be necessary. That is why this bill is brought before us. “When speaking during the debate on the

Appropriation (Works and Services) Bill, the Treasurer (Mr. Harold Holt) said -

However, it is expected that the- total expenditure-

I emphasize that this is additional expenditure - on capital works and services will not exceed the Budget estimate of-

The point is that this is not additional expenditure in the ordinary sense of the term; this is expenditure which comes more or less within our Budget estimate.

Another point which. I wish to impress upon honorable members is that these works and services are paid for out of Consolidated Revenue. They are not paid for out of loan money because, over the years, the Commonwealth has declined to participate in loan raisings through the Australian Loan Council. The Commonwealth Government has recognized that the States require all the loan money they can possibly get, and when loan money has been scarce, the Commonwealth has been prepared to allow the States to have the benefit of the full amounts raised by way of loan. Indeed, as the loan money has been insufficient for their needs, the Commonwealth has made money available to the States out of its own revenues. In addition, it has paid for its own capital works out of Consolidated Revenue. Some might argue that this is not good policy, but I emphasize that, had the Commonwealth Government taken its share of the loan funds available - I think, its allocation was 20 per cent. - the States would have been extremely short of money.

Before discussing the raising of loans for State governments and semigovernmental authorities, I point out that the state of our economy has been the subject of a great deal of discussion by people in many walks of life. As it is not unusual for honorable members to quote extracts from various authorities in this chamber, I quote from “ Canberra Comment “ the following statement by Mr. Ian Connell in the course of reviewing the national economy in his presidential address to the 57th Annual Conference of the Associated Chambers of Commerce of Australia in Adelaide recently -

The balance of payments problem was not a new one and was certainly not caused by the removal of import controls.

We have heard a. great deal in this House about the damage the removal of import controls has done to industry in Australia over the past twelve months, but this. man, who is well qualified to- comment on the subject, says that the balance of. payments problem has certainly not been caused by the removal of. import controls. He goes on to say -

It had, in fact, been- mainly due to the combined effects of a fall in export prices and the increased demand for imported raw materials and capital equipment resulting from the internal boom which developed rapidly in 1959-60.

Further on, he said -

Nor can the problem be considered to have reached critical proportions. Indeed, the fall in reserves is likely to be little if any more than was anticipated when the controls were lifted.

That very authoritative statement is worthy of the most earnest consideration of all honorable members. We have heard much criticism of the Government’s action on two counts. The first is its removal of import controls, with all their disabilities, with all their obnoxious features, with all the opportunities they open up for unfair and undesirable practices; yet the leader of the Chamber of Commerce says that he does not consider that the removal of import controls was the major cause of our difficulties. On the contrary, after considering our present position, and after giving due weight to the measures taken and proposed by the Government to correct our balance of payments position, the manufacturers have engaged in the strongest piece of lobbying that one could imagine. The Treasurer referred to it in this House about a week ago, and I do not propose to say any more about it now. But there is one body of people who, having had the ball at their feet for many years, apparently made no attempt to increase their efficiency to face up to harder times. For years they have lived on the products of the primary industries, which have supplied 80 per cent, of our overseas credits. I refer to the manufacturers who have imported many of the things they need in industry, and it ill becomes them at this stage, when primary producing industries are in dire straits because of low world prices over which neither they nor the Government have any control, to suggest that they will take every possible step to defeat the Government’s effort to remedy the present economic position for the good of all in Australia-

In contrast to that attitude I refer to the strong support which one of the federal leaders of the grazing industry, Mr. Scott, is giving the Government’s measures. Immediately the Government announced the steps it proposed to take to deal with the position, Mr. Scott urged all his members not to be squeamish, but to get solidly behind the Government in its efforts to help them. That is the support we want if we are to solve our problems.

For many years now, the grazier has been producing wool at an unprofitable price. As a result, the industry has asked for an inquiry into marketing methods. The Commonwealth Government has granted that inquiry into the marketing of wool, and so successful has the inquiry been so far that experts have come from England to give the Government the benefit of their knowledge of the wool industry, of the selling side in particular.

Another primary industry which has not enjoyed any prosperity recently is the wheat industry. Certainly it is in a better position than the wool industry in that wheat-growers have a guaranteed price for part of their crop. The average person believes that this guarantee means that the grower will receive 15s. 2d. for every bushel of wheat he delivers. That is not so. The grower will receive the guaranteed price for all wheat used for home consumption and for 100,000,000 bushels exported, but for all wheat exported above that quantity growers will be paid the ruling world market prices. The net result is that, the world market price being lower, the eventual return to the grower is averaged down to something below the guaranteed 15s. 2d. a bushel. So that, while we have one section of the people urging that there be no cut whatever in conditions of employment, and while another section is arguing that there should be no cut whatever in conditions of industry, the two main supports of the Australian economy - the wool-growing industry and the wheat-growing industry - are in dire straits, indeed. The latest quote on the London market for wheat was 13s. 8d. a bushel f.o.b. port. Those who think in terms of a 15s. 2d. guarantee for all wheat delivered should remember that.

To-day, the reimposition of import controls is being advocated most strongly by those who were most vociferous in their objection to them in the past. The moment their particular industries begin to suffer, they cry out for the reimposition of the very controls to which they objected in the past. Nobody wants controls. Even the Labour Party dislikes controls. All it does is advocate the imposition of controls upon other people, but it resists any attempt to impose controls upon its activities. Labour Party members do not want to have things regulated for them any more than do honorable members on the Government side of the House.

The Commonwealth to-day needs the confidence of the people and of the State Governments. The people should know that Australia is not in a jam but is in a sound position, and that if we pull together we will get somewhere.

I should like to comment now on the partnership that should exist between the Commonwealth and the States. Too often we hear criticism to the effect that the Commonwealth holds the purse-strings and controls the finances of the country. Every one should know, and I hope the Treasurer will have the opportunity to tell those who do not know, about the partnership that exists between the Commonwealth and the States in such matters as rebates of income tax collections. It is known that in years gone by the States and the Commonwealth levied their own income tax, and that by agreement during the war years the Commonwealth assumed the right to collect taxes and the responsibility to distribute a share of those taxes amongst State Governments according to an agreed formula.

It should be known also, and I hope that it is known that the Australian Loan Council was the product of the brains of our colleague, the right honorable member for Cowper (Sir Earle Page), who in the late ‘twenties conceived the idea that by establishing a common pool for governmental borrowing, competition would be avoided and interest rates kept down. But to-day the States are not playing the game by the agreements to which they are parties. They accuse the Commonwealth Government of ruling the financial market, of holding the pursestrings, of controlling the States and of suppressing them in the performance of the ordinary functions of government. They allege that the Commonwealth withholds the finance that is necessary for the proper conduct of their affairs. If any honorable members have any doubts about my statements, I shall read an extract from the “ Hansard “ report of the New South Wales Parliament which will be sufficient to show what is going on. But first I want to say that not so very long ago a county council in my electorate suffered because it found in late January or early February that it had run out of money. I do not want to mention in this place all the reasons why the county council ran out of money, but the fact remains that it had received an allocation of funds to carry out certain works during the twelve months, but a little more than half-way through the year it made a statement which was published in the newspapers. It was in these terms -

Council has decided to stop all new construction works following a refusal by the Federal Government-

Federal Government, mark you - to make supplementary loan grants to the States . . . The County Council had been promised a further loan allocation of £85,000-

The council does not say by whom the promise was made, but I suggest that it was made by the State Government - if the Federal authorities granted New South Wales a supplementary loan allocation, and lenders for that sum were available. However, at the Loan Council meeting in Canberra last week the Federal Treasurer- “ Federal Treasurer “, let me emphasize - refused the requests of several State Treasurers for a supplementary loan allocation for the 1960-61 financial year. As a result of that decision it was no longer possible to continue with rural extensions and other large scale works. The majority of the Ulan County Council’s outdoor staff will be given two weeks notice and then stood down until further loans are permitted by the Federal authorities.

I take the strongest exception to local government and semi-governmental bodies blaming the Commonwealth Government for something for which it definitely has no responsibility. I hope that the Treasurer will make a statement indicating how the Loan Council works, its functions and the contributions that it makes to State governments and semi-governmental authorities. It is well understood that these bodies must have finance, but there is machinery by which it can be obtained. If that machi nery works correctly and if the States make their requisition for funds with a realization of the nation’s economic and financial position, we shall all get along a lot better than we have been. But instead we see the kind of statement that I have just read.

I stated earlier that I would read an extract from the “ Hansard “ report of the New South Wales Parliament in relation to local government borrowing. On Wednesday, 15th February, 1961, a member of the Legislative Assembly asked this question -

I ask the Minister for Local Government and Minister for Highways whether the Ulan County Council electricity undertaking yesterday gave dismissal notices to 40 employees. Was this attributable to the failure of the Loan Council to grant approval for local-government borrowing, though lenders are available? If this is so, can the Minister say what action he may be able to take to prevent the spread of unemployment in localgovernment undertakings?

I will say for the honorable member who asked that question that he referred only to the Loan Council which, as all honorable members know, consists of representatives of all States and of the Commonwealth Government. The New South Wales Minister for Local Government and Minister for Highways replied to the question in these terms -

I noticed in this morning’s press that officials of the Ulan County Council stated that it would be necessary to suspend about 45 of their employees. . . . The subject of loan funds was dealt with by the Loan Council in Canberra last week, and the Premier and Deputy Premier and Treasurer put the case for New South Wales for an allocation of about £4,750,000 for localgovernment borrowing. However, the Loan Council rejected their overtures for the £4,750,000.

He then stated -

All honorable members must be amazed, as I was, that such a decision should have been made by the Loan Council.

Then he was prompted, by way of interjection, by no less a person than the Deputy Premier and Treasurer who said -

By the Federal Treasurer.

He insinuated that the decision was made by the Federal Treasurer and not by the Loan Council. The Minister for Local Government and Minister for Highways then went on to say -

My colleague the Deputy Premier and Treasurer points out to me that at the Loan Council discussion the Federal Treasurer told representatives of the States that Federal Cabinet had predetermined this matter before the Loan Council met and that the Federal Cabinet’s decision was that there should be no further approvals for localgovernment borrowings throughout the Commonwealth of Australia. Therefore, I cannot hold out any hope for the allocation of additional funds to local-government bodies in this State; I just do not have them, and therefore I am unable to approve them.

I do not know whether those words are true, but I have always understood that Loan Council meetings are held in camera. Yet the Deputy Premier of one of the States makes a statement in open session of Parliament indicating what occurred within the Loan Council! Some years ago I remember being here with some friends on business and we sat in the visitors’ gallery while a Loan Council meeting was in progress because we were interested to know what happened during the meetings. At the request of one Premier we were asked to leave, and I believe the Premier was right in making the request. Yet a responsible person in a State parliament is prepared to tell the parliament everything that occurred within the Loan Council which is supposed to conduct its deliberations in camera!

Mr Calwell:

– Not everything.

Mr FAILES:

– Perhaps not everything, but I can assure the Leader of the Opposition (Mr. Calwell) that if he cares to read No. 42 of the “ Hansard “ reports for the New South Wales Parliament he will see that very little was left to the imagination. Whether the Deputy Premier erred in a slight degree or in a large degree makes no difference. His actions were shockingly culpable, particularly when one considers the responsible position that he holds. In reply to a supplementary question, the Minister for Local Government and Minister for Highways stated -

The decision will remain until the Loan Council meets again and reverses its decision of last week. The Premier and the Treasurer asked the Federal Treasurer to take the matter back to Federal Cabinet for its reconsideration, and the Federal Treasurer refused point-blank to comply with their request.

If the Minister for Local Government did not obtain that information from the Premier or the Deputy Premier, I do not know from whom he obtained it. But I am sure that he got it from the source to which I have referred because on the following day an urgency motion in these terms was introduced into the House -

That, in the opinion of this House, the decision by the Commonwealth Government-

Again, the Commonwealth Government, mark you - to refuse to agree to any increase in the current year’s borrowing allocations for local government authorities will lead to serious unemployment problems in many parts of the State and will accentuate the general recession which is already being brought about by the Commonwealth Government’s “ credit squeeze “ and its other restrictive economic measures.

I could read on through the debate on that urgency motion and quote many instances in which the Deputy Premier of New South Wales made direct statements about matters which had occurred within the Australian Loan Council, and direct charges and allegations that the Commonwealth Government had refused to give local government bodies any assistance at all, although we know that in fact the decision was made by the Loan Council and not by the Commonwealth Government.

So I say: Have the States played the game and tried to help the Commonwealth Government in dealing with the problems that beset the States from time to time? We know very well that more money is required for local government. We know that more money is required for education. Under the terms of this bill, the Commonwealth Government is providing for a subsidy for higher education in the universities. We know that more money is required for roads. Undeniably, more money is required for them. We divert from the taxation that we collect from the people of this country a handsome subsidy for roads. The same thing applies to hospitals. We have arranged for a considerable hospital subsidy to be paid to hospitals under the national health scheme. The State governments get the benefit of this. But they still require more. I know it and I admit it. But I object to their attitude in not making their requests in a reasonable way which, I believe, would receive the support of the people of Australia.

Water supplies, also, are urgently needed. The honorable member for Wilmot (Mr. Duthie) complained that this Government had not done anything about water supplies. I point out that, after all, water supplies in the main are the responsibility of the State governments, except where schemes are so great in size as is the Snowy Mountains scheme, where more than one State is involved. The Commonwealth has contributed out of revenue £14,000,000 a year to the Snowy Mountains scheme. Is not that an achievement? The honorable member asked, “What are this Government’s achievements? “ The Government’s achievements in that scheme alone have been colossal, and they are probably greater than have been those of any other government in this country for a great number of years.

What has this Government achieved in aviation? We have seen the improvements that have been made to airports, and in the flow of air traffic as a result of the assistance given to the airlines. In the field of railways, there has been the duplication by means of a standard-gauge line of the railway between Albury and Melbourne. I have already mentioned the Snowy Mountains scheme. At present, we are considering a proposal for the development of the far inland that embraces not only water supplies but roads. All these things, I point out, have been provided for out of revenue and not out of loan funds. All the loan moneys being raised in this Commonwealth are being used for the benefit of the States.

What are the greatest problems that we have to face to-day owing to rising costs? Have the States helped us there? Have they contributed anything at all? I do not want to be critical of them, because my whole story is that we need co-operation from all the States which make up this Commonwealth. We need co-operation by the States with the Federal Government in dealing with the problems that beset the whole of the country. But, unfortunately, until now, we have not been getting it. We have not been getting the co-operation of a great number of the people. We have seen a demonstration to-day by members of a union to whom it is proposed to give great benefits by means of a measure to be enacted during this week, I understand. Those unionists gave up .heir work for the day and came to Canberra to stage their demonstration. The members of that union have done nothing over the last year or so but frustrate the efforts of people to ship exports from this country - exports of tremendous value in the critical situation in which we are placed. So I ask: Will the States co-operate? Will they help to build up the confidence of the people of Australia in this Government, which is responsible for trying to solve all these problems with which the country is faced? The Opposition may say, as it has said before, “ It is not our pigeon, and we do not care “. That is a matter for the Opposition, but I ask that the States co-operate and make fair demands in respect of their financial requirements. I ask, furthermore, that they ensure that they get fair value and a fair return for the expenditure that they make. Finally, I ask the people whether they will co-operate, because the position can be only as serious as the nation will allow it to become.

Mr CALWELL:
Leader of the Opposition · Melbourne

– Mr. Speaker, I should like to deal with the following aspectsof the Government’s economic and financial policies - the failure of its imports policy,, the loss of overseas reserves, the absence of any connexion between its internal policy and imports, the question of interest rates and housing, and its policy, if there is any, on unemployment. The Government’s economic policy is conservative, orthodox and doctrinaire. The Government seeks to cure the situation of the present with the methods of the past. To rely on experience is to be wise, of course, but it is not true that the blind following of the past is the safe course for this country to follow to-day. Often, that is the reckless course of the fool who leaps because he thinks he need not look.

In the fair weather of February, 1960, the Government became committed to a course of economic policy which Ministers entered on with all the sincerity of their limited imaginations. It seemed sound and safe because it conformed to> the financial and social prejudices, of a group long in office which preferred the catch-cries of the past to the hard work of thinking. So the Government mounted- the- tiger’s back. Its policy was one which would have been all right if it had worked, but it. was one which Ministers felt they must stick by to the bitter end. If the Treasurer (Mr. Harold Holt) lets out a little bleat of doubt about import licensing or the depreciation of the Australian £1 the inward flood of imports or the outward fl’ood of money will’ force either one thing or the other: So what did the Treasurer say to the International Monetary Fund through his deputy and negotiator,

Sir Roland Wilson, who departed from this country without anybody knowing anything about it except Ministers - and not all of them - and who returned without anybody knowing that he had arrived back until somebody saw him in the streets of Canberra? According to the documents tabled by the Treasurer last Thursday afternoon, Sir Roland Wilson told the International Monetary Fund -

The Government has repeatedly stated and now reaffirms its intention not to reimpose restrictions on trade or current payments except in the event of a very serious balance of payments emergency necessitating a major shift in policy.

The expressions “ repeatedly stated “ and “ reaffirms “ are not the language of some one who really knows where he is going. The fact is that, in the words used in the document from which I have quoted, “ a very serious balance of payments emergency “ is here. That is the current economic situation, and that is why the Government has borrowed from the International Monetary Fund. That is why Australians are unemployed. That is why Australia must borrow to pay her creditors at a time when Australians are refused permission to borrow to pay their creditors. Australia is bankrupt, according to the memorandum to the International Monetary Fund, and according also to leading business executives and economists. There comes a time, therefore, when facts must be faced. This is such a time. We cannot go on as we are going, frittering away our last half-pence because we dare not admit that the nation is broke.

The first matter with which I want to deal is the failure of the Government’s imports policy. The policy entered on fifteen months ago could have been described at best as a calculated risk. It amounted to this. No one likes restrictions for their own sake. No one likes import licensing as such, except those who are lucky enough to have import licences. For them, of course, it is the road to fortune, but for the rest of us it means exploitation. Australian industry should be protected by tariffs and similar measures and not by the granting of import monopolies. And it would be worth a great deal to Australian productive efficiency if we could get along without import restrictions.

It was argued that it was worth taking a chance in order to see whether we could really pay for our imports if they were unrestricted. But the Government chose the one time of all times when it should not have risked this. It chose the time when the economy was at last expanding after the stagnation enforced in 1956 by the last economic experiment. And so import licensing was abandoned just when it was certain that the demand for imports was at a maximum - when demand was certain to spill over into imports, pending the expansion of local production. With all the recklessness of the doctrinaire, the Government entered on its long-haired course.

There was alarm in March, 1960, when imports were running at £88,000,000 a month. If it had been known then that the monthly average for the next twelve months would be above that figure and that there would be no visible decline even by April, 1961, import licensing would have been reimposed forthwith. Of that I feel certain. But with £550,000,000 of international reserves and £200,000,000 drawing rights with the World Bank it looked not too bad and, to quote the Treasurer’s words, “ imports are sure to fall off as soon as we have restocked “. But month after month the same story went on and on, and month after month our reserves dwindled and we became more and more dependent on overseas borrowing in order to - to use a term familiar to those who follow the great Australian game of football - keep the ball in the air. Each month it was more urgent to be positive that import restrictions would not be reimposed, and so the Government became more positive.

The first breath of panic in the rake’s progress was felt in November last. October imports were announced at just on £100,000,000, and the figures for the September quarter revealed that extra imports were not just in luxury items but, to use the Treasurer’s words again, “ right across the board “. In fact, the basic items seem to have gone up even more than the previously restricted tinned chickens, wines, whiskies and perfumes. All in a fortnight came the measures of 15th November. The fact that they have all been either reversed or substantially modified shows clearly enough how ill-considered they were. But by then it was too late to reverse the major policy decision of “ free “ imports restrained by credit restriction, unemployment and a stagnant economy. Even in November, Sir, it was confidently believed that imports in the new year would fall off. In January, it was believed that the March imports would be down; in February, it was believed that the April imports would be down. But here we are with the April figure just announced at the highest daily rate ever recorded. The Government proposed to reduce imports by credit restrictions in February last year, and if any one of us had been asked whether the Government’s measures would work we would have said that they might in three months’ time. Three months later we would have said that they would work may be in another three months. If we had been asked in December we would have said that by April this credit restriction policy of calling up the overdrafts of people who really need the money would certainly stem the flood of imports. Yet we find, on the Government’s own admission, that the April figures reveal the greatest daily rate of imports of goods on record. Of course the Government has much to explain. It has to explain why imports have not fallen after fourteen months of the application of this credit restriction policy. There were only eighteen working days in April, because Easter fell in that month, and because of the Anzac day holiday, but imports for the month, according to official figures, were worth £86,800,000. I ask the question: When will imports cease to come in at that abnormal rate? When will the people of Australia who are out of work because of the flow of imports be able to look to the future with some hope that their jobs will be restored to them.

The story of our overseas reserves is somewhat the same. In its first ten years of office the Government reduced our overseas reserves from £630,000,000 to £512,000,000, despite the fact that it borrowed £1,200,000,000 overseas in that period. So, after ten years we have £1,300,000,000 less in national resources than we had at the start. In only one of the last six years have our resources risen, and the annual borrowings have got larger and larger. Twice during the period our resources fell to low levels - to £360,000,000 in July, 1952, and to £330,000,000 in April, 1956. Both of these falls were the result of a decline in exports. That is why we have to keep international reserves. Our exports are uncertain, both because of the risk of drought and because of the variability of export prices. If both drought and low prices happen together we must expect our reserves to fall by something like £300,000,000. If this occurs because of temporary changes of this nature we should not be forced to cut our imports correspondingly. We should have something to fall back on. Our orderly progress and development depend on just this - that our economy should not be at the mercy of droughts and drops in export prices. So, to be reasonably secure in an uncertain world, we must always hold at the end of a normal year something like £400,000,000 to £500,000,000 of international reserves - £300,000,000 to meet contingencies and, say, £150,000,000 as a working balance. Our drawing rights with the World Bank can then be regarded validly as a second line of reserves to meet a sustained drought or a delayed recovery in export prices. Those drawing rights would give us time to make any necessary adjustments.

But, Sir, what is the position to-day? Let us look at what is happening in the present financial year, 1960-61. Seasons have been good - the Government has said so. Wool prices are down a little. The first wool sales of the year showed a return of 45d. per lb. over the first two months. Then they averaged 47d. per lb, over the first four months, and over the first six to seven months the average rose to 50d. per lb.

Mr Luchetti:

– And the Government will not do anything about the prices.

