House of Representatives
14 August 1962

24th Parliament · 1st Session

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.

page 273



Mr. REYNOLDS presented a petition from certain electors in the State of New South Wales praying that the House will -

  1. Make provision in the Budget for a substantial federal emergency grant to all State governments for education services, and
  2. Set up a national committee of inquiry to investigate and report on the needs of primary, secondary and technical education throughout Australia. Petition received and read.

page 273



Illnesses of Minister for Defence and Leader of the Opposition.

Prime Minister · Kooyong · LP

Mr. Speaker, before questions are put, I should inform the House that my colleague, the Minister for Defence (Mr. Townley), who had hoped to be here this week, has been required to undergo some further medical treatment, and therefore will not be here this week. That, I am sure, all honorable members will regret. On the other hand, I am happy to say that I saw the Leader of the Opposition (Mr. Calwell) at the week-end and that he appeared to me, and to himself, to be making very satisfactory headway.

page 273



Rights and Privileges of Party Leadership


– My question is directed to the Prime Minister. I ask: Has the Government recognized the sole representative of a party in another place as parliamentary leader of that party? What benefits, financial and otherwise, above the normal entitlements will accrue to that person because of this recognition? Does the Government’s action establish a precedent and will this action mean that an independent who cared to apply to himself some convenient party appellation, would be entitled to similar recognition and benefits? Why did the Government decide to recognize the sole representative of the party in question as the parliamentary leader of that party? How many representatives constitute a parliamentary party in the Prime Minister’s definition of that term?


– I venture to suggest to the honorable member that he must not confuse the position of the parliamentary leader of the Democratic Labour Party and the position of an ordinary independent member of the Parliament. There can be no doubt whatever that, whether the honorable member or anybody else likes it or not, there is a very substantial Democratic Labour Party in this country. Therefore, a decision was taken that the leader of that party, even though he was the sole representative of the party in the Parliament at the moment, should be accorded the normal rights of the leader of a party. This case must not be confused with the case of a man who is an independent and, being an independent, does not profess to represent any party.

page 273




– I address a question to the Minister for Shipping and Transport. Will the Minister say whether, in view of the immense success of the Bass Strait vehicular ferry “ Princess of Tasmania “, consideration has been given to the construction of a similar vessel to cope with the ever-increasing volume of vehicles and freight carried by the “ Princess of Tasmania “, particularly during the tourist season? Can he give an estimate of the cost to the Commonwealth Government of the “ Princess of Tasmania “, the equally successful “ Bass Trader “ and the projected Sydney-Hobart ferry?

Minister for Shipping and Transport · CORIO, VICTORIA · LP

– The provision of another vehicular ferry to run between the mainland and Tasmania has been under consideration for a considerable time. This matter was brought up at a meeting of the Australian Transport Advisory Council and I then undertook to have figures taken out which would show the profitability of the “ Princess of Tasmania “. I should like to point out that although the passenger traffic side is perhaps the better-known and more spectacular side, freight profitability comes into the picture as well. Between Tasmania and the mainland we now have a service, largely due to the encouragement of the Commonwealth Government, such as we never had previously.

Speaking from memory, the “ Princess of Tasmania “ cost the Australian National Line about £2,500,000 and the “Bass Trader “, which carries freight only, cost about £1,500,000. Another vessel is being constructed, to run between Sydney and Tasmania, which will cost in the vicinity of £3,500,000. These costs, of course, are chargeable to the Australian National Line, which has a responsibility to make a profit. In addition, two vessels being built for the Union Steam Ship Company of New Zealand will have to be subsidized1 because of the agreement on shipbuilding. Therefore, the profitability of another vessel on the run is a matter that would have to be watched carefully. That, of course, is a matter of Government policy. It would be quite open to any other shipping organization to run a ship between the mainland and Tasmania if it felt that that would be worth while.

I can assure the honorable member, who has on many occasions been in contact with me concerning this matter, that figures are constantly being taken out. If the income from passenger and freight traffic over a period, viewed in relation to expenditure, shows that there is an opportunity to run another vessel between the mainland and Tasmania, I can assure the honorable member that the matter will not be overlooked.

page 274




– I address a question to the Minister for Trade. In view of the essential need for Australia to increase its export trade with all nations, especially Asian nations, and to maintain a high level of imports to meet the needs of an expanding economy, I ask whether it is true that a very substantial item in the cost structure of our exports and imports is due directly to the high freight charges imposed by the various shipping companies involved. Is it a fact that shipping freights on imports alone amount annually to about £150,000,000, a sum equal to 15 per cent, of our export income, and do freight charges on our exports cost a similar amount?


– Order! The honorable member is entitled only to seek information. He is now proceeding to give information. The honorable member should ask his question.


– If these are facts I ask whether the Minister has suggested to the Government that such costs may be reduced by the establishment of a nationally owned mercantile fleet capable of handling Australia’s trade.

Minister for Trade · MURRAY, VICTORIA · CP

– Some of the points made by the honorable gentleman in his question are correct, subject to audit. The latter part of his question raises a matter of policy.

page 274




– I ask the Treasurer whether the Government is satisfied that adequate steps are being taken to close any legal loophole that might facilitate tax evasions and lead to the revenues of the Commonwealth being defrauded?


– As I told the House earlier, the Commissioner of Taxation had been analysing the report of the committee of inquiry. The committee did point to certain matters in respect of which it thought that some evasion was occurring or, perhaps to put it rather more precisely, in respect of which advantage was being taken of existing legislation in a manner which worked unfairly on the general body of taxpayers; and the committee suggested, therefore, that some amendment of the law was desirable. I have received from the Commissioner of Taxation a voluminous analysis of the committee’s report. That analysis is currently receiving Treasury attention, and in due course will be considered by the Government. I regret as much as the honorable gentleman and members of the public who are interested in this matter that any delay is occurring, but I assure the honorable member that the Government’s best efforts are directed towards a satisfactory and speedy outcome of the committee’s deliberations.

page 274




– I ask the Minister for Labour and National Service a question. Now that the Government no longer subscribes to a policy of full employment but to one of maintaining a high level of employment, will the Minister say whether that policy means that the Government intends to maintain a pool of registered unemployed numbering about 90,000 persons? If not, what number of registered unemployed does the Government consider suitable to justify its policy of maintaining a high level of employment?

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

– I have never heard it said by any member of the Government that it has changed its policy of full employment. I have heard it said, from the Prime Minister down through the entire ministry that the Government, as an article of faith, believes in the ideal of full employment. The Government will stick to that policy. If the honorable gentleman cares to refer to the measures that have been taken during the course of the last few months and the expressions of opinion justifying those measures, he will know that at the back of our minds was the aim to reduce the level of registered unemployment as quickly as we could. The honorable gentleman will have noticed in to-day’s newspapers that last month the number of persons registered for employment was reduced substantially. If the honorable gentleman and his colleagues care to look at the facts they will see that that reduction is far greater than we normally expect in the month of July. I cannot forecast the future, but I can say that the Government’s policies are directed towards achieving the objective of full employment of the Australian people and of the country’s principal resources.

page 275




– In view of the fact that the Minister for Primary Industry recently announced that over a period there would be a guarantee of ls. 6d. per lb. for export lamb, and as the objective is to assist lamb producers, will whatever money is paid go to the exporter? What assurance can the Minister give that the financial benefit associated with this guarantee reaches the producer?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– Upon the recommendation of the Australian Meat Board and the two major producer organizations a guarantee of ls. 6d. per lb. for early

Iambs delivered between September and November was agreed upon. In respect of lambs delivered in the succeeding three months the agreed price was ls. 4±d. per lb. That will be paid to the exporter, and the grower organizations and the Meat Board consider that the competition that it will engender will bring about the desired result, so much so that the producers will have the guaranteed price, or the major portion of it, passed on to them.


– My question is directed to the Minister for Primary Industry. In view of the later season in Tasmania and the urgent need to re-establish stability in the Tasmanian fat lamb export market, will the Government extend the period for the guaranteed price of ls. 6d. per lb., less processing charges, for lamb exported to the United Kingdom from the present date of 1st December through December, January and February?


– It is not intended to extend the period which I mentioned in answer to the previous question, that is, from September to November, because lamb supplied in that period arrives on the United Kingdom market when there is a shortage of Iamb production in the United Kingdom itself and when very few New Zealand lambs are reaching that market. We want to encourage the delivery of Australian lambs during that period. Our supplies in the subsequent three months come, in a measure, into competition with supplies of United Kingdom and New Zealand lamb. It is because of the Tasmanian position that we did agree to extend the guarantee of at least ls. 4id. per lb. for the period December to February.

page 275




– My question is addressed to the Treasurer. Since there is in some States of Australia a great deal of misinformed comment about Federal assistance to the States, is he aware of the statement by the Lord Mayor of Melbourne that Victoria seems to be getting the thin end of the stick in the matter of payments for developmental works? If he has seen the statement, will he say whether that is a fact, and whether Victoria is being penalized at the expense of the other States?


– The only knowledge I have of the statement is a press account, which possibly gave in a very incomplete form what the Lord Mayor had said, because I can hardly believe that any responsible person who has followed the provision made by the Commonwealth by one means or another for one purpose or another in Victoria could come to that conclusion. After all, as one visits various parts of Australia one frequently hears the assertion that New South Wales and Victoria seem to be getting the lion’s share of developmental funds. The Snowy Mountains project is instanced as a major illustration of that point.

Quite recently, the Commonwealth has assisted Victoria and New South Wales directly with a major railway reconstruction scheme for the provision of a standardgauge line between Albury and Melbourne. Without trying to exhaust the catalogue, I think the Lord Mayor can remain assured that the Commonwealth Government tries to deal fairly with all sections of the Commonwealth, not purely on a State by State basis, but in its endeavour to do the best in the national interests for all concerned.

page 276




– My question to the Prime Minister is in relation to the standardization of the railway gauge between Port Pirie and Broken Hill. Last week the Premier of South Australia, Sir Thomas Playford, stated in the South Australian Parliament that he had received correspondence in which the Prime Minister stated that the Federal Government had decided to shelve indefinitely plans to standardize the Port PirieBroken Hill line. I ask the Prime Minister whether this is true. Does he not think that a company which pays over £1,000 a day in rail freights and produces over 200,000 tons of lead annually, and the welfare of the many thousands of persons who are dependent on the industry involved, are deserving of every consideration and attention?


– I would be reluctant to think that the Premier of South Australia had used the terms attributed to him by the honorable member. I will check up on this. If he did, I will give myself the satisfaction of making available the letter which I wrote to him containing the Commonwealth’s view.

page 276




– My question is directed to the Minister for Primary Industry. I refer to war service land settlement in Western Australia, where in some instances sub-standard development works have been carried out by the administration. I ask the Minister, therefore, whether additional work required to bring farms up to standard is considered to be a part of the planned work. If so, is the date of its completion also regarded as the date of completion of such planned work? When additional work is required, is the cost debited against the property to be paid eventually by the settler, or is it intended that such costs shall be written off?


– The honorable member used the words “ sub-standard development “. I could hardly accept that. I do accept the position that some additional primary development works are necessary because of re-growth or because of subsidence of land. This has happened in some places in the honorable member’s electorate. The work has been undertaken by the development authorities. The value to the settler, not necessarily the cost, is charged. This may not be the whole of the cost.

page 276




– I ask the Treasurer: Has his attention been directed to the comments made by Mr. Hiley, the Treasurer of Queensland, last Friday in relation to the Commonwealth Budget? Does he agree with Mr. Hiley that the Commonwealth Budget will have to be reviewed in the middle of the financial year? Does he agree with Mr. Hiley’s view that there is doubt as to whether the general provisions of the Budget will lead to revival in the commercial and private consumption sectors of the community? Does he consider Mr.

Hiley’s comments are honest and fair criticisms in view of the recent grants made to Queensland?


– I did not see the reported comments of Mr. Hiley, but I would be surprised to learn that a Treasurer from Queensland was other than delighted with the provisions made by the Commonwealth Government at the last meeting of the Premiers and again in this Budget. Indeed, while I was giving details of the Budget, I heard one honorable gentleman opposite interject that this was a Queensland budget. I do not necessarily accept that view, but certainly the Budget did carry a stage further the determination of the Government to see that the northern part of Australia is given some encouragement to develop.

If it is put to me that what we are proposing in the Budget will not produce the results we foresee, all I can add within the provisions of the Standing Orders is that the factual evidence which has accumulated, even by to-day’s press accounts, confirms the view that the Government put to the House in the Budget. I note that motor car sales in July were at a very high level - over 28,000 for the month - and that bank advances increased by £29,000,000. There is other evidence that a good level of buoyancy is developing inside the economy. We have the (encouraging employment statistics already mentioned by my colleague. I am confident that the Budget will, as the year goes on, achieve the purpose that the Government had in mind.

page 277




– I address my question to the Treasurer. Does he know that the Australian dried vine fruits industry does not enjoy a guaranteed price or any subsidy in the sale of its product, and that with prevailing lower prices overseas the industry faces real difficulty? Is he aware that the 121 per cent, sales tax on foodstuffs containing dried vine fruits is restricting sales of dried vine fruits in Australia? Will he give further consideration to abolishing this sales tax?


– The vigorous advocacy by the honorable gentleman of the interests of the dried fruits industry is well appreciated, I can understand the motives which impel him to bring forward a matter which he realizes to be an item of policy not normally dealt with at question-time. This is an important industry, and I commend the honorable gentleman for the persistence with which he brings its case before the House. But, Sir, the Government has already indicated that, for reasons on which I elaborated in the Budget speech, the range of concessions previously announced represented the maximum that we could advance at this stage.

page 277




– My question is addressed to the Prime Minister. In view of recent reports, damaging to Australian prestige and diplomacy, does the right honorable gentleman propose to have action instigated to enable the Australian National University to confer honorary degrees on persons distinguished in fields other than academic activities?


– The National University has a high degree of autonomy, and 1 am sure that the honorable member will agree that that is desirable. It makes up its own mind as to what it can or cannot do under its statutes. I may say, having regard to one comment that has been made, that any approach made by my own department was made in a highly informal fashion. I think it is satisfactory to know that while His Majesty the King of Thailand is here he will be given an honorary degree in the University of Melbourne, which offered to do this some time ago. I am, of course, quite pleased about that since it is my own university. I think, apart from that, that this controversy can become very embarrassing all around, and I would strongly urge that we avoid it. We are looking forward to a very happy visit by His Majesty, for whose services to his country and to the general field of learning we have the warmest possible regard.

page 277




– In addressing a question to the Minister for Primary Industry, I refer to proposals for setting up an overall wool authority and the implication contained in a reply to a question asked by the honorable member for

Wannon last week that the submissions of the Australian Wool and Meat Producers Federation and the Australian Woolgrowers and Graziers Council will be the basis for Cabinet consideration of this matter. Has the Minister read the paragraph in the report of the Wool Marketing Committee of Enquiry warning of the danger of confining management of the affairs of the wool industry to these two organizations, which may again split the industry into factions on an organization basis and perpetuate the unhappy situation which has obtained in the Wool Bureau? Will he consider the just claim for equal representation made by the Australian Primary Producers Union, the only organization giving truly specialized representation at all levels for their own industry exclusively?


– All the matters mentioned by the honorable member will be taken into consideration by the Government along with the submissions made by the major organizations.

page 278




– I ask the Minister for External Affairs whether the Government still pretends to be supporting the principle of self-determination in regard to the future of West New Guinea. If so, what reality can be attached to the principle under present proposals whereby West New Guinea will be occupied and administered by a nation which is aggressively determined to ensure that the ultimate vote will meet its will? Has the Australian Government sought or been able to gain any assurance that the United Nations will protect the rights of the West New Guineans to free political organization during the period of Indonesian trusteeship?


– There is no pretence about this Government’s support of the principle of self-determination. We have never wavered in our support of it nor have we failed on any occasion to make our view known. So far as the current negotiations are concerned, the honorable member appears to have a great deal more knowledge of what is being discussed than I myself have. The current negotiations are in the hands of the United Nations

Organization, for which I understand the party that the honorable members supports has unfeigned respect. The actual terms which the United Nations will accept to ensure self-determination have yet to be determined. The matter will be debated in the General Assembly of the United Nations, and the nations of the world will be able to say whether they are satisfied or not.

page 278




– My question is directed to the Minister for Primary Industry. Is it a fact that a conference of Japanese woolbuyers and mill representatives was held recently in Osaka to discuss rationalization of wool-buying? Is the Government aware of the decisions that were reached at that conference? Does this not represent a trend towards national buying to which the Wool Marketing Committee of Enquiry pointed as a danger and possibly as a justification for a change in the wool-selling system? Will the Minister give an undertaking that the Government will closely watch the position?


– I have no firsthand knowledge of the conference to which the honorable member referred and which is reported to have been held. As to an assurance about the marketing of wool, the Government has long since stated its views on this matter. We always seek the viewpoint of the industry itself, and in this instance the industry has made submissions that will bear ultimately on the marketing of wool. I am sure that we will always give sympathetic consideration to any submissions from the industry.

page 278




– I direct a question to the Minister for Labour and National Service. Has the Government abandoned its plan to build a £1,000,000 migrant hostel at Bradfield Park because of intense opposition from the honorable member for Bradfield? Was the Government deterred by the honorable member for Bradfield’s outburst and his threat that the migrants would be met with cold indifference or open hostility? Does the Government dissociate itself from this attitude? Can Australia’s immigration programme be adversely affected by the honorable member’s statements? Will the Government consider locating the migrant centre on Crown land in the electorate of Hughes where snobbishness would not prevail and where all sections of the community would cooperate in welcoming and assimilating new Australians?


– Perhaps I should say that my own opinion about whether the migrant hostel should remain at Bradfield Park was just about formed before I had heard that the honorable member for Bradfield had discussed the matter with the Warringah Shire Council. So I can say that my belief for some time has been that there might be a better location for the hostel. If other honorable members represent their electorates in the same thorough way that the honorable member for Bradfield represents his electorate, I think there would be no cause for complaint. In my personal discussions with him I have never heard him express himself in a way to which any person could take exception.

As to the abandonment of the hostel site, we have not made up our minds yet where the hostel will be situated, but I can assure the House that it will be on the North Shore line and close to the area where the residents work. As to the last part of the honorable member’s question about the effect of the alleged statements by the honorable member for Bradfield on our prospects of getting immigrants, I do not think there will be any adverse effect. I believe that this country offers opportunities to immigrants and I hope that, as the economy improves, the intake of migrants will be increased.

page 279




– Will the Minister for Territories inform the House whether additional teachers are to be employed to speed up the education of the indigenous children of Papua and New Guinea and, if so, how many teachers are to be employed? Are plans in hand for the provision of additional schools in the Territory?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– The expenditure on education in the Territory of Papua and New Guinea will be increased considerably in the coming year. We shall be recruiting teachers at three levels. There will be a recruitment of teachers with the junior certificate to undergo a special programme of training to teach in village schools; there will be a recruitment of certificated teachers, including teachers who have been trained under our own cadetship scheme; and there will be a very considerable recruitment of indigenous teachers, most of whom have been trained in our own training schools in the Territory. I shall obtain for the honorable member the exact figures in each category and, treating his question as being on notice, give him the detailed figures when they become available.

page 279




– Did the Minister for Labour and National Service, at a conference with officers of the Australian Council of Trade Unions and the Waterside Workers Federation, agree to have amendments made to the legislation dealing with long service leave for waterfront employees to meet some of the federation’s objections? If so, when does he propose to take appropriate action to fulfil this undertaking?


– I did have a conference with representatives of both the Australian Council of Trade Unions and the Waterside Workers Federation relating to some anomalies in the long service leave legislation and to what were called injustices. The representatives agreed to do their best to discourage port stoppages, and particularly the use of direct action. At present I say no more than that I want to see real evidence of goodwill on the part of the Sydney branch of the federation before I proceed any further. That branch is doing great harm to the community by stopping the shipment of wool, and is doing great harm to its own members by calling on useless port stoppages when it could have the matters in dispute adjudicated upon quickly by the Conciliation and Arbitration Commission by approach either through a board of reference or to the commission itself. At the request of the A.C.T.U., Mr. Justice Ashburner has now decided to consider how this problem should be handled and I hope that the action initiated by the A.C.T.U. will be the means of resolving the dispute quickly.

page 279




– My question to the Minister for Primary Industry relates to egg marketing. For some time the various State egg marketing authorities and the Australian body have been at variance and at times in conflict in relation to certain egg marketing practices. As a result, the egg producers have suffered. Did discussions take place recently between representatives of the State egg-producing interests with a view to arriving at a settlement of the differences which exist in the marketing methods adopted in the States? Have submissions been made to the Government? Do those submissions require any Government action? What is likely to be the outcome? Can this difficulty be resolved, and if so, how soon?


– The egg-marketing authorities of Australia, which include the Australian Egg Board and the marketing boards in each of the States - each State has a marketing authority - met recently and agreed to try to solve their problems. They were undercutting one another and causing dissension among themselves. They have agreed unanimously on a certain approach and have made a submission to the Australian Agricultural Council, which has given the submission its blessing. I shall be making a submission to the Government on this matter as soon as I -have reached a decision on the points involved.

page 280




– My question is directed to the Minister for External Affairs. Is it the policy of the Government to foster friendly relations with neighbouring Asian countries? Was it towards this end that an invitation was extended to Their Majesties the King and Queen of Thailand to visit this country? Will the action of the Australian National University authorities in refusing to confer an honorary degree on His Majesty undo any good which might have come from the visit? What action does the Minister intend to take to minimize the damage done to Australia’s reputation by the decision of the Australian National University?


– I would have thought that both sides of this House shared my view that one of the most important things we can do is promote and extend friendly relations with our neigh bours. I am not sure that there are many members of this House who would think that the honorable member’s question helped towards that end.

page 280




– My question is addressed to the Minister for Territories. I ask him whether, and in what form, government assistance is given to aid the aboriginal natives at Bathurst and Melville Islands. If assistance is given, is it in the form of goods, or is financial aid given, particularly to the mission station at Bathurst Island?


– Government aid to Christian missions in their work among the aborigines in the Northern Territory is provided for in the Budget recently introduced, and the amount of assistance for this financial year will be about £750,000. The two missions mentioned by the honorable member will share in that government assistance. The assistance is of various kinds. We give what are known as operational subsidies. These are related to the work done on a mission. For example, a subsidy of a fixed amount will be given for each trained teacher or trained nurse employed, or for a tradesman or artisan engaged in giving technical or agricultural training to the aborigines. Another form of operational subsidy is a contribution towards the upkeep of the children and the aged and infirm, our general policy being that the able-bodied should be employed and should help to make the mission to some degree self-supporting by engaging in useful occupations, while the children, the aged and the infirm are maintained by us - that is, by the taxpayers. Another form of assistance is a contribution towards capital improvements. If a mission will submit a proposal, and also submit its accounts, approval for capital assistance for the provision of buildings or other accessories to mission work may be granted. Then there is a further form of assistance by way of long-term, lowinterest loans to church and missionary bodies for the building of hostels and similar institutions for the reception of aboriginal children. In total, the aid of all kinds to all Christian missions will be about £750,000 in the current year, the principal beneficiaries, receiving almost equal amounts, being the Church of England, the Methodist Mission, the Roman Catholic Church and the Lutheran Church.

page 281




– I ask the PostmasterGeneral a question. He will recall that on a previous occasion, inspired by the Brunswick City Council, I asked him whether he would have a postage stamp issued bearing the likeness of a famous and handsome Australian who has rendered, and is still rendering, exceptional service to this country. The honorable gentleman refused to do so. In view of the great interest that the Prime Minister has displayed in this Australian, and others like her, I am emboldened to ask whether the PostmasterGeneral will change his mind and have a stamp issued bearing upon it the likeness of an Australorp.

Postmaster-General · DAWSON, QUEENSLAND · CP

– I see no reason whatsoever to change the decision previously conveyed to the honorable member for Scullin.

page 281




– I wish to ask the Minister for Repatriation a question about the drug phenacetin. Is action to regulate the use of this drug necessary? If so, what action has been taken by the Repatriation Department?

Minister for Repatriation · DARLING DOWNS, QUEENSLAND · LP

– Quite a lot of publicity has been given to this drug lately through the press and by other means, and I understand that the National Health and Medical Research Council is considering the matter at present, in the general sense. The Repatriation Department has established in all States drug advisory committees which advise repatriation general hospitals and outpatient clinics on the use of certain drugs. Phenacetin has not been approved by my department for approximately eighteen months in South Australia on the advice of the committee in that State. The advisory committees in other States have considered that the drug could be used, but it has been used under the strict control of the medical Officers of the department in both the repatriation general hospitals and the outpatient clinics. We shall watch carefully the determination of the National Health and Medical Research Council, and we shall take into account in the future whatever emerges from its consideration of this problem.

page 281



– I lay on the table the following paper: -

Audit Act - Finance - Treasurer’s Statement of receipts and expenditure for year 1961-62, accompanied by the Report of the AuditorGeneral.

Ordered to be printed.

page 281


Statement of Expenditure

HigginsTreasurer · LP

– I lay on the table the following paper: -

Statement for the year 1961-62 of Heads of Expenditure and the amounts charged thereto pursuant to Section 36a of the Audit Act 1901-1961 (Advance to the Treasurer).

Ordered -

That the statement be taken into consideration in Committee of the whole House at the next sitting.

page 281


Discharge of Motion

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

That the following Order of the Day, Government Business, be discharged: -

No. 8 - European Common Market - Ministerial Statement - Motion for Printing Paper - Resumption of debate upon the motion, That the paper be printed.

page 281


Ministerial Statement

Debate resumed from 9th August (vide page 263), on the following paper tabled by Mr. Menzies: -

Common Market Negotiations - Ministerial Statement, 9th August, 1962.

And on the motion by Mr. Hasluck -

That the paper be printed.


.- Mr. Speaker, in my maiden speech to this House five and a half years ago, I made reference to the negotiations then proceeding which were designed to promote the unity of Western Europe, and I suggested that the sooner the views of Australia on these matters were developed the more effective they were likely to be. I now propose to use my new-found freedom to add a few words.

This issue promises to be a crucial turning point in world history. It is not likely, therefore, to be resolved easily, quickly and without profound thought, deep heartsearching and clash of opinion. At this juncture, the fate of millions of Australians could, perhaps, lie in our hands, and be determined by our conduct. We have, therefore, a solemn duty to the nation to lift this question out of the rut of petty parochial politics.