Mr CALWELL:

– It will not do anything to protect the wool-growers against international exploitation. But prices have risen in the wool market and, according to to-day’s press they are about 20 per cent, higher in Brisbane than they were at the start of the season. We have been able also to sell a bumper wheat harvest to both Communist and non-Communist countries. Every member of the Country Party has literally licked his chops when he has heard the news of the sale of more wheat to China, and most of the reactionary members of the Liberal Party have either deplored the sales or remained silent. By and large, our exports are not likely to be much down on last year and, at about £900,000,000, say, they will be the third best of the past decade. This, then, happens in a year in which we should be adding something to our reserves to make a cushion for the bad year. But what has happened? Our reserves, apart from borrowings from the World Bank, will be about £250,000,000 at the end of June, and perhaps £200,000,000 at the low point in September. That makes a loss of £300,000,000. If we add the World Bank borrowing to our reserves we may touch as low as £275,000,000- or £50,000,000 below our post-war low. That is the condition to which this Government has reduced the country even after it has successfully negotiated this loan with the World Bank, and after we have had a very good export year. Not only shall we be below our safe minimum; not only shall we not have enough to meet a drought; not only shall we have trenched on our second-line reserves; but we shall be committed to repay nearly £80,000,000 in the next three or four years to those from whom we have borrowed. So, on the international front the Government has gambled - repeat, gambled - and Australia has lost.

Our security has been drained away for the sake of doctrinaire orthodoxy. We must start again, the hard way, to build up our reserves to the point that will give us freedom of action in an unsympathetic world. We cannot expect the world to be sympathetic to us when we are considered as one of the rich nations. Of course, the Government expects that other countries should make resources available to us for our further development while the underprivileged countries go without. In regard to internal policy and imports, in its statement of intentions to the International Bank for Reconstruction and Development, the Government, said -

The impact of the internal measures on imports has only recently begun to show.

I .think I have proved that the impact of internal measures on imports, if it has shown anything, has shown that imports are still flowing in and the Government’s policy has not -affected ‘the position one iota. Unless the statement of the Treasurer to the Inter national Bank is based on information not made available to Parliament, it appears to have little factual basis.

As I said earlier, imports last month, at the time that the statement was prepared, were running at the highest daily rate yet recorded. I find it hard to believe that the Treasurer believed what he said. None of the declines in imports, in the few cases in which they occurred, can be attributed to the Government’s internal measures. With regard to the major items, tractor sales in the December quarter were well up and current imports, even at the reduced level, are 50 per cent, above the level of 1958-59. Timber imports, at £4,000,000 for the March quarter, are only half the figure for the September quarter but are still at the 1958-59 rate. The facts about timber are well known - grossly excessive imports, terrific stock-piles, saw-mills closed down and Australians unemployed in at least four States because of the importation of timber. All this will continue until the stocks are used up. Imports are still at the 1958-59 rate, and none of this is due to internal measures. It is all due to excessive imports which provide, in part, their own cure at the expense of those least able to bear the burden.

The third major item imports of which fell was steel. Imports fell from £19,000,000 to £16,000,000 in the March quarter. This was the same rate as that for the September quarter and was nearly four times as great as the 1958-59 rate. Imports have been even more grossly excessive for steel than for timber. During the last nine months, imports have come in at the rate of 100,000 tons a month compared with a local production of 300,000 tons a month. This was not due to a rise in local demand but to speculative stock-piling which the Government did nothing to prevent.

Now, Stewarts and Lloyds, the pipe subsidiary of the Broken Hill Proprietary Company Limited, has had to put men off until excess stocks are used up and has given dismissal notices to at least 400 men. Similar action by John Lysaght (Australia) Proprietary Limited, the steel sheet makers at Port Kembla, was announced this morning. Many sections of the Broken Hill Proprietary Company Limited itself will doubtless do the same unless exports and reexports can be hurriedly arranged. The two industries which have been directly hit by internal measures are housing and motor vehicles. Therefore, I want to say something on the question of housing. Few imports are directly related to housing, but the difficulties of the timber industry, already created by excess imports, will be aggravated by the decline in housing.

Motor vehicles have been directly and hard hit by internal measures, both by the fly-by-night sales tax increase and by the hire-purchase restrictions. But imports of motor vehicle components in the March quarter were a record at £26,000,000. This is more than 50 per cent, above the 1959 figure despite the fact that registrations, even during last year’s boom, rose by only 15 per cent, and now, of course, they are well blow the level of 1959. So much for the claim that internal measures are beginning to affect imports.

The imports which are dropping are dropping because of grossly excessive imports in the immediate past. The industries which have been heaviest hit by internal measures are still importing as much as ever. The doctrinaire dream world of the Treasurer has taken charge. He says that the policies are working only because the theory says that they will work. There is no decline in imports of any economic significance and our international reserves are gone or committed. Let me turn again to the statement of intentions. I quote the Treasurer -

In present circumstances, the Government attaches particular importance to the objective of bringing the fall in reserves to a halt.

A noble sentiment! It is a relief to the more responsible members of this House - all of whom sit behind me, of course - and to the community that the Government has at last realized that its reckless course must be halted. It would, perhaps, be ungracious to suggest that this awakening has come only when the Government has discovered that Australia’s pocket is empty and no other course is open to it. It is hardly a virtue in a man who has spent all he has to say, “ I attach particular importance to spending no more”. But this Government still does not realize that its Docket is empty. It says that it will continue with the same policies that it was following while the money was running out. This is the policy, according to the Treasurer-

Since early 1960, the economic policy of the Government has been directed to reducing the excessive rate of increase in demand and to arresting the rise in costs and prices.

Thus, something was to be reduced and something was to be arrested. Let us look, first, at the thing that was to be reduced - the excessive rate of increase in demand. This means nothing more than that demand was to be reduced. But a reduction in demand sounds quite innocuous to those who do not understand the jargon of orthodox economics - the sort of economics that this Government prides itself on practising. Reduction in demand means, to the Labour Party, unemployment, unused machinery in factories, a cut in sales, bankruptcy for many small businesses and a pool of unemployed. These things were to be brought about by a flood of imports, by higher taxes, and by a cut in loans from banks and other sources. These results have been achieved by the Government.

We have had the flood of imports and, just as planned, it is making men unemployed, machines idle and small businesses bankrupt. But this measure has proved to be a Frankenstein. The measure is out of control. Australia can no longer afford to pay for its imports. So it has now become the Government’s first policy objective to destroy the very thing which it introduced to create unemployment. But it has thought of no new measures. It is now going to have still higher taxes, still greater cuts in loans and continued high interest. It also now admits that it recently attempted to persuade the Commonwealth Conciliation and Arbitration Commission not to increase wages “for the second year in succession, despite the great rise in the cost of living which has occurred in the last two years. It regarded that as one of the virtues that it might put before the International Bank to secure a loan.

It also said that it intended to maintain credit restrictions until June, 1962. There was a touch of arrogance about that. It presumed that it would be in office until 1962. It said, in effect, “ We will have an election, but we will be back to do those things that are bearing so heavily on *he

Australian people”. Let me tell the Government that the people of Australia will not return it at the next general election. When Labour takes office, early in 1961, we will re-impose selective import restrictions and we will ease credit, no matter what undertakings the Government has given to the International Bank. We have had the credit squeeze, the balanced budget, and the cut in real wages for fifteen months now. With all of them still operating, imports are the highest ever. With all of them still operating, most of the unemployment can be traced to imports and not to internal measures. If they are going to be used as the sole means to create the unemployment pool and the idle machine capacity pool we have seen nothing yet of what a credit squeeze really is. We are really going to see some unemployment in this country this winter, and nobody wants to see it. I wanted to speak about high interest rates and housing, because this is one of the internal measures which I would have liked to deal with in detail, but I find that in the time left to me all I can say to the Government is that the people of Australia do not stand behind its measures and the commitments it has given. The people of Australia will not allow this country to be thrown to the international wolves.

Mr McMAHON:
Minister for Labour and National Service · Lowe · LP

– Mr. Deputy Speaker, the Leader of the Opposition (Mr. Calwell) has first of all accused this Government of being conservative and of adhering too rigidly to the doctrines of the past. I believe that to be an extraordinary statement, and the honorable gentleman must himself know it to be inaccurate and perhaps even untruthful, for the simple fact is that probably one of the continued criticisms that the so-called objective critic has made about this Government is that it has introduced too many novel measures and has always been ready to experiment. Statements by the Prime Minister (Mr. Menzies) and by the Treasurer (Mr. Harold Holt) have made it clear that whilst our objectives of policy remain clear - and they are mentioned in the document presented to the International Monetary Fund - nonetheless we will always adopt flexible policies providing they are based upon liberal lines; we will adopt flexible policies to achieve these objectives.

I will mention one or two of the novel measures which have been introduced by this Government and which, when they were first mentioned in this House, were applauded by the Opposition because it felt they were much in advance of their time. I mention the action on convertible notes - that interest on convertible notes cannot be deducted. I mention the bill recently before the House, relating to life offices and their contribution to government securities. I mention the bill recently before the House - if it is not still before the House - relating to export incentives. So, I think you will find, Sir, that far from this Government being conservative, far from it thinking that it must stick to the recognized methods of the past, it has done what it considered to be desirable to keep the economy healthy and to keep the objectives of national development within the framework of steady international balances and a stable currency. So, the honorable gentleman has at the beginning - so, too, at the end - vastly exaggerated in everything he has had to say.

The second point which the honorable gentleman mentioned was borrowing from the bank. Here, I believe, some one has misinformed him, because the truth is that no borrowing has been made from the International Bank for Reconstruction and Development. We have borrowed from the International Monetary Fund, and it acts like any bank does. The International Monetary Fund was created under the spirit of Bretton Woods. Its very spirit is this: That if in times of difficulty a country should wish to borrow money for a temporary purpose, then it could treat the fund as a banker and go along and borrow the money and at any time repay it. We joined the fund at a time when the Labour Party was in office. What I want to ask is: Why would we have joined the fund and have made contributions to it unless we thought that at some subsequent date we might have to make a drawing and that we would make that drawing because we were facing temporary difficulties? Having mentioned the policy with relation to the International Monetary Fund, it seems to me that this was one of the occasions when, in the interests of the country, it was wise that we should turn to the international bankers and say to them, “Because of seasonal changes, and because we have quite substantial fluctuations in the prices we receive for our goods overseas, we would like to get a second line of credit from you and have a stand-by credit “. This appeared to me to be the ideal time when this Government should have gone to the International Monetary Fund and said, “Lend us £78,000,000 to cover our temporary difficulties, repayable over a period of time, and should we find at a later date that we want a further drawing of £45,000,000, we will approach you for it “.

It was made clear in the document issued by the Treasurer that this was done as a precautionary measure and not because we felt there were great difficulties in connexion with our international payments. It was because we felt that at this moment, and in order to sustain public confidence at a time when there could be a substantial run-down, we should take this precautionary measure to cover what could be difficulties ahead. And so, in short, I put it to you, Sir, that those who give this matter thought would say that the fund was created for this purpose and, it having been created for this purpose and as we thought that we wanted to create a psychological atmosphere in which people could realize that there was a solid basis for confidence, we should take the action we did. I say again, this was one of the occasions when it was wise for us to take action.

The Leader of the Opposition went on to make a statement which I regret he made, because it is not like him to make inaccurate statements or to misrepresent the position. He did say that the intention was to maintain credit restrictions until 1962. The fact of the matter is that there were two borrowings, one a matter of some £78.000.000 which was immediately placed to the credit of our London funds, and the second, a stand-by credit of something like £45.000.000. In making application for those moneys, it was made perfectly clear to the International Monetary Fund that if present conditions continued to exist the policy we were now following would continue to be followed. In other words, the agent of the Treasury said to the fund “ These are the policies we are now followin a to overcome our difficulties “: and T add here that the fund itself approved of the policy we were following to meet the difficulties that are facing us. What was made clear was that it was only in the present circumstances that we would continue to follow that policy, and that it was for us to decide whether or not we wanted to change. In other words, there is no commitment here to any one not to change our policies, and there never has been.

The Government is responsible for the management of this country and has i free hand, should it think it desirable to change its policy; and should the circumstances change and we think a change in policy ls necessary, of course the necessary chance will be made. The statement by the Lead.t of the Opposition that credit restraint will be maintained until 1962 is totally wrong. What the Government has stated is this: While we have difficulties of the kind wa now face, such as difficulties with our balance of payments and with regard to inflation and loss of purchasing power, we will see that the monetary system is kept under reasonably tight control. In other words, we do not want the creation of so much money that inflation will once again get out of hand.

But what we did go on to point out was that in the circumstances in which we find ourselves there will be a moderate increase in credit during the course of the next year. In other words, there will be no such thing as tying credit down or seeing that credit does not expand. The liquidity position of the banks will be sustained. Only to-day a release was made from the reserve deposits to the trading banks. In addition, it is envisaged that there will be a moderate increase in credit during the next year. So again I say that I regret that the honorable gentleman said that credit restrictions would be maintained until 1962.

Mr Cairns:

– They will be, will they not?

Mr McMAHON:

– I have stated the position accurately. Tt is set out on page five of the document issued by the Treasurer. If the honorable member for Yarra wants to be well informed, and not as ignorant as he appears to be, he will read that document carefully.

Mr Cairns:

– Will they not be maintained until 1962?

Mr McMAHON:

– 1 have no wish to listen to the honorable member’s interjections. I did not interrupt the Leader of the Opposition when he was speaking, and the honorable member for Yarra might show me similar courtesy and refrain from interrupting me when I am making my speech. 1 have stated the position as it concerns the International Monetary Fund. The next point raised by the Leader of the Opposition related to our import policy. First, let me make it clear that the honorable member told us in his introductory remarks that no one likes import restrictions, and that the Labour Party believes that the appropriate method of handling a problem of this kind is by tariffs, not by import restrictions. Therefore, it came as a surprise to me to hear him say, at the conclusion of his speech, that restrictive import licensing should be reimposed. It was quite obvious that he was not at all certain which policy he wanted to follow, nor why the imposition of selective import licensing should be advocated. Speaking from the political viewpoint, I venture to suggest, Mr. Deputy Speaker, that honorable members opposite would welcome the support of any one at all at the forthcoming elections, Communists or any other persons you care to mention, and that they would like to win the support of some manufacturers who would be happy to see import licensing reintroduced.

Having made that comment on the political plane, let me turn to the purposes of import licensing. We removed import licensing for very good reasons. It is well known to the House by now that the great difficulty we have faced in recent years has been an excess of demand over available supplies. This has meant that the demand for labour has increased, that prices have increased and that we have had balanceofpayments difficulties. The Government thought - and, Sir, f personally believe it correctly thought - that one way of overcoming the difficulty was to permit a large inflow of imports, so that, the excess demand could be satisfied and a balance could be achieved between supply and demand. If honorable members look at the document presented to the International Monetary Fund they will find that the Treasurer now argues that there is a better balance between supply and demand. I personally believe, in fact, that supply and demand are now quite evenly balanced. The problems of rapid labour turnover and of overtime have, I suggest, been solved, and the economy is in a substantially better and stronger position to-day than it was in February of last year.

Having these considerations in mind, we took off import licensing for a very good reason. We took it off because, in the spirit of Bretton Woods, we wanted, if possible, to give some inspiration to those who believe in the free flow of goods internationally. We led the way. The imports have come in and I believe they have had a beneficial effect.

But the point I want to make - and it has been referred to by the Treasurer - is this: If you study the make-up of imports under the various classifications you will find that 82 per cent, of the extra imports have gone to the manufacturer. He should be among the last to complain, because he is now getting the additional equipment, the raw materials and the accessories of which he was deprived when import licensing was in force.

Much has been said in recent weeks about selective import licensing, but I have yet to find a person who would contend that selective import licensing would be effective. I have yet to find a person who is prepared to say that by restriction of bank credits, or by exchange licensing, you can overcome the problem. The few countries that have tried exchange licensing, including Argentina and Turkey, have found that it will not work. The best advice I have been able to get from some of the banking authorities is that it would be extremely difficult to make it work. I do not think, therefore, that selective exchange control is the answer. I did believe that at the time when import licensing was virtually removed, this was the wisest thing that could have been done. I believe it has had a real effect in preventing prices from rising too substantially.

The fourth point mentioned by the Leader of the Opposition related to our overseas reserves. Here I have to confess that I do not understand his argument at all. What are overseas reserves for? We are not misers. We do not want to see this money just piling up in the banks of the world. These reserves are there to be used in cases of emergency,, and as this is an emergency the Government was wise, I believe, in letting its balances run down until it felt the time had come when some other action should be taken. At the present time our reserves, according to the latest Commonwealth Bank return on gold and balances held abroad, amount to something of the order of £420,000,000. If you consider that figure against our imports, and against the possibility that after the end of June imports will fall to a reasonable level, no one would argue that £420,000,000 is a really uncomfortable figure.

I repeat that I fail to understand the argument of those who say, “ Your London balances should be built up “. I was brought up in a world which, if you could borrow money and make a profit from it, and out of that profit pay back what you had borrowed with interest and still have something for yourself, it was considered a sound enterprise. In a country like Australia, which is developing rapidly, we must of necessity borrow money, whether on private or public account or from the International Monetary Fund, or, if it is for long-term investment, from the International Bank itself. In a country such as ours, which is rapidly developing and which has a fastgrowing population, we should not only have access to our reserves when difficulties are experienced, but we should also have access to the- International Monetary Fund and the International Bank when we think it is desirable to approach them.

The honorable gentleman asked when it was expected that we would overcome the difficulties. Well, I am not one of those who are given to making forecasts, and 1 believe the honorable member himself should be the last one to attempt to make them. Only a few months ago he made a forecast, suggesting what the level of unemployment would be at the end of March. His figures have been proved to be so dreadfully wrong that I will not make him blush by referring to them. However, I think we can say this: There is, amongst those who are best able to advise, a strong opinion that the Government’s measures are now taking effect, and that, within a reasonable time we. can expect to see imports declining in the way the experts said they would.

There are just two other matters I wish to mention before I complete what I have to say. The honorable member referred to the Commonwealth and State Housing Agreement and the interest rate laid down in that agreement. The new agreement is very near ready for signature and has been agreed to with one exception that the honorable member has not mentioned. I think it is true so far as the interest rate is concerned that the States are agreeable to the new method of computing interest, that is, for a 1 per cent, below in the long-term rate of interest.

That will do two things. First it assures the States that they will get the money that the Commonwealth has guaranteed to make available to them under the agreement; and secondly, it does so at concessional rates of interest. The would-be purchaser of a home will not worry so much about the extra £20 a year interest he will have to pay. What he wants is a home at a reasonable price. The agreement the Government has with the States will provide the money so that the people can get their homes, and the action taken by the Government on the general level relating to the reduction of the demand within the community had as one of its purposes the intention of ensuring that building costs did not rise under the speculative influences we knew from February last year until December last. So here again I believe the Government has acted wisely and in the best interests of the community.

The only other point I want to make concerns the importation of steel. I believe that as the Broken Hill Proprietary Company Limited has now advised importers and merchants that the total Australian requirements other than for specialized steels can be met from Australian sources, we can hope in the months ahead that the importation of steel, other than specialized steels, will drop away more or less completely. In other words, if the annual rate of importation of steel was something of the order of £55,000,000, it is now certain that the Broken Hill Proprietary Company Limited and others can henceforth supply the local market and start to move into the export markets.

I conclude on this note: We have listened to the speech that has been read by the Leader of the Opposition. I do not think any honorable member on this side of the House can say honestly that there was a consistent or cogent argument in any one of the points he made. The honorable gentleman repeated that credit would be relaxed and that selective import licensing would be restored by a Labour government, but I have said that so far as selective import licensing is concerned, it would be pretty difficult to satisfactorily administer such a scheme for long. As to credit, the Government’s policy of a reasonable relaxation of credit, a moderate relaxation, is the sensible one. The Treasurer is perfectly right in following the policy he has enunciated because it is for the benefit of the Australian people.

Mr CAIRNS:
Yarra

.- It is quite a long time since we heard the Minister for Labour and National Service (Mr. McMahon) labouring so hard with a speech. If he looked at the clock once, he did so ten times, hoping that in some miraculous fashion the fingers of the clock would travel faster than they move. He has made a useful agent of the stevedoring industry and the shipping companies in imposing penal provisions on the waterside workers, but he made no impact in answering the case that has been put forward by the Leader of the Opposition (Mr. Calwell).

Mr Bryant:

– A lackey for big business.

Mr CAIRNS:

– Yes, a lackey - I would say a dapper lackey - for big business.

Mr DEPUTY SPEAKER (Mr Wight:
LILLEY, QUEENSLAND

Order!

Mr CAIRNS:

– The Minister took up the point that the Leader of the Opposition said that the economic measures introduced by this Government were conservative measures. The Minister said that some were novel. He mentioned the provision of the Government for eliminating interest on convertible notes, and said that was a novel procedure. This was novel procedure when it was first suggested about ten years ago, but the Government did nothing about it for ten years and so it has become a conservative measure. The Minister mentioned several other minor points. He referred to the provision that life assurance offices should contribute to public funds up to 30 per cent, of their assets, and other completely minor matters of no general significance.

But the Minister did not mention the four conservative fundamental policies of the

Government. He did not mention the fact that this Government has followed a policy of wage freeze and has appeared in the Arbitration Court and other tribunals from one end of the country to the other opposing increases in wages. That is conservative policy. It was the policy of conservative governments 100 years ago and is still the policy of this Government. The Minister said nothing about credit restrictions, the main leg of this Government’s policy. That is conservative policy that has been followed down the years by conservative governments in every country. He did not mention the sales tax, an indirect tax on consumption goods. That has always been the policy of conservative governments. The Minister did not mention either the policy of balanced Budgets that has kept pensions down, provided inadequate amounts of money for education, kept public works in a backward condition and left the country with broken surfaces upon its roads and inadequate streets and water supplies. The Minister did not mention any of these things which are all conservative policy.

Then the Minister went on to speak of a loan to which the Leader of the Opposition had referred, and he said that this loan was not borrowing. The Minister said it was drawing from the bank. According to the Minister, when you draw £78,000,000 from a bank, you are not borrowing. In some miraculous fashion, that is not a loan at all. Overlooking the fine point he was making, the Minister said, “You go along and borrow from the bank “. It is costing us £390,000 in gold straight away for this socalled non-loan. It will cost us £900,000 in interest in the first eighteen months it runs, £575.000 in interest in the next six months and £675,000 in interest in the six months after that. If this is not a loan, I have yet to learn what it is. At the end of that period, we have to face repayment of the £78,000,000 and the £45,000,000 standby credit if we draw on it.