Before venturing any further views on this matter, I should like to clear up three points. First, I have never said that the Australian industries most likely to be affected by these negotiations, or the people dependent on those industries, were unimportant, or that we should not do our utmost to protect their interests in the difficult negotiations now proceeding. Indeed, like my colleagues, I applaud the strenuous efforts made in this direction both by the Prime Minister (Mr. Menzies), and by the Minister for Trade (Mr. McEwen), whose labours on behalf of the rural industries with which he has been closely associated for the whole of his working life have been herculean. The general opinion which I have expressed, and for which I have paid, and to which I adhere, is that, when looked at from the viewpoint of the Australian economy as a whole - I repeat, as a whole - the overall economic effects on Australia of Britain’s entry into the European Common Market are likely to be minor and, in years to come, could well be beneficial. Indeed, one of the reasons why I believe this to be so is to be found in the very success of the magnificent, many-sided efforts, over a long period, by the Minister for Trade and the Department of Trade to open up, expand and diversify the markets of the world for the export products of Australia. The suggestion by the Deputy Leader of the Opposition (Mr. Whitlam) that nothing dynamic or effective has been initiated in this vital matter may represent slick politics, but it is very far from the facts.

Secondly, I believe that if any of our industries, particularly the rural ones, do suffer loss of markets as a result of Britain’s entry into the European Economic Community, the Australian Government should underwrite the cost of the reconstruction of those industries so that hardship is avoided both for the producers themselves and for the families dependent on them. The social fund principle evolved by The Six to meet the problems of dislocation and redeployment is worthy of emulation here, should the need arise. Apart altogether from the products they produce, the human qualities and values which flourish in our countryside are an essential ingredient of a sound and healthy national life. I cannot believe, Mr. Speaker, that it will not be well within the capacity of our broad and growing economy to finance with relative ease an effective solution to any problems which are likely to arise.

Thirdly, whatever views are uttered by public men about the magnitude of the potential economic effects on Australia of British entry - clearly it is a matter of opinion, and I respect those whose opinions differ from mine - they will make little impact on the experienced, well-informed, knowledgeable and hard-boiled professionals engaged in these operations. I have worked for too long among their kind to suppose that they do not know the score. Anything we may say in this regard, whatever its influence on public opinion here or elsewhere, will be shrugged off as the routine guff of popularly elected persons, commonly known by a homelier term.

Turning now to the basic issue, may I remind those whose thoughts, very understandably, are focused mainly on particular industries, that the greatest economist of all times, Adam Smith, noted that defence was more important than opulence. It is vain to argue over the price of a crop which is about to be consumed by a bush fire. The current negotiations, though conducted in terms of trade and economics, are at heart not economic at all, but political. The superficial issue is trade, the real one is that of redrawing the political map of the world. What is at stake is the environment in which future generations of Australians will rear their children and develop their country. Political figures, however eminent, are here to-day and gone to-morrow, but decisions made in their fleeting moments of climacteric power may well uplift or darken the lives of millions yet to come.

My approach to this problem, Mr. Speaker, is simple. What matters most in life to me is the future of my family and the young Australians, of which they are a part. I do not suppose that many of us are very different. As a nation we are largely a multiplicity of families. The future security of Australia means more to most of us than the profitability of any industry, however important, and certainly more than any sophisticated arguments about constitutions and sovereignty. Montesquieu, Austin and Dicey are all dead, but sputniks and fusion bombs are very much alive and are no respecters of sovereignty. May I recall to the House that twice in our lifetime eruptions in Europe have handpicked for slaughter the finest flower of Australian manhood. Does anybody suppose for one moment that we can elude any future miscarriage of events in Europe? Our prime task is to make Australia secure in a dangerous world, without regard for the sentimental hangovers of history. If, by some chance, we lose a bit of trade in the process, then let us compensate and help the unfortunate few who suffer loss. There is no future in drifting idly upon the stagnant pools of the past.

European integration, of which the Common Market is an essential expression, is a keystone of the grand design for Western survival. The prospect of the ancient, dynamic and talented nations of Western Europe burying their mutual animosities to work in harness together, tempered in their outlook upon the world by the progressive participation of Britain and urged forward by and enjoying the blessing and goodwill of the United States, must surely cheer us on the road ahead and help to sustain our future life. Western Europe, North America and Australasia, the trilogy of our civilization, cannot afford to let petty matters impede a growing unit. All our close-knit strength, all our wit, will and wealth will eventually be needed to overcome the materialist menace of Communist barbarism, to raise the less fortunate peoples of the world from poverty and ignorance and to guide the footsteps of the world along the paths of peace.

It is, of course, a tremendous decision for Britain to make. Though the effects may be felt only slowly, it is the direction that counts. The progressive mixing of Western European politics and policy will be a difficult and painful process, requiring great understanding and forbearance. The economic consequences to Britain could be favorable, but there must be massive risks. Much will depend upon the spirit of the plunge. A confident Britain, determined to succeed in the close company of those amongst whom she has held her own for 500 years, must surely, in the long run, emerge as a strong beneficent influence.

The risks of closer European integration are with us and with Britain, in any case. Without Britain, a powerful Europe could easily fall victim to an aggressive grandeur and Britain itself shrink gradually in relative power and influence to but a small and fascinating relic of history. The peoples of Britain and the rest of Europe have mixed up together with outstanding success in the United States and, to a minor extent, in Australia. We should like many more of them ourselves. The number of Australians whose antecedents are continental European is growing. Australia needs the people, the capital and the enterprise of Europe to help it grow and achieve security. We need Britain to help lead and temper the growing European power. Our interests, outside certain items of trade, run parallel with those of the United States and, indeed, of the whole English-speaking world. We should be able to look to the United States to ease any economic difficulties which arise in the process. If Britain is willing to undertake this task, thereby providing us with a channel of influence and a ready access to the new dispensation, surely, far from restraining her, we should urge her onwards.

The implications to the Commonwealth of British entry must be considered in the light of what the Commonwealth now is and is likely to become, not what it used to be. When, last year, I attended the Commonwealth Parliamentary Association conference in London and visited various parts of Britain in the company of many parliamentarians of diverse races, creeds and outlook, amongst whom I made a number of good friends, it was forcibly impressed upon my mind what a very different affair the

Commonwealth now is from the old hard core of like-minded nations which we knew only a few years ago, and which, together with the United States, formed the solid core of Australian security. To-day - let us face it - members of the Commonwealth in the United Nations often side with our mortal enemies, which are also the enemies of liberal civilization. Their associations and influence are frequently thrown into the scale against us. Some of them who receive substantial aid from other members of the Commonwealth are even apt to bite the hands that feed them.

When the chips are down and life is at stake one needs friends, not lectures on morality. This does not mean that the Commonwealth does not have an immensely constructive part to play in the world. The ties of the past are changing form. The English language, the rule of law and parliamentary institutions form an enduring bond, whilst the personal friendships easily engendered among those in influential positions bridge different races and soften the terrible tensions close beneath the surface. Far from breaking it up, the unity of Britain with a strong Europe is more likely to underpin the Commonwealth with the power and wealth which alone in the long run can sustain it. This unique club, which President De Gaulle finds so hard to comprehend, could prove one of the few vehicles left for bringing aid to the poorer parts of the world in ways which preserve their self-respect and eventually incline their hearts towards the freedom and ideals of the West.

The slow melting of British sovereignty into something bigger and stronger may complicate membership of the Commonwealth club, but in the course of time this flexible body has digested many changes. It is the spirit which is now the essence and which, with careful cultivation, could continue to enrich the life of the world. The Commonwealth is a precious institution, but let us recognize its material limitations. It cannot in itself provide the future foundation for Australian trade and security.

The months ahead will be difficult indeed for those who bear the major responsibility of bringing together, reconciling and balancing legitimate trading interests with the needs of our future existence. Let us wish them well in their task and, for Australia’s sake, hope that they prove successful.

East Sydney

.- The intrusion of the honorable member for Wentworth (Mr. Bury) into this debate has emphasized at least one thing - the great disunity that exists on the Government benches on this important matter. It is significant that when the honorable member rose to speak the Government benches were very silent. I believe that he would have received much greater support from his colleagues had the great white master not been at the table.


-Order! The honorable member must withdraw that remark.


– I withdraw it. I

Mr Peters:

– After all, he is white.


– Order! The honorable member for Scullin must withdraw that remark.

Mr Peters:

– I withdraw the remark.


– The Prime Minister (Mr. Menzies) was at the table and no doubt was prepared to make a note of anybody who expressed approval of the viewpoint expressed by the honorable member for Wentworth. Such persons would have been marked for the axe. It is significant also that while the honorable member for Wentworth was speaking - enjoying his newfound freedom, as he put it - neither the Minister for Trade (Mr. McEwen) nor the Minister for Social Services (Mr. Roberton), each of whom had made very strong critical statements about the honorable member for Wentworth, remained in the chamber to hear him.

I propose to express a few views of my own on this very important matter. Every honorable member who has contributed to this debate has emphasized that there are economic and political implications associated with the European Common Market. In my opinion the main motive for the establishment of the Common Market is political rather than economic. People talk about a united Europe, but who imagines that the Common Market will establish a united Europe? Some people have said that the establishment of the European Common Market will contribute towards the preservation of world peace. The Common Market will not unite Europe; it will permanently divide Europe. The real purpose behind the Common Market is to strengthen the North Atlantic Treaty Organization. President Kennedy, in his Message to Congress on 30th January this year, said -

The unity of Nato has been weakened by economic rivalry. There is the reason for the Common Market proposals. The United States of America objected to the association of neutrals, such as Switzerland and Sweden, with the Common Market. We know that for some time the United States of America has been anxious to relieve itself of the great financial burden of maintaining large occupation forces in Europe. So now we have this proposal to establish what may be described as the new Rhine axis - an axis between President De Gaulle of France and Adenauer of West Germany.

One thing that may keep Britain out of the Common Market is the fact that President De Gaulle is not anxious for Britain to enter because he wants to be the predominant voice in the Common Market. It has been said that whether Britain enters is a matter for Britain herself to decide. Nobody disputes that - certainly I do not - but I do dispute the right of the Conservative Government of Britain, under the leadership of Mr. Macmillan, to decide. That is a vastly different thing from the right of Britain to decide because, as far as I can ascertain, when the last British elections were held no political party put forward its views on the European Common Market. The only way for Britain - this means the people of Britain - to decide is to conduct a referendum or to defer a decision until after the next general elections. Every by-election that has been held in recent times has indicated that if the Macmillan Government went to the people to-morrow it would be rejected.

Our Prime Minister and the Minister for Trade say that they see great political advantages in the creation of the European Common Market, but they are not prepared to accept the view that there are economic advantages. The British Labour Party is itself unable at this point of time to make up its mind whether it favours Britain’s entry into the Common Market. Mr. Gaitskell, leader of the British Labour

Party in the House of Commons, during the debate on 6th and 7th June last, said -

The creation of a European federal state, including Britain, might reach a point so dangerous to the Commonwealth that it would not be contemplated. But, it would also be dangerous for Britain to stay outside the Common Market. We might find ourselves a little island off Europe and nothing else.

He said also -

It should not be assumed either that Britain would increase her prosperity by going in or that she would suffer a catastrophe if she stayed out.

He claimed that supporters of Britain’s entry had grossly exaggerated their case, and that opponents to her entry had greatly exaggerated the political dangers. The British Labour Party will not express an opinion on this matter until it knows the terms on which Britain will be permitted to enter the organization. We must ask ourselves: Are there political dangers? In my opinion there are political dangers associated with Britain’s entry into the Common Market. Just as Berlin has been divided by the erection of a wall so, in my opinion, will Europe be divided by the Common Market. The Common Market will not mean a united Europe; it will mean a permanently disunited Europe.

The Common Market provides for complete economic and political integration of members. If Britain joins she must sacrifice some considerable degree of her sovereignty. The removal of the internal trade barriers, the erection of an external tariff wall, a common agricultural policy, the free movement of labour and capital, harmonization of social policies - all these things are contained in the Treaty of Rome, which contains the proposal to establish the Common Market, and most of them have already been accepted by the British representatives.

The members of the Labour Party of Great Britain are not all of one opinion in respect of this matter. Mr. Douglas Jay was reported as having said, “ The Common Market involves a loss of control by the British Government over much of our internal social and economic policy to an undemocratic body “. He referred to it as a major surrender of sovereignty, and when we come to examine the organization that is to control the Common Market we must agree that it is undemocratic. There is an assembly of 142 members, appointed by the respective governments; there is a council of ministers of six, one from each of the six principal nations, but not all exercising the same power; there is an executive commission of nine; and there is a court of justice of seven judges.

Mr. Jay went on to say the assembly has no power, except that of dismissing the whole commission. If Great Britain goes into the Common Market it does not mean that the power of President De Gaulle and Chancellor Adenauer is going to be considerably weakened, because, in the council of ministers at the moment, West Germany, Italy and France, the major partners in the Common Market, each exercises four votes so that they have to-day twelve votes out of seventeen. If Britain joins she could not expect to exercise any more votes than the other major powers. This would mean that West Germany, France and Italy would have twelve votes out of 21 and still have control of the organization.

Mr. Jay’s comment on article 155 of the Treaty of Rome was -

The Commission associated with the Common Market organization is entitled to reach certain decisions of its own, which would not automatically bind a British Government, but would automatically become law in the British courts, without the British Government, the Parliament, or electorate necessarily being consulted.

Time is not sufficient to allow me to cover the whole field. I want to deal with some of the dangers to the Australian economy. There is no doubt that the removal of the British market preferences will seriously affect certain Australian industries, but the Minister for Trade (Mr. McEwen), who is claiming to-day to defend the right for the retention of these preferences in the wider Common Market area, was not always of the same opinion of the value of these preferences. He was reported in the “ Daily Mirror “, of 1 7th November, 1954, as having said, when talking about the Ottawa Agreement, under which these British Commonwealth preferences were established, that British exports benefited under the Ottawa Agreement to the extent of £200,000,000 per annum, whereas Australian exports to Britain benefited by only £15,000,000 per annum. If the Minister was right then, he has nothing to protest about now, because if that was the measure of benefit received by Australia one would imagine that to-day he would be asking for the removal of those preferences, rather than for their retention.

If Britain enters the Common Market Australian exports can be admitted to the wider market in Europe only if there is a community shortage, and they would be admitted only on terms and conditions fixed by the commission. It must be obvious to every member of this Parliament what a serious situation that creates for many of our important export industries. It may be claimed by some people that it is to Britain’s ultimate economic advantage to enter the Common Market. I am not able to determine that. I say that is a matter for those representing the British people in their Parliament - their direct representatives. But I do know that it can create in the immediate future tremendous economic difficulties for Britain because the establishment of a common agricultural policy will obviously mean that Britain will lose the advantage to British industry of the cheaper food that she now receives from Commonwealth countries, and the cheaper supply of raw materials for industry. She will have to share with the other six European countries, if she joins.

It will be inevitable with rising costs in Britain - and Britain has other economic difficulties at the moment - that she will continue to lose her share of the world market. In my opinion, it will be inevitable, if Britain joins, that it will not be very long before she will have to devalue her currency. That could be a serious matter for the Australian community because our overseas financial reserves are mostly held in sterling. If sterling is devalued it will be a considerable blow to the value of our overseas reserves; it will mean in Britain a reduction of real wages. It will mean strikes in industrial fields; and with the right under the Common Market agreement for the free movement of labour it will mean that surplus labour in any of the European countries could be used to break British strikes against reductions of wages or industrial standards. Higher costs in British industry will prejudice that country’s exports to other world markets. Therefore it must be clear that there are great dangers for Britain as well as for others if she joins the Common Market.

Let me turn to the question of Australian exports. Our share of the United Kingdom market has been decreasing for some time. In 1939, 54 per cent, of our exports went to the British market; in 1961 it was down to 32 per cent. Besides the £170,000,000 worth of Australian exports, which I do not say are to be lost completely if Britain enters the Common Market, but which must be regarded as being in danger, £150,000,000 worth of our exports to Common Market countries could be affected as well. Let me take a few commodities. If Britain enters the Common Market I am one of those who believe wool could be affected. For some time we have heard in this Parliament talk about pies in the wool auction system, where buyers gang together so that there will be only one bidder. Six European countries will be bidding as one for our wool. It could bring about a reduction in the price of Australian wool.

We send to the British market every year approximately 28,000,000 bushels of wheat. France sends 11,000,000 bushels to the United Kingdom, but 40,000,000 bushels of French wheat goes to non-European countries. What will happen under the common agricultural policy? Every year The Six fix a target price, and the target price will be at a figure higher than the world price in order to encourage local production. That is one of the objectives of those in charge of the economic affairs of the Common Market.

What is the present position? The export price received for French wheat is 13s. 4d. and the internal price is 20s. In West Germany it is 27s. 6d. a bushel. As I have said, 40,000,000 bushels of French wheat now goes to non-European markets and growers get 13s. 4d. a bushel for it. Is it not obvious that if they can get £1 a bushel, as they will be able to claim under the Common Market arrangements, that 40,000,000 bushels, or portion of it, will be sold to Britain at the expense of the 20,000,000 bushels now supplied by the Australian growers. That will be a serious matter for the Australian wheat-grower.

As I have said, there is no advantage in bringing down our costs of production because that factor does not enter into the consideration. You can supply your surplus production to the Common Market only if the community suppliers are unable to supply - if there is a shortage of supplies - so costs do not enter into the matter. Six countries have variable duties, and if we reduce costs here, it does not mean that that will assist the producers by giving them a share of that market because the variable duties principle would then be applied. The lower your costs of production the higher the duty; the higher the duty the greater the return; and the returns from these duties go to boost and encourage the expansion of production within the Common Market. So we can see that our wheat industry is going to be seriously affected. I do not know whether honorable members are aware of it, but in the last two years the wheat industry in Australia has been subsidized by just on £19,500,000, and if it had not been for the fact that in the last year, 1960-61, the People’s Republic of China took 26 per cent, of our wheat exports the wheat industry in this country would have been in a very precarious position.

Let me briefly deal with the inertia of the Government. It has neglected to prepare any plan for Australia to follow should Great Britain enter the Common Market. The Prime Minister said that the Government had not been asleep, that Great Britain had four times changed its attitude and that the Government did not know until Mr. Duncan Sandys visited Australia about twelve months ago that Great Britain intended to join the Common Market. He said in a statement he issued that the Government took a different view from that taken by Great Britain. He went on to say, “ We refrained from giving approval to the opening of negotiations “, and then qualified this by saying, “ Of course, we were not asked to do so “.

Has the Minister for Trade taken a strong line on behalf of Australia? The Prime Minister went overseas, in my opinion, not to help Australia’s case but to counter the growing prestige of the Minister for Trade. His prestige had been growing because of the great amount of publicity he has received in the Australian press. When the Prime Minister went to Washington, he was given the full treatment. Did he put Australia’s case or the proposals we are told have been put forward on behalf of Australia? Nothing of the kind! He said he refused in Washington to argue specific commodities or to seek specific undertakings about Australian trade. He said he had decided not to argue about words or about dogmas. Was that not a rejection of the attitude adopted by the Minister for Trade? When talking to a group of Americans in Sydney not very long ago, the Minister for Trade advised the Americans to keep out of our hair, that they were interfering too much.

Let me briefly deal with the question ot Australian manufactures. Our exports of manufactures to the British market amount to only £5,000,000, but under the Brussels agreement all preferences on these goods are to be abolished by 1970. The Prime Minister and Mr. Marshall of New Zealand said they were shocked and they protested. But does the Prime Minister not know that Mr. Heath, who represents Great Britain in these negotiations, was the one who suggested to the Brussels conference that the preferences for Commonwealth manufactures should be abolished? 1 come now to the Bury incident. This shows that there is a division in the Government. Does any one believe for one moment that the former Minister for Air spoke as an individual when, on three occasions, he read a typewritten speech expressing a point of view with which the Minister for Trade disagrees but with which the Prime Minister largely agrees? It was only because of the insistence of the Australian Country Party that the former Minister for Air was removed from the Cabinet. Inside the Cabinet, there is at least one other Minister who supports him, and there are also quite a few members of the Liberal Party who agree with the attitude he has adopted.

I want to deal with the Government’s proposals. It put what I regard as an unrealistic proposition to the Common Market negotiators. The Government wants comparable outlets to the Common Market area for the same quantity of commodities that we previously sent to Great Britain plus an addition to allow for development. Who for one moment would believe that the Common Market countries would accept such a proposition? Is it not an impractical proposition?


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


.- I believe that the views expressed by the former Minister for Air (Mr. Bury) made an impression on this House and the country, which will not be quickly forgotten. These views should commend themselves to both.

In opening this debate, the Prime Minister (Mr. Menzies) divided the subject into two categories - the economic and the political. This is, I think, a correct division. The Prime Minister put most of the emphasis of his speech on the economic aspect. In a negotiator for Australia, this was understandable, but I believe that the real substance of the matter is one of politics, if we call survival politics, and it is here that we should place our greatest emphasis.

I agree with the view put forward both by the Prime Minister and by the Minister for Trade (Mr. McEwen) that if Great Britain enters the Common Market, the transitional difficulties for certain Australian industries will be very great indeed. I would think, because the structure of our trade has been built on the presumption of British preferences, we have a right to ask for transitional arrangements of the best possible kind. I am by no means convinced, however, that over the long term the economic effects - I will come to the political effects later - of Britain’s entry into the Common Market will be substantially to the disadvantage of Australia. I say this with the qualification that at this present moment none of us is clear about the exact terms on which Britain will enter the Common Market. I therefore follow the Prime Minister in assuming, for the purposes of this argument, that Britain will enter the Common Market on the terms which appear, on best analysis, to emerge as the likely outcome of the last Brussels conference. For Australia, these terms mean that by 1970 our preferences will substantially be gone. The Prime Minister remarked that this was an assumption he made. I think it was a justifiable assumption and I propose to follow it.

Even if we lose our preferences - as the Prime Minister said, this is the worst hypothesis and the outcome, from the point of view of Commonwealth preferences, may be better - I believe that the long-term effects on Australia will not necessarily be very bad. There will be pluses and there will be minuses. There will be industries which will suffer. For those industries I would hope and believe, as my friend the honorable member for Wentworth (Mr. Bury) said, that Australian resources will be available in some kind of equalization fund to make certain that no undue hardship falls on any section of the community. We do not in this context forget the human values. But over the long term, it may well be that even the rural industries, looked at as a whole, will have something to gain from these arrangements. The new world agreements will be world agreements about primary products. There will be a new outlook, which means that primary products will be made available to the less fortunate and starving people of the world, means that the rich countries - the United States of America and the rich European countries - will be helping to buy from Australian farmers food that will go to people who would otherwise die of starvation. This is inherent in the future. Are we going to throw it away? Are we going to sacrifice the long-term interests of our wool industry, for example, still incomparably our greatest earner of export income, for the interests of minor rural industries?

I repeat that if there is any dislocation, the whole community, rural and urban, should come to the equitable rescue of those who will bear the burden of the dislocation. This is not a new view. As the House knows, 1 expressed it some months ago here. I reiterate it. I stand by it. I do not forget the human problem. But looking at the interests, even of rural industry, as a whole it may well be that the advantages, in the long run - not in the transitional period - outweigh the disadvantages. If we are to have increased population here then we need freedom of negotiation for our secondary industries, and the secondary industries provide the home market which, for the rural industries, is the mainstay of income. Most of the income of these industries - though not of the wool industry - comes from the home market.

We should see ourselves as a growing country with an expanding population. Let us get rid of the old apron string outlook which is inherent, unfortunately, in the vested interests which demand the preservation of the economic status quo. It is time for us to grow up. If the problems of economic adolescence have some awkward factors in them that is no reason why those problems should not be faced. Hence I would say that while Australia has every reason to press for the best transitional arrangements and even, perhaps, for their extension, we should not be thinking in terms of permanent preferences. That would not be to our advantage.

It has been said here and elsewhere that the balance of advantage of the preferential system lay not with the Australian producer who was producing cheap food for the British market and subsidizing it by charging the local consumer a high price, but rather with the British manufacturer who has been getting the corresponding advantage and, therefore, has been in a position to push up the price of secondary goods which the Australian population, rural and urban, has to pay. If this is so then, from the purely selfish viewpoint of the Australian community - and this is a view which has been canvassed although not necessarily one that I would take - over the long term it would be to our advantage to go into this new adult world and to leave our economic adolescence behind us. We are grateful for the apron strings, but surely we are starting to outgrow them now.

Therefore, I believe that the Minister for Trade was not quite accurate in emphasizing what he called the “precipice” solutionthe “cutting-off in 1970” as he called it. What was proposed was the opposite to a precipice. It was a gradual process, terminating in 1970. We are justified in asking for the best transitional arrangements, and in endeavouring to help in human and other terms those who are disadvantaged by international economic dislocation. It may well be that we would have done better in negotiations and that we would be getting more if we had approached this matter in a less obstinate fashion. There are commodities - sugar is the greatest - which require special treatment. If we could concentrate on those commodities then we might be able to obtain some special long-term arrangements.

Our tendency to over-emphasize has, perhaps, kicked back in our faces, even when it comes to the pure economics of the situation.

I have spoken of the part played by the Minister for Trade. The Prime Minister has used his splendid eloquence - and it is a splendid eloquence - in order to put, not perhaps the same case, but a very similar one. I wonder, perhaps, whether the Prime Minister has entirely convinced himself of the case he is putting forward. I know his difficulties here. Nobody would know them better than I would. There is the trouble in connexion with a possible division between the two parties. There is a small majority and the necessity to take the position which will commend itself to the floating vote. These are very real difficulties, and we should not under-estimate them. But I wonder whether the Prime Minister who is, after all, first and foremost a splendid advocate, is entirely convinced, himself, of the case that he is making. For example - and it is a small thing - last Thursday I heard him speak of possible repercussions in Port Pirie. Yet, only two days before, he had written to the Premier of South Australia denying Port Pirie the rail advantages which it might need for survival. Does this argue an entirely consistent case? It is a small thing, and I mention it only in passing.

I have spoken too long on the economic side of this matter. It is the political side which is really important. It is here that the role played by the Prime Minister has been and will be important, because he is a figure commanding international attention in London. The British believe that this political aspect is of prime importance. It is only a few years ago that the United Kingdom Cabinet said that the United Kingdom should not enter the Common Market, partly because of economic stresses which it would cause in the United Kingdom - and there will be economic stresses - and partly because of a potential loss of sovereignty. These were real fears which were expressed only a few years ago. Yet they have now been overborne by the insistent political need for Britain to enter the Common Market as part of the general survival plan of the free world.

We all remember how, in 1940, in a crisis, Sir Winston Churchill offered France union with Britain - a political union even going beyond what is predicated in the Common Market. This was not taken up because France fell. But I would suggest to the House that the crisis of survival in which we stand to-day is at least as bad as the crisis of survival which Britain faced in 1940. It may be difficult for members to realize this because one of the insidious things about the present situation is that it has come upon us unawares almost. Yet it is here. The survival of Europe, the United Kingdom and Australia is going to depend on the mobilization of the forces of the free world against the forces of aggressive communism. This is the dominant issue of our time. Are we going to face up to it? If we do not face up to it we go down.