These are points that the Minister for Labour and National Service laboured so badly in debating. The Opposition has chosen to discuss the most significant matter that faces the Commonwealth Government at present. Several weeks ago. the Treasurer (Mr. Harold Holt) made a short statement to the House about borrowing £78,000,000 from the International Monetary Fund. He gave no particulars of this proposal. He did not indicate whether it was a loan or a gift, or whether any interest was payable on it. He did not indicate whether any conditions had been attached to the transaction. He made a bald statement of eight or nine lines in which he gave no particulars. Following that statement, he was questioned in the House and outside. It was suggested that he had agreed to adopt restrictive economic policies to get this loan. Then, on 4th May, he produced a statement which has shown that this Government has been willing to give up a considerable part of its sovereignty in relation to economic policy to the International Monetary Fund. Supporters of the Government may deny it, but the statement showed that the Government has sold out a considerable part of its economic sovereignty in determining the policy of the country. This was a statement of fundamental importance. It is a charter of Australia’s economic future for the next two or three years. In his statement of 4th May, the Treasurer served notice that full employment and economic expansion in Australia are a thing of the past, and that they have come to an end.

This statement is really an undertaking by the Government of the Commonwealth that it is no longer committed to a policy of full employment, and it is the first time for thirteen years that an official statement of this kind has been put before the Australian people. This statement puts the Australian economy into a strait jacket designed by economists and bankers in New York. It is a document of despair. It is a receipt for restriction. It is the Treasurer’s last will and testament. It is a symbol of senility, lt is a cry of administrative hopelessness. It is a hopeless, conservative document, which it seems the Treasurer was not prepared to tell the people about. Either he did not know the conditions or he was prepared to keep them quiet. Were they a secret between Sir Roland Wilson and the International Monetary Fund? Did the Treasurer know all about them. It was only after he was questioned about it here that he was prepared to divulge any information at all.

What does this statement mean? First, it means that Australia has lost, as I said, a considerable part of her own economic sovereignty, and to prove that assertion I propose to quote from certain official documents. First I have “ The International Monetary Fund: Its Present Role and Future Prospects”. On page 18, this official publication of the fund says -

Requests for drawing beyond these limits requires substantial justification.

Requests are not just taken as a matter of course. Contrast that with the following statement by the Treasurer -

As I said in my earlier announcement, these transactions were arranged, not because of any real anxiety on the part of the Government that out first line reserves will prove insufficient, but because the normal seasonal trend of our overseas business will produce extra calls on our reserves.

According to the Treasurer, it is just a normal i seasonal affair, nothing of any special importance, but the official publication of the Fund tells us that requests for drawing beyond these limits require substantial justification. The 1952 annual report of the fund shows just how the fund treats the situation. On page 87, appendix I., it says -

On the contrary, the task of the Fund is to help members that need temporary help and requests should be expected from members that are in trouble in greater or lesser degree.

The fund expects to receive requests from members who are in trouble in greater or lesser degree! Australia is not in a simple minor seasonal situation; Australia clearly is in trouble to greater or lesser degree.

Having got into trouble to greater or lesser degree, to what have we committed ourselves? The Treasurer and the Minister for Labour and National Service sought to convey that we had committed ourselves to nothing at all. Again I quote from the same International Monetary Fund document to which I have just referred. On page 18, the following reference is made to a loan undertaken by the British Government in 1956 -

Lastly, the events of December, 1956, established the precedent that sovereign states, and even the very important ones, have to be prepared to agree to conditions when obtaining large-scale access to the Fund’s resources.

Have to be prepared to agree to conditions! There is no option in this. It says that they have to be prepared to agree to conditions. It goes on to say - . . assistance obtained by the United Kingdom in December 19S6 was granted on the basis of a declaration by the Britsh Government that strict financial and credit policies would be pursued; that quantitative restrictions would not be reimposed, and that the value of the pound sterling would be maintained.

And those are the things that we have agreed to do. We have agreed to maintain strict financial credit policies until 1962. The contradiction by the Minister for Labour and National Service of the statement by the Leader of the Opposition (Mr. Calwell) can be completely refuted by reference to the documents themselves. In the memorandum submitted by Sir Roland Wilson to the International Monetary Fund we find this statement -

Seasonal needs apart, however, the monetary authorities intend to keep a firm control over the liquidity position of the banks with a view to limiting during the year ending June 1962 the amount of outstanding bank advances-

They have undertaken to do that.

Mr Killen:

– Be fair! Read on.

Mr CAIRNS:

– to a total that would be consistent with the maintenance of financial stability.

And the financial stability needed is one that is consistent with such a level of internal demand that your imports will not get out of balance. Of course the Government has agreed to maintain that! Does any one suggest that the Government will not be maintaining these credit restrictions until June, 1962? Of course not!

What are the difficulties underlying this condition? First, there is the difficulty of imports. The Leader of the Opposition pointed out that, despite the restrictions that the Government has applied up to date, it has failed to deal with the situation. He pointed out that the daily rate of imports during April was the highest in our history. If we are to maintain the kind of financial stability to which my interjectors have been referring by implication, these credit restrictions will have to be carried on still further to achieve the result desired by them.

The present situation has come about because the Government has sought by every conceivable means to raise money in every part of the world and has had to turn now to the International Monetary Fund.

Basically, the position has arisen because the Government has refused to impose import controls. A decision has to be made between internal stability and external stability. That it is impossible to maintain a condition of financial stability in a country like this without either unemployment or import controls is not only my opinion; that it is fundamental that Australia is faced with those alternatives is also the opinion of Professor P. H. Karmel, as is clear from a statement by him in the March, 1961, issue of the “Economic Record “ which reads at page11 -

It is difficult to avoid the conclusion that, at full employment (defined by, say, one to two per cent. statistical unemployment), the demand for imports is beyond the economy’s capacity to finance.

Professor Karmel is of the opinion, as I am, that, it would be beyond the capacity of the Australian economy to finance the level of imports that would come under conditions of full employment. Therefore, if we are to maintain the kind of economic stability which the Government has undertaken to maintain, some degree of unemployment must be maintained.

Australia’s economic history has always been one of struggle between two conflicting powers - the international banking interests on the one hand and the Australian workers and manufacturers on the other. The Australian primary producers and commercial interests have always sided with the international financiers and bankers on every issue. It is no accident that the Minister for Trade (Mr. McEwen), a Country Party Minister in close association with international financiers and commercial interests, sides with policies of this sort. It has always been the aim of the international financiers to secure stable exchange rates, to secure an affluency in overseas funds in order to ensure ready settlement of all overseas transactions, plenty of scope for the payment of high dividends and interest rates to overseas lenders, and free imports. Any instability, any shortage of funds, must be internal. The people living inside the borrowing country must suffer the shortage of funds and the instability. From this point of view, external financial conditions are primary. They are taken as the determinant of all conditions. Internal conditions are dependent upon these things. If external conditions dictate unemployment and fluctuations, then unemployment and fluctuations there will be.

On the other hand, throughout Australia’s history, there has been an attempt to secure internal stability, rapid economic progress and full employment. Therefore, external funds must fluctuate, and if they fluctuate too far, they must be controlled. From this point of view, therefore, internal conditions are primary. They are not dependent on external conditions. Those are the alternatives that face the people of Australia. The importance of this document lies in the fact that after thirteen years of committal to a policy of internal stability and relatively rapid economic development under conditions of full employment, the Commonwealth Government now has given notice that it is departing from that policy; that it has accepted the conditions laid down now by the International Monetary Fund and, over the centuries, by the international financiers, and that it has sold out to the money interests in other parts of the world.

What does this mean? It means that the level of demand in Australia must be sufficiently low to ensure that imports are not high enough to get our balance of pay ments into difficulties. What degree ot unemployment is necessary for this? Today, we have perhaps 3 per cent, unemployment and our imports are still rising. It is evident that 3 per cent, is not sufficient. The Leader of the Opposition (Mr. Calwell) has made his case that economic conditions have not changed in Australia to satisfy these criteria. What criteria are required? On page 12 of the article to which I have referred, Professor Karmel states -

The net effect of these adjustments is a rundown of reserves by about £150,000,000.

In other words, under conditions of relatively full employment we have a normal yearly deficiency of £150,000,000 - not in any one year, but in every year. Therefore, to prevent that run-down of £150,000,000, a certain level of unemployment is necessary. What is the level? On page 13 of the article to which I have referred, Professor Karmel makes certain statements which I commit for the consideration of the Government and the people of Australia. In setting out the percentage of unemployment that is necessary to achieve this end, he states -

If excessive importation were due entirely to internal inflationary conditions, deflation would be an appropriate remedy. If a fundamental disequilibrium exists, deflation, although undoubtedly a possibly remedy, is hardly an acceptable one.

Hardly acceptable to any one but this Government which has accepted it! The article continues -

On the basis of the third column in the above table, it would be necessary to reduce the demand for imports by about £150,000,000 to achieve balance. This would involve a cut in aggregate expenditure of as little as £150,000,000 below the full employment level, only if the marginal propensity to import was unity, at levels of income approaching (but not at) full employment. If the marginal propensity was one-third (which seems a reasonable figure to take), aggregate expenditure would have to be reduced by £450,000,000 or about seven per cent, of gross national product. Thus the remedy of deflation might require, say, five to seven per cent, unemployment, and, apart possibly from some favourable reaction on costs and export supplies, it would do little to produce the structural change necessary to foster the relative long-term supply of exports and restrain the relative long-term demand for imports.

Putting that into simpler language, it means that if the Government is to protect its balance of payments by the method of deflation which it has chosen, and undertaken to use for the benefit of the International Monetary Fund, it will have to achieve a fall in the gross national product amounting to £450,000,000, which involves a 5 to 7 per cent, level of unemployment.

Therefore, the Government has served notice on the people of Australia that this is the kind of economic future that is before us. What does this mean? It means not only as much as 7 per cent, unemployment before the changes have run their course but that claims for aid for education will continue to be rejected. It means that the people who have campaigned for increased Commonwealth aid for education will be disappointed when the 1961 Budget is presented. It means that there will be no change in social services. It means that those people who believe, and have believed for ten years, that pensions and child endowment should be increased, will be disappointed in 1961. It means that motorists’ associations, which have been publishing material for the last five or six years in the hope that more money will be spent on our roads, will be disappointed. It means that output will fall still further. It means that the textile industry, in which to-day we have perhaps 25 per cent, unemployment and which is working at 30 per cent, below maximum capacity - in other words, the industry is functioning at about the 45 per cent, level - will find itself in an even more serious plight. If these conditions continue we shall see the end of the Australian textile industry.

It means also that the Government will continue to impose a wage freeze in the year to come. It means that the Government will appear before the Commonwealth Conciliation and Arbitration Commission and every other tribunal to oppose increases not only in the basic wage but also in the margins of white-collar workers. It means that the white-collar workers who have campaigned all over Australia for an increase in margins will be disappointed during the next twelve months. It means that this is not Australia unlimited but Australia limited by the demands of the international financiers. Sir Otto Niemeyer moves to-day, not in his own person but in the person of the Secretary to the Treasury, Sir Roland Wilson. It means that full employment is no longer the accepted policy of this country, but that unemployment is a permanent feature of our economy. During the next twelve months unemployment may well rise to 7 per cent. If it does not, the Government’s economic policy will not succeed in maintaining the kind of financial stability that will be necessary for it to meet its overseas commitments. It means that the rapid rate of economic development in Australia will slow up. It means that this capitalist economy, which even at its best performance was a considerable degree behind economies organized on a socialist basis, will fall still further behind. It means that stagnation will become a reality, for that is the chosen course of the Menzies Government.

During the course of this speech in which I have outlined criticisms of the Government’s financial policy I have heard a number of interjections. I invite those who have interjected, or those who will follow me in the debate, to attempt to contradict any of the points that I have made. The funda mental points are these. The Government has chosen to free imports and to allow an unrestricted flow of goods into the country. This means that there must be applied in Australia an economic policy that will so reduce demand for goods, including imports, that imports will go down to a level at which we will be able to pay for them from the proceeds of our exports. This means in turn that the level of unemployment must rise to reduce our effective demand. Professor Karmel, the professor of economics in Adelaide, stated that there must be a fall of at least £450,000,000 every year, and that this would be associated with a level of unemployment of perhaps 7 per cent. I have pointed out that this involves a restrictive and narrow policy and that the necessary expenditure for social services and other matters cannot be met. I have suggested that this means that the Government will apply a wage-freeze policy in every arbitration tribunal in Australia. I have suggested that the document which was read by the Treasurer in this Parliament on 4th May last is an official statement that Australia no longer is committed to a policy of full employment but is committed to a level of unemployment sufficient to reduce our effective demand to meet our overseas commitments, and that this has been done at the behest of the international financiers.

Australia has now reached a level of conservative and restrictive policy that has not been seen in this country for 25 or 30 years. We have gone back to the principles of the 1930’s, and the degree to which this will go on depends on the unwillingness of the Australian people to accept this condition. I believe that they will not accept it and that if this condition is maintained for the rest of the year the Australian people will not accept unemployment, will not accept the retarded economic development that will result, and will not accept the decline and disappearance of businesses. I am quite sure that if this condition is maintained for the rest of this year, the Australian people will express their opinion accordingly and will not be diverted from the basic issues by any incidental and unimportant matters. I believe that the Government will not succeed in getting away with this restrictive, conservative and backward policy which returns to the principles of the nineteenth century.

Mr KILLEN:
Moreton

.- Mr. Deputy Speaker, the Leader of the Opposition (Mr. Calwell) made a rather long speech to the House this evening. It would have been a far better speech if it had been half as long, and which half of his speech the honorable gentleman omitted would not have mattered very greatly. He accused the Government of doctrinaire thinking. This intrigues me, because the Leader of the Opposition was followed on his side of the House by the most dedicated doctrinaire socialist in the federal Parliament. I refer to the honorable member for Yarra (Mr. Cairns), who, in a most disarming speech and with touching modesty, said that if anybody on this side of the chamber who followed him could refute even a tiny part of what the honorable member had said, that person would be very clever. That is an extraordinary challenge to throw down, because, if one looks at the speech made by the honorable member, one finds that, metaphorically speaking, one could drive a fleet of council buses through it. I hope that I can drive a few of the buses through his arguments in the few minutes that are available to me this evening.

First of all. Sir, the honorable member accused the Government of adopting a wage-freeze policy. This is a significant sort of thing to say, because what the honorable gentleman regards as a wage-freeze policy is interpreted by sensible people as merely the presentation of evidence before the appropriate tribunal. So the honorable member says implicitly, if not explicitly, that the Commonwealth Conciliation and Arbitration Commission, which determines wages in this country federally, will bow to government direction. I think that that is a monstrous charge to level at those who sit on the commission and determine these matters.

Then the honorable member made a fleeting reference to the Government’s credit policies. He said that the Government is committed to a hard, unyielding credit policy, or words to that effect, and he mentioned the name of Sir Otto Niemeyer. I remind the honorable gentleman that it was a Labour government which invited Sir Otto Niemeyer to this country together with Professor Gregory during the depression, and the most restrictive credit policy every pursued by any government in the whole 60 years of federation was adopted by a Labour government during the depression years. So when the honorable member talks about the ghost of Sir Otto Niemeyer, I say to him that he ignores the substance and sees things in the shadow, because, if he has any intellectual honesty about these things, he is bound to admit the fact that Sir Otto Niemeyer and Professor Gregory came to this country during the depression years and advised the Labour government of the day, and that what was known as the Premiers’ Plan was accepted at the time as a result. That plan was, in the broad, propounded by these two gentlemen, both of whom, interestingly enough, Sir, had a long association with the London School of Economics, which has produced more doctrinaire socialists compared to the total number of its undergraduates than has any other university in the world.

The honorable member for Yarra turned next to what he regarded as being the substance of this debate - the Governmeni’s transaction with the International Monetary Fund. With a touch of remorse in his voice, he said: “ Ah! You are abandoning our sovereignty.” This has been said by three or four Opposition members. For the purposes of my argument, let me concede that this was the effect of that transaction. But who was it that ratified the Bretton Woods Agreement? It was a Labour Government led by the late Mr. Chifley. And Australia’s participation in the International Monetary Fund was voted for by the present Leader of the Opposition, who was at that time a member of this House and a Minister in the Chifley Government.

Mr Uren:

– There was more to the International Monetary Fund than that, and the honorable member knows it.

Mr DEPUTY SPEAKER:

– Order! The honorable member should not interject.

Mr Uren:

– The honorable member knows that there was more to the fund than that.

Mr DEPUTY SPEAKER:

-Order! The honorable member for Reid should maintain order. If he continues to interject, I shall be forced to name him.

Mr KILLEN:

- Mr. Chifley, who was at the time Prime Minister and Treasurer, in his second-reading speech on the International Monetary Agreements Bill 1947, said -

Like ourselves, the United Kingdom Government is pursuing a full employment policy, and, as a further and final safeguard, the United Kingdom Government sought and obtained from the fund a ruling that “ steps necessary to protect a member country from chronic or persistent unemployment arising from pressure upon its balance of payments are among the measures necessary to correct a fundamental disequilibrium “.

Mr. Chifley went on to say later

Further, in return for the exchange undertakings given, a member is assured of assistance from the fund in time of need . . .

I thick that that language is perfectly expilicit. So, if there is any surrender of national sovereignty involved in the recent transaction wilh the International Monetary Fund, should not the charge be levelled al the Labour Government that it laid the basis for this in 1947? The significant thing that one notices on reading the debate on the International Monetary Agreements Bill 1947 is how few Labour members spoke. There seemed to be a touch of shyness about them. I have never known such strange inarticulateness. But one of the more loquacious members in this Parliament who was then a member of this House - the present honorable member for Grayndler (Mr. Daly) - had something to say about the bill. His words of wisdom, as he would modestly describe them, were - r cannot see that Australia can lose anything by becoming a member of the International Monetary Fund, but I can see that we may lose a great deal if we do not link up with it.

How does the honorable member for Yarra like these words? It was the ratification of the Bretton Woods Agreement in 1947 that has enabled this Government to draw on the International Monetary Fund. And not only this Government has drawn o~ the fund. Previous governments, also, have drawn on the fund. The Labour Government led by Mr. Chifley drew on it. On 20th October, 1949, announcing that borrowing in a statement made to this House, Mr. Chifley said -

Various possibilities were considered, but the Government finally decided that, in all the circumstances, the most appropriate course would be to purchase from the International. Monetary Fund the dollars required to meet a proportion of our current commitments.

He went on later to say -

The position will be kept under close review by the Government and. the question of further drawings will be considered as necessary.

If the charge made by the honorable member for Yarra and by the Leader of the Opposition that this Government is abandoning its sovereignty to the International Monetary Fund is valid, so was there an abandonment of sovereignty in 1947 when the Labour Government ratified the Bretton Woods Agreement, and so was there an abandonment of sovereignty in 1949 when the Labour Government drew on the fund.

The honorable member for Yarra has gone out of his way this evening in a most incautious fashion to chastise the Minister for Labour and National Service (Mr. McMahon) and to belittle the Minister’s observations. The Minister, with his great respect for technical accuracy, described the transaction with the International Monetary Fund not as a loan but as a purchase. The honorable member for Yarra said, “ Oh, no, this is a loan “. Well, let him mark the words of one who at one time led the Labour Party and presided over’ a Labour government. I refer again to Mr. Chifley, who said that a drawing from the fund is not a loan in the ordinary sense of the term. He went on to describe the mechanism of the fund. This is, I suppose, history in a sense; but it is important history because the relevance of the arguments used by the Leader of the Opposition and those who speak for him must be assessed against the background of the past. There has always been something of a “ thing “ in the minds of Labour members of the Parliament regarding loans. It is significant, for example, to take one’s mind back to the dollar loan that the Government secured in 1952. Listen to the words of wisdom of that greying, elderly member of this House, the honorable member for East Sydney (Mr. Ward), regarding, the loan. He said -

The Government has set. out to destroy Australian secondary industry and it is proposing to bring into this country by means of overseas commitments a large quantity of equipment.

That was said by the honorable member for. East Sydney on 19th September, 1952.

On the same day that bold centurion, the honorable member for Parkes (Mr Haylen), had this to say -

I do not think that any sane–

I repeat the word “ sane “ -

Australian considers that there is any grave danger in borrowing dollars at this particular time.

Was he by implication accusing the honorable member for East Sydney of being unbalanced or, worse still, insane? Not only did the honorable member for Parkes say that the honorable member for East Sydney was wrong, but he also said that he could not see that any sane Australian would consider that there was any grave danger in borrowing dollars at that time. Although on occasions, no doubt, I have said some harsh or moderately harsh things about the honorable member for East Sydney, I have never said that he was insane.

It is a great pity that the Treasurer, in his statement to this House on Thursday last, proceeded from the assumption, first, that he was dealing with intelligent, rational individuals in the Opposition in this Parliament, and secondly, that he was dealing with a community tolerably well informed regarding the mechanics of the International Monetary Fund. Unhappily, on both counts the Treasurer’s assumption was wrong. To judge from the arguments that have been used by the Opposition this evening it was a display of the utmost graciousness on the Treasurer’s part to even consider that the Opposition was rational and intelligent. Members of the Opposition have displayed neither rationality nor intelligence this evening. Judging from some of the remarks that have been made outside this House regarding the transaction under debate, the degree of knowledge concerning the International Monetary Fund is practically nil.

What the honorable member for Yarra did this evening was to take hold of the Treasurer’s statement and the memorandum, and the various letters that have passed between the Secretary to the Treasury, Sir Roland Wilson, and Mr. Jacobson of the International Monetary Fund and, as has been typical of many people in this House, consider them in utter isolation. He did not bother to pause to consider them with a relevance to the International Monetary Fund. With the utmost respect to all the critics of this transaction, I submit, Mr. Deputy Speaker, that it is completely futile to try to understand the transaction unless you take into account the articles of the International Monetary Fund agreement. To take a portion of a policy memorandum and twist and distort it is a gross and, to my mind, an unforgivable form of intellectual dishonesty.

What is the effect of the agreement? As I say. for better or worse this agreement was ratified under a Labour government. Article 1 of the articles of agreement of the International Monetary Fund sets out the purposes of the fund, and no person could conscientiously come to the conclusion that the purposes of the fund postulate some sinister policy either for the present or the future. Indeed, paragraph (v) or article 1 states that one of the purposes of the fund is -

To give confidence to members by making the Fund’s resources available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.

Again for the benefit of the honorable member for Yarra, who hasleft the chamber, I notice, let me say that paragraph (ii) states another purpose of the fund as -

To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.

Is there anything wrong with those two purposes? I should doubt very much whether there was any individual in this Parliament who would describe the two purposes I have recited as wrong.

Now we come to this transaction - the purchase of the equivalent of £78,000,000 Australian from the International Monetary Fund. The fund understandably wants something in the nature of a broad undertaking. We are not tied to that, we are not bound to it, we are not handcuffed to it. We are not committed to it in such a way that, as the honorable member for Yarra claimed this evening, this country’s sovereignty is brought into jeopardy or, worse still, abandoned. That is drivel of the worst order. Understandably, the International Monetary Fund wants some indication that it is dealing with rational, logical and responsible individuals. What is the fact? This country has purchased from the International Monetary Fund the equivalent of £78,000,000 Australian in foreign currency. What if a government, having done this, embarks on a mischievous and irresponsible financial policy? What sort of security has the International Monetary Fund in those circumstances? What about the other members of the fund? These are not the international financiers to which the honorable member for Yarra so sneeringly referred. He talked nonsense. The honorable member is as wide away from the mark as his leader is in his prophecies. As I interpret the policy statement, the fund wants a broad indication of policy to be followed during the substantial period that the transaction is in force. The honorable member for Yarra started to read one of the critical paragraphs in the Treasury memorandum, and with typical courtesy I said to him, “ Look here, read the rest of it “. I doubt very much whether he would have read the rest of it had he not been prodded into doing so. Let us look at the critical words in this paragraph. The statement about firm control over the liquidity position of the banks - that is, up to the end of June, 1962 - is completely governed by the words “ consistent with the maintenance of financial stability “. When the honorable gentleman was confronted with those words, he tried to twist their meaning. He is like the Marxists. He has a dialect of his own, and sees things in a different way from those who normally give to the words “ consistent with the maintenance of financial stability “ an ordinary, sensible and usual interpretation. If the honorable member for Yarra is right in the interpretation he has given to them, and if this country did follow the policy he suggested, it would mean that we would be breaching Article 1 of the International Monetary Fund agreement, because Article 1, as I recited it to the House, states in clear, explicit language that it is to be the aim of every member of the fund to maintain high levels of employment.

Before I leave the International Monetary Fund statement, I should like to say that, for my part, I see absolutely nothing in the policy memorandum nor in any of the documents that could even vaguely bring one to the conclusion reached by the Leader of the Opposition. One is entitled to doubt that the Leader of the Opposition has read the International Monetary Fund agreement because no person could read the agreement and come to the stupid conclusion to which he came in the House this evening.

With regard to imports, the honorable member for Yarra made an incredible statement which he based on the authority of Professor Karmel. He said that we were faced with the alternatives of unemployment and import restrictions. This is a completely false dichotomy. If the honorable member is to base his argument on the authority of one profesor of economics I am entitled to base a rebuttal on the authority of one professor of economics. Professor Cochrane of the University of Melbourne - the honorable member’s own professor 1 believe - takes a diametrically opposite view to that of the honorable member and of Professor Karmel whose authority the honorable member invoked this evening with the same love and attention as he invokes his own authority. lt is nonsense of the first order to say that we are faced either with import restrictions or with unemployment. Let us assume that we had a normal season in the sense that prices for our commodities overseas were at about the 1953 level. If we had our present volume of expotts we would not have an unfavourable balance of payments in those circumstances. Under those conditions, could any honorable member opposite justify import restrictions on the basis that we had a favourable balance of payments? And if we had a favourable balance of payments, am I to understand that what the honorable member for Yarra said would still apply - that we would have either unemployment or import restrictions?

The great tragedy of import restrictions is that thousands of people came to accept them as a form of tariff protection. This is quite wrong. Only a short time ago the former leader of the Chamber of Manufactures in Queensland accosted me on the matter of import licensing and said that we should bring it back. I said, “You know, quite a number of members of your chamber have come to regard import licensing as a form of tariff protection.” Without batting an eyelid, he said to me, “ It is the best form of tariff protection we have ever had.” There is something fundamentally dishonest in this approach.

Many thousands of people in industry have cutivated this idea, nurtured it and continued to feed it. The entire Australian community has come to regard import licensing as quite respectable, as though it should flow on like the brook and nevestop. Can any honorable member say with a clear conscience that import licensing never produced any inequities, never gave rise to any administrative injustice? Can any member say that he was not aware of any racket - the buying and selling of import licences and the adding of the extra cost to the price of the goods? Clearly in the face of rational, readily available argument stands the argument of the honorable member for Yarra. It is a grievously false argument which amounts to utter humbug.

What the honorable gentleman and his leader failed to say to-night was that the basic economic problem of this country stems from development. Unless we are prepared to continue to develop this country, then, in the plainest physical sense, we will not be allowed to hold this country. We are up against a world background of massive unrest, of great distress, great poverty and hunger. Do not imagine that we can hold this country unless we are prepared to develop it. Because the Government, for the last twelve years, has been possessed with the idea of building an Australia for the future, we have run into these difficulties. They are not insoluble. They can be solved, but they will never be solved by miserable, little minds like that of the Leader of the Opposition, who continually cries poor and who would make a star turn at any gathering of morticians. This country has no room for pessimism, but it has a great call for the warming, stimulating element of optimism.

Mr REYNOLDS:
Barton

.- I think that the Australian public has been treated to a series of most unconvincing statements to-night by Government supporters. The honorable member for Moreton (Mr. Killen), with his histrionics, his debating style, and his use of eloquent language and synthetic enthusiasm, would probably be amongst the least convincing of all. Let me refer to a few examples of the specious logic of the honorable member for Moreton. Early in his speech, he referred to the Scullin Government. But that

Labour Government was in office for only about two years, sandwiched in between fourteen years of anti-Labour government which preceded it and approximately eight years of anti-Labour government which followed it. It was a government which was only half in power. It was faced by a hostile Senate which rejected its policy. It was forced to implement, not its own policy but the policy of an Upper House of the same political kidney as this Government. That is the kind of gross misrepresentation that has been paraded here to-night. The Scullin Government wanted to borrow a meagre £18,000,000 for public works in order to put thousands of unemployed back to work. It was denied the right to do that because of the anti-Labour party that was in power in the Upper House of the Parliament.

The honorable member for Moreton also misrepresented the Labour Party’s ratification of the Bretton Woods Agreement in 1947. When the Labour Party ratified that agreement it did not envisage that a government, because of its stupid mistakes, would have to borrow overseas. The Labour Government did borrow from the International Monetary Fund in 1949. Everybody will remember the reason why. It was not due to the general position of our overseas balances. It was due to the dollar shortage which confronted this country at that time.

Mr Duthie:

– It affected the whole of the sterling area.

Mr REYNOLDS:

– Yes. It was for that reason that Mr. Chifley went to the International Monetary Fund, not because of the general position of our balance of payments. We all remember how the Chifley Government built up the overseas reserves of this country. In 1949 Mr. Chifley borrowed, not £78,000,000, but a mere £9,000,000, for the very reasons that I have outlined. The honorable member for Moreton (Mr. Killen) did not go on to say that in 1952 when the Menzies Government squandered our overseas balances and put people out of employment and put businesses on the run, it had a similar experience to that which it is having to-day. It had to borrow 30,000,000 dollars on that occasion. The honorable member also did not mention that in 1956 the rules of the International Monetary Fund were changed and somewhat tightened and that the terms which Australia is obliged to accept to-day are harsher and more restrictive of our economic sovereignty than they were before. That is why the Labour Party to-day warns the Australian people that this Government has got down to the bottom of the barrel and is looking to the lower echelons of its resources. The Australian people and the business people of this community are justifiably apprehensive about what will happen in the future.

I am reminded of another fatuous theory by the Minister for Labour and National Service (Mr. McMahon). He asked, “ What do we want these overseas funds for? We do not want to stack up funds overseas just to have them there “. Of course we do not, but as a country engaged in international trade and very dependent on our primary industries for earning capacity, we know very well what could happen to this country if the next two years were years of drought or flood which decreased our ability to export. We know what a position this country would be in. We have had an unprecedentedly good run of seasons, but the time could run out. Let us hope it does not, but what would be the position of our comparatively slender reserves, when we are actually dipping into the second line of reserves and are asking for an additional standby loan of £45,000,000? We are entitled to ask the Government why it is drawing on those reserves. Why is it dipping into them? What will be the position if the Government, as it stubbornly asserts it will, takes no action to prevent this country from wasting its overseas reserves on goods that we do not need? What would be the position should we run into periods of climatic calamity, fire or flood or any of the various calamities which have overtaken this country on previous occasions? Suppose that prices continue to fall - what will be the position then? The honorable member for Moreton, like the rest of the Government’s supporters, lives in a world of make believe. The simple, down-to-earth facts of life are that prices are not what they were. That is the world we have to live in and that is the kind of money which we have to raise in the international market. We have the money from the prices we are receiving to-day and not from the prices we would like to be receiving; and there is a world of difference between those two situations.

The Government is stubbornly and arrogantly sticking to its point that it will go on bringing into this country many goods that we do not need. Reading the newspapers only the other day, I noticed that luxury motor boats are being imported from Hong Kong. They are produced by American interests in Hong Kong and are being introduced into this country. In any mercery shop one finds not locally produced ties but Italian and American produced. The shops are cluttered up with overseas imports such as cameras, transistor radios and all the rest of these things. They are all very nice, but it is very important that this country should be able to pay for them and that the purchase of these imports should not mean that some unfortunate Australian family will be thrown out of work, or that some businessman who has built up his business and has helped to build up this country should be forced to close down. I have in my electorate, like every honorable member, men who, with prudence, diligence and foresight have re-invested most of the profits they were making in recent years and have tried to build up their industry. Some of them have been exporting.

A sporting goods manufacturer in my electorate comes to mind. His business is not the biggest, but it is a sizeable one. He has been building up his investment and reinvesting his profit, depriving himself of the right to consume his profit. He reinvested and expanded his industry, which was exporting goods from this country and then suddenly, within a couple of months, his turnover was halved. His unit cost of production must go up. Everybody knows that large-scale production is more economic than small-scale production. Here is a man whose cost of production has now gone up. but he still pays the same rates on his property and many of the same fixed overhead costs, even though he is able to produce only half as much as he produced before. Another firm came to my notice the other day. It was given credit by the bank when it was trying to build up its production and its capital assets. It was no sooner operating than along came these cruel credit restrictions which have paralysed that business and made it impossible for it to get a bank overdraft with which to carry on. That is the utter frustration that people in the community are feeling to-day. And we wonder why they are so upset and unhappy about this Government’s sudden changes in policy.

The Government made a colossal mistake in February, 1960, and it is not prepared to sacrifice its political face in order to retrieve the position which is to-day increasing the stream of unemployment in the community and the number of businesses that are going broke. It is not prepared to establish financial and economic confidence in the community. It would rather save its political face - and I do not believe it is even doing that - by stubbornly sticking to its policy of allowing imports to come into this country rather than take measures which would save the jobs of thousands of Australians who are now being put out of work and save many businesses that are being sent on the rocks. Many small businessmen, unable to get the share capital that big businesses can get, are being forced to sell out to big business to-day. The small businessman is the one who goes on the rocks more quickly. It might be a small builder, for instance. There are lots of them in every community. In my social engagements I meet many of these men who have gone out of business, men who have had to sell out and become the employee of some larger enterprise in the community. That is the unfortunate position that exists in the community to-day.

I want to refer now to some of the things which have occurred in the community as the result of the Government’s policy of refusal to abandon free imports and to abandon the present credit restriction policy which is supposed to counteract the freedom of imports. The Government allows imports to come in without restriction but, at the same time, a financial restriction on the Australian economy in order to cut down the people’s freedom to import all the goods that the 1960 measures permitted. That is the utter stupidity of the whole position, and as a result, there has been the depression of business which I have just described. One can parade figures and statistics. It is a precise and laudable exercise, but people are more impressed by their own observations in the community in which they move. For my part, I have met in recent weeks, unfortunately, a number of businessmen who have been, put into the financial plight I have described. In my office in the electorate of Barton,, which is situated in the same building as the Commonwealth Employment Office which services the whole of the Illawarra region, I have seen a stream of unemployed people in the last few weeks. The same people come back week after week trying to get a job. Some of these people even have to demean themselves and ask for a loan of 10s. so that they can buy something to take home. The most that any family can get by way of social services, if the bread-winner is unemployed, is. £6 2s. 6d. a week. That is the maximum amount, no matter whether there is one child or ten children in the family. The most that can be obtained by way of unemployment benefit is £6 2s. 6d. a week, and provision is made for another £2 to be received by way of income before the unemployment benefit is reduced.

These are the desperate straits in which people find, themselves. It is all very well tocite statistics about the matter, but there is nothing like the feel of the human problem that one gets by being in the community and seeing what is happening. Thisis not a sob story, and I do not want it tobe taken as such. I want the Government to be realistic and to realize what so many people in the financial circles of this country have realized for a long time, that we cannot afford to allow imports to pour intoAustralia without restriction. The difficulty will not be overcome by the severe financial restrictions which this Government has imposed on the economy, and which, according to statements of Government spokesmen themselves, will be retained until 1962 at least. My bet is that the Government will stubbornly stick to this policy until it has got the election over, hoping that it can get back to office. Then, if it is returned, import restrictions will come on. That is my bet. In an election year the Government feels that it cannot be honest with the Australian people and revoke its stated policy.

There is depression in all kinds of business circles. People have invested their funds and are now seeing the value of them whittled away simply because the unrestricted floods of imports are crowding out locally produced goods. The unfortunate fact is that, although the Government told us that these imports would be allowed to come here so that local prices would be reduced, that has simply not happened. The consumer price index for the twelve months ended December, I960, showed an increase of 4.5 per cent, over the figure for 1959, while the 1959 figure was only 2 per cent, higher than that for the previous year. In the last financial year we had these imports flowing into the country for almost the full year, but instead of prices going down, they went up. The consumer price index shows that that is what happened. The increase was almost double the increase that had occurred in the previous year.

In the face of all these facts, the Government, as at least one other speaker mentioned, is trying to maintain a wage-freeze policy. Ask the public servants their view about this. The vast majority of them have no opportunity of getting the benefits of overtime that are available to people in other walks of life. They are in a pretty desperate position. It is no wonder that they have come out and issued a strong challenge to the Government to do something about the position in which they now find themselves, and have threatened that if the Government does not do so it will have a block vote registered against it, by way of protest, at the election.

Of course the Government did not have the courage to do this year what it did last year, when it went to the Conciliation and Arbitration Commission and actively tried to prevent a wage increase, and did so with signal success. This year there would have been more justification, according to the Government’s lights, in taking the same action to prevent inflation. But it did not do so. It merely supplied information to the commission, or so it said. This is the kind of political dishonesty of which I accuse the Government.

The import boom is continuing at the expense of local industry. Local industry is being affected most. Credit restrictions are not preventing the flow of imports, which has hardly gone down. What has gone down is local production. Our local manufacturers are the ones who are taking the knock. Overseas goods have continued to be imported at a steady rate, while local industry has suffered. Yet the Government registers surprise and indignation when the

Chambers of Manufactures tell it what they think of its policy. Of course the Government is working on behalf of the big commercial interests, while our local industries are suffering. It is not only the employee who is being affected; the local businessman is also being hit.

The Government now says that it will siphon a little money into the building industry. The number of houses and flats being constructed has decreased by 30 per cent., and the Government says, “ There is no need to worry; next month we will release an extra few millions “. In the meantime, of course, people have gone out of business, contracts have been lost, and the business community generally has suffered disclocation. The person who has had his business ruined receives no comfort from the statement that the position will improve next month. In any case, the problem is not capable of solution by the little readjustments that the Government makes every now and again. The quarterly review of the Australia and New Zealand Bank Limited for April, 1961, had this to say -

General credit restrictions have proved relatively ineffective in forcing a rapid check to imports. . . .

The Government’s policy has checked the upward surge in the economy. The danger now is that there will be a swing too far the other way. . . .

Having achieved their immediate objective, the government would be wise to recognize the existence of a balance of payments crisis, and introduce suitable measures to curb imports without further delay.

I ask honorable members to note particularly the last paragraph.

That is a journal of the Australia and New Zealand Bank, not of the Labour Party or of any kind of radical organization. It is a statement made by a financial institution the views of which are normally completely in line with those of the Government.

The simple fact is that since June last our overseas reserves have gone down by £127,000,000. Retail sales have been tapering off. I have not time to give all the figures in this regard. In March, 1960, re:ail sales were 8.4 per cent, higher than they were twelve months earlier. At the end of the last year they were higher than at the same period twelve months earlier, but not by 8.4 per cent.; they were only 5.6 per cent, greater. The rate of increase had gone down by almost half. I have already mentioned that 30 per cent, fewer houses and flats are now being constructed. Of 34 branches of industrial production listed by the Commonwealth Bureau of Census and Statistics in March this year, nineteen showed declines over the last twelve months, as against fifteen that showed increases. Some of the industries showing declines were those concerned with gas, bricks, hardboard, floor coverings, domestic refrigerators, washing machines, radio sets, television sets, cotton yarn and woollen yarn. I have not time to mention them all.

The number of house approvals granted in the March quarter was 17,818, as against 25,813 in the March quarter last year. This showed a reduction of 30 per cent. I would like to have time to quote the remarks of the Victorian Liberal Minister for Housing, Mr. Petty, concerning people who live in ivory towers and quote statistics about how we are catching up with the housing lag. I would also like to quote in detail the remarks of Mr. Cox, a spokesman for the building industry in New South Wales, last Monday week, when he said that for builders connected with home building in New South Wales the position is worse than it was in depression days. That is strong language. Yet the Government wonders why there is this agitation in the community and why so many people are worrying about the position. These gentlemen I have mentioned are not politically biased against the Government. These condemnations . have been uttered by people who are not normally sympathetic to the Labour Party.

The great tragedy of the situation is that not only is our consumption going down, not only have we got unemployment, and not only are businesses going out of existence; but our national development, which the previous speaker had the temerity to refer to, is being severely prejudiced by the Government’s measures. I would like to touch on various aspects of national development, but I shall confine myself at the moment to a few remarks on one important aspect of it. I refer to education. In recent months we have found that the President of the United States of America has made 2,700,000,000 dollars available as federal aid for primary, secondary and technical education in that country. At the same time, the Australian Government rejects the almost universal demand of the Australian people that it should do something to lift up Australia’s educational system, so that it may be more in line with the needs of our economy and may be more capable of assisting in overcoming the difficulties that we are facing.

To-day I heard somebody talking about the inroads of automation and mechanization and asking how we could keep up with this scientific development. Whatever anybody may think about primary and secondary education, everybody must be able to appreciate how closely vocational education and technical education are connected with the economy of the country. The President of the United States of America, unlike this Government which washes its hands of any responsibility for these things despite its knowledge that the States are unable adequately to perform the task, had this to say -

To that end, I am requesting the Secretary of Health, Education and Welfare to convene an Advisory body drawn from the educational profession, labor industry and agriculture as well as the lay public, together with representation from the departments of Agriculture and Labor, to be charged with the responsibility of reviewing and evaluating the current national vocational education acts, and making recommendations for improving and redirecting the program.

In other words, the Federal Government of the United States, like other governments, is now recognizing that education is absolutely fundamental not only to the social and cultural development of the community - that is vastly important - but also to the economic development of the community. This young country, a continent with 10,000,000 people, with all its opportunities for development and expansion, is being retarded, and the great promise of Australia-unlimited is being denied by the Government’s refusal to be realistic and its rejection of requests that have been made to it by so many members of the community. There are other responsibilities, of course, in respect of roads, hospitals, water conservation and so on, that have been referred to.

This afternoon the Treasurer talked about what this Government has done in the past eleven years, more or less inviting us to forget about the present situation and to remember only the good things that the Government has done in that period. But some of its achievements in the past eleven years are not very creditable - the inflation that has overcome the country, the deterioration of the people’s savings that has occurred and the improper balance of payments that has forced the Government at this belated stage to act in the way that it has done. There is also the fact that no genuine plan of national development has existed during the time of this Government.

We have had the spectacle of Country Party members moving and supporting in this House a motion seeking decentralization. No outright condemnation of this Government’s policy over the last eleven years could have been more dramatic than that motion by the Country party in this House lamenting the absence of a proper policy of decentralization. It dealt with all the deficiencies of the policies of this Government. I do not know whether honorable members understood what they were doing, but they were parading for the Australian people, in a comprehensive motion on decentralization, a request for the Government to do something after almost twelve years in office.

I ask the Government to act in the name of humanity. Let it forget about saving political face. It will earn more respect from the people if it acknowledges that it made a colossal mistake twelve months ago when it decided to allow unrestricted imports into this country - imports that are causing severe hardship to Australian industry and misery to thousands of homes and families, as well as putting many worthwhile people out of business.

Mr HOLTEN:
Indi

.- I do not intend to enter into an argument with various Opposition speakers on the Government’s economic policy. I feel we have gone thoroughly into this matter over the past weeks. I should like to say, however, after listening to some honorable members of the Opposition who are all in favour of the re-imposition of import restrictions, that it has not always been the opinion of the Opposition that these restrictions are a good thing for the Australian community.

Mr Duthie:

– Selective import restrictions.

Mr HOLTEN:

– The honorable member for Wilmot mentions selective import restrictions. 1 think that he would be the first to agree that that opens up a very difficult subject and a wide field for argument among the various industries in Australia. I feel that the Government has handled the economic situation, which is a difficult one, with courage and wisdom. We are faced with the problem of imports, and we are not alone. It is a problem that is troubling many countries. We see in most trading countries a tendency to encourage competition by freeing imports. There is a move towards freer trade throughout the world. Industries are being encouraged to become competitive and to use their initiative in developing the export markets. When a situation arose here, mainly due to a fall in our export income from primary production, certain measures were necessary. No one can deny that the price of our primary products is a matter over which the Federal Government has very little, if any, control. We cannot dictate these prices. I feel, however, that some of our industries are affected rather too severely by the current restrictions.

I should like to bring to the notice of the House the plight of the textile industry. There are important textile mills in that great country town of Wangaratta which is in my electorate. It is a pity that the honorable member for Reid, who is interjecting, does not take the same interest in his electorate as I take in mine. When the Government’s economic measures were introduced they were designed for a certain purpose, but I feel that they have had some side effects that were not intended. In the textile industry, particularly in the country areas, mills have been forced to work short time and to dismiss some men. The remedy has been in the hands of these industries. They have put their case before officials of the Department of Trade and the department has been investigating the situation to ascertain the main cause of the difficulties and to determine what the Government can do to assist.

The fall in export income could be one of the reasons why the demand for the output of the textile industry has fallen. Obviously, if our wool cheque alone this year is reduced by something like £50,000,000 upon the previous year’s figure - which has been the case - it means that that amount of money is not circulating in the community. This could be one of the main causes of the difficulties facing this industry. On the other hand, there seems to be a difference of opinion among union secretaries and the industry itself whether credit restrictions are causing these difficulties. It is easy to question restrictions that have caused temporary difficulties in the textile industry; but it is the Government’s duty to assemble the information and sort it out and to reach a decision as quickly as possible if it can do something to assist the industry.

The Wangaratta woollen mills and the Bruck mills, as well as other branches of the textile industry, are most important to Australia. They are too important to be allowed to suffer serious damage. We find it hard enough to attract industry to country areas anyway. Surely, therefore, we “should be alert to make sure that industries that are established in country areas are assisted to the maximum extent possible by any government that holds office. I am certain that that will be done in this case. I feel that if it is possible for us to tell the banks that they must restrict credit to certain types of industries, such as importers and land and share speculators, it should be possible to act in the opposite direction so that credit will be released to industries that are of national importance and are affected unintentionally by certain economic measures. In country towns where the textile industries are principally established, the business people are adversely affected, and that is something we should consider also.