The part of Britain in this alliance may be a key one. She has to go into Europe to use inside Europe that undoubted influence that she possesses. This may have to be done at considerable sacrifice to herself, but it is not the first time the British people have faced such a national sacrifice for the survival of the values they believe are transcendent in a world that they hope will be a free world.

Communism is advancing. Our delaying tactics are not good enough. Let us look at the thirteen years in which this Government has been in office. I am not suggesting for one moment that this Government has a controlling influence in world affairs; but during those thirteen years, communism has advanced. It is still advancing and it must be stopped. If we are led aside by selfish considerations - even though as I believe, the selfishness is in this case misplaced - or if we are led aside by small considerations which may have loomed large in the past but which are small against the devouring threat of current history, then not only shall we fail to survive, but we shall deserve to fail to survive.

Our voice should not be raised to turn Great Britain aside from her destiny. Our voice should be raised to help Britain face what is not a pleasant situation but could be a disastrous situation if Great Britain runs away from it. I hope that the splendid eloquence of the Prime Minister will be used in September, not for overplaying a case which we undoubtedly have and which is good in principle but to encourage Britain. 1 hope it will be used to tell Great Britain that we stand by her in the free world. I hope it will be used to help us face the fact of a new order which we hope we can build. If we do not build it, it will be built by somebody whose ideas are not ours at all.


.- It is with a good deal of trepidation that I enter this debate. I realize, however, that it is necessary that those who have given any thought to the European Common Market, which is the subject of this debate, should courageously express their opinions and do what they can from their own point of view to influence the course of events that are being shaped in the United Kingdom and particularly at Brussels.

I have noticed that there is quite evidently a very strong difference of opinion within the ranks of the Government. I read the speech that was delivered by the Prime Minister (Mr. Menzies) in August, 1961, thoroughly, and I am quite satisfied that at that time, in reality and in his own heart, the right honorable gentleman was not an ardent supporter of the idea of the European Common Market or of Great Britain’s entry into it. After listening to and reading the more recent speech of the Prime Minister on this subject, I am still satisfied that in his own heart, he has not changed his point of view. I am also satisfied that because of the influence of the Australian Country Party in the Government coalition, the Prime Minister has been induced to trim his sails somewhat.

That brings me to the point on which I agree entirely with the honorable member for Mackellar (Mr. Wentworth) and it is this: In the main, the so-called European Common Market is really a political move. It is undoubtedly a move by the people of The Six and of the reactionary conservative forces of Great Britain because the people of the United Kingdom themselves have not been consulted. The British Prime Minister, Mr. Macmillan, did not go to the electorate to announce that his party intended to negotiate for Great Britain’s entry into the European Common Market. I am satisfied that when reference is made to the intentions of the United Kingdom in this matter, we are speaking of the outlook of and the motives behind the great conservative forces of the United Kingdom.

Like the Prime Minister of Australia, those forces in Great Britain believe that this is not so much a matter of economics but a matter of politics. They have said so. It has been so stated by Mr. Macmillan. The political fact is that these people fear the Union of Soviet Socialist Republics. Quite conscientiously and sincerely they believe that Russia is a world military power of great might. They believe that by setting up an economic bloc, they can hope to strengthen the economic system of Europe. In this way they hope to be able to offer, in a military sense, a much greater bloc to face the power and the military might of Soviet Russia. From their point of view, their ideas are reasonably sound, but they are also naive. Do they fully understand the implications?

In my opinion, nothing could be more calculated to intensify the anxieties and tensions which exist between the Soviet bloc and the Western world, than the European Common Market. The net result must be similar to the outcome of the armaments race. If one side gets an atomic weapon, the other seeks to develop a hydrogen weapon. If one develops a hydrogen weapon, the other seeks some more deadly form of atomic weapon. If one goes into space, the other must go into space. There is rivalry between the two sides all the while. In the meantime, the economic resources of mankind and its peace of mind are being wasted, but the issue is not being resolved.

This proposal will not resolve the political issue or the dangers of a conflagration between East and West. Rather will it intensify the efforts of the Soviet Union. It may even set up a powerful eastern European bloc to counter the European Economic Community. Meanwhile the military and economic conflicts between the ideologies will continue merrily on their way.

I agree with the decision of the Australian Labour Party that it is not for us to dictate to the United Kingdom the course it should take but I believe it is our place to act insofar as we believe that developments will injure Australia in an economic sense and for that matter in a political sense. It is for us to voice our protests without fear or favour and sincerely as we see our duty. My background and my origin are purely British and I believe that there still remains between the United Kingdom and the people of Australia a very deep sentimental attachment. It has been cemented over the years and has held firm through trading operations that have been of mutual advantage to both countries.

There is sure to be some slackening in trade if Great Britain goes into the new organization, and Australia’s national income will suffer detrimental effects. This means the income of every man, woman and child in Australia once the effects percolate through the agricultural economy into the industrial economy. We must protest and express our point of view.

Looking back over the events that have brought us to this point, I think it is evident that the value of our trade with the United Kingdom has been diminishing with increasing rapidity over the years. If you ask yourself who in this Parliament is more responsible than any one else for that state of affairs, you can only reply that it is the rump of the governing parties - the Australian Country Party - which from time to time has been vociferous in its condemnation of the Labour Party for its opposition to the Japanese Trade Agreement. Honorable members opposite are the associates of those who, after the negotiation of that agreement, were the first to go to Japan to buy cheap products, used in all sections of the community, which could have been obtained from the United Kingdom and other European countries. There was no sentiment about it. Now the Government wants it both ways. There is not. the slightest doubt in the world that the United Kingdom Government will point out these things when our representatives go abroad.

The moment an Australian industry is endangered - this is true of all political parties - there is a cry from the Australian manufacturer or the Australian primary producer for increased tariffs or other forms of protection, the Government yields and our valuable trade falls, and continues to fall very rapidly. Some explanation of these things should be forthcoming. But the most important point of all is the fear in the minds of most people - which I do not necessarily accept, although the evidence points that way - that the United Kingdom has already decided to join the European Common Market. It is looked upon as a fait accompli. This Government should have started long ago to plan to meet this situation and to accelerate action which will enable us to absorb the impact.

The honorable member for Barker (Mr. Forbes) to-day asked a question about a reserve price for wool. Let me tell the honorable member that if the United Kingdom joins the Common Market wool will prove to be as vulnerable as will wheat, butter or any other Australian product. But what has this Government done about the wool industry? It has fiddled while Rome burns! For the last five years there has existed a militant section of the Australian wool-growing interests which has remained uncontaminated by the merchant princes, the shippers and the brokers, and which has insisted that the solution of the economic difficulties of the wool industry lies largely in a well-organized marketing system. What does this Government do with its great business links? It appoints a time-wasting commission to ascertain all those things which are known already. In 1934 a government of exactly the same political complexion as the present Government did the same thing. The commission was not given the powers of a royal commission; it was not given the right to ask brokers to produce from their shelves documents to show the destination of any bale of wool. I hope that the people of the United Kingdom will note that if Great Britain joins the European Common Market that will force even this Government to take action of a more concrete character than it has taken hitherto to help the wool industry. The Government should get out and give a lead to the wool-growers! It should not sit placidly by and say, “ Cook up a plan, boys “ when it knows very well that the growers are ill-equipped to cook up a plan. In the Government’s archives are the plans and information which have been obtained previously, and in the government departments are skilled officers who could submit a plan within a couple of months. As I say, the Government should get out and take the lead, but it will not do so.

Furthermore, Britain’s entry into the Common Market will accelerate action, even by this Government, to purchase a shipping line to take our products to other countries.

The movement to ensure that no longer will foreign organizations buy and monopolize the mineral and other resources of this country will be accelerated. It was revealed last week in Western Australia that a Japanese company has a 90 per cent, interest in a lease of the great iron ore deposits of Pilbara. I have nothing against the Japanese, but I am opposed to any organization, if it is external to Australia, having the right to own any plant, equipment or mineral deposits in Australia. Foreign companies should have a right to buy in our markets, but we are selling Australia’s birthright. That is not the only thing that is going on. Only a very small proportion of the total capital devoted to oil exploration here has been contributed by Australians. If we are not careful wc shall be in the same distasteful position as is Canada in relation to the percolation of American capital.

I have learned that the freight charges paid by the dairy industry have increased to such an extent that the industry now has to bear an additional £100,000 a year. The primary producing section of the economy, which will feel first the impact of Britain’s entry into the European Economic Community, is in a sorry state. The other day representatives of primary industry approached the Minister for Primary Industry (Mr. Adermann) and asked for an inquiry into the cost of spare parts for tractors and so on. The Minister sat back in his chair and said complacently, “ I am sorry, but I am very doubtful about the Commonwealth’s constitutional position “. If the Commonwealth Government is to handle the situation which may develop, one of the most urgent things which should be done is to arm this Parliament with the requisite power to overcome all the constitutional difficulties. However, we know that you are not serious about this matter and are not capable of doing that. Your own Prime Minister appointed an all-party committee to review the Constitution-


– Order! I ask the honorable member to direct his remarks to the Chair.


– To whom am I directing them? I cannot turn and talk at you. We know that the Prime Minister appointed an all-party committee in 1956,

I think it was, to review the Constitution. The committee presented to the Government what was, with a few minor exceptions, a unanimous report, but the Government ran dead. The committee recommended that the Government acquire the power to make our marketing systems more efficient, to help us to meet the impact of Britain’s entry into the Common Market, and to control our economy more effectively than can be done at present. The committee recommended that the Government deal with restrictive trade practices. The need to deal with them becomes more urgent every day. New Zealand Loan has merged with Elder Smith; Goldsbrough Mort has merged with Dalgety and Imperial Chemical Industries has merged with Commonwealth Fertilizers. According to the interested parties, these mergers are in the interests of efficiency, but they do not mean reduced prices for the primary producers of this country. The Attorney-General (Sir Garfield Barwick) has been fiddling with legislation relating to restrictive trade practices for the past three years. Where is the proposed legislation? The Parliament will sit for a month and then go into recess for a month. After Christmas it will go into recess again for three or four months, despite the fact that all the things I have mentioned require attention urgently.

I have faith in this country. I believe that it can weather any storm, but we must protest against anything which damages our economy, recognizing always the right of other people to look after their own. We should get out of our bonnet the political bug which makes us claim that an organization which was formed without any democratic background will remove the antagonisms which exist between the Eastern and Western blocs. We should do what this Government has failed effectively to do. We should throw all our power behind the United Nations, the parliament of the world, to ensure that its efforts are directed, despite the prejudices of a few powers in Europe, towards world peace.

I hope that the Government will gird its loins. Whatever its internal faction fights may be, it should get on with the job. It should keep the Parliament in session and do all those things which are necessary to enable us to take the blow, if it comes. It should accelerate positive action to ensure that our economy is strengthened so that eventually we can recover and assume our rightful place in the affairs of mankind.

PostmasterGeneral · Dawson · CP

– One statement I shall make at the start with which every one, I think, will agree is that we are debating now a subject of great importance indeed to Australia. It will probably prove to be one of the most important matters that we have debated in this Parliament in our lifetimes.

On Thursday last the Prime Minister (Mr. Menzies) dealt very fully indeed with all the aspects of this most difficult subject. He dealt with the political as well as the economic aspects. His statement on all these aspects was so complete and thorough that it needs no further elaboration from me. I shall therefore use the relatively short period available to me to discuss the points that have been made by Opposition speakers.

First, I shall deal with the speech which the Deputy Leader of the Opposition (Mr. Whitlam) made in reply to the Prime Minister. It was a speech which I concede was cleverly delivered and well thought out, but it appealed to me as something in the nature of a theoretical essay and nothing more. It was a theoretical essay which had no relation to realism and which offered no plan alternative to that which the Government is following and has been following ever since this matter came within our purview.

Let me concede that there were occasions during the honorable member’s speech when he made some proposals, but it is significant to note, if you study his speech, that on those occasions he was recommending action along exactly the same lines as that which we have been taking for some time, and to which the Minister for Trade (Mr. McEwen) has referred from time to time. For example, the honorable gentleman suggested that we should be building up the underdeveloped countries and our trading opportunities in those countries. Is not that exactly what we have been doing, and what we were doing long before the Common Market became a subject for debate? Let me point out that Australia has not lagged in providing commodity, capital or technical aid to these under-developed countries. We have fully supported the Colombo Plan and have actively participated in the work of international organizations, in many of which we have taken a leading part. As any one who looks around him can realize, there are Australians scattered throughout these under-developed countries giving them the benefit of their technical knowledge and enabling them to overcome their technical problems.

In addition, the Government has cooperated with Australian industry in looking for markets wherever they can be found, in under-developed as well as mature countries. We have sent trade missions to Asia, the Persian Gulf and South America - all underdeveloped areas. In the last decade Australian exports to South-East Asia, Far East Asia and the Pacific Islands have doubled. In other words, we have been doing exactly what we are now criticized for not having done.

The Deputy Leader of the Opposition also spoke of the need for international commodity agreements. This is a line of policy that the Government has been pursuing for many years. The Minister for Trade himself has told us about it many times. At the great Trade and Economic Conference at Montreal Australia gave a lead, which was unanimously endorsed by all the Commonwealth countries, in calling for international commodity arrangements and for a recognition by industrial countries of the commodity problems of primary producing countries. This is another direction in which we have not lagged.

The honorable member also chided the Prime Minister and the Minister for Trade for not having sufficiently stressed the problems of northern Australia. This also is not in accordance with the facts, as can be seen from our record in recent years. In his speech last Thursday the Prime Minister specifically mentioned our sugar and metallic lead industries. The Minister for Trade, on 3rd May last, announced our support for the British proposal that there should be no duties in the common external tariff on lead, zinc, aluminium, alumina and cadmium, all of which are of vital importance to the north of Australia. He also stressed the importance of meat and sugar to northern Australia, thus emphasizing the significance of the fifteen-year meat agreement and the Commonwealth Sugar Agreement. The Minister has also kept The Six very well informed of the problems of northern Australia, and has even gone so far as to mention the special problems of New Guinea, which are of vital interest to us. The few proposals that the Deputy Leader of the Opposition put forward are ones to which we have already applied ourselves, and in regard to which we have had considerable success.

Let me mention a few other matters about which we were criticized, so as to set the record straight. We heard two or three times the old suggestion that we should have been forewarned, and that early plans should have been made to deal with the situation that is now arising. The facts have been stated briefly on previous occasions, and they are well worth repeating. It is well known, and must be well known to members of the Opposition, that the United Kingdom had no intention of joining the Common Market in the early stages. Instead, the United Kingdom set out to form what is commonly called Efta - the European Free Trade Association. Great Britain envisaged that the objective of the association would be the protection of the agricultural products of the Commonwealth. That was Britain’s plan, and we were fully aware of it. Unfortunately, it did not meet with complete success, and it was only when it failed that the United Kingdom turned its attention to the development of the Common Market.

Some time later we had the visit to this country of Mr. Duncan Sandys. After three days of discussion in the chambers of this Parliament Mr. Sandys was fully advised of our opinion of Britain’s prospective entry into the Common Market, and of the adverse effect which we considered it would have on Australian trade and Commonwealth trade if no safeguards were provided. We did not merely state a general objection, but went so far as to deal with individual products, item by item, and to show exactly how our trade in them would be affected. The communique which followed made several important points, to which we have adhered ever since.

We did not presume to object to Britain entering the Common Market. The honorable member for Lalor (Mr. Pollard) has just told us that it is not Labour Party policy to object to the entry of Great Britain into the Common Market, because the Labour Party recognizes Britain’s right to enter that market if she elects to do so. Well, we have stated on several occasions that we also recognize that right. But we said also, however, that the lack of disagreement on our part must not be interpreted as acceptance of the proposal. We reserved our right, if the United Kingdom applied for entry, to state our case, and we said that when the provisions of entry came up for discussion we wanted to be fully represented, by Australian representatives, at the negotiations. That has been the contention to which we have adhered ever since.

Let me say here that it is acknowledged by every one who is prepared to form a fair opinion that our case has been stated magnificently, both by the Prime Minister and the Minister for Trade as well as by all those high officials in the various departments who have been working so hard, here and overseas, on our case. The result has been that following forceful and blunt statements in negotiations in the United Kingdom, the United States of America, Canada, New Zealand and Europe, our case is now completely and fully understood. Let there be no mistake about the fact that there is no one, amongst all those with whom we have been negotiating, who does not understand what the impact on us will be if no provisions are made to reduce the harmful effects on Australia’s trade.

Other criticisms have been offered. The Deputy Leader of the Opposition said that we had not sufficiently informed the people. The fact is, however, that statements were repeatedly made by the Minister for Trade as to the impact of Great Britain’s entry into the Common Market, without qualifications, on our trade in such things as sugar, butter, wheat, beef and veal, dried and canned fruits and processed agricultural products.

All these matters have been very carefully and very fully represented in the statements which the Minister for Trade has made not only here but also overseas.

Generally, these products enjoy duty-free entry to the British market and Britain applies duties to similar products of foreign countries. If Britain entered the European Common Market on unqualified terms, the position would be reversed. I think that the Minister for Trade, indicating that the existing position would be completely changed, said, “ It would be preference in reverse”. I think that was the expression which he used. So ample evidence of the position has been given. As a result of this realization, all the representations that we have made since have been based on these facts which I have just very briefly mentioned.

Let me now make this point, Sir: What we have set out to do in our representations is to try to find some way of easing very much the impact against us of these results of Britain’s entry to the Common Market. I take leave to remind the House of the statement made by the Prime Minister on Thursday evening as an indication of our attitude. We are not being blindly obstinate or unreasonable in our advocacy. We believe that there may be found an alternative course which will secure for us the substance of maintained and expanded access to an enlarged European market. That, I think, sums up the basis of our advocacy.

I want to deal now with another charge. This is an amazing charge by the Deputy Leader of the Opposition. He said that we should have done something about diversifying our trade beforehand and that we have not sought to diversify it. This statement, of course, is completely at variance with the facts. The honorable member for Lalor, also, said just a few minutes ago that we should have started to plan long ago. Just what have we done to diversify Australia’s trade? I put it to honorable members that, obviously, this Government realized many years ago that Australia’s future demanded the development of further markets for our increased production, both primary and secondary. So, right back in 1949, we set out to plan the development of those additional markets. I remind the House that this Government has developed a specialized Department of Trade to carry out this important task.

Our object has been to find for our exports markets additional to the traditional ones already available to us. I cannot stress strongly enough the word “ additional “, Mr. Speaker. In setting up trade posts and in other trade activities, we have not been seeking markets alternative to the British market. We have been seeking markets additional to that one. We have always considered, and we still consider, that the United Kingdom market is a solid rock on which to base the security of our economy, but we have realized that there is a limit to the degree to which we can depend on that market. If Australia is to develop as we expect it will develop under our guidance, this country must have additional markets, not markets alternative to the British market. This is worth stating in some detail. What have we done to diversify our trade?

Mr Peters:

– Nothing!


– Hold your horses for a moment. In 1947, Australia had seventeen Trade Commissioner posts in twelve countries. By the financial year 1961-62, we had 37 posts in 28 countries. In particular relation to the charge that this Government has neglected trade with underdeveloped countries, I point out that since 1949 we have opened Trade Commissioner posts in Karachi, Rome, Trinidad, Bonn, Montreal, Salisbury, Auckland, Manila, Christchurch, New Delhi, Kuala Lumpur, Bangkok, Stockholm, Chicago, Ottawa, Nairobi, Accra, Beirut, Lima and Caracas. Does that amount to a failure to try to diversify our trade? I remind the House that this has not been done just in the last twelve months since the Common Market issue came up. This began away back in 1949. The funds voted for trade publicity have increased from £16,000 in 1949-50 to about £1,000,000 in the current financial year. Yet the Opposition says that this Government has made no effort to diversify Australia’s trade.

By 1960-61, the old traditional markets in Europe and North America took less than half of our exports. We have now developed important markets in sugar, wool, coal and wheat in Japan and other Asian countries and in countries bordering the Pacific and the Indian oceans. Between 1950-51 and 1960-61, over a period of ten years, Australia’s exports to Japan and New Zealand increased threefold, to other SouthEast Asian and Far East countries twofold and to Africa by 90 per cent. SouthEast Asia and the Far East now account for 30 per cent, of our total exports, compared with 13 per cent, in 1950-51. New Zealand, the Pacific Islands and Africa account for another 11 per cent., compared with 5 per cent, in 1950-51. This is a further example of the way in which we have diversified our trade and built up additional markets so that we can go ahead on the old plan.

I am not talking just of primary products. Manufactures are increasingly important, and our exports of these have greatly expanded. In 1960-61, manufactures accounted for 12 per cent, of our total exports, compared with 5 per cent, in 1950-51. Exports of steel manufactures increased spectacularly, from £2,000,000 in 1950-51 to £23,000,000 in 1960-61. Do honorable members recall the charge by the Deputy Leader of the Opposition, who asked why had not we done something about this big steel monopoly in an effort to get it to manufacture for export? What basis is there for that charge when exports of steel manufactures increased by £21,000,000 in ten years?

Mr Peters:

– How much-


– My time is going, and I cannot listen to the honorable member. Exports of motor vehicles and parts rose from £1,000,000 in 1950-51 to £9,000,000 in 1960-61, and exports of machinery from £7,000,000 to £16,000,000. We have developed new markets in Japan for coal. We sent no coal to Japan in 1950-51 and we sent £6,900,000 worth in 1960-61. We exported to the United States of America £47,000 worth of beef in 1950-51 and £25,500,000 worth in 1960-61. These increases in exports are some of the results of our drive to diversify trade. I emphasize again that this drive was commenced long before the European Common Market problem came up. These efforts are designed to provide Australia with more and more outlets for the increasing output of our economy.

An example of the value of developing additional markets is to be found in my own industry, the sugar industry. This calendar year, the Queensland sugar crop will total about 1,652,000 long tons. About 600,000 tons of this will be disposed of under the Commonwealth Sugar Agreement and more than 500,000 tons on the home market. We have a firm order from Japan for 310,000 tons of the 1962 output. This is a result of the development of our additional markets. Also, we have obtained a permanent quota from the United States for the first time. This totals 40,000 tons a year and we still have to ship more than 15,000 tons of this quota in 1962. Furthermore, we have obtained, under what the United States terms global quota provisions, a further quota of 50,000 tons, making a total of just over 65,000 tons for the United States in 1962. As a result of these arrangements, Mr. Speaker, we shall this year be able to take off the whole of the cane crop instead of being forced to plough under millions of tons of cane as has been done in recent years. This change arises from the Government’s concept of building up additional markets.

Mr SPEAKER (Hon Sir John McLeay:

– Order! The Minister’s time has expired.


.- As is generally agreed, Mr. Speaker, there are, broadly, two aspects from which this allimportant subject of Britain and the European Common Market may be approached. They are the political and economic aspects. It cannot be questioned that international politics is a great underlying factor influencing Britain’s prospective entry into Common Market. But although the Minister for Trade (Mr. McEwen) has said that this subject goes beyond our internal politics, I do not think that should preclude me from making some valid criticisms of the Government’s actions or lack of action in recent times. The first criticism must be on the grounds of the Government’s failure to put Australia’s case effectively, not in recent months but in the years since the signing of the Treaty of Rome in 1957. During those five years the Government knew of Britain’s interest in the market and knew, in fact, that Britain was waiting on the sidelines with extreme interest in how the market principle would work.

Late last year in Europe the Minister for Trade expressed his astonishment at Britain’s lack of appreciation of the effects her entry could have on Australia’s trade and economy. To me, this was a clear admission of guilt on behalf of the Government, highlighting the Government’s failure to press Australia’s case adequately before Britain became embroiled in direct negotiations. The second criticism relates to the greatest deterrent that Australia faces in trade with Britain, the Common Market or any other trading nation or zone in the world - the fact that our cost structure has priced us out of many markets and has made competition with other exporting nations extremely difficult in a great many fields.

To find the basic cause of our inability to be competitive in many markets of the world, we must look back fifteen years to 1947, when the Chifley Government’s referendum on prices control was defeated by organized opposition from the Liberal Party and the Australian Country Party. It was defeated by the members of the present Government, who hoodwinked the Australian people into believing that the law of supply and demand would iron out any inflationary spiral. Had that referendum been carried, the ordinary people of Australia and the great trade unions would have accepted, with price restraint, wage restraint, and our inflationary spiral would never have got under way. To-day our farmers are squeezed between low prices on the one hand and high costs of production on the other. Upon reflection, surely they should realize that their so-called champions, the Country Party and the Liberal Party, did them a grave disservice in 1947, because eventually the only period of levelling out in costs in twelve years has come after the application of severe credit controls, applied by the same parties - the Liberal Party and Country Party, which expressed their so-called abhorrence of controls during the referendum campaign of fifteen years ago and, for that matter, many times since then.

My third criticism comes as a result of the defection from the Government line of thinking on the Common Market by the former Minister for Air and Minister assisting the Treasurer - now, by invitation of the Prime Minister (Mr. Menzies), again the honorable member for Wentworth (Mr. Bury). Despite denials by the Treasurer (Mr. Harold Holt), it is difficult to believe that he had no foreknowledge of his former assistant’s statements. Further, it is difficult to believe, with the Common Market gloom having a depressing effect on our already troubled economy, that the Treasurer was not cast in the role of a reluctant rebel - rebellious against the forecasts of the Minister for Trade of great economic difficulties, yet reluctant to risk his political position, already undermined by unfortunate Treasury policies. Obviously, after this afternoon’s debate, this cleavage in Government opinion is stronger than ever.

What will happen to our trade with Britain? That is the important question and one the answer to which Australian industries and the Australian people have every right to know. I believe that the Minister for Trade should make a comprehensive statement, outlining the possible effect on each exporting industry, so that those engaged in those fields may know the best and the worst that could happen. Estimates have been given suggesting that £160,000,000 worth of trade with Britain could be affected, and undoubtedly a loss of trade of that magnitude - approximately one-fifth of our average annual export income - would have far-reaching adverse effects on our economy. A lesser figure of £120,000,000 seems nearer the mark, but, whatever the final figure may be, some industries and certain communities within Australia must suffer severe depressing effects.

As I see it, the most heavily hit commodities must be dried, canned and fresh fruits, along with sugar and dairy products. A number of Australian communities which have geared their entire economies to trade with Britain under Commonwealth preferences could suffer disastrously. Commonwealth preferences and trade with Britain have been the lifelines of the Goulburn valley, which depends on canned fruit, and of Mildura, Australia’s largest dried fruits district. Facing the prospect of having to surmount a 25 per cent. Common Market external tariff, in place of preferential entry into the British market, provincial cities and towns like Shepparton, Mooroopna and Kyabram, which literally live on the canned fruits industry, could become ghost towns, while Mildura dried vine fruits, which could face a Common Market external tariff of 8 per cent., would suffer disastrously.