When import restrictions were lifted in February, 1960, provision was made for control of imports of textiles. This indicates that the Government must have considered that the textile industry could be in danger if imports were allowed to flow in too freely. There is no doubt that because of our cost structure, it is impossible for us to compete with certain overseas countries. It has been said by the Government that the textile industry is important to Australia and that it is wanted. If this is the case, urgent action is necessary. I know that departmental officers have been working hard on information that has been submitted to them and have required more information from time to time. I hope the Government will be in a position to announce a decision soon on what it can do to assist the industry.

Mr L R Johnson:

– What do you expect the Government to do?

Mr HOLTEN:

– The Government could look at credit and it could also ascertain whether imports from overseas countries are damaging this industry seriously. I notice that the Treasurer (Mr. Harold Holt) is in the chamber; I ask him to consider whether something can be done to help the textile industry.

Mr McIVOR:
Gellibrand

.- I was amazed to hear the honorable member for Indi (Mr. Holten) refer with some concern to the textile industry that is operating in his electorate. It is strange that the honorable member has never mentioned the large timber industry which also operates in his electorate. I refer to the timber activities that are conducted at Alexandra.

Mr Holten:

– I have had no complaint from that industry.

Mr McIVOR:

– You will; they are only waiting to complain to you. Timber milling is also conducted on the edge of the honorable member’s electorate at Myrtleford, Marysville and Narbethong. There is another strange thing about this credit squeeze. Long before it was introduced by this Government, the honorable member for Indi rose in this House and asked what the Government intended to do about the deterioration of the textile industry in Wangaratta, particularly the Bruck mills. In spite of his concern - I know it was genuine - when the credit squeeze was brought down he and all other supporters of the Government voted for it. They stand indicted for that. Nothing can ever eradicate that stain on their names so far as the industries are concerned.

Mr. Deputy Speaker, the subject that is being discussed most throughout the length and breadth of Australia is the credit squeeze imposed by the Government. It must seem an amazing circumstance to the people, therefore, that the Government is seeking an additional amount of £4,415,000 for defence and an additional £2,030,000 for the PostmasterGeneral’s Department. For the Postal

Department, of all departments, to need more finance in view of the profit it has made from higher postal and telephone charges is the essence of the three-card trick.

Mr Turnbull:

– The Postmaster-General’s Department’s profit goes into the Consolidated Revenue Fund, and it has to be drawn from there by legislation.

Mr McIVOR:

– In spite of the prattle from the honorable member for Mallee, 1 still question this proposed additional vote. Those who have lost both land and homes due to the credit squeeze must find an appropriation of £393,000 for further land acquisition a bitter pill to swallow. At one time during the Second World War there was a slogan “ Guns Before Butter “. To the people who desire land and homes, it must appear that the new slogan is “ Dromes Before Homes “.

This is an appropriation bill, and the debate gives honorable members an opportunity to question the reasons for the measure, in view of the statements that were made on behalf of the Government when the Budget was introduced. It is time now to consider some of the performances of the Government since the presentation of the Budget. When this Government was elected to office in 1949, it promised to put value back in the £1. That promise, like other promises, was never fulfilled. As one year succeeded another, we have witnessed a shrinkage of the purchasing power of the £1; in fact, the shrinkage is such that to-day almost 100,000 people living in the so-called prosperity regime of this Government are deprived of the privilege of even having £1 to spend.

The Government said that it would arrest inflation. That has been its catchcry since it took office. In that regard the Government has failed miserably. Its idea of arresting inflation has been to peg wages, discontinue the cost of living adjustment, and interfere in wage claims before the courts. In other words, arresting inflation means to this Government that it must be done at the expense of those who can least afford it, that is, the workers. At the opening of the Twenty-third Parliament of the Commonwealth on 7th March, the Ad ministrator’s Speech was delivered, and we were informed in one passage -

In the economic sphere, it remains the firm aim of the Government to maintain soundly based national expansion, immigration and full employment

Since that document was presented, what has happened? In terms of national expansion applied to national projects, it is true to say that this Government has not started any works of a national character since it took office. The Snowy Mountains scheme was started by a Labour Government, and the economic value of the scheme to the Commonwealth would be hard to estimate.

Sitting suspended from 11 to 11.30 p.m. [Quorum formed.]

Mr McIVOR:

– Prior to the suspension of the sitting, I was speaking about national progress and its relation to national expansion. As to national expansion, one has every right to ask, as the article appearing in the “Daily Mirror”, of 15th February this year does, “ Where the devil are we going? “ That article reads -

Where the devil is the Federal Government heading? We don’t apologize for putting it so bluntly. The “whole country demands to know the answer.

We suspect the answer will be a lemon. It seems the Government, once again, doesn’t know where it is going.

But if it does, then the country deserves to know.

Is there a plan - or even a thought - for a greater Australia behind the crisis policy?

Thousands of workers, for whom the economists’ term “ disemployment “ is merely an academic obscenity, are being handed their chips in the car factories.

All the indications are that similar nervousness is attacking the building industry, through the whole complex chain from supply to finished job.

How true those words have proved to be! Certainly, the building industry has been ruined. The article continues -

Many jobs are in fact finished, in another sense.

It goes on to say -

The Nation demands an answer.

Australia is sick and tired of Canberra’s bungling.

The statement in His Excellency’s the Administrator’s Speech that the Government has maintained its immigration programme is quite true, but it is also true that, at the height of this immigration programme, the Government has introduced a credit squeeze which has curtailed employment, which has curtailed the home-building industry and which in fact has placed a severe check on all those activities which are so essential if we are to cope with the increase in population which results from this immigration policy.

His Excellency’s Speech also contained the statement that it was the firm aim of the Government to maintain full employment. A few weeks after that Speech was delivered, the Minister for Labour and National Service (Mr. McMahon) said in this House that the Government had not yet learned to live with full employment. In other words, he was saying, in effect, that the only way in which this Government could control the economy of Australia was by creating a pool of misery, a pool of unemployed. And this in a country the Treasurer of which speaks of prosperity unlimited, a country which the Treasurer describes as Australia Unlimited! Such statements at a time like this are nothing but wicked insincerities.

Another tragic feature of the Government’s credit squeeze has been the effect it has had on the person who is buying a home and on the unfortunate who is endeavouring to raise money for the purchase of a home. Such is the state of things at the moment that mortgagee sales are becoming common throughout the country and many young people who invested every penny of their hard-earned savings in homes have lost the lot. That is the sort of prosperity we have to-day. My statement is borne out by an article published in the “ Age “ on 22nd March of this year under the heading, “ Thousands of Homes for Sale, but no Money to Buy them “. The article reads -

Thousands of houses are being offered for sale in Melbourne wilh vacant possession, but homeseekers are unable to find the money to buy them.

The Registrar of Co-operative Housing Societies (Mr. E. T. Ebbels) made this point in his annual report for 1959-60, tabled in Parliament yesterday.

Mr. Ebbels said it appeared that Victoria’s housing problem was more one of a shortage of housing finance than of a shortage of houses.

The difficulty was that lending institutions generally would lend only on new houses.

In other words, more houses were being built simply because finance was not available for existing homes, he said.

The article goes on to mention the figures quoted by the Commonwealth Department of National Development in which the estimated housing shortage in Australia was stated to be 50,000 units in 1959. It also informs us that the Victorian Housing Minister, Mr. Petty, had estimated Victoria’s housing shortage at between 35,000 and 40,000 dwellings. He stated that this figure included 17,000 applicants for housing commission homes. I point out here that since then that figure has increased to almost 20,000. Mr. Petty also said that there were 10,000 persons on the waiting list of co-operative housing societies and that from 8,000 to 13,000 people were seeking finance from other sources. Mr. Ebbels said that from inquiries he had made, it would seem that Mr. Petty’s estimate was very close to the mark, and that the shortage throughout Australia at June, 1959, must have been very much greater than the 50,000 estimated by the Department of National Development. And this squeeze is imposed on advances for the construction of homes in face of those figures!

No one will deny that it has been necessary to take some measures to control excess profits and extortionate interest rates, but to blanket the whole of Australia with a credit squeeze without first ascertaining the effect that such action might have on certain very essential industries was wrong, no matter from what angle the question is looked at. The Treasurer now informs us that Cabinet has recently completed a survey of the nation’s economy and that the whole of the housing situation was examined closely. He tells us that as a result of that review it was decided that some stimulus to housing activity should be achieved in the near future, and that departmental officers are at work examining how that may be done in a practical and proper way. I ask the Treasurer why this action could not have been taken before the Government ruined the building and timber industries. He has said that the Government will boost home building. Will he lend a helping hand to those who have lost their homes? Will he restore solvency to those builders who have been forced into bankruptcy? I think not. Will the Treasurer deny the assertion by Sir Douglas Copland that unemployment could rise to something between 150,000 and 200,000 as a result of the measures adopted by the Commonwealth Government last November?

Mr Anderson:

– He has not been right yet.

Mr McIVOR:

– It seems he was right when his opinion was your way. But the Treasurer does not look upon this economist’s opinion as being of any value because it does not agree with what this Gvernment ha? done. Suffice to say that he is renowned throughout the world. He stated -

The work force will be increased by 100,000 in the current year, and the outlook for employment is likely to be depressed.

He then made a statement of which the Government should take notice. lt is reported in these terms -

He points out that an unemployment figure of between 150,000 and 200,000 would take earnings of between £3,000,000 and £4,000,000 a week out of circulation. The full impact of the November measures would probably not be felt until the second and third quarters of the year.

That is a rather dismal outlook.

Mr Cash:

– Pretty dismal.

Mr McIVOR:

– Yes, pretty dismal for those who are unemployed because the Government has said that it cannot live with full employment and that therefore we must have a pool of misery.

What is the Government’s policy on home building? On 13th April the Treasurer stated -

The rate of house building would not be allowed to return tolast year’s boom level

Then on Wednesday, 3rd May, he said -

The Government will boost home building.

He cannot have it both ways. Many people in Australia would like an authentic statement on this matter. However, their attitude will be shown in no uncertain way at the next election. Even the Government’s friends are criticizing the Treasurer for statements he has made. The “ Sun “ of 6th April, 1961, carried the following article which appeared under the heading, “Banks Attack ‘Squeeze’”: -

The Federal Treasurer had weakened the effect of his own policy by saddling the banks with responsibility for the current restraint of business, the Bank of New South Wales states in its quarterly economic review released yesterday. The aim of the Treasurer had been to distract attention from the Government.

That has been the way in which the Government has always acted. Honorable members will recall that when the Minister for Supply (Mr. Hulme) was in Brisbane he charged the retailers with being the cause of all the trouble because they bought the imported goods.

As to the housing position, it is interesting to note, as the honorable member for Barton (Mr. Reynolds) has stated, that in the first quarter of this year the number of people ready or preparing to go ahead with the building of new homes fell to 31 per cent. less than the figure last year. This slump has occurred when it is estimated that in the metropolitan area of Melbourne alone there are 12,000 sub-standard homes - 12,000 decayed, dilapidated, vermininfested, insanitary homes. A survey has revealed that 51 per cent. are without sinks and that 38 per cent. have no baths. Yet 40,000 men, women and children are living in these shameful conditions! The Governmen talks about prosperity unlimited, yet curtails home building when a social problem of the kind to which I have referred exists in practically every capital city in Australia. Did the Government consider these aspects when it paralysed the building industry and closed off the supply of finance, which is the main ingredient in home building? Did it consider the demands that the immigration intake makes on the homebuilding industry? The Government must have known that there was then an estimated shortage of 90,000 homes. Being in possession of that knowledge, what a travesty of justice it has perpetrated on the young people of this country and the people who rightly consider that their inheritance is to build, buy or own a home and to raise a family in a manner that is worthily Australian.

The Government has asked for an appropriation of about £40,000,000. That sum would lift the home-building industry out of the morass into which this Government has plunged it. That sum would put into production all the timber mills that have been closed down and to which the honorable member for Indi (Mr. Holten) has referred. That sum would open up all the furniture factories and countless other industries which have closed their doors as a result of the credit squeeze. That sum could save the most vital industry in Australia - the industry which is the hub upon which the economy of the country revolves. It is to the everlasting disgrace of this Government that it has failed to appropriate £40,000,000 to revive the building industry.

We know that the major portion of the money to be appropriated is necessary, and we have no argument about it. But the people have a right to know whether the Government has a plan to overcome the present crisis and the unemployed have a right to know when they are going to share in the prosperity unlimited in this Australia unlimited. In fact, the lot of the unemployed is misery unlimited for themselves, their wives and their children. The Government talks about prosperity unlimited at a time when unemployment is rife. The Australian Textile Workers Union has circulated a letter to all members of Parliament which prompted the honorable member for Indi to buy into a matter that he would have done well to avoid particularly as he is a supporter of the Government’s credit restriction policy. The letter is dated 4th May, 1961, and is in these terms -

As indicative of the unemployment I need only to. point out to you that in the carpet section of the industry the work force had dropped by 21.8 per cent, as at 10th March, 1961, and the number of persons working short time, that is, less than 40 hours per week, was 9.2S per cent.

The letter goes on to cite a number of figures, but the sum total is that it indicates the position in the textile industry, not orly in New South Wales but also in Victoria. People have been put off work everywhere. Many married women who were working in an effort to keep the home going, to try to pay off the home and to pay instalments ar.d high interest rates on furniture, have lost their employment.

I have received also a letter from the Sunshine City Council dated 8th May. 1961. Incidentally, this council is not Labour-controlled. The letter is headed, “ Unemployment in Industry “ and states -

At the last meeting of the council, a discussion took place on the policy of the Federal Government which has brought about the present credit squeeze and the result that that policy has had upon the welfare of the citizens of this municipality.

As you are aware, Sunshine is heavily industrial and the majority of the residents are employed at the very many factories within the boundaries. Some of those factories have been forced to considerably reduce the number of their employees and, further, have placed remaining employees on a greatly reduced working week.

The council then sets out the following resolution which it passed -

That this council views with apprehension the disruption of industry and commerce with the re sultant unemployment and reduced hours being worked in other industries; these conditions are imposing hardship and discomfort in many homes in this municipality and that, believing the full responsibility to be attributable to the squeeze policy of the Federal Administration representations be made to the Government through our federal parliamentary representatives demanding the substitution of an expanding economy whereby the work force shall be fully employed and the productive capacity of Australia increased; and that in the opinion of this council public opinion supports this latter approach.

And public opinion will support it! Honorable members opposite should know that that letter will be circulated to every municipality in Victoria.

It is within the Government’s own hands to rectify the grave position into which the credit squeeze has plunged the country. The quickest and most effective way to improve the position would be to make money available to the home-building industry at low rates of interest which the workers could afford to pay. If the building industry were revived, 80 per cent, of the economic ills of this country would be cured, because it is true to say that many of the commodities which a nation produces are concerned either with the building of homes or use in homes.

On the subject of home building, let me refer to an article that was published in the Brisbane “ Courier-Mail “ on 28th February last, under the heading “ Holt Raises Hopes Over Building of Homes Here “. Of course, the hopes have not yet been fulfilled, because no homes are being built. The article stated -

Business men were hopeful last night that action would be taken soon by the Federal Treasurer (Mr. Holt) to ease the credit squeeze on Queensland home building.

Let us raise homes and there will be no difficulty about raising hopes. How much did the Treasurer raise the hopes of the Liberal Party in Queensland? At the first opportunity the people of Brisbane had to express their views of the Government’s policies - at the Brisbane City Council elections - they gave a landslide victory to the Australian Labour Party. The same thing will happen in Victoria in July and it will happen again when the general election is held at the end of the year.

Mr FOX:
Henty

):- I do not intend to enter into a debate of the Government’s financial policy. I believe that it has been effectively defended and justified by many previous speakers on this side of the House. I only wish to say, to assure the honorable member for Gellibrand (Mr. Mclvor) and other honorable members opposite, that we on this side are just as concerned about unemployment as they are. The cause of the unemployed is not helped by the constant talk of depression and calamity which we hear from honorable members opposite. Such talk could cause workers to fear for their jobs and to spend less than they would normally spend, thereby reducing the output of factories and restricting opportunities for employment for the people whom honorable members opposite profess, to represent.

The subject to which I wish to devote my remarks is much less topical and less stimulating. It is not my intention to take up a great deal of the time of the House at this late hour, but I want to take this last opportunity before the Parliament goes into recess, to refer to a few matters to which I hope the Minister for Repatriation (Mr. Osborne) and the Minister for Social Services (Mr. Roberton) will give some thought. The first matter that I wish to deal with relates to the fact that the Seamen’s War Pensions and Allowances Act provides for benefits for seamen who served in the 1939-45 war and who suffered injury as a result of enemy action. Unfortunately, the provisions of the act do not extend to the period prior to the 1939-45 war, and consequently, seamen who suffered injuries as a result of enemy action in the 1914-18 war are excluded from the benefits provided by the act, nor do those men benefit by qualifying under the Repatriation Act, as they were not members of the armed services. Most of the men concerned are over 60 years of age to-day, and there are not many of them. It would be a gracious gesture on the part of the Government if it were to make provision for these men who served their country just as surely as did the merchant seamen of the Second World War.

The second matter to which I propose to refer concerns the Aged Persons Homes Act. Men who are under the age of 65 years may not be admitted to the homes for which the act provides. In view of the fact that the Government, in recognition of war service, pays a service pension at 60 years of age to an ex-serviceman with overseas service, it does not seem logical to exclude such a person for admission to an aged persons home. The cost to the Government in providing for the admission of such men would be exactly nil because the homes are already erected and it would only be necessary to change the wording of the act to correct the position.

While I am discussing the subject of aged persons homes I wish to say that I, in common with quite a number of other honorable members, have received representations asking me to support a case for the widening of the Aged Persons Homes Act in order to provide for the disabled as well as the aged. Several very worthy voluntary organizations are helping to rehabilitate disabled persons. They are helping to provide employment for disabled persons and are thereby easing the strain on the public purse. The organizations are engaged in a most worthwhile task which is to the benefit not only of the persons whom they are endeavouring to help and to care for, but also of the Government. I personally believe that the provisions of the act could be widened in such a way as to include benefits for the civilian disabled, as well as the aged.

The qualifying residential period for newcomers to this country in respect of the age pension, is 20 years, except in the case of migrants from the United Kingdom and New Zealand, with the governments of which countries we have reciprocal agreements. At naturalization ceremonies we tell migrants that they are now Australian citizens and as such are entitled to the benefits and privileges of Australian citizenship. I know that many of them feel that they are being treated as second-class citizens, since we impose on them a qualifying period of 20 years before they become eligible for the age pension. I believe that many more migrants would become naturalized citizens if we reduced this period to 10 years. I should like to see social service benefits made available to all Australian citizens without any qualification ot time, but I realize that that may be too costly to implement immediately. If we can induce more migrants to seek naturalization, surely we will be doing what we profess to desire; that is, to build one nation, in spirit as well as in name. If it is felt that such a policy would encourage the migration of too many persons in the over SO years age group, 1 am sure that that trend could be controlled through our migration selection policy.

A matter to which I have referred previously in this place is the fact that while, under the terms of the reciprocal agreement with the United Kingdom, migrants who qualify for the age pension on arrival in Australia are paid at the Australian rate and are thereby placed on an equal footing with Australian-born age pensioners, the handful of persons who have been blinded in the United Kingdom and who migrate to Australia continue to receive the United Kingdom pension rate in Australia. As that rate is lower than the Australian rate, they consequently are at a disadvantage compared with their blind brethren in Australia. If we accept a migrant, knowing of his disabilities, we should be prepared to pay to him the same amount that we pay to an Australian-born person who is similarly afflicted. The cost to revenue in doing so would be small because the number of persons affected would not be great. To do so would eliminate discrimination against the less fortunate section of migrants.

Finally, Mr. Deputy Speaker, I want to refer to the case of one of my constituents. His wife is an invalid who is suffering from multiple sclerosis. She is bedridden and completely helpless. She requires constant attention. Their seventeen-year-old daughter, who would normally toe working, has to devote the whole of her time to taking care of her mother. The husband’s taxable income last year was less than £900, and out of that he had to pay medical expenses in excess of £150, which is the present limit of the allowable deduction. As their daughter is over the age of sixteen years, he cannot claim for her as a dependant, although she is prevented from earning anything towards her keep. The. provisions of the Income Tax Assessment Act which limit the allowable deduction in respect of medical expenses to £150 a year, work harshly against persons at a time when they most need help.

I believe that the present limit of £150 is not realistic. No person deliberately incurs medical expenses. It cannot be denied that such expenses frequently impose a strain on a person’s resources. I hope that the Government will remove the limit and allow taxpayers to claim the full amount of medical and hospital expenses.

Mr Stokes:

– What about the refunds that are paid?

Mr FOX:

– I am taking them into consideration. When a person claims these expenses as deductions, he naturally brings into account any refund that he has received, but I believe that if his total expenses are in excess of £150 he should be allowed to deduct the full amount, because it is when expenses are so high that the taxpayer requires the greatest help. I believe, also, that persons placed in the position of this man’s daughter, who has had to give up a normal existence and employment in order to care for an invalid mother who would have qualified for admission to a public hospital where she would have been cared for at public expense, should be eligible for some kind of pension or unemployment benefit.

The matters which I have mentioned, Mr. Deputy Speaker, are nearly all, in themselves, minor, but they indicate the existence of apparent anomalies, and I hope that the two Ministers whom I have mentioned will sympathetically consider my representations.

Wednesday, 10 May 1961

Mr UREN:
Reid

.- Mr. Deputy Speaker, the honorable member for Henty (Mr. Fox) says that members of the Australian Labour Party are not the only persons who are concerned about unemployment in this country. He says that he is concerned about it. May I remind him that Labour governments have been the only governments ever to give full employment to the people of Australia. The Menzies Government has not faced up to that responsibility. If it wishes to do so, let it do something to solve this problem of growing unemployment. We know that there are at present more than 80,000 persons registered as unemployed. We know, too, that there are in fact more than that number of persons unemployed, because a great number of married women, for example, who have lost their employment are not registered, although employment is an economic necessity for them because of this Government’s policy.

We could say a lot to-night in making a survey of the Government’s economic policy. We could recall that this is a government of inflation. We know that it has increased indirect taxes and promoted inflation throughout the years. This Government has tried in all sorts of ways to control that inflation, but it has not been able to do so. In 1952, it introduced import restrictions in an attempt to curb inflation, but in February, 1960, it virtually removed those restrictions.