The provincial city of Bendigo is, of course, one of Australia’s largest eggproducing centres, and Britain provides the traditional market for the major part of our surplus egg and egg pulp production. The recession which the poultry industry is encountering now has been principally the result of the partial collapse of the market in Britain. Instead of a preferential entry into Britain, our eggs and egg pulp could face a tariff of from 10 per cent, to 15 per cent, and the already uneconomic sales to Britain could vanish altogether. No other markets are readily available, so the industry and the city of Bendigo could suffer a further severe setback. Just south of Bendigo we have the renowned apple and pear orchards of Harcourt. About 70 per cent, of the Harcourt district’s production is consumed within Australia, but the greater part of the other 30 per cent, goes to Britain. This year the Harcourt district exported £250,000 worth of apples and pears. No duties or tariffs were paid on this export, but tariffs of from 8 per cent, to 12i per cent, could be expected if Britain failed to gain concessions for our primary industries. This would make it tremendously difficult for this industry to compete against other and closer countries. For instance, on even terms with the Californian product, our trade in apples and pears could strike difficulties.

It is true that there exists a substantial market in Sweden for Australian apples and pears, and perhaps this market could be expanded, but Sweden seems sure to follow Britain into the Common Market, and again the external tariff would be a hurdle which our products would have to negotiate. For the Harcourt district, the prospect of the loss of one-third of its market is a matter for serious concern, although obviously the effects would not be as disastrous as those felt by Mildura or the Goulburn valley. Other speakers have outlined the possible effects on other Australian industries such as those producing beef, lamb, mutton, sugar and butter and other dairy products. As I see it, we have to pattern our industry on the needs of other nations, not on what we would like to produce.

Let us look at the dairy industry. We could lose a substantial trade in butter with Britain, but have we done enough to meet the markets in Moslem countries, for instance, for products derived from butter fat? Moslem countries use ghee or, as it is called in Arabic, samneh. Hundreds of millions of people in Pakistan and the Arab states use ghee made from butter fat. It is used in every household in Tunis, Morocco, Algiers and other Moslem cities. In 1958 the United States entered the Pakistani market and Holland entered the Middle East, while India, with a vegetable equivalent of ghee, enjoys a substantial market in the Persian Gulf area. If we are to survive, we must be wide awake to these opportunities and, despite being last into the field, we can still obtain a share of the markets.

In the Arab states extensive use is made of burghlol, a product that is milled from wheat, which is first boiled and then dried. An immediate investigation of its potential could assist wheat-growers and flour-millers in Australia immensely.

My great concern is not only at the prospect of losing markets which are in jeopardy because of the United Kingdom’s proposed entry into the European Common Market but the wait-and-see attitude of the Government. It is true that no final decision on Britain’s entry or the terms of her entry has yet been made, but I believe, as I said in this House about twelve months ago, that she will enter because she cannot afford not to enter. Are we to wait until the wolf is at the door? Are we to wait until this battle for trade is lost before we plan to relieve the casualties? So far, in all the countless Government statements on this subject not one word has indicated that the Government is aware of the great need to plan to assist industries and communities that are likely to be affected through the loss or reduction of Australian markets in Europe. In any artificially-engendered alteration of trade patterns it is inevitable that some industries must suffer.

Written into the Treaty of Rome is a provision for a European social fund which was designed by the Common Market countries to assist in ironing out difficulties encountered by employers or employees in connexion with any necessary re-organization of industry. The policy of the Australian

Labour Party at the 1961 Federal elections contained assurances of subsidy assistance to seriously affected industries. Industries and communities facing serious setbacks are entitled to Government assurances of assistance. Mr. Speaker, I believe that from the very moment of Britain’s acceptance of the Common Market terms of entry which are adverse to Australia, seriously affected Australian industries should be subsidized in an effort to cushion the shock and to give them greater opportunities to gain alternative markets. If these efforts should fail, a fund should be established to finance the reorganization of these industries. Serious thought and planning should begin now to determine how best the pattern of work and life in the affected communities can be altered if, even with the aid of subsidies, alternative markets cannot be found. The establishment of an industries rehabilitation authority should be a matter for urgent attention. For instance, what products with market prospects can the Goulburn Valley best produce? What use can be made of factories such as those of the Shepparton Preserving Company Limited and the Ardmona Preserving Company, whose products now, in the main, go to Britain? Individual orchardists must not be left to bankruptcy. Through compensation, the nation should lend a hand. Employees in the orchards, the canning factories or ancillary industries - the case factories, machinery suppliers and the like - must be found alternative employment and maintained until that employment is found. If replacement industries are necessary, will they be able to employ all the people who now live and work in those districts? If not, the suggested fund I have mentioned could aid their transfer elsewhere. ‘

None of these people should suffer hardship through the inevitable sharp drop in home values. In addition, adequate credit facilities should be guaranteed to any firm or individual needing rehabilitation. These are the problems for which solutions may become necessary and to which an authority, such as I have mentioned, could apply itself. We hope that they will never be encountered. However, it is not being defeatist to mention them at this stage. It is being realistic. In recent times many poultry farmers, because of conditions on the British market beyond their control, have been forced to relinquish their farms and have suffered disastrous financial losses. No government should allow similar circumstances to apply if Britain’s entry into the Common Market has a similar depressing effect.

To look and to plan ahead is the responsibility of any government. Unfortunately, forward planning has never beon a strong point of the Menzies Government, but it should not fail to meet this challenge. The livelihood of many Australians may depend on its actions.

Mr. Speaker, I do not propose to debate whether Britain should or should not join the European Common Market. That is her decision, not ours, but it is not hard to see the strong arguments in favour of her entry. Should Great Britain, as a manufacturing nation, remain an off-shore island, facing tariff barriers into the largest importing zone in the world, or should she take advantage of the major aids to internal trading offered by the European Common Market? With its free movement of capital and labour, its eventual integration of transport systems and its aims for even higher standards of working conditions, continued and advanced prosperity for the Common Market zone seems assured. The principle on which the Common Market operates has already brought great material benefits to many nations. Industrial production figures for the Common Market group bear testimony to this. For example, the group’s overall increase in productivity in 1959 was 7 per cent, whilst in 1960 it was 12 per cent. Those figures are far above the comparative figures of Britain or, for that matter, the United States of America. After taking into account the disadvantages, Great Britain is still anxious to join. The only major deterrent is the effect Britain’s entry will have upon Comonwealth countries such as Australia. It is clear that the major obstacle preventing adequate safeguards being granted to Australia and Canada in particular is the attitude of France. As the principal agricultural nation of the Common Market group, France stands to lose most if the export of agricultural products to Britain from Commonwealth countries is safeguarded. For instance, Great Britain guarantees to purchase at least 750,000 tons of wheat from Australia annually, and

France would happily add Britain to her list of customers. The United States of America also has vast surpluses of wheat. In open competition, and bearing in mind the Common Market’s agricultural price policy, Australia would face the loss of this market. Flour-millers, too, who are already facing difficult marketing conditions, could encounter greater difficulties.

Earlier I mentioned that although it is Great Britain’s right to say yea or nay, prospective entry into the Common Market is not governed solely by economic issues but is directly and deeply affected by international politics. For example, France has other than economic reasons for making Britain’s path into the Common Market as tough as possible. Despite on-the-surface co-operation and friendliness between The Six, there is still keen competition for the unofficial title of “ Leader of Europe “. For 150 years Great Britain has been the undisputed titleholder, but the new France is strong economically and militarily. She is a nuclear power, and I suspect that General De Gaulle is a modern but more peaceable Napoleon. He sees France as the logical leader in Europe, and to force Britain into an embarrassing bargaining position and eventual capitulation to lesser terms than she would wish will place her in the position of the beggar - the poor Common Market cousin. Of course, there are other international implications, with the United States of America heavily committed to support Great Britain’s entry into the Common Market. Obviously, the United States sees a strong, prosperous and united Europe as a major bulwark against Soviet influence. But America, too, has her trading difficulties. For several years now the combined total of her imports, her economic aid to other nations and her massive military expenditure overseas, has posed a serious balance-of-payments problem. In addition, Amerca holds vast quantities of surplus agricultural products despite her practice of rigidly controlling the acreage planted. Obviously, the removal of Commonwealth preference would provide her with opportunities to add to her export income.

Mr. Speaker, earlier I outlined problems which may possibly confront individual industries or communities. Collectively, for the last decade Australia has failed to pay its way. Our export income has fallen short of the cost of imports and services by nearly £1,700,000,000. To balance our international payments we have depended on loans and investment from overseas. Without any of the Common Market influence, this is a serious situation, but with British capital tied up in the Common Market zone, British investment in Australia, which has traditionally been our major source, could dwindle away. Consequently, it is imperative that we should strengthen our position. We should seek out new markets abroad and improve our sales organization and methods. We should end our dependence upon foreign shipping services. In shipping competition has gone by the board and Australian exporters are held to ransom. It seems ridiculous that we, one of the world’s great trading nations, should depend solely on foreign shipping, foreign export insurance, foreign warehousing, and the like. Each year these items drain about £300,000,000 of Australian money from our resources. Let us have a new and vigorous approach to our lifeline - trade - and let us throw off our dependence upon others who live on finance we can ill-afford and have no need to pay.


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


.- The only thing I will say about the speech of the honorable member for Bendigo (Mr. Beaton) is that he really could have saved himself a loss of breath in beating the air in an attempt to get assurances from the Government that, if Britain went into the European Common Market, the burdens of those Australian export industries that would be affected would be borne not by the producers themselves but by the whole of the Australian community. As the honorable member for Bendigo well knows, those assurances have been given by this Government and, therefore, if the Government is in office those assurances will be carried out. What is more, those assurances were given long before the Australian Labour Party ever thought of giving them.

Like other honorable members who spoke this afternoon and on Thursday last, I want to talk about the political implications of Britain going into the Common Market. What is the impact on the future political pattern of the world? Is the pat.tern that is likely to be thrown up a good one or a bad one from Australia’s point of view? How do the advantages, if any, weigh in the balance against the short and long term disadvantages? I want to do this because, until now, examinations of the political implications of Britain’s entry into the Common Market have largely passed us by in this country.

To be sure, the Prime Minister (Mr. Menzies), with scrupulous fairness, set out some of these factors in the original statement he made to the House. He pointed to the advantages of a united and economically strengthened Europe in the overall defence of the free world. He pointed to the advantages of submerging the age-old enemities of France and Germany, which have brought Australia and most of the world into two world wars, in one co-operative union. He pointed to the strength that could be given to the Commonwealth if Britain, the leading Commonwealth member, gains in strength, power, and influence by her accession to the European Economic Community. He dealt with the political aspects, again at some length. on Thursday night.

But, Mr. Speaker, in the events that have transpired between the Prime Minister making these statements, the immense importance of the political factors seems to have been lost in a welter of recrimination on trade and economic matters. I do not wish the House to misunderstand me, Mr. Speaker. I do not want to discount the importance of these matters - they are of very great importance. It is right that we should fight for the preservation of our trade - and we have done so, I believe, with consummate skill. I should like to pay a tribute to the Prime Minister, and to the Minister for Trade (Mr. McEwen) and to the officials, in particular Dr. Westerman, for what they have done. But I wish that we, in addition to presenting to the world an image of a country skilful and tenacious in the defence of its trading interests, had also presented to the world an image of a country capable of comprehending the infinite advantages to the values and the causes we believe in of these epoch-making events.

I would have liked us to make it clear that we recognized that these .events were crucial in the flood-tide of history; that they indicated that Europe, the cradle of nationalism and the progenitor of its worst and most terrifying excesses, had seen the error of its ways; that having had their fill of nationalistic excesses the nations of Europe were setting an example to the world by taking the first tentative steps along the road which will ultimately submerge their national political identity, though not their individual culture, in a wider union. How can those of us who have been brought up to believe that national sovereignty run wild has been the cause of most of the troubles of this tumultuous century do anything but applaud when we see before our eyes this evidence of its overthrow in at least one part of the world. I would like to see my country, while fighting for its legitimate trading rights, applaud, too.

I would also like this country to proclaim aloud that it recognizes the enormous value of this coming together in Western Europe, particularly if Britain joins, to the defence of the free world against the Communist enemy and, of enormous value, therefore, to the future survival of this country. In the last resort, of course, nothing is more important - no, nothing, not even trade is more important - than survival. There is no country in the world, Sir, which has so clearly, openly and irrevocably identified itself with the Western cause, and yet is more isolated and vulnerable, than this country. That is good. Unlike members of the Opposition, who have a bit both ways, I believe that in that way lies survival. But I wish it were more obviously thrown into the balance in considering where we stand and shall stand on the Common Market issue.

I have often heard it said in this House - even by the honorable member for Moreton (Mr. Killen) - that the free world has lost to the Communists in the post-war world because we have been unable to co-ordinate and direct the strength, both latent and actual, of the West against the monolithic strength of the Communist powers. To the extent that this is true then the events in Western Europe must bring an accession of strength to the free world - or, rather, they must, if Britain joins. I say this because it is by no means certain that Western Europe without Britain will look outward across the

Atlantic and southward to our part of the world. With Britain in, Western Europe undoubtedly will. Any one who has been in Britain in recent months knows full well that the achievement of this objective is one of the primary aims of British policy, and probably the overriding motive which led her to the point of applying for membership.

As I say, Sir, I would like to think that we have weighed these great objectives in the scales and given them adequate weight. No doubt we have, but the impression we have given the rest of the world, I suspect, is a different one. Even when we do talk in political terms of the consequences of Britain joining the Common Market, it is mainly in terms of misgivings about the effect on the Commonwealth.

No one is more conscious of the importance of the Commonwealth and its value to the world and Australia than I am. Its capacity to bridge continents, races, colour and creeds in a divided world has played an immense part in preventing that world from splitting in’.o fragments. The system of consultation and co-operation which has been pragmatically devised over a long period has created a special, more intimate relationship between its members, which has in turn enhanced the influence of each of them in the world at large. In the course of its progression from Empire to the Statute of Westminster, or Crown Commonwealth, as the Prime Minister has so eloquently termed it, and from there to the Commonwealth of to-day, the Commonwealth has shown an immense capacity to adapt itself to changing circumstances. If it had not, it would not have survived, except as a rump. My point, Mr. Speaker, is this: Will an entity which has shown such a capacity to adapt itself to changing circumstances stand up and say confidently that it will not adapt itself to Britain joining the Common Market? There are, of course, many who have and many who will. But then there were great and authoritative voices that said the Commonwealth would not survive the decision to admit a republic in 1949. They were all wrong.

Of the more sensible arguments that are used to suggest that Britain’s entry into the Common Market will mean the end of the Commonwealth, two are important. The first relates to trade. Its advocates see inter-Commonwealth trade as the linchpin that holds the Commonwealth together, and, insofar as Britain’s entry will lead to a decline in inter-Commonwealth trade, they see it as a blow to the Commonwealth. I have never been able to agree with this point of view. Quite apart from the fact that the proportion of trade done by Commonwealth members with the Commonwealth has consistently declined over a considerable number of years without any noticeable effect on the strength of the Commonwealth, trade has been, and is, as much a source of weakness as of strength. This is amply demonstrated by the feeling of inferiority that exists in many Asian and African countries, because of the degree of their dependence in trade on the United Kingdom after independence. There is no doubt that this inferiority tends to be translated into bad feeling towards the Commonwealth relationship itself.

The second argument suggests that because it is essential to the Commonwealth relationship that its members be free and equal and sovereign, it will lose its strength when and if Britain merges her political sovereignty in the wider unity of Western Europe. This is an argument of some force. At the present time, the United Kingdom Government speaks authoritatively for the United Kingdom at conferences of Commonwealth Prime Ministers and in the other mediums of consultation. But would she, as a province of Western Europe? My own feeling is that that point is a long way off yet and that it can safely be left to be solved when and if the occasion arises. In any case, surely it can be met by bringing the Commonwealth closer to Western Europe.

Too often we are inclined to present the matter as a choice - a choice for Britain between the Commonwealth and Europe. Why should it be a choice? Why cannot Britain, by her accession to Europe, take the Commonwealth with her - not, of course, in the sense of the Commonwealth countries formally joining the Common Market, but in the sense of strengthening the ties that bind them to Western Europe? Why can it not be regarded as a merger in this sense between the Commonwealth and Western Europe, a merger cemented by the formal accession of its leading member, Britain?

This was the suggestion made by the great Field-Marshal Smuts to a meeting of the Commonwealth Parliamentary Association in London at the end of 1943. It is not new. Looking forward then to the post-war world, he saw the two colossi, Russia and the United States, dominating the international scene, with Britain, and therefore the Commonwealth, weakened by the war, for the first time in 400 years no longer the equal of the greatest. He saw this as a loss to the Commonwealth countries, because their special relationship with one of the greatest of powers gave them an influence in the world which they would not otherwise have had. He saw it also as a loss to the world, because he believed that three great centres of power were more likely to produce a stable world than two. The course of wisdom, he suggested, was for Britain to strengthen her position with the countries of Western Europe, which, he said, “ are of our way in their thinking, which are entirely with us in their outlook and their way of life, and in all our ideals “. In the Commonwealth, he said, there was a group of nations working together, and neighbouring nations living the same way of life and with the same outlook with perfect safety say, “ That is our group; why are we not there?”

I believe, Mr. Deputy Speaker, that Field-Marshal Smuts’s words are even more valid to-day than they were then. It is our group. We sometimes forget that we are joint inheritors of traditions that descend from the Greek city state. We become so bemused by emphasizing the value of the British tradition that we sometimes forge that the roots of British culture go a long way further back, where they merge with the culture of Western Europe. The glory that was Greece lit a lamp which still shines brightly in Europe, as in Britain, Australia and other parts of the world.

That is what Smuts meant when he said, “ That is our group; why are we not there? “ Why are we not there? The purpose of my remarks is to ask that question. Should we not say to Britain: “We are with you on this. You tell the Europeans that if they take you in, they are taking the Commonwealth, too. or at least the part of it that has inherited the European tradition.”? I do not mean, of course, in the formal sense of entry. I mean that through the Commonwealth system of consultation and co-operation, a special and intimate relationship should be established. If Britain is able to say that to the Europeans, is it not likely that they will listen more sympathetically to the case we make for the protection of our trading interests? In this way they would gain something - an intimate association with a world-wide Commonwealth - for the quite substantial economic concessions they are being asked to make. At present, they gain nothing. Indeed, it must seem to many Europeans that we and other Commonwealth countries are basically hostile to the whole great experiment, that we have been unable to comprehend its importance. It must seem to them that we would be in favour of keeping Britain out if we could. Yet, having generated this atmosphere, we ask them to make substantial economic concessions!

May I, with due humility, suggest to the Prime Minister that when he goes to London in September, he gives the lead in taking the Commonwealth into Europe, in the sense that I have mentioned, or rather that part of it which is prepared to go. That way, to my mind, lies salvation both in terms of our future survival and our economic well-being. Looking to the future, I see an inevitable drawing together of those nations, wherever they may be on the globe, that have inherited the European traditions, including the United States of America. We may be a part of Asia, but only geographically. Culturally, we live with New Zealand in an alien part of the globe. I am deeply convinced that if we wish to preserve our culture and our concepts of civilization, we must draw closer to those who share these matters with us. We can then face the rest of the world, not in any hostile or exclusive sense, but as a group which believes it has developed something fine and valuable and which is determined to maintain its integrity.


. With much of what he said, I find myself in complete agreement. However, I would suggest that the honorable member is not fully aware of the circumstances that at the moment actuate the minds of those who are responsible in various European countries for the negotiations for Britain’s entry into the European Common Market. During my brief experience overseas, I took the opportunity to speak to people who were connected in some way with the negotiations that are to-day proceeding between Britain and the European Economic Community. I believe that Britain will be accepted into the Common Market on the terms of The Six, and certainly not on Britain’s terms. Although one can appreciate the plea that has been made by the honorable member for Barker that the Prime Minister (Mr. Menzies) should suggest, during his next trip overseas, that Commonwealth claims in that respect should be given due consideration by those who now constitute the European Common Market, it must be remembered that a great number of the countries which constitute the Commonwealth of Nations live in the Asian sphere of influence. I am sure it will be difficult for the European countries to agree that the Commonwealth should be taken into the European sphere of influence.

Having said that, Mr. Deputy Speaker, I want to return to the statement that we are debating, the statement which was delivered in this House last Thursday night by the Prime Minister (Mr. Menzies), and which concerns the application by the United Kingdom to join the European Economic Community. I agree with the Prime Minister and with other speakers who have preceded me that Britain’s application poses great problems, not only for Australia and the Commonwealth, but for the whole world. 1 know it has been said on other occasions by honorable members in this House, particularly on the Government side, that this issue should be considered on a non-party political basis. That may be so. It is a great issue. To a certain extent I find myself in agreement with that general opinion. On the other hand, I believe that the Government has neglected its responsibilities for so many years that honorable members on this side of the House find it extremely difficult to adopt a non-party point of view. We are now debating the third statement that has been made in this Parliament on the situation. The first debate took place in August of 1961. It was followed by a second statement which

F.6363/62.- /?.-[!!]

was made by the Minister for Trade (Mr. McEwen) in May, 1962. We are now debating a third statement in August of 1962.

I think that any honorable member who cares to peruse the statements that have been made available to this Parliament, particularly the Governor-General’s Speeches at the opening of each Parliament, will know that this matter has been referred to consistently in the GovernorGeneral’s Speech since 1957, when it was first mentioned. The reference was repeated, probably in the same context, in 1958. again in 1959, in 1960 and in 1961. So, in actual fact, as far back as 1957, the Government was aware of the danger to this country should Britain enter the European Community. At least, it made brief references to the position, but it did nothing about the matter. For that reason, as well as for others, it is very difficult for members on this side of the House to accept the plea that this situation should be debated on a non-party basis.

For example, what action has been taken by the Government to deal with the situation? As far back as 1957, even if the Government did not expect the United Kingdom to enter the European Common Market, it must have been aware that this action would ultimately be considered by the United Kingdom Government. However, the Australian Government, during the whole of the intervening period, has made no attempt, for example, to establish new industries in this country. It has made no attempt to expand the industries that we already have.

Mr Freeth:

– What a lot of nonsense.


– It is pleasing to me to see that, for once, the Minister for the Interior (Mr. Freeth) is awake. Normally, when I see the Minister in the House, he is fast asleep. I can see that, at least on one occasion, the Minister is taking an active interest in a debate in this Parliament. I shall deal with the matter to which I have just referred at a later stage of my address. I believe that I can prove indisputably that since 1957 the Government has taken no action to improve and extend the industries that we now have, and it certainly has neglected to foster new industries which it should be possible to establish in Australia.

I do not believe that we can argue successfully in this Parliament against Britain’s right to enter the European Community. After all, Britain lives in that sphere of influence. She is closer to Europe than to any one of the Commonwealth countries. I have formed the opinion, as have other speakers in this debate, that the United Kingdom is joining the Common Market, not for economic reasons, but for political reasons. I believe that that point was adequately dealt with by the honorable member for Barker, who preceded me in this debate. Certainly, it is a very difficult decision for the United Kingdom Government to have to make. That government was actuated, I believe, entirely by political reasons. But if the United Kingdom accepts the political point of view, then she loo, will have economic problems to meet, lt should be clearly understood, that the United Kingdom will take into consideration the political importance of her becoming a member of the Economic Community regardless of some of the economic difficulties that will result in the United Kingdom and regardless of many of the problems that will become apparent in Commonwealth countries. 1 had an opportunity, during my recent trip abroad, to attend a conference in the Palace of Westminster. Like the Deputy Leader of the Opposition (Mr. Whitlam) I want to take the opportunity of thanking those people who made it possible for me, not only to attend the conference, but also to meet those people who are actively interesting themselves in negotiations which are now taking place in regard to Britain’s entry into the Economic Community. 1 refer to people, not only in the United Kingdom, but in other European countries also, which 1 had the opportunity of visiting.

The conference in the Palace of Westminster was attended by delegates from a number of Commonwealth countries. During that conference there was a discussion which lasted almost two days on the possible effects of Britain’s entry into the European Community on the Commonwealth of Nations generally. I think it would be fair to say that every delegate from the Commonwealth countries spoke against Britain’s proposed entry into the Economic Community. In doing so, they acknowledged that the final decision rightly should be the

United Kingdom’s. Nevertheless, they took the opportunity of pointing out that once the entry of the United Kingdom to the Common Market became an established fact there would be economic difficulties for all of the Commonwealth countries.

The economic difficulties have been dealt with by both the Prime Minister and the Deputy Leader of the Opposition and I do not think there is any need for me to enlarge on them. However, I was most impressed by the views expressed by Mr. Heath who is now responsible for the negotiations on behalf of the United Kingdom Government. He spoke to the conference for an hour and I believe most of the delegates were impressed by his address. No doubt he and British Government want Britain to enter the Common Market; but while that might be the attitude of the British Cabinet, it was obvious to me when I was in the United Kingdom that there were members on both sides of the House of Commons who disagreed entirely with Great Britain’s actions in this connexion.

Anybody who has had an opportunity to discuss this matter with those responsible for the negotiations, and with ordinary persons engaged in agriculture and industry, must realize that the mass of the people are firmly opposed to Great Britain’s entry into the European Common Market. 1 believe that to be a fact. Largely they are influenced by the belief that if Britain becomes part of the European Economic Community, the Commonwealth of Nations as we know it to-day will no longer exist. Both Mr. Heath and the Leader of the Opposition in the House of Commons, Mr. Gaitskell, who addressed the conference in the House of Commons, referred to these issues and said that naturally Great Britain felt a sense of responsibility to the Commonwealth countries. It is a fact of overwhelming importance that Great Britain’s decision must be based on political and not on economic grounds. After all, the European Common Market is an economic and social organization. It will provide for common internal laws and practices for The Six or The Seven if Great Britain becomes a member.

The European Economic Community will certainly have high protective tariff barriers.

It will provide for restrictions on trade and travel except between those who belong to the organization. Politically, it will be an effective basis for the North Atlantic Treaty Organization, and in that respect one can understand the opinions that have been expressed on behalf of the United States of America. No doubt the United States believes that an economically strong Europe will be in a better position to accept some of the responsibilities of Nato that the United States has shouldered for so long.

Under the Treaty of Rome there will be a common agricultural policy and a common transport policy. In addition, there will be a free movement of workers, not only within their own country but also from state to state. There will be a common banking policy and a common taxation policy. So having regard to Great Britain’s relationship to Europe, it will be very difficult for her to ignore the tremendous impact that the Treaty of Rome will have here politically. All these matters were emphasized by both Mr. Heath and the Leader of the Opposition in the United Kingdom as well as by other members from both sides of the House of Commons who addressed the conference.

As I have indicated, I found a widely held opinion that it was not inevitable that Great Britain would become a member of the European Community. There are those in the Government who believe that at least Great Britain should wait until the result of the negotiations on the European Common Market is made known later this year before making a decision. There are those in Australia, of course, who believe that Great Britain’s application will be accepted in terms favorable to various Commonwealth countries. I do not believe that at all. After talking lo people in European countries, I believe that Great Britain will be accepted into the European Common Market on the terms of The Six and certainly not on Great Britain’s terms.

It might be said that seven years ago, Great Britain might have been able to enter the European Economic Community in circumstances favorable to her. It was less possible five years ago and is even less possible now. I found there was understanding in the European countries of the problems of most members of the Common wealth of Nations. Certainly, if Britain enters the European Common Market, it will only be on the terms of The Six. Those who have visited Europe know that some of the countries which are now members of the European Community have advanced economically and socially in recent years. They have made those advances since they joined the European Economic Community. For example, they have full employment. So it will be extremely difficult for Great Britain to negotiate entry into the European Common Market on her own terms rather than on the terms of The Six.

On the other hand, there is animosity between France and Great Britain. It is not political animosity, but France has no great desire to see Great Britain enter the European Common Market. France wants to hold the position of power in the European Economic Community. On that basis alone, it will be extremely difficult for Great Britain to secure entry on her own terms. The Deputy Leader of the Opposition supplied some of the answers to the problems in an inspiring address in this House last week.

Mr DEPUTY SPEAKER (Hon \V C Haworth:

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

Debate (on motion by Mr. Jeff Bate) adjourned.

page 307



– I have received a message from the Senate acquainting the House that Senator Hannan has been appointed a member of the Joint Committee on the Broadcasting of Parliamentary Proceedings in the place of Senator Marriott, resigned.

Sitting suspended from 5.54 to 8 p.m.

page 307


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

That so much of the Standing Orders be suspended as would prevent the Deputy Leader of the Opposition (Mr. Whitlam) making h.’s speech on the Budget without limitation of time.

page 308


BUDGET 1962-63

In Committee of Supply: Consideration resumed from 7th August (vide page 60), on motion by Mr. Harold Holt -

That the first item in the Estimates, under Division No. lol- Senate - namely, “ Salaries and allowances £34,400 “, be agreed to.


.- As a mark of censure against this Budget I move on behalf of the Opposition -

That the first item be reduced by £1.

Last Tuesday night, the Treasurer (Mr. Harold Holt) presented the House with a document which was a curious amalgam of apology and bravado. In the last three years he has brought down four budgets and four other major economic plans in February and November, 1960, April last year and February this year. Of them all the present one made the fewest changes and the longest explanations. Formerly he has usually been intent on proving why he has had to change his latest policies; now he has gone to unprecedented pains to prove that he should not change his latest policies. I must say, Sir, that much of the Treasurer’s advocacy was disingenuous and specious in the extreme - to put no stronger term upon it. I will say more of that later. But, to begin with, I am more concerned with the deeper significance of the Budget, its significance as reflecting the attitude of mind of the men who sit upon the treasury bench and therefore have, to a large degree, the happiness of this nation in their hands.

Sir, the Budget the Treasurer brought down last week was obviously the work of men demoralized by their own failure. It was, indeed, the work of frightened men, fearful of many things. This Government is frightened of economic expansion in Australia. It is frightened of the challenge that such expansion undoubtedly presents. It prefers a pool of unemployment because it knows that a policy of genuine full employment brings many problems in its train and leaves less room in which to manoeuvre. It is frightened lest its actions create a boom, because it realizes the inadequacy of its political philosophy in dealing with the problems of a modern economy. It is frightened of the future; and it is apparently very frightened of the people, so much so that it now prefers to fight its elections by proxy.

Many honorable members now present were here a year ago on a similar occasion. Many members on this side were not here. Many sat on the other side of the chamber who are not here now. Some of them might be here still if the Government had heeded the advice then given by the Leader of the Opposition (Mr. Calwell). Members will well recall the jeers that came from the other side when he proposed a Budget deficit of up to £100,000,000 to restore full employment. Now the Treasurer is budgeting for a deficit of £118,000,000. But like most things done by the Government, the deficit proposed is once again a case of “ too little too late “.

We on this side knew last November how grave the economic condition of the country was. We knew, and said, that the springs of growth in Australia were drying up. But what did the Prime Minister (Mr. Menzies) say? He said: “Labour’s policy, if carried out, will increase unemployment “ He asked: “ What is the Leader of the Opposition going to use for money unless he forces upon the Reserve Bank the creation of vast sums of money, unmatched by new production?” He said that increased expenditure without increased taxation was the very definition of a vast system of inflationary finance. He even went so far as to say: “ Mr. Calwell promises to restore full employment in twelve months. Without any of his grossly inflationary policy, we expect the same position to be achieved under our administration.” Did the right honorable gentleman have any knowledge of how he would restore full employment with his then policies? Did he care? Has he any idea when he will be able to redeem this promise now or how long it will take to restore full employment with the modified policies? It is only now, a year later, a year since we proposed our plan and policy for the growth of Australia and the restoration of full employment, that the Government has acknowledged the wisdom of the key parts of that policy. Gone now, apparently, are the fears that a deficit of £100,000,000 would be grossly inflationary; gone is the confidence that full employment would be restored in twelve months; gone is the dishonest accusation that Labour’s policy would increase unemployment.

But it is the people, not the Government, who have borne the real burden imposed by the Government’s errors, neglect and delay. What has been the cost of this wilful neglect of its duty by the Government? It has already been about £700,000,000 in lost production. And the bill is still rising. Between 1959-60 and 1961-62 there has been virtually no increase in the real value - the value adjusted for price changes - of the total of goods and services produced in Australia. Normally we should expect an increase of at least 4 per cent, each year in national production; under a Labour government wedded to national economic growth the normal increase would be greater. Yet over the last two years there has been no growth at all - nothing. So we have sacrificed an amount of production equal at the very least to 10 per cent, of the present value of the gross national product. And the staggering total of this national account for government negligence is at least £700,000,000 in those two years.

Let me take a few minutes to show the dismal record of the last two years of this Government’s administration. Unemployment has risen sharply and has fallen all too slowly. In July this year there were more than 90,000 registered unemployed - and we all know that this figure underestimates the true total of the workless in the community. Two years previously there were 44,000 registered unemployed, or only one-half of the present number. The number of registered vacancies is a much smaller percentage, and the number on relief a much greater percentage, of the registered unemployed than during the two earlier Menzies slumps. Recovery is now taking longer than it used to take.

Unemployment is only one aspect of the problem. Employment has shown a negligible increase, pointing to a stagnation of the economy. Between June, 1960, and June, 1962, the total of civilian employment, that is the number of people in work, rose by little more than 1 per cent, but the population rose by about 4 per cent. Between November, 1960, and June this year there was no rise at all.

Industrial production, as shown in the Australia and New Zealand Bank Limited index of factory production, excluding power, was running in February this year about 5 per cent, below the level of two years before. Since February, the latest month for which the A.N.Z. Bank gives figures, there has been some modest increase in output. The Statistician’s figures, however, indicate that the output of our factories is still little better than two years ago.

Or let me instance the level of private investment in fixed capital equipment, the investment which is calculated to expand our factories, shops and buildings. In 1961-62 gross private investment was lower in value than it had been since 1958-59, three years before. Yet time and again we have been told that manufacturing industry must provide most of the new jobs for the growing number of young people coming from our schools, technical colleges and universities.

Let me take another example in immigration, one of the foundations of expansion in Australia since the war and the result of a Labour government’s vision and drive. The Menzies Government’s stop-go policies have thrice struck at our immigration programme. In the first half of this year the net intake of migrants was still lower than for the first six months of any year since 1954. Last quarter departures were still higher than in any quarter up to the end of I960.

The Treasurer spoke of confidence. He was worried because there did not seem to be much evidence of confidence. We are all worried about it. But who is to blame? The Government and only the Government is to blame. I have the authority of the Minister for Trade (Mr. McEwen) for that proposition. I know he did not support last year’s Budget in this House, and I do not expect him to support this year’s. Cabinet solidarity is a one-way process with him.

What do the Government’s own supporters in the community think about its policies? Do they have confidence in the Government? The Sydney Stock Exchange index of share prices is lower now than it was before the last federal election. And since the Budget speech of last Tuesday it has shown further weakness. There has been a consistent vote of no confidence in the Government from those who are said to support the Government.

These are a few indicators which show the state of the economy as it really is. By wisely omitting some facts and judiciously handling others the Treasurer sought to conceal the true facts of the economy and the possibilities of recovery.

Reduced to a few sentences the basic argument of this Budget is that recovery is taking place. By maintaining the rate of growth of public sector spending the pace of recovery may be expected to increase. In this situation no further budgetary stimulus is required. This is especially so because the timing of government spending is such that it will foster recovery in the near future and then taper off. In short the present rate of recovery is sufficiently rapid and the Treasurer instances the state of the housing and motor vehicle industries. So long as the Government continues to spend as it has done recently all will be well.

That is the Treasurer’s argument. On behalf of the Opposition I completely reject his diagnosis, his reasoning and his conclusions. It is true that some recovery has occurred. It is by no means true that this recovery, as the Treasurer would like us to believe, is simply a result of government policy. What is even less true is that the rate of recovery is sufficient. Sufficient for what? The Labour Party has an unambiguous answer - sufficient to achieve full employment as soon as possible.

This Budget is a betrayal of the principle of full employment. It illustrates the depths of intellectual dishonesty to which this Government will fall in order, frantically, to bolster an obviously untenable position. This dishonesty, or subtlety, is illustrated most clearly in the alleged skilled timing of its budgetary action. The Treasurer has become fascinated with the financial processes which he alleges adjust automatically to produce the right pressure within the economy. He has become an expert. His February measures, he told us, would give a sharp boost to the economy and then ease off as the economy gained momentum of its own. The impact of his latest deficit is alleged to occur mainly in the first three quarters of the year and then to dwindle away once again. It will be noticed that what was expected by last February’s measures to be achieved by this July is now expected, by this month’s measures, to be achieved by next March. The Treasurer is, of course, simply referring to the normal seasonal pattern of government finance; a government runs a cash deficit until about March and then repays the greater part, if not all of it, between April and June. This is a process which has occurred every year this Government has been in power and, of course, existed for many years before it came to power. As such, it is no genuine stimulus to the expansion of national income.

This action indeed looks very like an attempt to hoodwink the public. A Treasurer who pays so little respect to the level of intelligence of the general public can hardly be surprised that this attitude is more and more reciprocated.

The reason for this abuse of technical financial knowledge is, as the Treasurer himself can’t help making clear, to conceal the deflationary impact of the increase in effective rates of tax from 1st July. If the February measure was as stimulating as the Government claims, then its deflationary impact is accordingly two-thirds as strong. This is one reason, equity apart, why the Labour Party feels very strongly that the regressive nature of the original reduction in income tax should not be allowed to continue. If the schedule of marginal rates were changed, a great deal of the potentially deflationary impact of this tax measure would be avoided.

The Government has once again shown very poor skill in technical economic management. To the extent that it is aware of this bad technical decision its only positive move is to let loose a fallacious red herring.

Not content with such disreputable double-talk on the overall issue, the Treasurer proceeds with it in specific instances, such as housing, motor vehicles and public works.

In his Budget speech the Treasurer proudly claims that dwelling commencements increased by 4.4 per cent, in the March quarter. In keeping with the general quality of his analysis, the Treasurer carefully closes his eyes to seasonal influences. There is always a rise in commencements in the March quarter and in completions in the December quarter. When seasonal influences are taken into account the rate of increases of commencements in the March quarter falls to 2 per cent., scarcely a massive rate of growth. Not satisfied by this misuse of statistics the Treasurer happily cites the increase of 10.7 per cent, between the June quarter of 1961 and the June quarter of 1962. Now the June quarter, 1961, was, as we all know, the trough of the recession which this Government intentionally produced. No wonder there is an apparently healthy percentage increase on the basis of that quarter. - If, however, we refuse to be taken in by this statistical sleight of hand and attempt to see how the June, 1962, figure appears against a longer-term background, we see that the commencements in the June quarter this year were 171 per cent, fewer than in the June, 1960. quarter and virtually unchanged from the June quarter, 1959.

The Treasurer also pointed with pride to the fact that this year the Commonwealth will provide £91,000,000 for housing. What he conveniently omitted to mention was that every year repayments of housing interest and principal to the Commonwealth are rising rapidly. As a result net advances by the Commonwealth this year will be half the sum quoted by the Treasurer and lower than five years ago.

Another sector of private demand upon which the Government apparently places much reliance for recovery is that for motor vehicles. Here the statistical evidence of recovery is undoubtedly stronger than that for housing. But once again the Government is using figures to make its point when there may be little justification for doing so. On this point it cannot plead ignorance of the industry’s own view because it has made much of its procedure of consulting industry, including representatives of the motor vehicle industry. Surely then it must have had this view put to it - I quote from an official publication of the Federal Chamber of Automotive Industries of Australia dated June, 1962 -

The strong resurgence of the new vehicle market must, it is predicted, taper off very soon. This tapering off will be accelerated, no doubt, by the fact that there is a current glut in used car stocks and prices of these have been falling steadily.

While the recent release of new models will no doubt delay this process, there may still be a firm foundation for this expert view of motor vehicle industry prospects, as expressed by the industry itself through it own journal. If the industry’s own expectations are proved correct, then clearly another of the Government’s alleged props to the economy isn’t going to bear very much weight.

The Treasurer sought to obtain great credit for the public works programme the Commonwealth is undertaking to stimulate the economy. It is no doubt true that the Commonwealth Government is maintaining or even increasing its rate of spending on public works. But because of the slowing down in the rate of spending on State and local public works, as announced by the Australian Loan Council in June, it appears very likely that there will be a significant slowing down of the rate of spending on public works as a whole. The stimulus from this source is declining, as is the stimulus from the expenditure of taxation money. Is this really what the Government intended? Or is it the case that in its pursuit of kudos for glamour works it has lost sight of the wood for the trees - that it is picking the eyes out of the public works programme in order to gain credit for itself at the expense of the States? Perhaps the Government would like to tell us - much later in the debate, when it has had time to work it out - what it expects total national expenditure on public works will be this financial year and how this increase will help to produce the rate of growth of the economy which the Government says it wants to see. But perhaps it does not know what that is, either.

In his arguments on these material subjects of housing, motor vehicles and public works, the Treasurer reveals sinister shifts in the Menzies Government’s principles on employment and migration.

The Treasurer treated the problem of unemployment in quite callous terms. At the time of his Budget speech last year, the right honorable gentleman was verbally in accord with the Australian Labour Party. He stated: “ We have always stood for full employment … we put it foremost now in our immediate economic plans.” This year, with the possibility of attaining “ immediate “ full employment much better than last year, but with the Government, despite its protestations to the contrary, shadow-boxing the next boom, the objective changes. From an unequivocal statement last year that the Government “ has always stood for full employment “, the Treasurer now merely says “ unemployment has to be reduced further “. If the Government were one for which matters of principle were important, it would have elucidated what it meant by the word “further”. As it has not done so, we have to draw our own conclusions from the Budget estimates. If we do examine the Budget Papers carefully, it becomes only too clear why last year’s “ foremost objective “ has been relegated to the background.

The Government expects to spend £13,000,000 on unemployment and sickness benefits this financial year as against £15,900,000 last financial year. Conservative estimates, which allow for the change in the rates of benefit which were extorted from the Government last February, indicate that this expenditure estimate implies an expected annual average of 35,000 recipients of unemployment benefit this financial year. This in turn, on the basis of experience, implies an average number of registered unemployed of 80,000. Further, this annual average means a seasonal peak in January next of 100,000 applicants for jobs in Australia. I repeat that these calculations are made on a conservative basis. The Government’s statement that unemployment must be reduced does not mean that it Stands for full employment.

I know that to-day, in answer to a question without notice, the Minister for Labour and National Service (Mr. McMahon) said that the Government did believe in full employment. I make all allowance for the honorable gentleman’s competence as a casuist; I know that he has few peers. But what he has given as the definition of “ full employment “ to-day is not the definition which was given by the Treasurer a week ago and, quite clearly, it does not accord with the Budget estimates, which fall very far short of any objective of full employment. The Budget simply shows that there will be a reduction of unemployment from 130,000 last January to 100,000 in January next. That this assumption should be written into a Commonwealth budget directed “ at the highest level of activity we can hope to sustain “ indicates only too well the despair and timidity which have become the way of life for this Government.

Not only is the Government extraordinarily cautious, not only is it betraying one of the alleged major planks of its policy, but also it is showing great callousness towards the plight of the unemployed who are offered an indefinite extension of time in this condition. If only as an apology for its own incapacity, the Government should have increased the unemployment benefit. It should at least pay for the unwanted idleness which it first caused and still permits.

As another example of the way in which this Government’s principles can change with the breeze, the Treasurer’s comments on immigration are revealing. The Treasurer, in his Budget speech last year, referred to “ the standing target of net immigration at the rate of 1 per cent, of population per year “. In his Budget speech last week, he said, “ the immigration target for 1962-63 remains at the unchanged level of 125,000 permanent and long-term arrivals “. He made no mention of the departures. The Minister for Immigration (Mr. Downer), if no one else, should point out to him that these are very different concepts and imply significantly different targets. Here again, one of the Treasurer’s senior colleagues disagrees with him. I quoted the Minister for Trade and the Minister for Labour and National Service earlier. Now we have the Minister for Immigration. All have set and proclaimed objectives different from those which the Treasurer espouses in the Budget. The standing target as defined this year is very much lower than the standing target as defined last year. It is about 50,000 fewer. When principles change in this easy fashion, is it any wonder that actual net immigration fell far short of the original standing target last financial year and is very likely to fall far short this financial year? This “ foundation of forward planning “, to quote the Treasurer, is very ill-based when this Government is at the helm in economic policy-making.

On one of the rare occasions when the Government has adopted a policy which is sound in principle, its application of that principle has been far from sound. I refer, of course, to the method by which the Government has lowered income tax, that is, by a rebate of tax payable and not by an alteration of the structure of rates of tax. The Labour Party asserted strongly on the February measures, and continues to assert strongly now that this is being continued in the Budget, that this is a poor application of a sound principle. Labour makes this assertion on two grounds. First, the practical aim of the measure was, and should be, to stimulate consumer spending. When, however, a lowering of income tax takes the form of a simple rebate, it is just as likely that the additional funds will be saved rather than spent. The practical usefulness of the tax reduction as an instrument of policy is sadly reduced. Secondly - and this is even more important - this method of reducing income tax is grossly inequitable. It means not only that the poorer members of the community gain amounts which are in absolute terms less than those obtained by the richer ones but - and I cannot emphasize this too strongly - the poorer members of the community are receiving proportionately less than the richer ones. This is a denial of one of the central canons of equitable taxation policy, namely, the greater the income then, in all justice, the greater proportionately should be the tax. On this occasion, the Government could not plead ignorance of the rule as, if it had forgotten the rule, the Labour Party plainly reminded the Government last February. Nor has the Government the excuse that it has not had time to make the necessary adjustments within the Taxation Branch to carry out this canon of equitable taxation policy. We are in fact left with the impression that the Government just has no regard for considerations of equity. “ Unprincipled “ is an adjective with many meanings; all apply to this Government.

So far, Mr. Chairman, I have merely criticized the Government, pointing to its failure to appreciate the real needs of the current economic situation and drawing attention to some of the more obvious inconsistencies in its analysis of it. Once again the Government has been conspicuous for its incompetence in the field of economic policy. In his speech on the last Budget, the Leader of the Opposition had to tell the Government how to frame its economic policy. After an unfortunate delay of six months, during which the electors showed in no uncertain terms what they thought of it, the Government reluctantly and incompetently followed our lead. Once again, now, the Labour Party has to outline a positive policy to promote sustained national economic growth. If the Labour Party occupied the ministerial benches, these are some of the policies which we would adopt now.

First we would budget for a deficit of £160,000,000. A year ago the Government threw up its hands in horror when we suggested a deficit of about £100,000,000. Last year’s experience shows that the Labour Party has a much better judgment of the appropriate level of deficit financing. In the light of my earlier comments I intend to make no apologies for exceeding the Government’s figure by some £42,000,000. The magnitude of a deficit should be assessed according to the amount of the national income. Last year this was nearly £6,000,000,000- to be precise £5,932,000,000- so that the additional direct spending this measure should generate would be less than i of 1 per cent, of the national income. This measure alone surely has no serious inflationary implications. It is, of course, directed towards providing full use of existing but unemployed resources of labour and equipment, towards ending the present waste of human and material assets.

In proposing a greater amount of deficit financing than the Government in the current year, the Labour Party is then merely showing its sense of responsibility to the community, lt is, nevertheless, aware that it is possible to make a deficit too large. It does not believe that the deficit it proposes is too large. It also believes that in the current sluggish economy it is the wiser, more equitable, more responsible action to take a calculated risk of over-shooting the mark rather than under-shooting it. What worries the Labour Party is that the Government will even fail in its objective of securing a meagre reduction in unemployment, that its policy will not even be sufficient to absorb the present growth of the work-force. If the Government parties can stick together in the House and avoid the electors outside for another six months, they may again have to adopt Labour policy - another case of too little too late. They will be in the position of having to give that extra stimulation to the economy which the Labour Party recommends now.

What are the major measures we would adopt to place this spending power in the hands of the community? The largest single amount would be used to increase child endowment and pensions. In this way a direct stimulus would be given to consumption and it would be given to those who are sorely in need of it. We would also make an emergency grant to the States for education.

Apart from these social services in cash and in kind, the Labour Party would retain the 5 per cent, cut in personal income tax in aggregate terms, but would do so not by the grossly inequitable method of a rebate of income tax but by altering the marginal rates of tax. This measure would not only appeal to our views on social justice, but would provide a much stronger stimulus to the growth of spending within the community. The restoration of a measure of financial strength to the broad mass of the people who have suffered such losses from the last two years of stagnation would be our first priority. Until the mass of the people are relieved from fear and hardship there can be no health, no growth for our country. Until the mass of the people move back in force to the shops and the factories there can be no increase in production, no making good the years of waste. We recognize and would meet the needs of the mass of the people.

A third measure would be to request the Reserve Bank to bring pressure on the bond market to lower the long-term yield on bonds. This measure could be expected to have some mild effects in reducing saving and increasing consumption. It would be a useful general stimulus to all types of investment. Most of all it would make a real contribution to reducing the cost of major public works and in reducing the cost of housing. Here it would have a two-fold beneficial effect. It would make it easier for young couples to set about building their own homes, and so stimulate new construction. It would also, when spread through the structure of interest rates, ease for many members of the community their high burdens of rental and amortization payments and permit them to increase their spending on other goods and services. It would place at our disposal another means of controlling monetary policy. Interest rate policy can only hope to be used successfully if it is used flexibly; it should lead the market, not be led by it. Under the Menzies Government alone in the Western world, interest rates are not flexible, they always rise. They are the highest in the Western world.

So far, I have confined myself principally to dealing with the measures which must be taken immediately for correcting some of the more obvious waste, distortions and obstacles erected under the Menzies Government. But our plans go far beyond that. Stop-go as a way of life must be thoroughly exorcised from the administration of Australia’s economy. Instead, we must now begin to plan for progress, looking several years ahead. A Labour government would begin immediate preparation of a plan for the progress of Australia, a cooperative plan, which would give private investors a solid foundation upon which to make their own plans.

Expansion is a means to an end. For Labour, economic growth means the betterment of the lot of the people and the strengthening of Australia. We want real national growth and an equitable distribution of the fruits of that growth. So for us the haphazard, chaotic pattern of stopgo is out. We will plan ahead. And we will ask the trade union movement, business and the community at large to join us in planning ahead. We are not interested in how little trouble we can cause ourselves in governing the nation. We are interested in how we can make Australia grow stronger faster.

We will set targets for Australia - and bend our every effort to see that high targets are matched by high achievement. Our first task will be to plan the expansion of the part of Australian spending directly under our control; that is, the spending plans of the Commonwealth Government. We will then, through co-operative economic planning with business, unions and the community at large, fit our plans into the plans of the whole country. Only if we know where wc want to go and how we mean to get there can we as a nation end stop-go.

Any Australian only needs to look around to see the vast range of problems facing our community which can only be solved by community action. Look at education. After nearly thirteen years of Menzies Government rule Australia has reached the shameful situation where we spend a little more than 3 per cent, of our national income on education. Norway and the Netherlands spend nearly twice that proportion. The United States and Canada spend almost half as much again, in relation to national income, on education as we do. The United Kingdom, New Zealand, Germany and Sweden all spend a greater proportion of their national income on education than Australia does. Our universities are seriously lacking in facilities, in teachers, in buildings, in research. The insidious pattern of quotas on entry and higher and higher student fees is re-appearing. Our schools are grossly over-crowded, our teachers underpaid. There is a crisis in education, a crisis at the very time in history when education of all kinds is being increasingly recognized as the key to economic progress and at a time when a great tide of young people is becoming available for school and later training. We will plan for a new deal for education in Australia, so that education can make a major contribution to the faster and sounder economic progress to which all our people have a right - all those who were born here and all those who have come here. AH the Premiers sought this new deal in June last year. The Prime Minister refused to cooperate with them.

Then look at transport in Australia. Our ports are run down; a major potential trade in coal is being jeopardized because of years of neglect of our nation’s ports. The waterfront suffers from the outdated and inefficient equipment with which men are asked to work. Our cities are choked - at enormous and mounting economic loss - with traffic trying to force its way over inadequate, old-fashioned road systems. Major inter-city arterial highways are broken and dangerous, leading to slow movement of traffic and further economic loss. Transport of people to and from work in major capitals and cities involves every day large and avoidable national losses of what could otherwise be productive working time. We will plan to avoid these losses of production, of time, of effort. We will plan for major reforms in transport throughout the nation. We will not shrug this off as a problem for the States in the negative fashion of the Menzies Government. What would be the condition of German, American and Canadian roads if the federal governments in those countries had similarly shirked their responsibilities?

How can Australian railways be coordinated while our Prime Minister continues to dishonour the Commonwealth’s obligations to link Broken Hill with Port Pirie - obligations entered into in 1949?

Mr Clyde Cameron:

– What did the Playford Government say?


– I do not need to pay regard to what a State Premier says about these matters. I have only to look at the statutes passed by this Parliament and still in force. The Government is obliged to carry out the laws made by the Parliament. This Government has failed to carry out this basic law on national transport.

Then look at our national health. The improvement in the physical and psychological health of our people is not something to do simply for reasons of justice - although that is one very good reason and a reason close to the heart of Labour. To improve our people’s health is to raise the productivity of our nation. Time lost in sickness is time wasted in production.