The matters with which 1 wish to deal are, in brief, the failure of the Government to stabilize the balance of payments and its failure to deal with the situation caused by the indiscriminate inflow of new capital from overseas - an inflow that is not being controlled by this Government. Since this administration has been in office it has built up a deficit of £1,800,000,000 in our balance of payments. That represents partly an excess of imports over exports, which is totally against the best interests of Australia. The deficit has been made up partly, also, of new capital brought in from overseas and undistributed profits of overseas companies_ on operations in this country. These undistributed profits are just an indirect tax levied by these great monopolies on the Australian consuming public, and the overseas companies reinvest these funds in Australia. Portfolio capital, also, has come in from overseas. I remind the Treasurer (Mr. Harold Holt), who is now at the table, that this is a dangerous kind of investment. We know that the money invested in this way is hot. On top of all this, we have raised foreign loans, because this Government will beg, borrow or steal from anywhere in the world in order to get money. However, I shall deal with that more fully later.

As a last resort, this Administration turns to the International Monetary Fund. The Government has now scraped the bottom of the barrel and has borrowed from the fund. But it has not obtained only small loans. I know that Government supporters say that the Chifley Government borrowed from the fund. We do not deny that fact. We do not deny that in the dying hours of the last Chifley Government, in October, 1949, the dollar reserves of the entire sterling bloc, including the United Kingdom, were low, and consequently the Chifley Government, as a member of the British Commonwealth team, borrowed 20,000,000 United States dollars, which was equivalent to about £9,000,000 Australian, to help reduce the dollar deficit of the sterling bloc.

We have been told that the Labour Government signed the Bretton Woods Agreement. That has been said by many Government supporters. We do not deny that fact. As a matter of fact, there was great discussion in the Australian Labour Party as to whether the Labour Government should sign that agreement. A certain body of opinion within the party considered that the signing of that agreement would not be in the best interests of Australia, and another body of opinion thought that the signing of the agreement would be in Australia’s interests. The party, by a decision of the majority, determined that it would enter into the agreement.

When Mr. Chifley, in March, 1947, made his second-reading speech on the International Monetary Agreements Bill 1947, which ratified the Bretton Woods Agreement, he said that Australia was entering into this agreement in order to assist the backward nations of the world - the under-developed nations. Some Government supporters seem to think that the Bretton Woods Agreement was concerned only with the International Monetary Fund, but that is far from the truth. The agreement was concerned with two main financial structures - the International Bank for Reconstruction and Development and the International Monetary Fund.

Mr Harold Holt:

– Did not the Chifley Government borrow from the International Monetary Fund?

Mr UREN:

– We know that Mr. Chifley said that he would never borrow from the International Bank because Australia was entering into the Bretton Woods Agreement in order to assist the backward nations of the world. But what has this Administration done? It has borrowed a total of 318,000,000 United States dollars, or about £142,000,000 in Australian money, from the International Bank. Until a year or so ago, it was the biggest borrower from the bank. Only recently have India and another country passed Australia’s borrowings, and Australia now is the third greatest borrower from the bank.

Let me remind Government supporters that the Bretton Woods Agreement has been developed a stage further with the formation of the International Finance Corporation. That is another financial organization established under this agreement, which I may perhaps describe as an interna.tional bank agreement. And there has been yet another development in the field of international finance. On 4th May of last year, the Treasurer introduced in this House - perhaps many years later than was desirable - the International Development Association Bill 1960, which has at long last been established for the purpose of assisting the backward nations to develop their own countries. We know that originally the International Bank was to assist in this task.

The Menzies Administration has been so greedy and so eager to make good the deficit of £1,800,000,000 in its ‘balance of payments, which has built up since 1949, that it borrowed large sums from the bank in order to fill the gap. We have heard much sniping by Government supporters at the Australian Labour Party. A few moments ago, I heard the Treasurer mumble something about the Chifley Government having borrowed from the International Monetary Fund. Of course it borrowed from the fund, and I have already told the House why. In October, 1949, the Chifley Government borrowed £9,000,000 from the fund to assist the sterling bloc, not to improve Australia’s overseas balances. In doing that it was doing something as a member of the Commonwealth team and was not worrying solely about Australia. As honorable members opposite well know, that amount was repaid within a couple of years. Then the Menzies Government found itself in difficulty in August, 1952, and it had to resort to borrowing 30,000,000 dollars, or £A 13,000,000 from the International Monetary Fund.

Let us compare those amounts with the amount that the Government has scraped the bottom of the barrel to obtain now. On this occasion the Treasurer has just made a few statements, and during question time the honorable members for Yarra (Mr. Cairns) and Wills (Mr. Bryant) had to pummel him to ascertain the provisions of this agreement. The Treasurer did not know. One would think that the man who has control of the Treasury would know such important things as that, but he did not have the information at his finger-tips. He had to go to his back-room Treasury boys to get the information. As a result, on 4th May he tabled these documents which have given us the information. We now know that the agreement with the International Monetary Fund contains certain provisos and has strings attached to it in much the same way as the Minister for Labour and National Service (Mr. McMahon) wants to attach strings to the provision of long-service leave for members of the Waterside Workers Federation. The Government wants to control the waterside workers of this country in the same way as the International Monetary Fund, the financial clique of Wall-street, wants to control the economic conditions of this country.

On this occasion the amount that we have to borrow from the International Monetary Fund is 175,000,000 United States dollars or £A78,000,000. The Treasurer has also told us that there is a further stand-by, another loan of 100,000,000 United States dollars or £45,000,000 Australian, available to us. Let us compare those amounts with the £9,000,000 that the Chifley Government borrowed in the interests of the British Commonwealth in 1949 and the amount that the Menzies Government borrowed in 1952 to overcome its balance-of -trade problem. The Government is scratching, lt has been scratching for a long time. As I said earlier, an amount of £1,800,000,000 has been borrowed from whatever source the Government could get money, and it has encouraged an inflow of foreign capital from any country it could get it. I reminded the Treasurer earlier that this hot money coming into Australia is dangerous because, as he knows quite well, it can slip out just as easily as it slips in.

It is interesting to note how portfolio foreign investment in Australia has grown during the years since 1947-48. Under the Chifley Government the inflow of foreign investment was controlled, and in that year it was only £1,600,000. It was kept to a fairly low figure under the Menzies Government until about the mid ‘fifties. Even in 1957- 58 the inflow of hot money or portfolio capital was only £7,600,000. It rose from that figure in 1957-58 to £19,800,000 in 1958-9. But what has happened now? A bulletin on Australia’s balance of payments which has been issued only in the last couple of days discloses that last year, 1959-60, the inflow of hot money or portfolio capital rose to £34,000,000. I believe that there should be some concern about the way the Government is getting this money at pawnbroker rates from whatever source it can.

Let us look at the money that has been borrowed by the Menzies Government during its term of office. Apart from borrowing 318,000,000 dollars from the International Bank for Reconstruction and Development, this Government has borrowed £342,000,000 sterling from Great Britain, 15,000,000 dollars from Canada, 180,000,000 Swiss francs, and 271,000,000 dollars from the United States of America. Those figures were given by the Treasurer in answer to a question asked by me. They were the figures as at 30th lune last. Since then he has negotiated a loan of 27,000,000 dollars from New York, a loan of about £20,000,000 from London, another loan from Canada and yet another Swiss loan. Those are some of the loans that have gone to make up the deficit of £1,800,000,000 which this Government has accumulated during its ten years of office.

Let us have a look at the loan market generally. The amount of overseas borrowings for general Commonwealth and State Government securities at 31st December, 1949, was £522,000,000. By 30th June, 1960, that amount had risen to £696,000,000. That represents a net increase in overseas borrowings by this Government of £174,000,000. The figures for the internal debt are interesting. Under the Chifley Government, at 31st December, 1949, the internal debt stood at £2,661,000,000. On 30th June, I960, it was £3,885,000,000. That represents an increase of £1,224,000,000 in the internal debt under this Government. That is yet another example of the failure of this Government.

Let us look at the inflow of new capital under the Menzies Government. 1 take my figures from the annual bulletin on overseas investment for 1958-59. An examination of the figures discloses that between the years 1947-48 and 1958-59, £945,000,000 has been invested in Australia by overseas investors, of which £596,000,000 was direct new investment and £349,000,000 was reinvested from profits made by overseas companies operating in Australia. That amount of £349,000,000, the undistributed profit, is in fact a tax levied on the Australian consumers. In Dr. Coombs’ own words, these major companies that have control of the distribution of goods in this country place that tax in their cost structure and on the price of their goods so that in fact the consumers are paying for the future development of many overseas companies which are operating in Australia.

Under the Menzies Government there is no control over overseas investment in this country. Since 1949, the Government has encouraged overseas investment, whether for the manufacture of lipstick, soft drinks or any other product, or the building of luxury hotels. The Government has not been selective in attracting overseas investment in Australia. I defy the Treasurer to give me an example of the Government being selective. There is no such example. The Government is concerned only to encourage foreign investment in order to reduce the difference between the values of our imports and exports. The Government is only concerned about attracting the money into Australia. Although that will present a great problem in the future, all the Government is worried about is settling the present issue. It does not worry about the future. Our trading deficit is a Frankenstein’s monster which has been built up, and another government will have the difficult job of dealing with the problem in the future. The Government is concerned only with making up the difference between the cost of our imports and our earnings from exports.

Let us examine the great wealth that is being made by overseas investors in this country as a result of two double taxation agreements - that with the United Kingdom and that with the United States of America. It may be said by honorable members opposite that the double taxation agreement with the United Kingdom was entered into by the Chifley Administration. It was; but at the time Mr. Chifley entered into that agreement he was faced with the task of taking the Australian economy into the post-war era, and he was also concerned with full employment for the people. He entered into that double taxation agreement in order to encourage British equipment and technical know-how to come to this country and help to develop it. However, I am sure that had he been here to see the great savings made by British investors as the result of this double taxation agreement Mr. Chifley would have reviewed the agreement. Only a fool would not see, from an examination of the relevant figures, that the agreement was working against the best interests of Australia.

The figures disclose that since 1947-48 new capital inflow from the United Kingdom has amounted to £421,000,000. In the same period capital outflow in the form of dividends was £258,000,000. That is to say, we have had a gross gain of £163,000,000. At even a conservative estimate the tax saving by United Kingdom investors has been between £80,000,000 and £90,000,000, leaving us with a net capital gain from the United Kingdom of £73,000,000 to £83,000,000. The new capital inflow from the United States from 1947-48 was only £94,000,000, but it is interesting to note that the outflow in the form of dividends was £99,600,000 - a loss to Australia of £5,600,000 in the period.

When the Menzies Administration entered into the double taxation agreement with the United States it said it was doing so in order to encourage more new capital into the country. I stress that. It wanted an inflow of new capital. It is interesting to note that whilst the capital inflow from the United States between 1947-48 and 1952-53 was £32,700,000 the capital outflow in the same period was only £16,000,000. But the capital inflow since 1953 has been only £61,700,000 whilst the capital outflow has been £83,600,000. There has been a gain to the American investors of about £21,000,000.

Before the double taxation agreement with the United States was signed, the tax paid by American companies to the Australian Government was 7s. in the £1. Indi viduals paid Id. in the £1 on the first £100 of dividends, and up to 180d. in the £1 on £8,000 and above. The tax on dividends after the agreement was signed was 15 per cent., or 3s. in the £1 for companies and individuals. At a conservative estimate American investors during the period saved £19,800,000 in round figures at the expense of the Australian taxpayer. Australia suffered to the extent of £40,000,000.

The Treasurer may be a little bored and may not be at all concerned with this problem, but this indiscriminate inflow of foreign capital into Australia will lead to a very sorry story in the future, because this money is being invested at pawnbroker rates now, and we as a Labour government in the future will have to face the problem. This Government goes round getting money in any corner possible. It has its back to the wall at the moment, because it has to go to the International Monetary Fund for help out of its troubles. During its term of office the Government has allowed our imports to exceed our exports by £1,800,000,000, and has had to borrow money from overseas to make up the difference. I will say that at least borrowing money straight-out is better than the indiscriminate inflow of hot capital, which is being directed into non-essential industries and is working against the best interests of Australia. The Goverment is a government of inflation because it uses indirect taxation as a main means of gaining revenue, thus passing the tax burden on to the mass consumers. I heard the Treasurer say that I was talking rubbish. I am not talking rubbish, because the plain fact is that this Government has allowed the burden of taxation to bear, through indirect taxes, more and more on the worker, since it is the workers who pay the bulk of indirect taxes. This Government has raised the depreciation allowance on plant from 4.4 per cent., as it was during the last year of the Chifley Administration, to 7.7 per cent, this year. It would not be so bad if the benefit of depreciation allowances were in respect of plant for essential industries instead of plant for non-essential industries which make the wealthy wealthier.

The Government is completely smug. All it is concerned about is helping the big interests which it represents. I have said on many occasions that the Menzies Government is a 5 per cent, government. It represents the top 5 per cent, of the community. lt allows this 5 per cent, in the top bracket to get away with great wealth through tax evasion. It allows great capital gains to be made, untaxed. The “ Hansard “ record contains details of the great wealth that is being accumulated by certain sections of the community. Under this Government, Australia’s economic position is going from worse to still worse, and only a Labour administration will get the nation out of the trouble. I am quite sure that when this Government is game enough to go to the people the election will be disastrous for it. The honorable member for Griffith (Mr. Chresby), who is now interjecting, will be saying farewell to this Parliament. He is a “ oncer “ and will not be back here after the next general election. The Brisbane City Council election has made clear where members of the Labour Party in this House will be after the next general election. They will be seated on the opposite side of the chamber. We are quite well aware of the great problems as a government we will inherit from this Government. When the honorable member for Melbourne Ports (Mr. Crean) takes over from the derelict who is now Treasurer he will have a difficult job to straighten out the nation’s accounts, which are an all-time low. This Government is like all antiLabour governments. A Labour government handed over to it a buoyant economy and a Treasury in good condition but, by begging, borrowing and stealing, it has run the economy down. When we take over again, we will be faced with the task of building up the economy once more.

Mr SPEAKER (Hon John McLeay:

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

Mr. NELSON (Northern Territory)

X 1 2.3 1 a.m.]. - I want to devote my time in this debate to discussing a very important and urgent question of national development. I feel that there is no more important question in the field of national development than that of the development of the north of Australia. An idea that is winning support from members on this side of the House and from many other responsible people in the community is that the development of the whole of north Australia - that is. the Northern Territory, northern Queens land and the north-west of Western Australia - should be handled on a national basis by a commission similar in structure to the Snowy Mountains Authority, which, as we know, has done excellent work in the past and is doing excellent work at the present time. The establishment of such an authority, of course, has been advocated by honorable members on both sides of the House, and the proposal is now receiving the support of a very distinguished Australian, Sir Douglas Copland. I think that some of his comments in an article in the “Daily Mirror” of 5th May bear quoting, because the points he made are very important. The article reads, in part -

AUSTRALIA’S NEW WORLDS TO CONQUER LIE, NOT IN SPACE, BUT RIGHT HERE.

Build the North a Snowy, says Sir Douglas Copland.

There was a vision behind the Curtin-Chifley move to develop the Snowy Mountains project There are however, new worlds to conquer if Australia is to develop its estate, and to demonstrate to its populous neighbours its capacity to populate its great outback …. This could be done by the creation of a new statutory authority …. In short, a body designed to develop the framework of the economy of the north - a Northern Development Corporation …. The new corporation would indeed provide the framework in which a new attack on the settlement of the north could be contemplated.

These were the comments of a distinguished Australian who has no political bias in this regard. He has devoted much thought and study to the problems of the economy of the nation and to the means by which those problems can be solved.

Mr Cope:

– How many Government members supported the Snowy Mountains scheme?

Mr NELSON:

– I do not know, but I do know that not many of them are supporting the development of northern Australia at the present time. I wholeheartedly support Sir Douglas Copland’s proposal because I believe that it is beyond the financial and physical resources of the States to develop all the areas that he mentioned. We know that only a body having the whole of the resources of the nation behind it could undertake the development of the north-west of Western Australia, northern Queensland and the Northern Territory. Not only should a body of this nature be established, but a Minister should be appointed to handle the problems associated with this great work.

In the early days of the reign of this Government, honorable members on this side, including myself, convinced the Ministry that no worth-while results were being obtained from the administration of the Northern Territory by the Department of the Interior and, in the course of time, the Government improved the machinery of administration. The Ministry of Territories was established to administer both the Northern Territory and New Guinea. I believe that the next logical step that should be taken in the process of making a determined attack on a developmental problem that is crying out for something to be done is the creation of a new ministry to be responsible for the development, not only of the Northern Territory, but also of the whole of the north of Queensland and the north-west of Western Australia. This ministry could come to an arrangement with the Queensland Government and the Western Australian Government to take over the developmental problems, while daytoday problems associated with the areas - the local problems - would continue to be handled by the local authorities and institutions. The main developmental works - those embracing roads, railways, harbours, water conservation schemes and so on - would be handled by the ministry, but a commission would be created to do the actual work involved. If such a ministry were created and such a commission appointed, a determined attack could be made upon many of the problems that confront the north to-day.

No development of any consequence is taking place in the north at the present time. The futility of continuing this Government’s present policy is apparent from the population figures. There is actually a drift of population away from the Northern Territory. The natural increase of population in the Territory is at the rate of about 600 per annum. In the last year for which figures are available, the result of movements of people between the States and the Territory was that the Territory suffered a loss of 290 adult people, but the population showed a net gain, due to the very high birth rate, of 350 persons. These figures show that the adult population of the Northern Territory is moving out. I am sure that the figures for the next quarter and the quarter after that will show that the Terri tory is losing the battle to maintain its work force and its adult population. That is the position in the Northern Territory to-day. I believe a similar position exists in the north of Queensland, if one excludes the populations of Mount Isa and Mary Kathleen. Such a position certainly would exist in the north-west of Western Australia. This indicates how deficient is the present policy in relation to the development of the north. It is not imaginative enough to cope with the situation.

Superimposed on this problem is another problem that has been created by the credit restrictions imposed by this Government. There is unprecedented unemployment in the Northern Territory at the present time. According to advice that I received recently from the Secretary of the North Australian Workers’ Union, many single men in the Northern Territory, particularly in Darwin, are getting only three days’ work a week to provide for their sustenance. Married men are being provided with a full week’s work. Such a state of affairs has not been experienced in this land of ours since the dark days of the depression. It is a scandal that such a thing can recur at a time like this in a country which is crying out for development.

– 1 know that the provision for the Northern Territory at the present time is equivalent to the amount mentioned in a recent take-over transaction involving two breweries in Victoria and Queensland. Where are the public works that we have been promised? Where are the water conservation schemes, the railways, the roads and the mining development? The Minister for Territories (Mr. Hasluck) said recently, in opening a conference of scientists of the Commonwealth Scientific and Industrial Research Organization and agricultural experts in Darwin, that the Government had enough information at its fingertips to implement a developmental policy for -the Northern Territory as soon as the Cabinet made funds available. We have not heard much about that.

I now want to draw attention to a couple of educational matters concerning the Northern Territory. One is the imposition of a means test on exhibitions or scholarships won by children of the Northern Territory schools. I think that the position can best be set out if I read a letter addressed to me by the Darwin High School Parents’ and Citizens’ Association and another one from the Alice Springs counterpart of that association. The letter fom the Darwin association reads as follows: -

Dear Mr. Nelson,

Our association would like to draw your attention to the unfair situation which arises out of the application of the means test to N.T. Students awarded the Intermediate Exhibitions. It is not applied to South Australian students with whom N.T. students compete in public examinations.

Each year twelve exhibitions, each worth £40, are allocated to the N.T. for the top twelve placegetters in the Intermediate public examination. Because of the means test they are seldom awarded to the top twelve students but are passed on to students who often have only a mediocre pass. Indeed, we understand it has happened that an exhibition has been awarded to a student who has failed English, a compulsory subject.

The top twelve students’ names are never publicized and in this regard they receive no credit for the hard work they have done during the year to gain their places.

We feel the application of the means test is resulting in an entirely wrong sense of values being put on the Intermediate exhibitions. We feel they should be awarded to the students who are capable of higher education to act as an incentive to them to continue regardless of family income.

This year only four of the twelve exhibitions available to the N.T. were awarded. The situation has been similar in previous years. One year we know only seven were awarded.

Moreover we are disturbed that nobody seems able to tell us what happens to the money not distributed. Last year the amount which might have made the difference to eight students continuing to higher education was £320

This anomalous situation has now extended to the Leaving Standard. As you are aware, N.T. students wishing to do Leaving Honours must leave their homes, board in the south and attend a southern school. Accommodation is costly (our own son’s accommodation in Adelaide costs six guineas a week) and an allowance of £80 a year is granted towards it.

After questions asked in the Legislative Council by the Crown Law Officer, Mr. Withnall, last year, an investigation was made by the Government and prospects were bright for an increase. The increase was made, but in the form of a £50 scholarship to Leaving students subject to a means test This means that only an odd student can benefit. . . .

I am sure you can see what a fantastic situation it is.

We write to you as our Member to register a strong protest with the Minister for Territories. We hope you may be able to improve the situation.

So far I have had no reply to a request to the Minister for Territories on this matter. I hope that, as a result of the representations that I make in this House now that something will be done to rectify the position. As a result of this means test we penalize only the children themselves. The parents are not penalized in any way but the children are handicapped. We have promising children in the north who are unable to go on to higher education because of this penalty of the means test. It is time that it was abolished. It does not apply in South

Australia, although the South Australian Department of Education runs the educational system for the Northern Territory.

Mr L R Johnson:

– Why does the department discriminate against the Northern Territory?

Mr NELSON:

– It is only because the Commonwealth does not make the fund? available.

Mr Crean:

– The Territory must be a long way back if it is behind South Australia.

Mr NELSON:

– That is so. South Australia is probably the most backward State in its per capita education expenditure. I do not think it is to the credit of the Commonwealth that it allows such a state of affairs to exist. The same type of protest has been made by the parents of the Alice Springs school and I know that the same situation exists throughout the Northern Territory.

On previous occasions, the honorable member for Dalley (Mr. O’Connor) and I have referred to the action of the Government in proceeding with the construction of a high school at Darwin without airconditioning and without the provision of an assembly hall which was strongly recommended by the Public Works Committee when it made its investigation into the desirability of the construction of this building. The committee was strongly of opinion that students in the area suffered disability as a result of having to work in unsatisfactory conditions in the prevailing tropical heat, and it urged that the expenditure required for the installation of air-conditioning and the provision of an assembly hall be authorized. However, the Government is proceeding to construct the school without air-conditioning and without an assembly hall, in complete disregard of the advice of its own departments and many distinguished medical men who have reported on the need for air-conditioning in tropical areas to achieve the maximum results from students.

I shall quote some passages from the publication “ Environmental Problems in Tropical Australia “, by R. K. Macpherson, who made a survey at the request of the Minister for Health (Dr. Donald Cameron). He sets out some of the problems associated with working in tropical conditions. At page 67 he states -

It is very strange, since the chief source of inefficiency in the tropics is the high environment temperature, that a direct attack is not made on this prime cause. It is taught in medicine, that in attempting to cure a patient of his ills, one first removes the cause and then combats the effects. In our prescription for the cure of tropical ills, it seems that we have so far concentrated our efforts on controlling the effects and neglected to remove the cause . . .