Then consider our national defence. Our forces are insufficiently equipped. Labour, which established the Royal Military College, the Royal Australian Navy, the Royal Australian Air Force, the Fleet Air Arm and Woomera, will plan for Australia’s defence. The Labour Party is able to plan for Australia’s defence not only in the narrow purely military sense. We will plan for it through our other plans for strengthening the productive power of the nation. Improvements of ports, roads, education and health are all direct contributions to our national defence, for they will all help to make our nation stronger, readier and more able to stand on its own feet.

Then consider the development of the northern reaches of our land, vast ranges of productive resources presently neglected and left idle for want of leadership and planning. The Treasurer takes credit for reviving the beef roads schemes in Queensland and Western Australia which the Chifley Government initiated and which his own Government allowed to lapse. He has still announced no plans to put the Snowy Mountains Authority on a permanent and national basis. Where in this Budget is there a reference to the water resources council? There is no plan to revive the Chifley-Hanlon proposals for the northern rivers which his Government abandoned.

These are some of the great projects of national development. Development cannot be conducted on an annual or piecemeal basis. It must be planned over a period. Increased spending on a number of projects which were hastily conceived six months before in an attempt to placate a justly irate electorate is not our idea of planned national development.

In the last two years alone there has been no increase in production, but, as 1 said previously, a loss of output amounting in value to something like £700,000,000 in current prices. This is not the first time that this has happened. In 1956-57 and 1957-58 there was also a period of negligible increase in production, once again due to the Menzies Government’s policies of stagnation. In fact, in the eight years ended 1961-62, national production has remained stable or static in four years and has risen noticeably in only four years. The total loss of production involved would amount in to-day’s prices to well over £1,000,000,000.

But we would do more than recover lost production, for by ending stop-go we would encourage a greater national urge to expand - a greater national desire to make our country grow. The effect on confidence in the future alone would be immense as business found it could confidently plan ahead again. So 1 envisage under a Labour government not only the avoidance of the huge losses of production which have followed from stop-go, but a strong upward impetus to expansion of all kinds. Accordingly, we will be able to plan for a higher rate of growth of production.

In the next two years, a Labour government would be able to look first to making good the present loss of production due to under use of our existing stock of labour, machines and materials. This would lead to an increase in gross national product, at to-day’s prices, of the order of £600,000,000 to £700,000,000. In addition, we could count on a further increase in production simply because of the normal increase in productivity and the sharp rise in the number of young people coming forward looking for their first jobs.

The Government, of course, is aware of the process and has made use of it in framing its revenue estimates. The trouble with the Government, however, is that it has been so niggardly in providing further stimulus to the economy that it is running the serious risk of not keeping up an adequate momentum in the economy. Clearly then, the Labour Party has a sense of responsibility and a clear appreciation of the current and future needs of the nation.

On the other hand, we have had plenty of opportunities in recent years to take the measure of the Government parties and the Government. We remember the 1960 Budget, followed so swiftly in November of that year by the disastrous credit squeeze; and in those months, and by those actions, we experienced the full measure of this Government’s ineptitude. We had the pre-election Budget of 1961 which did nothing to stimulate the economy despite the rising toll of unemployed and the mounting volume of criticism of its policies; and this was the measure of the Government’s complacency.

Now we have the 1962 Budget, which deliberately delays action, obviously because the leaders of the Government are gambling on not having to face the electors before they have sufficient time to close their ranks and rehabilitate their reputations; and this is the measure of their cynicism.

Presumably in 1963 we are to have a budget which will do all the things which the Government knows should be done, but which it will tell us in this debate this month cannot be done; and this is the measure of its political opportunism. Therefore this Government stands condemned on past, present and probable future performances. But it stands condemned by this Budget itself, a budget of lost opportunities and broken promises. It is condemned by the unemployed who are offered at best only gradual relief from their plight - in itself a result of this government’s ineptitude. lt is condemned by all the poorer members of the community who have gained not only absolutely less but proportionately less from its inequitable method of maintaining reduced personal income tax. It is condemned by the family man who has lost half the value of his child endowment. It is condemned by the homebuilder and home-purchaser and by all those who suffer from the three increases in interest rates that it has imposed. It is condemned by all those who see in more aid to education the greatest contribution the Commonwealth can make to the long-term growth of the nation and the well-being of the community. It is condemned by those who had hoped to see real evidence that the Government would give purposeful guidance to the growth of the economy. It is condemned by every one outside the Government Parties. Every one else, we trust, believes in sticking to his principles and not waiving them whenever it is felt expedient to do so.

The great majority of the Australian people condemn the Government and this discreditable Budget. The Government may, by virtue of its tenuous but obedient majority, escape condemnation by a vote of the Parliament. But when we consider the massive contempt in which this incompetent, unprincipled, caretaker Government is held throughout Australia; when we recollect verdict after verdict that the electors have recorded against conservative governments and conservative policies and in favour of Labour policies, we would regard a vote for this Budget as a very small triumph and respite indeed for the Government. Such a vote would merely defer the condemnation and annihilation which this Government expects and deserves.

Minister for Supply · Paterson · LP

Mr. Chairman, it is a matter of regret for the Committee to-night that the Leader of the Opposition (Mr. Calwell) is not with us to lead this debate on behalf of his party. I am sure we have all been happy to hear the Deputy Leader (Mr. Whitlam), who recently gained experience overseas which will do him immeasurable good. He needs some good to be done to him, too! We have also been pleased to hear his magnificent word picture of Australia, such as no author could possibly paint. One wishes that he had a better case. He has gone to the trouble of proposing the traditional vote of no confidence in the Government, and within the specifications for the task he has done a rather workmanlike job, that is, if a detailed analysis of figures means anything. A technical analysis has led him to draw a mass of conclusions which are denied by visible evidence available to everybody in this community to-day.

There are great limitations to the task which the honorable gentleman had to perform. If he is to undermine the Government’s support he has to draw a picture of chaos and ruin. Despite what he has said to-night, the fact is that there is very little raw material for the exercise. It seems to me that the Deputy Leader of the Opposition is not able to make up his mind. At one time he hopes we will be able to draw our party strengths together and avoid a test at the polls until we can rehabilitate ourselves; and the next point is that he is looking forward to the day when we will be destroyed by our own ineptitude. Pretty obviously the honorable gentleman understands very little of what the Government has done in this and preceding Budgets, and the steps that are necessary to rehabilitate not so much the Government but the economy of this country and to guard its future, which would be hopelessly thrown to the wolves with the Labour Party in power.

Sir, the people of this country will not judge this Budget by the sort of analysis that the honorable gentleman has given here to-night. They will judge it by the practical things it does; they will judge it by the practical background of activity within this community; and they will judge it against the background of this country’s growing problems, which I thought the honorable gentleman would have understood much better than he apparently does, having come so recently from having a look close up at the European Common Market problems and what it means to us. I am bound to say that the man in the street understands this very well, and it is for that reason that I have not heard the chorus of condemnation which the honorable gentleman said we should have had. I followed him through his reading of the long list of people who condemned this Budget, and it seemed to me that there was nobody left except the members on this side of the House. I have read a good deal of comment from leaders of business and industry and I have heard comments from all sorts of people, but none of them in the terms anticipated by the honorable gentleman. It seems to me there must be something wrong with his assessment. The Opposition member who is interjecting will do some cheering later.

The Deputy Leader of the Opposition has dealt with the economy of Australia and tried to prove that in fact it is in a ruinous state. He is defeated by the morning newspapers which point out that, so far as cars are concerned, the increase in motor car registrations - this is one of the great indicators of consumer expenditure in this country - has been on the up since May last. The registrations for July were no fewer than 11,500 above those for July of the preceding year and 3,000 over the peak of July, 1960.

I have had the pleasure of meeting many people in the automotive industry and looking at their plants, and I find among them no lack of confidence in the future of Australia. The capacity of the two greatest automotive engineering plants in this country is being expanded at enormous cost, not because these people see a dead future for this country but because they understand very well that the stability produced and nurtured by this Government with a little political courage may be the sort of thing which will guarantee the future of the economy and, necessarily, the future of their industry.

If one looks at this morning’s newspapers, one will find that business advances are up £29,000,000 and are running to-day at over £1,000,000,000, which is being ploughed back into developmental industry, thus backing Australia’s economy, the judgment and the good faith of this Government with hard cash. I did not notice anybody doing that sort of thing during Labour’s term of office. Capital is still flowing into Australia freely to bolster not only the economy but to reap for the industrialists and investors the sorts of advantages which come out of operating in a new and virile country which is going somewhere.

When one looks at what the manufacturers have been doing in recent years; when one looks at money investment in every branch of Australian industry; when one looks at the missions that have been sent abroad - some sponsored and all encouraged by this Government - when one looks at the new markets that are being developed overseas, one realizes that it is these things which are the best auguries for the future of this country - not the dead, dreary analysis of figures that the honorable gentleman imposed upon us tonight. This is a picture of industry in action, building a new future for this young country in the Pacific.

The one thing which underlies the confidence in industry is the fact that people appreciate the economic stability that this country has brought. It is here that there is a great divergence of opinion and policy between the Labour Party and ourselves, because the Labour Party never does quite understand the real need for a stable basis on which industry and the economy can be planned and developed. The consumer price index for the last four quarters has shown two falls of .2 per cent., one fall of 1 per cent., and one fall of .4 per cent. - not very big figures, but they are falls. This illustrates two things. One is that security can be gained and the other is a lesson which the Labour Party ought to learn, that it is not necessary to have more pound notes in the pocket in order to enjoy an increased standard of living, because costs can be forced down and the standard of living can be forced up in that way if we have stability.

Therefore, the sort of stability that this Government has produced is of the very essence of benefit to the people of Australia. The economy will be rehabilitated, but on a stable basis, because we do not want to be victims of the sort of inflation that we had three, four, or five years ago - a good deal of it fostered by the aid of and supported by our friends opposite.

When it comes to development, the honorable gentleman draws us a picture of a country in the doldrums, a country with no hope for its industrial future. He is being laughed at by the development going on at every hand, and if he fails to see this, then he is extraordinarily blind. The honorable gentleman, I think, was in Western

Australia recently. When I was in Western Australia four years ago, Western Australians were complaining that they had no friends, that nobody encouraged them and that nobody took any notice of them. Three months ago, when I was in Western Australia, there was a completely new atmosphere in the industries of the State. Not only have they multiplied their capacity, but they have made up their minds that if something has to be done they are the people who are going to do it, with whatever encouragement the Government gives.

To-day in that State people are talking in terms of a new California, of taking away the trade of the eastern States, and they are selling the products of their industries in competition with the bigger manufacturers in the eastern States. They are at the same time developing extraordinarily valuable export markets in Asia for Australian products, the output of Australian factories. This is what can be done when industrialists make up their minds, and the industrialists of this country have made up their minds that Australia has a great future and they are going out after it, aided and supported by the Government.

On every hand there are signs of this development which the honorable gentleman has failed to see. Private enterprise has enormous faith in Australia’s future. It has only one fear and that is the fear of a change of government. There has never been a more dramatic change in a country’s industrial background than there has been in the last 25 years. To-day we have a great and expanding automotive industry ready to step out into export markets. We have as well the developments in steel, minerals, and all kinds of manufacturing industries. Our textile industries can support this county’s requirements. Our chemical industries are increasing. We have oil refining on a broad scale, and aided and encouraged by this Government we may well be on the verge of producing oil. Success in that field will make a big difference.

When one looks at the amount of development generally being put into this country, one realizes that it is not true to say that because this Budget does not increase social services, it does nothing; when one looks at the figures of expenditure sup porting development it is to understand that the Government is channelling public funds into the quarter where they will do the most good for this country’s future. I notice that £27,000,000 is going into development, including the provision of coal-loading equipment in two coalproducing States. This will not only boost the coal industry at home; it will also go to supply^ an increasingly valuable market, if my friends on the opposite side of the chamber can persuade their trade union friends to keep the coal moving through the ports. Mount Isa is being developed through the provision of an improved railway and the brigalow lands in Queensland are about to be opened up. Cattle roads are going through the north. We also have the benefit of rail standardization and two or three States are ready to cut costs and continue this development.

My honorable friend opposite talks about development of the north. There can be quite a fetish about this development. All sorts of people talk about developing this area or that area, but development is not a matter of merely pouring millions of pounds into the north. We want to encourage people to settle there. If there is to be worth-while development and protection of public expenditure in the north, any development must have regard to the sort of markets we can capture for the produce of the north. If development goes ahead merrily only by pouring millions of pounds into northern development, this will be waste of the worst kind; it will achieve nothing.

The Government is seeking new export markets, and when these export markets are available development money will be ploughed into the north. This is the finest kind of development.

Mr Peters:

– You mean Communist China.


– I will come to Communist China in a moment. There are good friends on the opposite side of the chamber who are constantly chirping about Communist China. If the honorable gentlemen will spend a little time studying what happened to countries that did not understand that the Communist Chinese, like Communists all over the world, regard trade as an instrument of policy, he will be better equipped to raise the point in the Parliament.

The Deputy Leader of the Opposition raised the question of unemployment, and here he struck a responsive chord. There is no one in this community who doss not understand the frustration of unemployment. Whilst it may be true that the plans of the Government to produce full employment have not come to fruition on the time-table that we anticipated, the Government is devoted to doing two things together. One is to take care of the unemployment problem and the other is to preserve the public interest. My good friends opposite will not overlook the fact that advertisements in every newspaper show, tragically enough, the great shortage of skilled tradesmen right throughout Australia. This is a sobering thought. The situation is, in fact, the outcome of the days of over-full employment, when easy money was available. In those days, many of our young men coming into industry forbore to train themselves in trades but went after the easy money. To-day, they are unskilled workers out of a job and the country is stricken for need of skilled workers. I hope we will not commit that kind of folly again.

We are talking about the unemployment situation. To-day, unemployment stands at 2.1 per cent, of the work force. I invite honorable members on the opposite side of the chamber to look at comparable figures for industrial economies in other parts of the world. They will find that our figure compares more than favorably with the figures in other countries. I know the comment that will be made on this point. In comparative terms, this is a very good performance, but in absolute terms, I know it does not feed the man who is out of a job or cure his frustrations. But if his frustrations are to be cured on a permanent basis, we must establish a sound foundation for the growth of our industries.

The Deputy Leader of the Opposition spoke about social services and told us what the Australian Labour Party would do if it were returned to office. Of course, it would buy some more votes in the easy way he has outlined to us. The fact is that in this field we are a little like Kansas City; we have gone about as far as we can go for the time being. When we look at the enormous rate of growth of expenditure from the National Welfare Fund, surely we must understand that we have not a continuing capacity to make annual increments in social services. Expenditure in this field for this year will be £22,000,000 greater than it Was last year, without increasing the rates. Let me give an illustration of what is happening under the major heads of expenditure. The social services account has gone up steadily and stands to-day at £387,000,000. We need a period of stabilization, and this is the year in which it can be done without injury, because this is the year in which the cost structure has failed to increase. Unlike in previous years, the value of pensions and fixed incomes has remained static or has improved.

In the general picture, we can do all that the Deputy Leader of the Opposition has suggested. We can boost the economy and we can boost the rate of Australia’s development. We can get back to overfull employment. We can increase social service benefits. We can do all this by the simple and destructive medium of adopting deficit financing or deliberate inflation. This is the finest illustration of the point I have made. The Australian Labour Party never does understand the dangers of increasing the flow of money beyond the flow of goods. It is absolutely transfixed by the idea that if you have more pound notes in your pocket your standard of living is immeasurably increased. All the records of past years prove this to be a great fallacy; yet it is a fallacy supported by the Australian Labour Party. It is certainly the one thing that would destroy this Utopian dream that the Deputy Leader of the Opposition has put before the House.

We need to have regard to two points. We need to understand that we cannot go in for continued deficit financing without taking the great risk of inflation. The real fact is that when a deficit is put into a budget, you virtually inbuild a deficit for the following years, because the deficit gets itself caught in avenues of expenditure and cannot be extracted. So, costs constantly rise. To appreciate the percentage of the Budget expenditure which is committed under fixed heads and which continues to increase automatically from year to year is to understand that the room for any government to manoeuvre in budget affairs in the future will continue to shrink unless we pay very great attention to this one problem.

I notice the vote for defence is to be increased by £9,600,000. Social services, without any change in the rates, will require an additional £22,000,000. The States are to receive an additional £22,000,000. War and repatriation benefits will require an additional £6,200,000 and the vote for the Territories will be increased by £6,000,000. These are costs that must continue to rise year after year. If we start deficit financing to cover the rest of the Budget, we will always have deficits.

Mr Pollard:

– That is what you are doing.


– The honorable member comes back to our deficit. I merely said that if you put a deficit in a budget, you risk having a deficit in succeeding years. We have taken that risk. But this is as nothing to the risk that would have been taken in implementing the Labour Party’s policy of having a deficit of £100,000,000 or so last February and repeating the dose in this Budget. That is the sort of action we must avoid, and it will not be avoided with the magnificent plan put forward by the Deputy Leader of the Opposition. What we need to do immediately is to see where this country stands in relation to its future problems. It is recognized everywhere that Labour has always been the consumer; it has never been an investor. Labour supporters look for quick results; they do not look for the long-term advantage. Labour does not understand the demands of the competitive markets into which Australia will find itself absorbed in the course of the next few years.

Of course, if you are dealing with this problem at home you can always do a little socialist fixing. But no amount of socialist fixing will take care of this problem in the world’s markets. So if this country is not competitive we shall not even be in business. We have had some experience in recent times of what the Common Market could mean to this country. Despite the magnificent effort which has been put forward on behalf of this country by the Prime Minister (Mr. Menzies) and the Minister for Trade (Mr. McEwen) it seems quite likely that Australia, perhaps in the not-too-distant future, will lose the advantage of preferences which have sheltered our trade since we became a great trading nation.

Two things we have to do: One is to stabilize our cost structure at home as an aid to remaining or becoming competitive in world trade. We also have to find new markets for the goods which may be rendered surplus when we lose our preferences in the British market. This is a co-operative job for government, for management and for labour. The Government’s first contribution is in the sort of developmental programme which has gone on in years past, which is repeated in this Budget and which will make the greatest contribution to this country’s competitive position in world markets.

The Government’s second great contribution is to maintain, with some political courage, the stability which must underlie our efforts. It may be that we shall have to look into the tariff structure. We have made provision to preserve for Australian manufacturers more of the Australian market. In one of to-day’s newspapers I read a headline stating that higher export sales had cut the market costs of a certain firm. That illustrates what it means to have a mass market. The preservation of a great percentage of the Australian market for home producers represents the finest contribution towards pulling down our production costs and allowing our industries to expand into export markets.

On the management side, industry is making a magnificent effort. Not only is it involving itself in a bold trade drive abroad which is having splendid results and is expanding our export income but, at thd same time, it has adopted the slogan, “ Buy in Australia “. To-day, a great campaign is running to convince the Australia people that they ought to buy the products of their own factories. After all, our products arc as good as and, in many respects, perhaps better than, imported products. J often wonder why people who are prepared to earn their money in Australian factories are not prepared to support Australian industry by purchasing its products. We should endorse the magnificent contribution of the various chambers of manufactures on the “ Made in Australia “ front. We must understand the effect that this policy will have in boosting the economy and extending avenues of employment. We should remind ourselves that the most important thing to be produced in Australia in the years lying immediately ahead is nothing less than the future of this country itself. What shape the future will take for us will depend entirely on what we put into the task of building and producing.

On the labour side, there will be great need for the Australian Labour Party to seek peace in industry. We have had a memorable record of peace in industry during this Government’s term in office. At the moment, there are some signs of deterioration, and it will be the responsibility of my friends opposite, if they have the future of this country at heart, to see that peace in industry is restored. There is a great need on the part of industry to stay its hand in demands for leap-frogging wages and shorter hours in a country which is already very low in the scale of average hours worked in industrialized countries.

The catalogue of achievement by this Government in the last twelve or thirteen years is not to be impaired by some minor setback arising from a policy designed basically to preserve this country’s future. The Government understands, apparently much better than the Opposition may ever hope to do, the nature of Australia’s changed position in a changing world. If, as some people believe, this Government has risked its political future on a budget which seeks stability to ensure the country’s future development and security, I think this is a fair gamble for a worthy end.

I do not believe that the Australian people will judge the Government’s efforts and its Budget upon whether or not it makes hand-outs. I do not believe that people will come to us in groups and say, “ There is nothing in it for us and therefore it is not a good budget”. I do not believe that the Australian people want to risk their long-term future for a shortterm, temporary advantage. The Government has maintained stability on the only basis which can assure Australia a sound economic future. Every indicator in the community is to-day pointing to the fact that a job has been well done. I do not believe that the people need to look at this

Budget in order to ascertain the state of the nation. They need only to look around them to see the picture of Australia on the march. They need only to understand what the Government has meant to Australia, and what to-day’s developments will mean to them. I hope that they will disregard the professional pessimists and mourners on the other side of the House.

East Sydney

.- Mr. Chairman, we have just heard an extraordinary speech from the Minister for Supply (Mr. Fairhall) allegedly supporting the Government’s policies. I am quite certain that the Minister picked up the wrong speech. It must have been the one that he intended to deliver last year - not this year. I would imagine that he could expect, any day, to get a letter from the Prime Minister. He had better see the honorable member for Wentworth (Mr. Bury) so as to arrange with him to move over and let the Minister pick his position on the back bench. The Treasurer (Mr. Harold Holt) has blossomed out in this debate as a humourist. He made this remark -

My colleagues and I have Jess liking than most people for policies of stop and go. We are preoccupied with stability. We have pursued it consistently through thick and thin, wc have achieved it.

Surely members will not require to be reminded that most of our troubles to-day arise from the fact that since 1949 the Government has allowed inflation to run riot. In 1949, the famous promise was made by the Prime Minister (Mr. Menzies) to restore value to the Australian £1. Instead, there has been a rapid depreciation in the value of our currency. If you try to find out from the Treasurer the present value of our currency compared with 1949, Mr. Chairman, you will get a very evasive answer. 1 asked the Treasurer a question concerning the value of the Australian £1 compared with the value at 30th June, 1949, and here is what he told me -

Because of disparities in price movements for various commodities and services, in various places and at various times, and at various stages of distribution, it is impossible to designate any single figure as representing in all circumstances the change in value of money in recent years.

That is the reply given by the Treasurer to a simple question as to the present value of the Australian £1 compared with its value when the Labour Government left office in 1949.

During the general election campaign of 1958 the Prime Minister was a little more frank. At an election meeting at North Sydney he admitted frankly that the value of the currency had depreciated by 60 per cent. I would say that that was an understatement of the facts, but he admitted to 60 per cent, depreciation by 1958. What I would like to know is whether the Treasurer really believes in stability. If so, he is a recent convert to that belief because he is on record as saying in this Parliament that creeping inflation was not too bad. He referred to creeping inflation as a 3 per cent, increase in costs per year. He said that it was, in itself, not too bad for the nation. If a 3 per cent, depreciation in the currency continued it would mean that any person who had invested in long-term Commonwealth loans would suffer an erosion of his investment by over 50 per cent, before the loan matured. Yet the Treasurer was not a bit disturbed about what he regarded as creeping inflation.

Then he said, “ We have achieved it “. What has the Government achieved? Is the reply 140,000 unemployed? Of course, the Government admits to only 90,000 registered unemployed. The Treasurer admits that there is a degree of unused industrial capacity and a loss of confidence in the business world. The fact is, there is loss of confidence in this Government. I remind the committee that in December last - and the Government’s position has become much worse since then - the Australian Labour Party received 300,000 more votes than the Liberal Party and the Australian Country Party combined. So even in December, there was no confidence in this Government, and it had to depend on a few preferences from the Communist Party to enable it to occupy the treasurybench.

The Treasurer referred to the cause of lack of confidence in the business world. Do not forget what he said -

We have been persistently pursuing this policy of stability and are opposed to a stop-go policy.

The reason the business world has no confidence at the moment is that it is afraid the Government may suddenly and hastily reverse its policies, and the business world has every reason to be afraid. Surely the Treasurer has not forgotten that when the Government decided to increase the sales tax on motor cars, the higher rate of tax remained in force for 98 days. In Victoria, the honorable member for Bruce (Mr. Snedden) was appearing on television defending the decision of the Government at the same time as the Prime Minister, just prior to his departure overseas, was announcing the removal of the higher sales tax. So one readily understands why the Treasurer refers to a stop-go policy.

The Treasurer has said that confidence is vital. If he believes that the people have confidence in this Government, why does not the Government test the position in the electorate of Batman? The Government has the narrowest of majorities in this chamber. A by-election is to take place through the unfortunate death of one of our colleagues, and this affords the Government an opportunity to test public opinion. But the Government is afraid to put forward a candidate, and judging by the result of the by-election for the State seat of Broadmeadows in Victoria the Government has every reason to be afraid to face the electors.

This Government has used unemployment as an instrument for the enforcement of its economic policy. To illustrate that the Government has not approached this problem in a humane way, I quote the words of the Prime Minister who said -

There is a little unemployment and some loss of confidence. Is this too great a price to pay for controlling our overseas funds and controlling inflation?

The Prime Minister did not think so, because he does not have to pay. But what is the price in terms of human suffering? In the “ Sydney Morning Herald “, of 8th December last, it was reported that a survey conducted by the Red Cross Welfare Service had revealed this -

Some unemployed families in New South Wales pawned their blankets to raise money for urgent needs. A man, wife and six children from thirteen years to eighteen months had been living on unemployment benefits of £6 2s. 6d. a week for five months.

The Minister for Supply (Mr. Fairhall) said we have gone as far as we can go. I am amazed at the patience of the Australian community in putting up with the treatment it has received at the hands of this Government. When you complain about the *’ temporary difficulties “ to which the Prime Minister has referred, you become a calamity howler and a whinger. That is the way the Prime Minister refers to people if they dare complain about the way they are treated by the Government. The Prime Minister has also said -

If you are going to put down a boom, you have to hit a few heads in the process. We have done it and the boom has gone.

The heads that the Government hit were those of the unfortunate 140,000 unemployed in Australia to-day. Of course, the right honorable gentleman delights in cracking a few heads. He has declared it to be a great accomplishment on his part because in the general election campaign last year he referred to unemployment as being a by-product of the Government’s policy. There is no doubt in the world that unemployment has been deliberately created by this Government as an instrument of its economic policy. The AttorneyGeneral (Sir Garfield Barwick) said in Brisbane in an unguarded moment - and he has many of them -

Unemployment is greater than the Government would have wished.

I would like the Attorney-General to tell us some time the volume of unemployment for which the Government was wishing. When he went to Western Australia to talk to the Young Liberals, the AttorneyGeneral said that in any case it was not a matter for the Commonwealth Government and consequently he washed his hands of unemployment. In Victoria, another of this Government’s ilk - the Liberal Premier - saw great advantages in having an army of unemployed because he said that we would get greater output with fewer employees. If this Government was frank and honest, it would admit that that is what it is trying to do. It is trying to use the unemployed as an economic weapon to force the workers in industry to allow their conditions to be worsened and to accept lower rates of pay. With this situation prevailing, the Prime Minister said -

I am a seething mass of confidence about the future.

If any man were in the Prime Minister’s place, he could be a seething mass of confidence about the future. I suggest to honorable members that at some time when they have the opportunity and the time, they should examine the emoluments that the Prime Minister receives - not only the emoluments he gets directly because of his occupancy of the post of Prime Minister but also the legacies he collects from grateful constituents who have mentioned him in their wills. So anybody can see that in the Prime Minister’s position, anybody would be a seething mass of confidence about the future.

Let me turn now to immigration. I do not share the views of a number of honorable members in regard to immigration. The Government has declared that immigration policy should be tied to work opportunities and the capacity of Australia to absorb new settlers, but it has not honoured that undertaking. This is a most inappropriate time for an Australian Government to talk about stepping up the intake of migrants. The Treasurer said - immigration should continue at the highest possible level consistent with our capacity to absorb them.

There is nothing wrong with that statement if the Government carried it into effect; but this year it has declared its target to be 125,000 immigrants. We know what the situation is at present. The Treasurer has referred to the quite formidable task of absorbing labour. Of course, it will be a formidable task. Will it be eased by bringing in additional workers from overseas? Of course not! There are 90,000 registered unemployed and 50,000 unregistered, and the Government has estimated that the addition to the work force in the next twelve months will be 85,000, which is rather an under-statement. It means that if the Government is to achieve its declared objective of full employment within the next twelve months, it has to find 225,000 positions. Nobody believes that this Government has the capacity to do so.

When the Minister for Labour and National Service (Mr. McMahon) was talking about the additions to the work force, he admitted that, on the figures, 85,000 appeared to be an underestimate. But how did the Minister explain it away? He said that there were many more young people to-day staying on at school. Why are they staying on at school? Their parents keep them at school because there is no work for them. Many of the young people in

Australia who left school at the end of last year are still unemployed and are still looking for work. So this is a most inappropriate time to talk about stepping up the flow of immigrants.

It is well known that building is not keeping pace with demand. In Sydney alone, there are thousands of unsewered homes. In Melbourne, essential services, particularly water supplies, will be inadequate before the end of this decade. There are insufficient hospitals and educational facilities. Yet the Government persists with its dishonest propaganda to induce unfortunate people from overseas to come to this country to establish their homes. It has prepared and shown overseas a film entitled, “The Way We Live”. The film purports to show what happened to what the Government alleges to be a typical English family. Twelve months after arriving in Australia the family had bought a block of building land at French’s Forest. Twelve months later, the family owned its home, and the final scene in the film showed the husband of the family sailing his own yacht on Sydney Harbour. This is the guff that the Government puts out to induce unfortunate people overseas to come to Australia.

Every one knows that the immigration scheme is becoming a dead economic loss to Australia. That does not mean that many of the people who have established their homes here are not proving to be good citizens and are not doing good work in certain Australian industries. When I say that immigration is proving to be a dead loss, I mean that it costs thousands of pounds to bring individuals to Australia, to absorb them into our community and to provide the services that they require. Yet every month thousands of them go home when they can save the fare. Many more thousands would return to their homelands if they were able to raise the fare. From that viewpoint I say that the Government’s immigration scheme is an economic loss. The Government might be interested to hear our views on immigration. I would not stop immigration completely at present. That is a policy which no Labour man could support. However, I say that, until such time as the Government’s undertaking on full employment is fulfilled, we should concentrate only on re-uniting families and bringing in single women to balance the sexes and skilled men for whom there are work vacancies which cannot be filled by people already in Australia. They are the only conditions on which a continuance of immigration can be justified.

Let me return now to the Treasurer, whom we have heard try to establish that prosperity exists in Australia. The Treasurer, of all people, cites the increased number of motor vehicle registrations to prove the success of the Government’s measures to revive industry. We know that motor vehicle registrations in May and June of this year were 7.1 per cent, higher than they were in May and June of 1960, but in 1960 the Treasurer used the number of motor vehicles being purchased and registered as an indication that we were in a state of boom about which something had to be done. He imposed a higher sales tax on motor vehicles to dampen down the industry and to lessen the boom. How is it that in 1960 a greatly increased number of motor vehicle registrations created difficulty and that in 1962, two years later, an increased number of registrations apparently is regarded by the Government as evidence of great prosperity and of the success of its plans? This is what the Treasurer said -

Some doubts have been expressed about the trend in private capital expenditure. In respect of building construction and motor vehicles there seems little reason for concern.

Then why the concern in 1960? As I have pointed out already, unemployment is an increasing problem. Even the Treasurer has admitted the difficulties of the situation. I am not making a mere guess when I say that at present 140,000 people are unemployed. On 8th November last year the leading article in the “ Sydney Morning Herald “, referring to the Government’s official unemployment figures, had this to say -

That this figure is artificial can no longer reasonably be disputed.

Of course no one can dispute it. Now we come to the Treasurer’s statement relating to the necessity to stimulate demand. He said -

The large reductions in sales tax - first on household equipment and next on motor vehicles and parts - were meant to boost public spending, and the rebate on individual income tax rate rebate was intended to encourage spending over the whole range of consumption goods.

He went on to say that consumer goods constituted the largest element in total demand, representing 60 per cent, of domestic expenditure. Tax reductions on high incomes do not necessarily boost sales. The Treasurer has stated that in 1961-62 savings bank deposits increased by £157,000,000. Giving increased taxation rebates to people who already are able to purchase what they require does not boost demand; it boosts savings. If you want to boost demand you should give purchasing power to the people who lack it, You should have regard to the low wage workers and to the pensioners by removing the sales tax immediately from all goods except luxury goods - that would assist the family man by giving him the opportunity to purchase more goods, thus boosting sales - by increasing substantially all civil and repatriation benefits and child endowment and by increasing unemployment benefits pending the absorption of unemployed persons into jobs. That is the way to boost demand and to provide for a higher consumption of the goods which this country produces in great abundance. But the Government would regard such actions as inflationary although it does not so regard the financial aid it has given in other directions. In 1960, on the basis that it was doing something to arrest inflation, the Menzies Government opposed an adjustment in the basic wage. When the basic wage was increased by 12s. in 1961 the Treasurer said -

It will increase purchasing power and help revive lagging retail sales.

I ask the Treasurer this question: Is it not true to say that an increase in social service, unemployment and repatriation benefits and the like would have the same effect on sales as would an increase in the basic wage?

The Minister for Labour and National Service (Mr. McMahon) is opposed to quarterly adjustments of workers’ wages. After the Commonwealth Arbitration Commission had decided to abandon quarterly adjustments of the basic wage, he then opposed annual adjustments of the basic wage. He said that annual adjustments were unrealistic. Referring to the basic wage, he said -

The basic wage is more than adequate to maintain a man, wife and two children.

Those statements indicate the Government’s general attitude. It has no regard for the way in which the value of money has depreciated over the years. The only way to test whether the living standards of the people have improved is to consider the amount of food which is consumed. We all know that the Australian people like to live at a high standard if they can afford to do so. According to the Commonwealth Statistician, the Australian people eat and drink less now than they did in the pre-war period. I asked the Prime Minister a question about this matter in the Parliament and his reply, which is on record, was in these terms -

This does not necessarily show that there is a lack of purchasing power but that there has been a change in their eating habits.

That is how the Prime Minister accounts for the fall in the consumption of food in Australia. The Government is worried about where it will find markets for our surplus primary production. Let me refer to a couple of the commodities which we produce. Taking butter first, in the prewar period butter consumption per head of population was 32.9 lb. To-day it is 26.2 lb. If the people to-day were consuming as much butter per head as they were in the pre-war period, the difficulties of the dairy industry would be solved. The same position applies to meat production. Pre-war the amount of meat per head of population consumed annually in Australia was 252.8 lb. Now the average consumption is down to 237.5 lb. In the pre-war period 40.6 per cent, of all primary production in this country was consumed locally. Now only 35.7 per cent, of it is consumed locally. It seems outrageous, therefore, that this Government should say it can no longer afford to make any adjustment in age, invalid and widows’ pensions, or in service pension payments or unemployment benefits. We produce food in abundance, and if we had a good government, governing in the interests of the people, it would see that the people who needed the food that we produce were able to procure it.

I want to hurry on, because my time is running out. I wish now to refer to the dangers ahead, to which reference was made by the Treasurer. He admitted that there are dangers ahead. He said that export earnings are expected to fall and that imports are certain to increase considerably in the next twelve months. During the month of July, which has only recently ended, exports amounted to £80,200,000, while imports were valued at £89,100,000. This represented a trading deficit of £8,900,000, and it was the first such deficit in the last fourteen months. If you add to that amount £20,000,000 - a conservative estimate - in respect of what are termed invisible items, you get a total deficit for the month of £28,900,000. Obviously the position is serious. According to a monthly summary of Australian conditions issued by the National Bank of Australasia Limited on 12th May, 1962, 25 to 27 per cent, of total export payments were used to pay off these invisibles eight to ten years ago. Now we must use 30 per cent, of our total current payments to meet those charges. Putting it in another way, all the proceeds from the export of wheat and flour, butter and cheese, sugar and dried fruits and a number of other commodities, lumped together, would be absorbed in meeting these charges.

Last year, 1961-62, was a record export year, lt was a low import year. Yet we just broke even, and even the Prime Minister was obliged to say, “ We are living beyond our means internationally “. We were able to carry on only because we managed to induce foreign capital to come to Australia, either by way of loan or by way of investment. Now we have, according to the Treasurer, “ the unknown possibilities of the Common Market “.

It is obvious that this country is in real danger. The overseas reserves of £561,000,000 at 30th June, 1962, to which reference has been made, largely consisted of foreign investment and foreign loans. If we had had to pay our way, paying for our imports with our exports, we would have just broken even in the last year, and our reserves would not have been up to that substantial amount.

Excess foreign capital creates a grave national problem. To show how serious it is, I refer the House to an answer given by the Minister for Trade (Mr. McEwen) to a question in this House on 17th May last. The Minister admitted that there were 400 companies in Australia which suffered export restrictions of various kinds imposed by the foreign shareholders in those companies. He said that 100 of them were not permitted to sell outside Australia or its territories. How can you expand your exports in those circumstances? What relation has the cost of production to exports if foreign capital, which controls a large section of Australian industry, is able to prevent such industry from exporting to markets that may be available in other parts of the world?

In the few minutes remaining to me I would like to turn briefly to the question of national development. The Treasurer tried to revive hopes in this direction by talking about the Government’s plans for national development. The Government has been talking about national development for a long time. The Treasurer said that it was the Government’s intention “ to promote development in outlying parts of the Commonwealth, especially in the far north and the north-west “. Let us have a look at the Government’s record. In 1949 the Prime Minister replied to a request by the North-West Rehabilitation Committee for the establishment of a taxfree area, so that people who lived for twenty years north of the 26th parallel would be granted taxation concessions. The Prime Minister promised to examine the suggestion closely. As far as I know, he is still examining it, because he has never announced any decision.

At the time of the 1958 general election the Government was still talking about national development. The Prime Minister said -

One of our most urgent problems-

It had been urgent in 1949 and it was still urgent in 1958 - is the development of the north’s vast potential. . . For the sake of our national future we must develop and use the north.

Does the Government really mean business in the north? Let me refer the committee to a publication issued by the Department of National Development in December, 1953, in which the following appeared: -

The conclusion at present is that generally northern Australia is relatively unattractive from the point of further development.

Unless it could be made attractive for private enterprise and private capital, the Government was not interested in it. When the Government talks about it being unattractive, what exactly does it mean?

Unattractive to whom? The “Daily Mirror” of 19th May, 1958, said-

The record of the Menzies Government in the north is like that everywhere else: It is difficult to think of one constructive thing it has done.

That was after nine years of peace-time government by the Menzies administration.


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

New England

– I find it exceedingly difficult at all times to deal with a multiplicity of figures, but I find it incredibly difficult when I study the remarks that have been made by Opposition speakers. For years the cardinal sin for which this Government has been criticized by the Opposition has been its alleged failure to put purchasing power back into the £1. To-night we find that the Government, having stabilized the purchasing power of the community by the economic measures it has taken, and effected quite a little improvement, is being taken to task because it has not followed a policy entirely at variance with that which must be pursued if one is to curb inflationary tendencies.

I remind honorable members who have criticized the Government so vigorously that the great United States of America was still a debtor nation until practically the end of the 1914-18 war, and did not become a creditor nation until that time. The lesson we must learn from that fact is that if Australia is to develop its vast resources, then the foreign capital about which various members of the Opposition have spoken in differing terms from time to time must come in. If it does not, we cannot hope to develop at anything like the pace at which the United States of America was developed.

While I do not propose to follow my friend through all the intricacies of the arguments that have been put forward, I would say that the great task of this Government - as would be the task of any government anywhere in the world - has been to strike a balance between the natural desire to continue the expansion of this country for the very existence of the people in it, on the one hand, and, on the other hand, the necessity to prevent inflationary tendencies from getting out of hand. There have been times when, for certain reasons, the Government has been compelled to put the brake on. Every economist and every financier knows perfectly well that one of the toughest propositons that any government can face is that of judging accurately the moment when it can act without causing the ship of state to roll backways down the ways, as it were, and on to the shore to be wrecked in the shallows of unemployment and depression.

This Government has been faced with the need to conform to certain tendencies in the world, such as the weakness on the stock exchanges in the United States of America and elsewhere - tendencies to pause that come after every great effort. It is to the credit of this Government that, applying the brake so soon afterwards, we find ourselves with only about 2.1 per cent, of unemployment. No doubt I shall now hear somebody say: “ Ah! The honorable member for New England talks about only 2. 1 per cent, of unemployment “. I fear that the Minister in charge of these matters has scarcely done justice to the Government and himself by not making a more qualitative analysis of what that unemployment consists of.

At this point, Sir, my mind goes back to about 1937 or 1938, when I discussed with Mr. Wallace Wurth, that very brilliant public servant who, unfortunately, has since passed away, the question of the number of unemployed still remaining in New South Wales at that time. He said, “ We have got down to a hard core of about 15,000 people who are unemployed “. I found that he was referring to a number of people who were virtually completely unemployable or who, by reason of various deficiencies in their make-up, were practically unemployable except under certain conditions. I suggested to him that we might say to the local government authorities throughout the State: “ You have a certain complement of men for parks and gardens work. If you promise not to reduce their number, we shall give you half as many more, to whom we shall pay the prevailing rates, to enable you to increase your staffs for the upkeep not merely of public areas but also of the grounds of schools and hospitals “. Mr. Wurth thought that was an excellent idea for the employment of people who must be under control all the time if they are to succeed in retaining employment. Otherwise, they would still have been a drag on the State and we would have been getting nothing in the way of work from them.

Australia’s population has increased since about 1937 or 1938 by something like 62 per cent, and the work force to-day is about 4,300,000, or about two-thirds of the total population at the time of which I am speaking. If we relate the present number of unemployed with the figures for about 1938, taking into account the population increase, we shall find on a close analysis, I am certain, that the great majority of those who are unavoidably unemployed are either in the category that Mr. Wurth found in New South Wales or, alternatively, are mainly passing from one job to another. I say that with due sympathy for a relatively small number of people who do not fall in either of those categories and for whom we should do what we can.

I do not wish to take up any further time on that matter, Sir, because I want to deal this evening with another matter which is of first-rate importance to the people in the ru al areas whom I represent. The development of our rural inland has been hampered in the past by unfortunate policies. I do not put the responsibility on this Government. As I have pointed out before, this is inherent in the basic policies followed by all governments. As a matter of fact, the present Government has probably done more than any other government has done to try to break the vicious circle. What has happened was brilliantly made clear by the Professor of Geography at the University of New England in his inaugural address. He compared Australia with the great countries of South America, particularly Brazil. Money has not been poured out on the development of rural areas in order to bring about a norma] distribution of population, and the transport system has been wrongly developed. First, it has been designed to take everything virtually to only a few ports on the coast. Secondly, proper road communications between all inland areas which could develop and the coast have not been provided. Thirdly, rail links without which ports are a sure waste of money have not been provided.

In addition to those things, we need to conserve our water resources to provide power and irrigate crops, as well as to mitigate floods. These requirements have largely been by-passed and, as a result, the soil from some of the richest river flats in the world has been washed out to sea. This has happened simply because we have failed to conserve our water resources, something which we could do at a relatively small cost. I have seen 5,000 acres of water, or more than 4,000,000,000 gallons, impounded at Mount Isa in a dam which, with its spill-ways, cost some £200,000. When I saw this, I began to think that a good deal of new scientific achievement ought to be applied to water conservation by the engineers of the public works departments in the various southern States.

However, Sir, the main factor affecting development of country areas is finance. I shall deal with this point as quickly as possible, because I wish to proceed to another subject. An excellent survey was made recently in the New England area by the Adult Education Department of the University of New England, in conjunction with the New England Rural Development Association. It was found that in almost every instance there was a pressing need for finance on long-term fixed-interest firstmortgage loans. I am glad to know that the Treasurer (Mr. Harold Holt) has arranged for something like £55,000,000 for the purpose of providing this kind of finance. But the normal requirements of ordinary operations and development on the land will not be fully met unless there is something to take the place of the old form of overdraft finance which enabled the primary producer to carry on until he received the returns from his crop or his wool clip, and so on. In the past, that sort of finance was provided by the ordinary trading banks, but, for various reasons, this kind of financial activity has now been largely crippled.

Another thing that we have to face up to is the need for what is termed emergency finance. In my own State of New South Wales, localized droughts, as distinguished from widespread droughts, were dealt with by what was originally the Rural Industries Branch of the Lands Department. A body of experience grew up among men in the department who afterwards came to control the Rural Bank of New South Wales, to which the Rural Industries Branch of the Lands Department was later transferred as an agency. The men in the bank understood the kind of financing which was required. Sometimes, finance was provided in an emergency on the security of a lien on crops or stock. Sometimes, not even a lien was taken. Sometimes, funds were provided through co-operative societies and sometimes individuals obtained money from the banks to enable them to garner their crops and so on. By a freak of nature, one of the richest districts in my territory has been affected by three lean seasons. In the past two years, wheat has been sold at very profitable prices. This means that the people in this district have missed out almost completely, and nothing short of a miracle will cover them for this season. We must provide emergency finance, outside ordinary banking, to enable such people to carry on. I submit that question to the Treasurer.

Sir, I want to deal now with a subject which I think is long overdue for further ventilation in this Australian Parliament. As one who has a deep and abiding interest in education and a fairly complete knowledge of the growth of Australian education from its foundations, I desire to submit certain facts for the consideration of this Parliament. Firstly, this Government, with the concurrence of the Parliament, has guaranteed the interest on loans raised to enable independent schools to carry out an urgent building programme in the Australian Capital Territory. Secondly, it is providing £750,000 to assist the missions in the Northern Territory to carry out the valuable work that they have been doing, with limited funds in the past, in bringing the natives to a state of civilization and in helping them generally. What the missions are doing in the Northern Territory, they are doing pro rata in the Territory of Papua and New Guinea Had it not been for them, the natives would have had their old taboos destroyed, with nothing to put in their place. The work which is being done by the missions in these Territories is being supplemented by departmental education, particularly in Papua and New Guinea.

The New South Wales Country Party, at its annual conferences in 1961 and 1962, approved the principle of interest-free loans to assist independent schools in that State, thus supporting the policy of the Commonwealth Government. The delegates affirmed the principle that there must be two streams of education - public and independent. They noted that the existence of only one system could end in the regimentation of all education. Dictatorships of the right and the left have found how useful such regimentation can be to them. Communist countries are using it to-day. Poland is a case in point at the present time.

I wish to make it clear that, from this stage of my speech onwards, I shall be expressing my personal opinions as to why and how the principles I have enunciated should operate. To-day approximately 25 per cent, of our children - or one Australian child in four - are taught in independent schools. According to a recent report by the New South Wales Department of Education, the cost of maintaining children in the primary and secondary schools, exclusive of capital building costs, is over £100 per child. I would say that the figures in the other States would be very close to that figure. State Ministers of Education informed the Commonwealth recently that they must have more funds to enable them to bring their school programmes fully into line with modern standards. The Country Party of New South Wales has declared that its proposals must not be carried out at the expense of the State public schools and, therefore, it supports the claim for additional assistance. New South Wales may be taken as a case in point concerning the impact of this policy.

Let us now consider the plight of the independent schools. If we deduct such items as the cost of inspection and administration - all schools are inspected, no matter what type of schools they may be - the net cost of primary and secondary pupils in the independent schools in New South Wales is about £90, or rather more, per pupil. There are those who may say that they do not object to independent schools provided those schools finance themselves. That, in my opinion, is not good enough, nor is it fair play. One-quarter of our school children are in independent schools, but the parents of those children have to pay their share of the cost of maintaining the other three-quarters of our children, who are costing £104 per student. That was the exact cost per student last year in the State schools. The parents of children attending independent schools pay the whole cost of educating their children, although the State Government says that £104 per child is not enough for its purposes. Ironically, the parents of children in independent schools must pay their share of the £1,500,000 required to educate native children in the Territories, plus their share of the cost - £104 per pupil - of educating Australian children.

I believe that an impartial and competent committee should be appointed and asked to report to the Commonwealth and the States after inquiring into the whole question of aid to independent schools. As an interim measure of relief, I suggest that there should be a generous allocation of secondary bursaries, not only for the independent schools but for all schools, together with interest-free building loans and payment of a part of the cost of qualified teachers’ salaries. This assistance should be provided under section 96 of the Constitution, for the States acting as agents for the Commonwealth. Incidentally, that would get over a certain legal difficulty which is apparent to me.

Finally, I want to make two things clear. I do not believe that the whole cost of independent schools should ever be defrayed from public funds, because, in my opinion, that would destroy their very independence. Secondly, in my own State, Ministers of Education, irrespective of party, have refused to allow education to become either a political or a sectarian football. Irrespective of party, they have undertaken their administration as a high and honorable trust. In that spirit I have spoken to-night. I believe that the greatest contribution we could make to the future of this nation, to the understanding of our people and their co-operative spirit would be to avoid the evil of one stereotyped system and one stream of education.

I believe, contrary to certain opinions that have been expressed, that to have 25 per cent, of our children, or one child in every four, suffering under the increasing disabilities that are being imposed upon them because of the changing nature of education, with the necessity for high-grade teachers, would constitute a canker in this community which would grow continually and destroy all harmony. In my part of the world, schools of every denomination, schools of no denomination and the public schools have a fine fraternal spirit in sport and so on. There is no question of strain between any of them, but if this rank injustice to independent schools is permitted to continue they will be unable to go on making their present fine contribution to the true spirit of education. The true spirit of education cannot flourish under regimentation. It is not allowed to flourish in certain countries. Education in Australia, if regimented, would be in danger of coming under the control of adverse elements either of the right or of the left. I believe that our independent schools are rendering a great service and are maintaining standards as high as those in the public schools, to which I have contributed a great deal in my time.

I urge the Government, which will not have my support after the next election because I intend to retire, to deal with this matter as courageously as it had dealt with it in the Australian Capital Territory and in other territories under the control of the Commonwealth.

Mr Don Cameron:

.- Last Tuesday night in this place the Treasurer (Mr. Harold Holt) presented what must be regarded as the most tragic document ever presented to this Parliament. I call the document tragic in all sincerity because I consider that it is tragic for Australia and her people. I trust that I will, during the course of my remarks, prove conclusively that the document is a tragic one.

When the Treasurer began his speech I could not help noticing the expressions of anticipation on the faces of Government supporters. Towards the end of the Treasurer’s speech, however, the expressions on the faces of Government supporters changed from expressions of anticipation to expressions of despair and disappointment. I was amazed to hear the Treasurer say that the Government had budgeted for a deficit in excess of £118,00,000. My mind went back to the policy offered to the people of Australia on 16th November last year by the Leader of the Opposition (Mr. Calwell). He told the people that if the Australian Labour Party were returned to office he would immediately introduce a supplementary budget to provide if necessary for a deficit of £100,000,000 in order to restore full employment and boost the economy. His statement was condemned by the Government parties as reckless, inflationary and irresponsible; but, within eight months of the election, the Government is once again obliged to adopt part of Labour’s policy without offering in return a kind smile, a kind word or any expression of gratitude.

The differences between this Government’s policy and that announced by the Labour Party are £18,000,000 and the way in which Labour would have used the deficit. Labour’s proposal for a budget deficit of £100,000,000 was and is as different from this Government’s £118,000,000 deficit as chalk is different from cheese. Repeatedly in his speech the Treasurer emphasized the Government’s desire for stability and steady growth in the economy, but he completely ignored two important mediums that would assist stability and growth quicker than any of the suggestions that he put forward. I refer to a return to full employment and increased purchasing power in the hands of the people. The Treasurer has committed those two important factors to a deep freeze. He also has committed Australia to a further period of stagnation. His proposals are of a short-term nature. There is no long-range plan to restore the confidence of producers and consumers in this Government; but who will deny that such a plan is urgently needed? Apart from an increase in government spending, which may be regarded only as a normal or consequential addition to spending, the Budget does nothing. Yet the Treasurer had to go all the way to Bingil Bay to work on his Budget in the glow of an oil lamp.

The sad thing about our present economy is that it need never have been in such a plight. Our economic plight is a wound inflicted on us by the Menzies Government. No external forces or national disaster forced us into a loss of years of growth and production and into an unemployment pool of 100,000- not to mention loss of wages and production amounting to more than £700,000,000. The Treasurer has completely ignored the necessity to increase age, invalid, widows’ and ex-servicemen’s pensions. He has completely ignored the need to increase child endowment and the maternity allowance. If social service payments had been increased, the purchasing power of our people would have been increased. This would have created a demand for consumer goods, which would have led to a reduction in unemployment. In my opinion recipients of social service benefits are not able to provide for themselves and their dependents even the basic necessaries of life. Those people and their needs have again been committed to the deep freeze - until such time as the Government realizes that it has not gone far enough in the right direction and is obliged, as it has been obliged in the past, to introduce in the early part of 1963 a supplementary budget which we, as the alternative government, hope will give financial relief to pensioners and mothers in this country.

Where is the sense in making available to pensioners pharmaceutical benefits and free hospitalization if at the same time they are not given sufficient means with which to provide themselves with adequate food and clothing and pay rent, rates, fares, power charges and the like? Sir,I have spent a lifetime in the catering business. Doctors and authorities on nutrition recognize that adults require a certain amount of vitamins and mineral extracts daily in order to remain in a state of good health. With the concurrence of honorable members I incorporate in “ Hansard “ the following list of vitamins and mineral extracts which it has been claimed, though not conclusively proved by authorities on nutrition are needed daily by the average adult: -

Vitamin A (acetate)- 5,000 I.U. (125 per cent. m.d.r.).