It is considered that the practice of airconditioning living and working spaces would, by reducing environmental stress, definitely increase the output of effective work, and improve the health and morale of those living in tropical areas . . .

It is recommended that consideration be given to priority in proceeding with the introduction of the air-conditioning. First on the list would be hospitals - indeed air-conditioning has already been introduced in hospitals in many centres. Very properly, operating theatres and X-ray rooms have first received attention, but airconditioning should now be extended to recovery wards, wards for the seriously ill, labour wards and nurseries.

Leaving aside for the moment the requirements of schools, I should like to comment on the reference to the need for airconconditioning hospital wards. This amenity is not provided in hospitals in the Northern Territory. I know that some sections of hospitals, such as X-ray rooms and operating theatres, have air-conditioning, but in the wards it does not exist. Recently I visited the Alice Springs hospital at 8 p.m., when the temperature inside the wards was 92 degrees. I do not know how anybody expects a patient to endure a long illness under those conditions which must retard recovery. It is in the interests of the health of patients that air-conditioning be installed without delay in hospitals in the Northern Territory, as well as in schools. Later, in the same publication, the author states that air-conditioning could assist in education. Knowing the problems and conditions affecting schooling in the Northern Territory, I heartily endorse those remarks. I have seen crowded schoolrooms in various parts of the Territory. Children, overheated from exercise and play, enter the crowded rooms and suffer terrific discomfort in the course of their studies. It is impossible for any child to do his best under such conditions. The Public Works Committee appreciated the position when it stressed the need for air-conditioning of new schools, with particular reference to the proposed new Darwin High School which it was then considering.

It is time that the Government took heed of the experts it appointed to investigate, these problems and provided funds for these purposes. After all is said and done, this provision is no more than is being made at present for schools in the Australian Capital Territory, where climatic conditions do not affect the work of students to the same degree. I think the total amount involved in air-conditioning every school in the Northern Territory would be less than £250,000. It certainly would be no more than that. That is a very small price to pay for the comfort of children, the peace of mind of parents, and the general efficiency of all concerned.

In the few moments that remain at my disposal, I again direct the attention of the House to the fact that the Northern Territory, after some twelve months, still lacks a Supreme Court judge. We have certainly had the temporary appointment of a gentleman who has done much to clean up the accumulated criminal work but has been unable to touch any case on the civil list. It is time that the Government made a special effort to fill the position in order to remove the hardships, expense, worry and inconvenience, of litigants in civil jurisdiction.

I direct the attention of the Minister for Territories (Mr. Hasluck) - he knows the position well enough - to the fact that the Legislative Council has again passed two bills which have been disallowed. One concerns discretionary power for magistrates in relation to the supply of liquor to aborigines and the other concerns lotteries and gaming. In the face of the passage of those bills by an overwhelming majority of councillors, does the Minister intend on this occasion to disallow or to allow the bills, even if only in amended form? It is tine that the Government took heed of the wishes of the elected members of the council. The Government may have some doubts about the wisdom of the legislation, but it should give the council the means of giving effect to legislation that it wants.

Another matter upon which I wish to touch is the request for incorporation in the coming Budget of provision for the appli cation of a zone allowance basis to age and social service pensions paid in the Northern Territory. This matter has cropped up from time to time. In our income tax legislation we recognize that taxpayers in certain areas of Australia suffer hardships and disabilities. I ask that recognition be given to the fact that pensioners in those areas suffer similar disabilities. Although pension rates are uniform throughout Australia, the cost of living in the south has no application to the north, where costs are high. Pensioners in the north have to contend with hardships that do not exist in the south. I ask the Government to take note of this factor with a view to having the principle of zone allowances applied to pensions in the coming Budget.

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

– Mr. Speaker, I deal to-night with the tragic stab in the back administered to the Australian dairy industry by this Government through the unexpected publication this week of an extraordinary but official booklet bearing the cunning title, “ Eat Better For Less “. Among its many other deplorable features, this official publication, backed with all the authority of the Menzies-McEwen Government, has the wickedness - and I can use no term less strong than that - to deceive people and incite them to stop eating butter, and to incite and encourage them to use the substitute, margarine.

Mr Hasluck:

– You do not think you are exaggerating, do you?

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

– No, I do not. The Minister asks whether I thi:-k I am exaggerating. I do not know whether he has read the booklet, but I propose to read to the House all the relevant passages in order to substantiate my claims. The booklet also incites and deludes people into giving their children powdered skim to drink instead of pure cow’s milk. People are advised by the booklet to do these things so that they will save money. a~.d they are told at the same time that they will get just as much nutriment. This contention, that they will get just as much nutriment, is, of course, false, lt is a disgrace that the Australian Government should give wide-spread publicity, by means of this booklet issued with the Government’s authority, to this falsity, and that it should permit such a falsity to circulate widely, to the grave ir.jury of every decent, hard-working dairy farmer in this community. If the advice given in this booklet is followed, sales of butter in Australia will fall away to practically nothing. They will fall to the extent that the advice in the booklet is followed. Every honorable member who is acquainted with the booklet will know that this is true.

I must admit that, to my mind, it was inconceivable at first that the Prime Minister (Mr. Menzies), the Leader of the Country Party (Mr. McEwen) or the honorable member for Macarthur (Mr. Jeff Bate), who, I think, is chairman of the Government Members’ Agricultural Committee, would permit this to go on. But the booklet speaks for itself. I shall read from it the whole of the relevant passages on which the statements 1 have made are based. First, the booklet is entitled, “ Eat Better for Less “. The clear implication of that title is that if you follow the advice in the booklet your food will cost less and you will obtain more nutriment from it. There is no question that this is the inference to be drawn from the title - spend less money, buy the cheaper substitute, and you will get better nutriment by so doing.

Let me deal with the detailed items in the booklet. It begins by saying -

This booklet will tell you how to get the best food value for your money.

It clearly implies - and says, in fact - that while you follow the advice given you will get the best food value for your money. Then, dealing with milk, it says -

Value for Money - Milk.

Milk is a very important item in the diet and every effort should be made to ensure that the whole family drinks the amounts recommended. However, milk bills can mount up - especially for a large family. To economize, have you ever tried using powdered milk?

There is a direct encouragement to people to use powdered milk instead of fresh cow’s milk. But the booklet goes further -

Powdered skim milk is the cheapest source of protein and calcium.

The booklet is advising people to use powdered skim milk instead of pure cow’s milk.

Mr Hasluck:

– Do not Australian dairymen provide the raw materials?

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

– They do.

Mr Griffiths:

– They give the skim milk to the pigs!

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

– They do. The booklet continues -

It contains all the important nutrients of fresh milk except the fat and fat-soluble vitamins, of which the average diet has a good supply.

The booklet is telling you that you do not need the fat and fat-soluble vitamins that are contained in ordinary cow’s milk, because they are present in the other foods that you eat.

Mr Mackinnon:

– Do not forget that this is written for people who want to economise.

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

– Yes, the whole point is that you economise, and that you get better food by doing so.

Mr Mackinnon:

– No, you do not; but you do economise.

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

– And you get better food as well. The title of the booklet is “Eat Better for Less”. It has two implications; first, that you eat better, and, secondly, that you economise. However, let me continue with the contents of the booklet. It says that powdered skim milk is quite good enough, because the fat and fat-soluble vitamins that are in ordinary cow’s milk are also in good supply in the other foods that you eat. Then, to rub it in, to make perfectly sure that you do not give your children pure cow’s milk, it goes on to say -

Use it-

That is powdered skim milk - reconstituted in cooking, in soups or serve a glass to the children with flavouring

Mr Griffiths:

– And add water!

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

– I dare say. If you add flavoring the children will be deceived into thinking that it is a better article than it really is. Then there is this cunning piece of advice -

If it is prepared 10 to 12 hours early and kept in the refrigerator, the flavour will more closely resemble that of fresh milk.

The food value will not be there, but the flavour will more closely resemble that of pure cow’s milk, and the children will accordingly be deceived. The booklet continues -

Two ounces by weight or half an 8-ounce measuring cup of dried skim milk is equivalent to one pint of liquid skim milk

Then the booklet goes on to deal with cream, and it starts off -

Cream is an expensive food . . .

It advises you to eat the cheaper foods from which, it says, you will get better value for less money. It says that cream is an expensive food, thus discouraging you from buying it. The booklet continues -

Cream is an expensive food and is not a substitute for milk as it contains only the fat portion of the milk. To save on this expensive item, pour off and use the top milk for desserts etc.

The proper course, I should think, would be to shake the bottle so that the cream value would be distributed throughout the milk, but this booklet says, “ Pour off the bit of cream on the top and use that for your desserts “. It continues -

Evaporated unsweetened milk, refrigerated and whipped, makes a cheap table cream.

Butter and table margarine are equally good sources of fat and vitamin A.

– Let it go at that. Butter contains many other nutritious elements. It is a natural, fine food, unequalled in food value. None of its other attributes are mentioned anywhere in this pamphlet.

Before I give to the House other quotations from this publication, some misconceptions need to be cleared away. One is the question of ministerial responsibility for the publication of this pamphlet. It might be thought that it was issued by mistake and without the knowledge of Cabinet. The fact is that at question time every day since this booklet was published attention has been directed to the damage that the booklet can do to the dairy industry, and to the falsity of the statements in it. Every member of the Ministry is fully aware that the booklet exists. The Minister for Health, far from agreeing to a request to withdraw it, has sought inside this chamber to justify and defend it. He will not withdraw the booklet. Instead, as honorable members learnt at question time this morning, he will arrange for its still wider distribution. Every Minister, by his silence, has given his approval to the course that has been announced by the Minister for Health and the Minister for the Interior.

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

– Order! The honorable member for Eden-Monaro (Mr. Allan Fraser) has the call. I suggest that the House come to order and allow the honorable member to continue his speech, unassisted from either side of the House.

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

– I was saying that every member of the Ministry, by his silence, has given his approval to the answers given to-day by the Minister for Health. The Minister for the Interior and the Minister for Territories have shown by their interjections to-night that they give their active and direct approval to the advice given in this booklet, which is so injurious to the dairy industry and to the health of the Australian people.

Mr Crean:

– Do you think it would be more honest if the booklet were re-issued with a new title, “ Eat Less Butter “. instead of “ Eat Better for Less “?

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

– That would be more honest. Nothing would be satisfactory now except that all copies of the booklet be withdrawn immediately.

Mr Hasluck:

– And burnt by the public hangman?

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

– Yes. Also, the Prime Minister should publicly repudiate it in this House, and the resignation of the Minister for Health should be required.

Mr Hasluck:

– Is not that a bit extreme?

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

– No, in view of the injury that this booklet is doing and will continue to do to a great primary industry so long as copies remain in circulation. It is most important that that should be done. I am afraid that the Minister at the table has no knowledge of the importance of the dairying industry to this country. The members of the Country Party are failing in their duty by not bringing him and other Ministers to a recognition of the importance of this industry and of the need for the withdrawal of this pernicious publication.

The Minister for Health has even taken the extraordinary attitude of claiming that the booklet really represents the individual publication by an honest scientist of his honest views and, therefore, that it ought to be allowed. Of course, that is far from the truth. A scientist would be fully entitled to publish independently his views on any food subject, but the author of this booklet, if he were a propagandist for the margarine industry, could not have done a better job. The fact is that no author’s name appears on this publication. The only authority for it is given at the back - “ Issued by the Australian Institute of Anatomy, Commonwealth Department of Health, Canberra “. It therefore goes out to the people of Australia under the auspices of the Commonwealth Department of Health, a body in which the people have every cause to have full trust. Therefore the booklet will do the maximum damage. If it were published by the margarine people, the people would tend to discount it. The honorable member for Macarthur (Mr. Jeff Bate) knows that when this booklet goes out, officially authorized as a publication of the Commonwealth Department of Health, the people are likely to accept its contents as a final statement upon these important subjects. I know that he could not agree that these statements are correct and I am amazed that he has not risen in his place, in the interests of the dairy farmers whom he represents, to make sure that the booklet is withdrawn.

Mr Hasluck:

– Do you think this is a conspiracy by the margarine makers?

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

– No, I do not think so. That is a ridiculous interjection, for which I excuse the Minister only by reason of the time of day. Perhaps he is a little over-tired. I want to quote a little more from this booklet.

Mr Jeff Bate:

– Don’t you think that by drawing attention to the booklet you are causing more damage and that sleeping dogs should be let lie? The more you stir things up, the more damage you do to the industry.

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

– The woeful interjection of the honorable member for Macarthur is that this booklet should be allowed to circulate, without protest, as widely as the Government chooses to distribute it, and that harm would be done by raising the matter in this House, exposing the falsities of the booklet and making a demand upon the Government for its withdrawal. The honorable member knows that if every Government member representing a rural electorate in this House demanded that the booklet be withdrawn, that would be done. They know that. They know they have the power to compel the withdrawal of the booklet but they are not using that power although it is in the interests of the industry and of the consumers of dairy products that this should be done. I shall now proceed to deal with some further aspects of the booklet.

Mr Hasluck:

– You have not dealt with bacon.

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

– The Minister for Territories reminds me about bacon. The reference to bacon is in one sentence. It states -

Bacon is a luxury food, so use it sparingly.

The title of the book is “ Eat Better for Less “. It advises the reader to eat the less expensive foods, so by declaring bacon a luxury food, the booklet is advising people not to use it. In fact, the booklet says - so use it sparingly.

Bacon, however, is a healthy food. It is a product of Australian primary production, and every Australian family should be assisted to eat as much bacon as its members reasonably desire. The effect of that sentence is to cause an injury to a valuable branch of Australian primary industry. Then we come to fish. The Australian seas teem with good fish. Surely the Australian people should be able to eat the choicest products of the seas; but not according to this booklet. It advises the people to eat mullet and leather-jackets.

Mr Griffiths:

– We use them for bait.

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

– Some people would hesitate to feed them to their cats; but sole, bream, schnapper and all the other magnificent fish are available to eat. The whole of the argument in this booklet is that the food value of all fish is about the same, so you should eat mullet and leatherjackets. The Minister claims that the booklet as a whole is of assistance to the dairying industry. I think I have read all relevant passages connected with the dairying industry except one. A careful reading of this book shows that there is not one word from beginning to end in favour of butter, although there are plenty said in favour of margarine. Yet the Minister claims that the book is of assistance to the dairying industry! Let us take this further example of the way this booklet sabotages the sale of butter -

Sandwiches run away with your butter supply.

Do not give your children butter in sandwiches -

If you cut lunches for your family every working day, here is a tip to make your butter or margarine go further. Take i lb. butter or margarine, let it soften but not melt and beat in i pint warm (not hot) milk, with a little salt to taste. You will find that your butter or margarine goes nearly twice as far.

In other words, follow this advice, cut the consumption of butter in half and deprive your children of the special nutriment that butter contains.

Mr Hasluck:

– Does it not urge you to use milk?

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

– That is another silly interjection. The booklet proceeds to give menus for a whole week.

Mr Mackinnon:

– It suggests the use of butter.

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

– Never once in the menus for the whole week are the people advised to eat butter. I have the booklet in my hand.

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I again call the House to order and ask that interjections cease from both sides. If interjections do not cease, I shall be forced to take action.

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

– I thank you for your assistance, Mr. Deputy Speaker. I was pointing out to the honorable member for Corangamite that although a menu is given for every day of the week, the booklet does not advise the use of butter once. For every menu, the advice is to use “ butter or margarine “. Finally, I wish to direct attention to one feature of this booklet which I find particularly disturbing. That is the official advice given in the name of the Government to housewives and mothers of families to follow the advertising of weekly shopping bargains. We all know that the great chain stores, which are destroying the business of many small independent storekeepers throughout Australia, specialize in deceiving their customers into thinking they give better value than other shops by having a few special lines which they advertize in large spaces in the newspapers every week. This is a very unfair form of advertizing and an unfair form of competition. The chain stores offer these cut lines at reduced profit to attract customers into their shops. They take an unfair advantage of the small independent shopkeepers who cannot afford to do anything of the sort. Yet in this booklet, the Government deliberately advises housewives to patronize the large chain stores to the disadvantage of the small independent city and country storekeepers!

I think it is totally wrong that the Government should take sides in this very difficult battle for existence which is being fought to-day throughout Australia by the small independent storekeepers who cannot afford to offer the special cut-price lines, but who, on the whole, give better value than the chain stores which operate now in almost every town and city. I would do my best to assist the small storekeepers, and certainly would not go out of mv way, as the Government has done in this booklet, to assist the large chain stores.

My final observation is that the whole effect of this booklet is to say to the people, “We will not allow your wages to keep pace with the increase in the cost of living. We will freeze your wages. We will put up your rents. We will increase the charges you have to meet. But here is the answer: Eat cheaper food. Eat substitutes, and you will manage to get by “. I think the whole booklet is a disgrace to the Government. Every member of the Australian Country Party and every Liberal member representing a country electorate should take stronger action than any of them have taken so far. I know that they feel indignant about the booklet, but they should have the courage to express their indignation and compel the withdrawal of this booklet and a public repudiation of it by the Prime Minister (Mr. Menzies) and the Government.

Dr Donald Cameron:
Minister for Health · OXLEY, QUEENSLAND · LP

.- We all know the object of this exercise. We are quite used to the honorable member for Eden-Monaro (Mr. Allan Fraser) coming into this House and acting a part as he has done to-night.

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

– I rise to order, Mr. Deputy Speaker. I resent the statement that I come into this chamber and act a part. I have put my case sincerely and honestly and I resent, as offensive, the statement that I am not sincere, but am acting a part.

Mr DEPUTY SPEAKER:

– I ask the

Minister for Health to withdraw that statement.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– I withdraw it in deference to you, Mr. Deputy Speaker. Let me say that we are all quite used to the honorable gentleman exaggerating very much when he speaks. In fact, his closing remarks were a supreme example of how much one can distort and exaggerate. Let me say to him that actions speak louder than words and that no government in the history of the Commonwealth has done more for the dairying industry than has this one. No government has provided more finance, in fact no government has provided anything like as much finance to support the dairying industry. No government has made such comprehensive arrangements to assist the dairying industry, and no government has done more to promote the welfare of the dairying industry in the whole history of the Commonwealth.

It was not this Government that acted to increase quotas of margarine. But it was the Labour Government of New South Wales which increased margarine quotas very largely, indeed far ahead of what any other government in Australia did; and the Government which granted the second greatest increase in the margarine quota in order to allow margarine to compete directly with butter was the Labour Government of Queensland. It was a body headed by a Labour appointee that fixed the price of cream in New South Wales at 7s. 6d. a pint with the result that consumption of cream in that State sank to something like one-quarter of the average consumption per head in the rest of Australia.

Mr Pollard:

– It was your Government which put the price of butter up by 6d. per lb.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– No, it was not. Those were the actions of Labour governments, not of a Liberal government. But it was the action of a Liberal government which provided and continues to provide a very extensive scheme of milk for school children.

Mr Turnbull:

– The Country Party was in that; it was not the Liberal Party alone.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– I accept the correction. Of course, the Liberal and Country parties work together. Those are the actions of this Government. They are not the actions of a government which is determined to do something to damage the dairying industry. What utter nonsense. The whole history of recent years is to the contrary. Does the honorable member really mean it when he talks about withdrawing this pamphlet?

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

– Of course he does!

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– The honorable member says, “ Of course he does! “ Implicit in that, of course, is the philosophy that when a government department makes a statement and it is considered to be commercially inconvenient, or perhaps politically inconvenient, it should be suppressed.

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

– Nonsense.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– That is implicit in what the honorable member says. Among my responsibilities is the National Health and Medical Research Council, and implicit in what the honorable member says is that if that body makes a statement which a government or a commercial interest may find a little inconvenient, the Government should suppress it. Does he follow that political philosophy, because that is exactly what it means?

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

– No, and I resent your distortion of what I said.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– Does he mean that if a scientist, or the scientific section of the Commonwealth Scientific and Industrial Research Organization, makes a statement in such circumstances it is to be suppressed? That is absolutely implicit in what he says and is quite obviously the philosophy of the party of which he is a member.

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

– But this is not a scientific statement; it is a statement by the Government.

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– Don’t try to wriggle your way out of it. That is implicit in what the honorable member has said. I think I have said enough to show that what the honorable member has done to-night, to use the words which he just used by way of interjection during my speech, has been to distort the whole thing, to exaggerate the facts. We know why he is doing this. He is not doing it because he thinks it will help the dairying industry. No one will accuse the honorable member of being sincere in that. What he is really trying to do is to jump on the political bandwagon; and the record of his party in promoting the interests of the dairying industry is so lamentable that his whole speech is ludicrous.

Motion (by Mr. Hasluck) put -

That the question be now put.

The House divided. (Mr. Deputy Speaker - Mr. P. E. Lucock.)

AYES: 53

NOES: 22

Majority . . . . 31

AYES

Consideration resumed from 2nd May (vide page 1303), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1678

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate: -

Without amendment -

Coal Excise Bill 1961.

States Grants (Coal Mining Industry Long Service Leave) Bill, 1961.

Without requests -

Customs Tariff (Dumping and Subsidies) Bill 1961.

Excise Tariff Bill 1961.

page 1678

ADJOURNMENT

Australian Airlines - Swine Fever - Importation of Canned Food

Motion (by Mr. Harold Holt) proposed -

That the House do now adjourn.

Mr WARD:
East Sydney

.I would not have attempted to address the House at this hour if it were not for the fact that very few opportunities to raise matters will present themselves before the House goes intorecess, and that the matter to which I wish to refer is of great importance and of some urgency. It relates to preferential treatment that the Government has extended to the private airlines which compete with Trans-Australia Airlines, the government service.

Honorable members will recollect that in late 1959 and early 1960, as a result of accidents with Electra aircraft in the United Stales of America, it was decided to operate these aircraft in Australia at a slower speed than previously until such times as they could be taken to the Lockheed works in America for certain modifications to be carried out. The aircraft that were operating on Australian services were to be taken to America in accordance with an arranged schedule. Apparently T.A.A. and Qantas Empire Airways Limited sent their aircraft to America in accordance with the schedule, but Ansett-A.N.A. declined to take the company’s aircraft out of service because it was more profitable to keep them operating and has continued to postpone the time for sending the aircraft to the Lockheed works at Burbank for modification.

According to an officer who is in a position to know the facts, work has been completed on the aircraft operated by T.A.A. and Qantas but not on those operated by Ansett-A.N.A. For some extraordinary reason, although the modifications have been completed, T.A.A. is not allowed to run its aircraft at the permissible higher speed. Instead, they have been kept to the reduced speed of 225 knots although, according to the Lockheed Corporation, they are now ready and quite safe to operate at 275 knots. Because Ansett-A.N.A. is not ready, this Government has taken action to prevent T.A.A. and Qantas from using their Electra aircraft in Australia at the higher speed. That appears to me to be an extraordinary situation.

I am given to understand by the officer to whom I have referred that that is the present position in regard to these aircraft. It seems to me to be an outrageous thing. The Government has stated repeatedly that it would act fairly and impartially in regard to the two major airlines and that they would be placed on a competitive basis. How can that argument be put forward, in view of the fact that when Ansett-A.N.A. should have been consigning its aircraft overseas to have the modifications carried out, it refused to conform to the schedule that had been laid down. The company was told, when it was not ready to send the aircraft forward, that they would be put to the end of the list. The company was quite happy about the position. Evidently the company knew it could afford to accept that situation, knowing the Government would see to it that T.A.A. did not get the advantage of having its aircraft back on the run at a much earlier date.

Honorable members will recollect the many occasions on which the Government has showna preference for the private airline. If T.A.A. had had its way, it would not have purchased these aircraft and would not therefore have been put to the trouble of having the modifications carried out. Mr. Warren McDonald, who was then in charge of T.A.A., sent the aeronautical experts overseas to select the best aircraft that was available, and they recommended the purchase of Caravelles. Those aircraft would have involved the outlay of sterling instead of dollars, which were then in short supply. But because Ansett-A.N.A. have taken Electras - evidently they were not proving as satisfactory as Caravelles would have been - the Government decided that T.A.A. also had to have Electras. Everybody knows what happened thereafter. AnsettA.N.A. had DC6 aircraft which also proved to be unsatisfactory in respect of economical service, and the Government, in trying to even matters up, compelled T.A.A. to take DC6 aircraft and to allow some of its Viscount aircraft to be transferred for use by the private airlines.

I do not want to go into any further details of the matter, but I should like the Government to tell me whether the information which has been furnished to me by an officer who is in a position to know the situation, is true. Is it true that the public today, who show a preference for T.A.A. when they can get the service, are to be denied the faster travel in Electra aircraft merely because Ansett-A.N.A. has not had its aircraft converted, or because the modifications as prescribed by the Lockheed Aircraft Corporation of America have not been carried out? If that is the position, it is outrageous. It is obvious that if T.A.A. aircraft could operate at 275 knots, as they should, instead of 225 knots, much more economical service would be possible. It would be more profitable for T.A.A.

This Government, which has never been favourably disposed to government enterprise, has favoured the private airlines, as I have indicated. I hope that the Government has an explanation of this extraordinary position. I feel that the general public of Australia, who regard T.A.A. as its own air service, will resent very much this action of the Government in prejudicing this efficiently run service and favouring its rival, . Ansett-A.N.A.

Mr WHEELER:
Mitchell

.I realize that the hour is late, but I may not have another opportunity to direct attention to a serious situation which has occurred in the County of Cumberland or, to be precise, in an area stretching from Wollongong to Port Stephens in New South Wales, which was declared yesterday to be a pig quarantine area in order to combat a suspected outbreak of swine fever. This disease last occurred in 1942. At that time it cost producers about £1,000,000. On that occasion, nearly 10,000 pigs were killed before the disease was stamped out. Although a precise diagnosis has not been made, it is suspected that the disease may be swine fever and that it could have been brought to Australia in meat smuggled into the country by migrants. Scraps of the meat could have been fed to pigs and the disease introduced in that way. I hope that it will be proved that the disease is not swine fever, but whatever eventuates, one must be uneasy about our quarantine precautions and their effectiveness.

The quarantine regulations relating to the import of live animals are stringent, and rightly so, but those relating to the import of canned meats are loose and useless. Once it was said that the safety of Britain depended on a thin red line. The safety of our animal industries depends on a thin red tape line. An error at any one of a dozen points could bring disaster. Errors have already occurred. So far, they have had no serious consequences, but we cannot continue to depend on luck. There is no regular inspection of tinned meat imports by our Department of Health. The department depends on the country of export to declare the import and to furnish a certificate from the authorities in the exporting country to the effect that the consignment is free from disease. It accepts such certificates. To support that statement, I invite attention to a statement that was made in another place on 19th October last by the Minister for Customs and Excise (Senator Henty), who represents the Minister for Health (Dr. Donald Cameron), regarding imports of canned ham. Senator Henty said -

One small parcel got through without undergoing a proper quarantine examination, but the officers of the department have traced the parcel and have seized the hams.

Human errors, it will be seen, can and do occur. I shall mention a case which has not been officially admitted, because it is difficult to check the facts. I am not able to vouch for them, but they come from a good source and I believe that they are true. In June, 1960, a consignment of canned ham was admitted from Denmark without any certificate or clearance. This meat went bad. The matter was reported to the department, but 80 cans were never recovered. The normal thing to do in such a case is to dump the contaminated cans, but some may find their way into pig swill. According to the latest evidence in Britain, 70 per cent. of primary outbreaks of foot and mouth disease can be traced to swill containing affected meat. There is another unpleasant implication. The department only found out about some of the consignment I have mentioned because some of it went bad. No one knows how many uncertified consignments get through without ever being heard of. Once this disease gets through, there is no stopping it. Early last November it occurred in Britain and within a fortnight, 120 separate outbreaks were reported, extending from East Anglia to the Orkney Islands.

This outbreak in the County of Cumberland is a serious matter. The disease could spread throughout our primary industries. Therefore, I strongly urge the Government that, as a precautionary measure, it should act immediately to prevent any further imports of canned meats, canned hams and canned chicken. In addition, I urge the Government to tighten the existing quarantine regulations. I mentioned earlier that a certificate is given that canned meat imports are free from disease. But what is the value of a certificate from the exporting countries in relation to the sterilization of canned meats if our Department of Health places such reliance on the certificates? To the end of November, 1960, we had imported canned meats from 22 countries. In some of those countries the standards of hygiene are primitive. Proper guarantees in regard to shipments would seem to be important. Three of those countries - China, Hungary and Poland - are Communist-controlled so that we may not rely on either the honesty or the goodwill of the officials concerned, apart altogether from the question of standards. In other places such as Hong Kong and Singapore, the population is so dense and economic conditions are so poor that even the utmost efforts of officials might be defeated!

Economically, these imports are of no importance to any one, but from a health stand-point, even the smallest is big enough to bring national disaster. We imported canned poultry and canned ham from the United States of America and Canada but these two products can be supplied very satisfactorily by local producers and the national interests of no country could be affected if we eliminated these imports, although the profits of a few individuals might be touched. In advocating a complete ban on imports of canned meat, I say that we cannot afford to run the risk which these imports present. Our exports are now absolutely vital. Our solvency would collapse without our great output of products of animal origin. In 1958-59, they provided 61 per cent. of our total exports. Not only foot and mouth disease, but also blue tongue, swine fever, Newcastle disease in poultry, and rinderpest are some of the scourges of the earth which, by magnificent luck, we have so far avoided. Pigs, sheep, cattle and poultry all are dependent forsurvival on the continuance of this immunity. How foolish it is to imperil our animal industries for the sake of importing a few hundred tons of canned poultry, ham and other meats which are already in plentiful supply locally. In fact, they are oversupplied.

I trust that the Minister for Territories (Mr. Hasluck), who is in charge of the House, will convey to the Government my remarks about the serious situation arising from this suspected outbreak of swine fever in the County of Cumberland, and I hope that the banning of the import of canned meats into this country will be considered.

Mr JONES:
Newcastle

.- Mr. Speaker–

Motion (by Mr Hasluck) put -

That the question be now put.

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

AYES: 51

NOES: 18

Majority . . . . 33

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 2.7 a.m. (Wednesday).

page 1681

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Immigration

Mr Ward:

d asked the Minister for Immigration, upon notice -

Has his department ever made an assessment of the average cost of bringing an immi grant to Australia and settling the immigrant in this country?
If so, what are the details?

Mr Downer:
LP

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

An essential feature of the administration of the immigration programme is an appreciation of the cost factors involved. Consequently, the costs of immigration, including those two aspects to which the honorable member’s question refers, are subject to a continuing review and examination.
For the post-war period, the average cost of bringing a migrant to this country, based on the Australian Government’s contribution towards the cost of assisted passages, has been £68. The average cost of £68 relates to an estimated intake to the end of this financial year of approximately 890,000 assisted passage migrants and a total expenditure of £60,785,871 on passage costs. The average would be considerably less, however, if this expenditure were related to the direct net gain in population from migration. This, in the post-war period, comprises approximately 1,220,000 persons representing long-term and permanent arrivals less departures, added to which is a figure approaching 600,000 children born in Australia to migrant parents. On this basis, the average cost would be reduced by half. The average of the direct costs incurred by the department in settling a migrant in this community varies. For those assisted passage migrants who have been personally sponsored and who, on arrival, proceed direct to private accommodation arranged by their nominator, the costs are relatively slight. They are somewhat higher for those migrants who travel as Commonwealth nominees and who, on arrival, proceed to Governmentprovided accommodation in migrant centres and hostels which is available until such time as they are in a position to make their own private arrangements for accommodation. For the former, the average cost has been estimated to be £12, comprising £2 as the average expenditure on rail fares and £10 in respect of instruction in the English language for non-British adult migrants. For the latter, the average cost has been estimated at £81, being £71 in respect of fares and a per capita allocation of the operating cost of centres and hostels and £10 in regard to language instruction. Apart from expenditure on instruction in the English language, no direct costs are incurred by the Department in the settlement of migrants other than those introduced under the assisted passage schemes. Accordingly, the average cost incurred in settling migrants would, if spread over the total population gain from migration, be similarly reduced as in the case of passage costs.

Movement of Tradesmen to New Zealand

Mr Ward:

d asked the Minister for Immigration, upon notice -

Is it a fact that advertisements have been appearing in Australian newspapers inviting Australian workers, particularly those in the building trade, to accept employment in New Zealand?
Is there a serious possibility that skilled tradesmen may be permanently lost to Australia in this way?
is it a sound economic proposition to bring immigrants to this country at the rale of 125,000 a year whilst people already resident here are obliged to leave because of growing unemployment and lack of housing?

Mr Downer:
LP

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

Yes. 2 and 3. There has always been a two-way movement of people between Australia and New Zealand. In fact, we have a reciprocal arrangement with the New Zealand Government whereby citizens of Australia and New Zealand may travel between the two countries without passports. The latest statistics available show that in 1960 the number of long-term and permanent arrivals in Australia from New Zealand exceeded the number of long-term and permanent departures from Australia to New Zealand. Perhaps the honorable member will agree that a movement of people between two countries of the British Commonwealth, with so many similarities, is inevitable, and is not necessarily a cause for concern. It is certainly not inconsistent with Australia’s immigration programme.

Department of Immigration Pamphlet

Mr Ward:

d asked the Minister for Immigration, upon notice -

Has his attention been drawn to recent statements made by the Reverend R. Fraser, the Church of England immigration chaplain in Sydney, that a Commonwealth Immigration Department pamphlet distributed overseas states that a four to five bedroom brick house can be rented in Australia for £1 10s. to £3 10s. per week, whereas he had recently assisted a desperate English migrant to secure the tenancy of a furnished garage at Narrabeen, New South Wales, at a rental of £1111s. per week.
Is this pamphlet being circulated by his department?
If so, who authorized it, and was it prepared and distributed with his knowledge and approval?

Mr Downer:
LP

– The answers to the honorable member’s questions are as follows: - 1, 2 and 3. Yes, my attention has been drawn to what appears to be a misquotation from a booklet which is not among the publications produced by the Department of Immigration to inform prospective migrants. For many years, the Department of Immigration has issued a wide range of Fact Pamphlets in several languages. They include a Fact pamphlet on housing which is freely available to potential migrants. I assure the honorable member for East Sydney that this Fact pamphlet issued by my department carefully paints an accurate picture of housing opportunities for migrants. I shall be happy to give him a copy.

Aborigines

Mr Ward:

d asked the Prime Minister, upon notice -

Did he say in January, 1957, after Mr. Grayden, a former Liberal member of the Commonwealth Parliament, had directed attention to the abominable conditions of certain aborigines in Western Australia, that the Government was waiting for documentary evidence regarding the sufferings of these natives, before deciding what it should do?
What action was subsequently taken by the Government to correct the position as disclosed by its inquiries at that time?

Mr Menzies:
LP

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

In reply to a telegram from the honorable member in January, 1957, referring to the Report of the Select Committee of the Western Australian Parliament appointed to inquire into native welfare conditions in the Laverton-Warburton Range area I indicated that, following discussions between a deputation from the Western Australian Parliament and the Minister for Supply (Mr. Beale), it was agreed that a precise statement of facts would be submitted to the Commonwealth for its consideration. I subsequently informed the honorable member that I was not aware of any responsible allegation against the Commonwealth’s administration in relation to aborigines.
No action was taken because careful examination revealed no reliable evidence of suffering of natives in the areas concerned as a result of Commonwealth activities. Mr. Beale spoke of this in the House on 9th May, 1957. The Commonwealth has always been extremely careful to ensure that its activities in Central and Western Australia do not distress aborigines in the area.

Overseas Reserves

Mr Ward:

d asked the Prime Minister, upon notice -

Does the cost of freights payable to overseas shipping companies constitute a considerable and growing drain on Australia’s overseas financial reserves?
Has the Government ever considered the establishment of an Australian national mercantile marine to carry our exports to the markets of the world as a means of conserving Australia’s overseas financial reserves?
If so, why did the Government not proceed with the proposal?

Mr Menzies:
LP

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

The total amount of freight payable on goods imported into Australia as published by the Commonwealth Statistician in the Australian Balance of Payments, 1955-56 to 1959-60, was as follows: -

and 3. The Government has not considered the establishment of a national mercantile marine to engage exclusively in overseas trades. The Australian Coastal Shipping Commission is, however, empowered, under the legislation by which it was established, to engage in overseas trades and it has done this whenever suitable opportunities have been available to employ its vessels economically. At the present time the commission has one vessel operating in the sugar trade with New Zealand, a second vessel en route to Japan with a cargo of pig iron and a third vessel fixed to lift a further cargo of pig iron to Japan.

Export of Motor Vehicles

Mr Daly:
GRAYNDLER, NEW SOUTH WALES

y asked the Minister for Trade, upon notice -

What is the (a) number and (b) value of Holden vehicles exported since the commencement of their manufacture?
1. To which countries have these vehicles been exported, and what was the value in each case?

Mr McEwen:
CP

n. - The answers to the honorable member’s questions are -

Details of exports of particular companies are not available from official statistics. However General Motors-Holdens Proprietary Limited has publicly stated that it has exported 24,700 vehicles valued at £13,000,000 since export operations commenced in November, 1954. About 10,700 of these vehicles were exported in 1960.
Exports have been made to 38 different overseas territories. These territories are known to include New Zealand, Singapore, Hong Kong, Malaya, North Borneo, Thailand, South Africa, Indonesia, Southern Rhodesia, Kenya and Hawaii among others. The value of exports to each country separately is not available.

Papua and New Guinea

Mr Cairns:

s asked the Minister for Territories, upon notice -

Was Stahl Salum, the secretary of the Madang Co-operative Association, a witness against Brian Cooper at his trial for sedition?
Has Salum’s father, during his service as an Administration appointed headman, built up a large plantation on Karkar Island?
Have other natives a claim to the land on which the plantation exists?
Will Stahl Salum’s inheritance of this plantation and land follow as a matter of course?
Would Administration support be of any assistance to him in his inheritance of the land and plantation?

Mr Hasluck:
LP

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

Yes. There is no connexion of any kind between this fact and the matters raised in the following questions.
Until 1958, Stahl Salum’s father, Solum, was a Paramount Luluai appointed by the Administration. He asserts ownership rights under native custom over relatively large areas of land on Karkar Island, some of which is planted with coconuts.
Alum of Karkar claims ownership of some of the land, including the planted area. Investigations by the Native Lands Commissioner are pending.
Under the local system of inheritance Solum’s eldest son Gilaleng would at Solum’s death take over any land interests held by Solum under native custom. It is understood that Stahl Salum claims that he will become entitled to his father’s land interests on his father’s death on the ground of appointment by his father. Any dispute that may arise would be heard by the Native Lands Commission.
No.

Frozen Foods

Mr Davis:
DEAKIN, VICTORIA

s asked the Minister representing the Minister for Customs and Excise, upon notice -

What quantities of frozen peas were imported into Australia during 1958-59, 1959-60 and for each month of the current financial year?
What quantities of Bel-Air brand peas were imported during the same periods?
Is he able to say whether Woolworths Limited imported retail packs of “ Bell-Air “ peas; if so, what quantity of peas was included in the various packs, and were the packs allowed into this country free of duty?

Mr Osborne:
LP

– The Minister for Customs and Excise has furnished the following answers to the honorable member’s questions: -

1958-59, 4,661 centals; 1959-60, 8.45S centals; 1960-61-
The information in the possession of the Department of Customs and Excise does not, with one exception, which is not “ Bel-Air “ brand, disclose brand names of imported fresh frozen peas.
See reply to question 2.

Cite as: Australia, House of Representatives, Debates, 9 May 1961, viewed 22 October 2017, <http://historichansard.net/hofreps/1961/19610509_reps_23_hor31/>.

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House of Representatives 9 May 1961

ANNIVERSARY OF PARLIAMENT

Mr MENZIES:Prime Minister and Minister for External Affairs · Kooyong · LP

CANBERRA RENTALS

Petition

QUESTION

PAPUA AND NEW GUINEA

Mr BEAZLEY:FREMANTLE, WESTERN AUSTRALIA

Mr SPEAKER:

Mr BEAZLEY:

Mr HASLUCK:Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

QUESTION

AUSTRALIAN ECONOMY

Mr McCOLM:BOWMAN, QUEENSLAND

Mr HAROLD HOLT:Treasurer · HIGGINS, VICTORIA · LP

QUESTION

HOUSING FINANCE

Mr ERWIN:BALLAARAT, VICTORIA

Mr HAROLD HOLT:LP

QUESTION

TELEVISION

Mr GALVIN:KINGSTON, SOUTH AUSTRALIA

Mr DAVIDSON:Postmaster-General · DAWSON, QUEENSLAND · CP

QUESTION

SKELETON WEED

Mr KING:WIMMERA, VICTORIA

Dr Donald Cameron:OXLEY, QUEENSLAND · LP

QUESTION

CANNED CHICKEN

Mr BEATON:BENDIGO, VICTORIA

Mr McEWEN:Minister for Trade · MURRAY, VICTORIA · CP

QUESTION

SECURITY

Mr KILLEN:MORETON, QUEENSLAND

Mr MENZIES:LP

QUESTION

AUSTRALIANS STRANDED OVERSEAS

Mr HAYLEN:PARKES, NEW SOUTH WALES

Mr SPEAKER:

Mr HAYLEN:

Mr SPEAKER:

Mr MENZIES:LP

QUESTION

AUSTRALIAN AIRLINES

Mr ASTON:PHILLIP, NEW SOUTH WALES

Mr HULME:Minister for Supply · PETRIE, QUEENSLAND · LP

QUESTION

UNEMPLOYMENT

Mr CALWELL:MELBOURNE, VICTORIA

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

QUESTION

COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION

Mr DRUMMOND:NEW ENGLAND, NEW SOUTH WALES

Dr Donald Cameron:OXLEY, QUEENSLAND · LP

QUESTION

DEPARTMENT OF HEALTH BOOKLET

Mr FULTON:LEICHHARDT, QUEENSLAND

Dr Donald Cameron:OXLEY, QUEENSLAND · LP

Mr CHRESBY:GRIFFITH, QUEENSLAND

Dr Donald Cameron:OXLEY, QUEENSLAND · LP

QUESTION

HOUSING FINANCE

Mr SEXTON:ADELAIDE, SOUTH AUSTRALIA

Mr HAROLD HOLT:LP

QUESTION

CONSTITUTIONAL REVIEW COMMITTEE

Mr BLAND:WARRINGAH, NEW SOUTH WALES

Mr HAROLD HOLT:LP

QUESTION

LONG SERVICE LEAVE

Mr CAIRNS:YARRA, VICTORIA

Mr McMAHON:LP

QUESTION

WOOL

Mr Malcolm Fraser:WANNON, VICTORIA · LP

Mr ADERMANN:Minister for Primary Industry · FISHER, QUEENSLAND · CP

QUESTION

LONG SERVICE LEAVE

Mr WHITLAM:WERRIWA, NEW SOUTH WALES

Mr McMAHON:LP

House of Representatives
9 May 1961

Mr MENZIES:
Prime Minister and Minister for External Affairs · Kooyong · LP

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

Mr McCOLM:
BOWMAN, QUEENSLAND

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

Mr ERWIN:
BALLAARAT, VICTORIA

Mr HAROLD HOLT:
LP

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

Mr KING:
WIMMERA, VICTORIA

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

Mr BEATON:
BENDIGO, VICTORIA

Mr McEWEN:
Minister for Trade · MURRAY, VICTORIA · CP

Mr KILLEN:
MORETON, QUEENSLAND

Mr MENZIES:
LP

Mr HAYLEN:
PARKES, NEW SOUTH WALES

Mr MENZIES:
LP

Mr ASTON:
PHILLIP, NEW SOUTH WALES

Mr HULME:
Minister for Supply · PETRIE, QUEENSLAND · LP

Mr CALWELL:
MELBOURNE, VICTORIA

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

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

Mr FULTON:
LEICHHARDT, QUEENSLAND

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

Mr CHRESBY:
GRIFFITH, QUEENSLAND

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

Mr SEXTON:
ADELAIDE, SOUTH AUSTRALIA

Mr HAROLD HOLT:
LP

Mr BLAND:
WARRINGAH, NEW SOUTH WALES

Mr HAROLD HOLT:
LP

Mr CAIRNS:
YARRA, VICTORIA

Mr McMAHON:
LP

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

Mr McMAHON:
LP

Mr CASH:
STIRLING, WESTERN AUSTRALIA

Mr DAVIDSON:
CP

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

Mr MENZIES:
LP

Mr BUCHANAN:
MCMILLAN, VICTORIA

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

Mr L R JOHNSON:
HUGHES, NEW SOUTH WALES

Mr DOWNER:
Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

Mr HAROLD HOLT:
LP

Mr MACKINNON:
CORANGAMITE, VICTORIA

Mr MENZIES:
LP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr HAROLD HOLT:
LP

Mr CALWELL:
Leader of the Opposition · Melbourne

Mr TOWNLEY:
Minister for Defence · Denison · LP

Mr IAN ALLAN:
Gwydir

Mr CRAMER:
Minister for the Army · Bennelong · LP

Mr OSBORNE:
Ministerfor Repatriation · Evans · LP

Mr OSBORNE:
Minister for Repatriation · Evans · LP

Mr OSBORNE:
Minister for Repatriation · Evans · LP