Vitamin D- 500 I.U. (125 per cent. m.d.r.).

Vitamin B12 with autrinic* intrinsic factor concentrate lederle - 1 -15th U.S.N.F. unit (oral).

Thiamine mononitrate (Bl) - 5 mg. (500 per cent. m.d.r.).

Riboflavine (B2) - 5 mg. (416 per cent. m.d.r.).

Niacinamide - 15 mg. (150 per cent. m.d.r.).

Pyridoxine hydrochloride (B6) - 0.5 mg.

*CA pantothenate - 5 mg.

*Choline bitartrate - 50 mg.

Inositol - 50 mg.

Ascorbic acid (C) - 50 mg. (166 per cent. m.d.r.). l-Lysine monohydrochloride - 25 mg.

Vitamin E (as locophery acetates) - 10 I.U.

Rutin - 25 mg.

Ferrous fumarate - 30.4 mg. (100 per cent. m.d.r.).

Elemental iron - 10 mg.

Iodine (as K.1) - 0.1 mg. (100 per cent. m.d.r.).

Calcium (as CAHP04)- 145 mg. (20 per cent. m.d.r.).

Phosphorus (as CAHP04)- 1 10 mg. (16 per cent. m.d.r.).

Copper (as CUO)- 1 mg.

Fluorine (as CAF2) - 0.1 mg. , ‘

Manganese (as MN02) - 1 mg.

Magnesium (as MGO) - 1 mg.

Potassium (as K2S04)- 5 mg.

Zinc (as ZNO)- 0.5 mg.

M.d.r. - Minimum daily requirements for adults.

What possible chance has anybody in receipt of social service benefits of purchasing the variety of food needed to supply the vitamin and mineral intake necessary for good health? A great many pensioners and their children who are forced to exist on social services only are under-nourished. Under-nourishment in turn sets off other physical conditions that require medical attention and perhaps hospitalization, the cost of which must be borne by the Government. Would it not be better to pay pensioners sufficient to enable them to enjoy a stable and balanced diet? Would it not be better to pay them sufficient to enable them to clothe themselves and to protect themselves from the elements? Would it not be better to pay them sufficient to enable them to meet their rent and other costs? Surely it would be better to give pensioners an adequate amount rather than give them an insufficient amount - which only leads to mental anxiety, under-nourishment, illhealth and hospitalization?

The only solution for any government that wishes to provide adequate social service payments is to establish a national insurance scheme owned and controlled by the people through the government. I suggest that this Government put into operation, with the least possible delay, the necessary machinery for the establishment of a national insurance scheme. Another imposition borne by our people, which the Treasurer had the opportunity to remove in his Budget but did not, but which would have put into circulation an additional £14,500,000 per annum and in turn would have been of great benefit to the primary producer, food manufacturers and consumers, is the 121/2 per cent. sales tax on foodstuffs. Numerous requests have been made by various sections of the community to the Treasurer for the removal of sales tax on food, but to no avail. We are the only country in the free world which taxes certain food commodities at the rate of121/2 per cent. Every housewife in Australia is opposed to it, and if the Country Party members of this coalition Government were sincere in their claim to being representatives of the primary producers they would oppose it also and demand its abolition.

The Treasurer himself has made an important statement on the sales tax on food. I quote the passage from “ Hansard “ of 1949, Volume 205, page 1660-

I should hate to live in a household which had to exist on a diet which consists of the basic items of foodstuffs that are so exempt.

I submit that the Treasurer has never had to live in a household that has to purchase its foodstuffs at the local grocery store, that has to pay 5d. tax on 21b. of biscuits. He has been raised in the lap of luxury on the ministerial allowance of £10 a day and on a Minister’s salary. He would not know what the people who have to bear the imposition of this sales tax have to suffer. I quote also a statement made in another place by a supporter of the Government. It appears at page 10 of “Hansard” of 27th November, 1947 -

The time has come for a general overhaul of the sales tax with a view to its removal from a great many additional items. The tax was first imposed during the depression years as a means of raising revenue. . . . Sales tax bears particularly heavily on the family man, from whose income purchases for himself and his family have to be made.

Sales tax on food is an indirect, hidden tax borne mainly by the man with a large family. It is also a burden on the recipients of pensions. I appeal to the Treasurer, if his Government remains in office long enough to enable him to prepare another Budget, to provide for the removal of sales tax on food which is currently costing the housewives of Australia £14,500,000 per annum, restricting the sales of a large volume of our primary products and depriving our people of additional food intake, which is so vital to their good health.

Sir, I shall now deal briefly with the greatest stigma on our society. I refer to the fact that, in this young country which abounds with untold wealth, where vast spices of fertile land lie idle, and untold mineral wealth is to be won from the earth, we have an unemployed work force in excess of 100.000 of our people.

Where in the Budget speech did the Treasurer offer to this Parliament, or to the people of Australia who are unemployed, a total solution to the problem? This situation was brought about by the mismanagement of our national affairs by the Menzies Government over the last twelve and one-half years. The Treasurer spoke at length and repeatedly referred to the vast sums of money that were being made available by his Government to its subsidiary in Queensland, the NicklinMorris Government, for the rehabilitation of the Mount Isa railway line. This project was entered into by these two governments some considerable time ago, and the people of Queensland do not consider that the money made available by this Government for the rehabilitation of this railway a bonus. They consider it, and justly so, a millstone around their necks. The loan has to be paid back, together with interest at a high rate. This debt will be borne by the people of Queensland and their children for many years to come. All the employees required for this project have already been engaged. The Treasurer, in his repeated reference to this project, was only glossing over an already fading picture.

I come now to the improvements to Gladstone harbour, a subject so professionally elaborated on by the Treasurer in his speech. Gladstone harbour, when completed, wis be a highly mechanized and a bulk-loading seaport and, as such, will offer very little opportunity for a reduction in the unemployed work force existing in Queensland to-day. Yet again we find that the people of Australia are to be saddled with a fair-sized debt and that the chief beneficiaries from the modernization of this seaport will be the coal barons Thiess-Peabody and the Japanese nation. Very little relief to the unemployment situation will be given by this undertaking.

Now. briefly. I shall look al the brigalow eradication scheme, which was men tioned in the Treasurer’s speech and which provides for the expenditure of £1,750,000. By how many does the honorable Treasurer consider the unemployed work force will be reduced by this undertaking? In my opinion fewer will be employed than were employed preparing for and flying the Treasurer over the brigalow belt of the Fitzroy basin.

I remind the Treasurer, and also the Minister for Social Services (Mr. Roberton), of the fate that befell one of their Cabinet colleagues who flew to Queensland to attend a dinner instead of paying attention to the affairs of the nation. His seat is now occupied by my colleague, the honorable member for Petrie (Mr. O’Brien). I also remind the Ministers not to fasten their seat belts.

On 29th June the number of unemployed - that is, persons actually registered as seeking jobs - was 93,128. The number actually receiving the unemployment benefit at the same date was 46,324. Yet I recall that the Prime Minister said that if the number of unemployed reached 80,000 it was time for any government to become alarmed. Having watched the Prime Minister in this House during the last few months I cannot detect any signs of alarm or excitement displayed by him over this situation. Perhaps there are some signs of post-election shock, but after all, Sir, that must be expected when one views the results of the last election. However, there are signs that the Government regards a situation in which about 90,000 are seeking jobs and about 45,000 are in receipt of the unemployment benefit as quite satisfactory.

Let us pause here to have a look at the figures showing the number of persons drawing the unemployment benefit during the past few years. They are as follows: -

To June, 1962, there were 46,350. That is a brilliant record, I must say, for a Government that boasted of an unprecedented era of prosperity and development! If this trend continues, the Prime Minister may find after the next election that the people have become alarmed, and he could quite easily be the only Government supporter in this Parliament left to go into his dance of alarm.

To sum up in the brief time left to me, I would say that this Budget makes no attempt to cope with the problems of a stagnating economy and widespread unemployment. There are no concessions or benefits for workers, farmers, pensioners or ex-servicemen. War expenditure has been increased by £7,300,000 to a total of £212,500,000. The total amount given to the States for works and housing is only £1,400,000 more than the £244,600,000 given last year. Of the total defence expenditure, £98,000,000 will be charged against the Commonwealth loan fund, compared with £23,600,000 last year. The allocation from loan funds for housing is cut by £4,500,000 from £50,400,000 to £45,000,000. It is interesting to note here, Sir, the allocation from loan funds for war purposes and the allocation for housing for our people. While the latest available figures disclose only a slight fall in unemployment, the allocation for unemployment and sickness benefits is cut by £3,000,000.

This Budget is the worst budget ever presented to any parliament. It is frigid, unimaginative, and stagnant. The Government should be ashamed of it. The Australian Labour Party rejects it and calls upon the people to dismiss this Government from office and to return the Australian Labour Party as the alternative government.

Progress reported.

page 335


Motion (by Mr. Swartz) proposed -

That the House do now adjourn.


.- Mr. Speaker, the matter 1 wish to raise relates to two questions-

Motion (by Mr. Swartz) put -

That the question be now put.

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

AYES: 59

NOES: 56

Majority . . . . 3



Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 10.42 p.m.

page 335


The following answers to questions were circulated: -

Airline Pilot Training Scheme

Mr L R Johnson:

son asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. To what extent does the Department of Civil Aviation participate in the Airline Pilot Training Scheme?
  2. To whom do the aircraft being used in the scheme belong?
  3. What charges for the hourly use of these aircraft are made against the scheme?
  4. What fees have been paid by the trainees accepted under the scheme?
  5. How many of these trainees have taken up the “ guaranteed “ positions with the airlines mentioned in the newspaper advertisements?
  6. Are regular audited accounts of the scheme made available to the Department of Civil Aviation; if so, will the Minister arrange for some of them to be tabled for the perusal of honorable members?
Mr Townley:
Minister for Defence · DENISON, TASMANIA · LP

– The Minister for Civil Aviation has supplied the following information: -

  1. My department does not participate directly in the airline pilot training scheme, but naturally provides advice and co-ordinates the views of the airlines and the training organizations.
  2. The aircraft being used in the airline pilot training scheme belong to the particular aero clubs which provide the flying training of the individual trainees concerned. The “ elementary “ training is carried out by the aero club or clubs selected by the federation - in practice this is the club located nearest to the trainee’s residence or such other club as may suit his convenience. For the “ advanced “ flying portion of the course the trainees carry out their instruction at Bankstown Airport with the Royal Aero Club of New South Wales.
  3. The rates payable to the aero clubs carrying out the instruction are as follows: -

Owing to the replacement of Chipmunks in certain of the clubs, the federation has laid down that rates charged must not exceed the minimum rate charged for the various types of aircraft - this affects, of course, the charge for “ elementary “ types only.

  1. To dale five separate courses of the airline pilot training scheme have been commenced and the details are as follows: -

    1. The first course covered a period of two years and the cost to each trainee was £2,000. This course has been completed and the thirteen successful trainees have been placed with the airlines.
    2. A short course of six months’ duration followed, and was due to be completed on 31st March this year. The cost to each trainee was £1,750. At the present time the seven trainees from the course are awaiting employment pending the passing of certain Department of Civil Aviation examinations. The terms of payment for this short course were £500 deposit and the balance spread over the length of the course.
    3. An intermediate course is now being pur sued. This is of eighteen months duration and the cost to the trainee is £2,300. It commenced in September, 1961, and there are nine trainees involved. Again the terms of the payment are £500 deposit with the balance spread over the length of the course.
    4. There is also a long course being con ducted at the present time. The duration of this course is two years and the cost per trainee is £2,550. This course also commenced in September, 1961, and there are four trainees involved. The terms of payment of the £2,550 are £550 deposit and the balance spread over the length of the course.
    5. A further long course commenced in February this year and is now operating with nine trainees. The cost and the terms of payment are the same as for the long course which commenced in September, 1961.
    6. Another long course commenced in June.
  2. The thirteen trainees of the first course have taken up positions with the airlines. The seven trainees of the short course recently completed are awaiting employment pending the passing of certain departmental examinations. The remaining courses are, of course, still current.
  3. The accounts of the scheme as such are not made available to the Department of Civil Aviation. The accounts of the federation, however, are properly audited and a balance-sheet and supporting statements are presented to the council of the federation at its annual meetings. The Department of Civil Aviation receives, in respect of the Royal Federation of Aero Clubs as a whole, a statement, duly audited, of its expenditure each quarter.

Civil Aviation

Mr Whitlam:

m asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. What negotiations took place between the Department of Civil Aviation and Butler Air Transport or Airlines of New South Wales for the provision of night landing facilities at the aerodromes at Griffith, Coonamble and Walgett?
  2. What did it cost to provide the facilities at each aerodrome?
  3. What negotiations took place between the department and Airlines of New South Wales before the airline ceased in June, 1961, to use the aerodromes for night landings?
Mr Townley:

– The Minister for Civil Aviation has supplied the following information: -

  1. In order that the airlines can obtain reasonable utilization of their aircraft while providing convenient and frequent air services in rural areas, it is essential that some aerodromes be equipped for night flying operations. Following representations from Butler Air Transport Limited, Airlines of New South Wales and other operators that the economic success of their service patterns depended on the availability of night flying facilities at certain airports, the Department of Civil Aviation, after careful consideration of all the facts, arranged for the installation of such facilities at a number of aerodromes, including Griffith, Coonamble and Walgett. The latter two ports were, in fact, included in a network of DC3 feeder services radiating from Dubbo, which place was connected to Sydney by fast Fokker Friendship services, and the ability to operate outside daylight hours enabled Airlines of New South Wales to give the public a satisfactory service and to utilize both types of aircraft io the best advantage. In the same way, the department agreed to install night landing facilities at Quirindi and Gunnedah following representations by East-West Airlines that the full and proper use of its Friendship aircraft required night operations at these and other airports.
  2. Griffith, fi 8,298; Coonamble, £7,321; Walgett, £7,470.
  3. In 1961 it became evident to Airlines of New South Wales that its network of services was not receiving sufficient public support to justify its continuation, and in the interests of achieving a reasonable economic return from its operations, the company was forced to revise its route pattern and to cease night operations at the airports mentioned. My department approved the new route pattern submitted by the company in accordance with the normal procedure followed under the Air Navigation Regulations. Whether or not night services are restored to these airports will, of course, depend on the measure of public support given to rural air services in New South Wales.
Mr Daly:

y asked the Minister representing the Minister for Civil Aviation, upon notice -

  1. Have there been some extraordinary results in examinations held for senior commercial and airline pilot licences?
  2. Is it a fact that in the subject of flight planning in the examination held in February, 1962, 104 pilots failed out of 114 who sat for the examination?
  3. If so, is he satisfied with these results?
  4. If he is not satisfied, what action does he intend to take to prevent a continuation of this state of affairs?
Mr Townley:

– The Minister for Civil Aviation has supplied the following information: - 1, 2, 3 and 4. The subject of flight planning to which Mr. Daly refers demands a practical knowledge of navigation, meteorology and the operating characteristics of modern aircraft. A candidate must demonstrate the ability to extract such information as is required from various data sheets and graphs and apply it to the solution of practical flight planning problems. The flight planning syllabus and the pass mark of 80 per cent, specified by my department are identical with the recommendations of the International Civil Aviation Organization for this particular subject. Records show that for the year ended December, 1961, the number of successful candidates in these examinations varied between 12 per cent, and 38 per cent, with an overall average of 22 per cent. The same records show that very few candidates were successful on their first attempt. Personal discussions between individual candidates and departmental examiners has confirmed that many examinees, while hoping to pass at their first attempt, have not fully prepared for the examination. They consider the experience gained most useful for future examinations. Of the candidates who sat for flight planning at the February examination only 8 per cent, passed. This is certainly a lower pass rate than the average pass rale for the subject during preceding years. It is most difficult to find specific reasons for the poor results which arose from the February examination but a thorough study of the results leads us to the conclusion that candidates have not allowed themselves sufficient time to prepare for the examination. This, we believe, has been aggravated by the fact that the period of four months between examinations previously allowed tended to encourage candidates to sit before being adequately prepared. Action has already been taken to increase the period between examinations from four to six months and il is hoped that this additional time will bring about an improvement in the pass rate for flight planning and all other flight crew examinations. My department is watching this matter very closely but as much as I would like to see a high pass rate achieved in flight crew examinations, I cannot entertain any proposal which would result in a lowering of flight crew standards.

Preservation of Meat

Mr Webb:

b asked the Minister representing the Minister in Charge of the Commonwealth Scientific and Industrial Research Organization, upon notice -

  1. Can the Minister say whether the Commonwealth Scientific and Industrial Research Organization is investigating the use of preservatives, such as sulphur dioxide, for preservation of meat?
  2. Is it a fact that these preservatives are being used illegally by some butchers, thus deceiving the public?
  3. Are they harmful to the consumer if absorbed indiscriminately from unknown doses?
  4. If so, what action is being taken to police the use of these preservatives?
Mr Freeth:

– The Minister in Charge of the Commonwealth Scientific and Industrial Research Organization has supplied the following information: -

  1. The C.S.I.R.O. Division of Food Preservation, at the request of the Meat and Allied Trades Federation of Australia, has carried out an investigation into the use of sulphur dioxide as a preservative for comminuted (minced) meat. This report, which is a technical document, is available on request.
  2. C.S.I.R.O. would not be in a position to know if sulphur dioxide or any other preservatives were being used illegally.
  3. Studies of the effects of particular chemicals on the human body are not undertaken by C.S.I.R.O. An opinion of the harmfulness to the consumer of sulphur dioxide used in varying amounts as a meat preservative would best be obtained from a medical authority.
  4. Regulations covering the use of preservatives in meat come within the jurisdiction of the various State authorities and C.S.I.R.O. would not be in a position to indicate the action taken by the various States to police these regulations.

Royal Australian Navy

Mr Hansen:

n asked the Minister representing the Minister for the Navy, upon notice -

  1. How many ships are under construction or are on order (a) in Australia, and (b) overseas for the Royal Australian Navy?
  2. What is the tonnage of these ships?
  3. Who are their builders?
Mr Freeth:

– The Minister for the Navy has supplied the following information: -

  1. Under construction in Australia -


Mr Cairns:

s asked the Minister representing the Minister for Health, upon notice -

  1. Has the Minister, or his department, or the Pharmaceutical Benefits Advisory Committee, received any written submissions in relation to the prescription of chlorpromazine (Largactil) from any members of the medical profession?
  2. If so, what are those submissions?
  3. Will he consider the restoration of chlorpromazine (Largactil) to the pharmaceutical benefits list?
Mr Swartz:

– The Minister for Health has furnished the following reply: -

  1. Yes.
  2. The submissions were in the nature of requests for the removal of the present restrictions on the prescribing of chlorpromazine as a pharmaceutical benefit.
  3. The Pharmaceutical Benefits Advisory Committee has this matter under consideration and the question will be reviewed by the Minister in the light of any further recommendations being made by the committee.

Commonwealth Estate Duty

Mr Ward:

d asked the Treasurer, upon notice -

  1. At what figure does the estate of a deceased person become liable to Commonwealth estate duty?
  2. When was the present minimum fixed? -
  3. What changes have since occurred in the value of money?
Mr Harold Holt:

– The answers to the honorable member’s questions are as follows: - 1. (a) Where the whole of the estate of a deceased person passes to the widow, widower, children or grandchildren of the deceased, the amount of the statutory exemption is £5,000, less £1 for every £3 by which the net value of the estate exceeds £5,000. (b) Where no part of the estate so passes, the amount of the statutory exemption is £2,500, less £1 for every £3 by which the net value of the estate exceeds £2,500.

  1. These provisions came into force on 28th October, 1953 (Act No. 52 of 1953).
  2. Because of disparities in price movements for various commodities and services in various places and at various stages of distribution, it is impossible to designate any single figure as representing, in all circumstances and in all classes of transactions, the change in the value of money from one date to another.


Mr Harold Holt:

t.- On 5th April, the honorable member for Barton (Mr. Reynolds) in asking me a question without notice about the Commonwealth Superannuation Fund, referred to an increase of 2s. 6d. per unit to retired officers under the New South Wales superannuation scheme and the possibility of a similar adjustment being adopted by the Commonwealth. I undertook to examine the question more closely and, as the subject is one in which other honorable members have been interested, and in respect of which there is misunderstanding, I have thought it desirable to reply at length to the honorable member’s question, as follows: -

In recent years there have been many representations for an increase in the value of the unit of pension under the Commonwealth scheme, the usual request being for an increase from 17s. 6d. ‘ to £1 per week. The Government gave full and careful consideration to this matter before deciding that there were good reasons why there should not be a further flat increase in the value of the unit. The implications of a £1 unit must be considered not only in relation to existing pen- sioners, on whose behalf most of the representations are made, but also in relation to present contributors whose entitlement to pension in the future would thereby be increased.

The Existing Contributor and the 20s. Unit.

The present value of the unit and the scale of units of pension were determined so as to provide a maximum pension entitlement equivalent to 70 per cent, of salary, for those on lower and middle range salaries, reducing to 40.9 per “cent, at the top level. Of the total amount of each pension the Commonwealth meets five-sevenths, equivalent to a maximum of SO per cent, salary, and the contributor, through his contributions, two-sevenths. The Government adopted this basis in 1954 and no evidence has been produced to show that it is ungenerous, or out of line with pensions provided in other spheres. As a contributor’s salary increases he becomes entitled to contribute for a greater number of units of pension, subject to the maximum number of units applicable at any time. Thus, for the majority of contributors, pension entitlements are - automatically maintained at the appropriate percentage of salary.

An increase in the value of the unit from 17s. 6d. to £1 per week at Commonwealth expense would materially alter the basis of the scheme by increasing the maximum percentage of pension to salary from 70 per cent, to 80 per cent, and would mean that the Commonwealth itself would be contributing in pension up to 60 per cent, of salary instead of the present 50 per cent, of salary. Quite apart from the cost involved, it is doubtful whether pensions of this magnitude could be considered. No examples have been given of other schemes providing pensions equivalent to 80 per cent, of salary. If the cost of a £1 unit were to be met by higher contributions, the current rates of contribution would have to be increased by about 50 per cent, as the present contributions provide only twosevenths, or 5s. per unit per week, of the total amount of each pension. Contributors generally would be unlikely to favour such an increase.

The Pensioner and the 20s. Unit.

The representations seeking a £1 unit for existing pensioners point out that those who retired in earlier times are in need of relief because of the serious decline in the purchasing power of their pensions since retirement. However, it is not always appreciated that the lower salaries then payable and the scale of units then in force restricted the number of units available. A flat increase in unit value would provide much smaller increases for the earlier pensions than for their successors in office who became entitled to a greater number of units and whose retiring pensions have not deteriorated to the same extent, because of the shorter period since their retirement.

The point is illustrated by comparing the increase which would be payable to the recently retired contributor for the present ceiling number of 54 units with the increase which would be payable to his predecessors in office who were limited to sixteen, 26 or 36 units according to their date of retirement. Clearly, a flat increase in unit value providing relief for those pensioners of £6 15s., £2, £3 5s., and £4 10s. per week respectively would be in inverse relation to their problem. That is why, since 1954,’ the Government has made adjustments in superannuation pensions which have been designed to concentrate the limited funds available upon the relief of the greatest hardship. The increases from the Superannuation (Pension Increases) Act 1961, will, if the total pension thus payable is divided by the number of units held at date of retirement, show that payments now being made are equivalent to a unit value well above 20s. in many cases and in excess of 30s. for some pensioners.

The Fund.

The balance in the Superannuation Fund of approximately £81,000,000 docs not represent accumulated reserves available to increase pensions or other benefits because this growth in the fund in the post-war period has been matched by a corresponding increase in its liabilities. Not only has there been a large increase in the number of contributors but the general increases in salaries since the war have meant a substantial rise in contributions for higher pensions on retirement. The rates of contribution payable by contributors have been actuarially . determined to provide sufficient to meet the fund’s share of the benefits at current rates which will ultimately become payable to present contributors. In order to meet, as they become payable in the future, the fund’s contingent liabilities it will be necessary to continue to build up the balance in the fund. If any part of this present balance was now to be applied towards increasing present benefits it would affect the solvency of the fund in the future because there would not have been any corresponding reduction in the contingent liabilities of the fund which it is being accumulated to meet.

As the honorable member knows, the act provides for quinquennial investigations of the fund. These investigations disclose the amount of any deficiency in the fund or whether any part of the balance in the fund is surplus to the contingent liabilities and therefore available in the terms of section 17(3) of the act for the provision of additional benefits. Any such surplus is, however, to be distinguished from mc balance of £81,000,000 in the fund referred to by the honorable member.

Radio Australia

Sir Wilfrid Kent Hughes:

asked the Postmaster-General, upon notice -

  1. Is Mr. Rahardja still employed by Radio Australia as an Indonesian interpreter and announcer for news to Indonesia?
  2. If so, was he involved in the recent complaints from Holland regarding the slanting of news in Indonesian concerning West New Guinea?
  3. Is he able to say whether Mr. Rahardja is one and the same person as a Mr. Wirisoebroto who wrote three strongly nationalistic propaganda letters to “ The Age “ newspaper in January last?
  4. Is it usual for foreign employees of the Government to participate in nationalistic propaganda or disputes under different names from that shown on their passports?
  5. How long has Mr. Rahardja been employed by Radio Australia, and at what salary?
Mr Davidson:

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

  1. Yes.
  2. No.
  3. Yes. He wrote under his father’s or family name. It should be explained that in Indonesia a son does not automatically take his father’s name and there are no surnames as we understand them. It is quite common, however, for Indonesians to use the family name.
  4. No.
  5. Mr. Rahardja took up his appointment as a translator/announcer in the Indonesian section of Radio Australia on 11th July, 1959. His present salary is £1,353 per annum, in the salary range of £1,243-£1,463.

Mail Services

Mr Armitage:

e asked the PostmasterGeneral, upon notice -

  1. Is it a fact that some Royal Australian Air Force personnel stationed in Thailand have not received mail for up to six weeks?
  2. Has his attention been drawn to the varying advice on postage rates being given by post offices to persons sending mail to these personnel, some offices advising a letter rate of 6d. and others 8d., while some advise ls. 6d.?
  3. Is it a fact that, while letters stamped with ls. 6d. are apparently being delivered, those stamped with less than this amount are the subject of correspondence from the General Post Office to the sender indicating that, if the extra postage is forwarded, the mail will then be despatched?
  4. If so, does this action result in considerable delay in the delivery of mail to the service personnel?
  5. Does he appreciate that the receipt of mail is of great importance to servicemen overseas and that any action which results in its delay can have a serious effect on their morale?
  6. Will he take action to correct this position and ensure that all post offices are fully acquainted with the amount of postage required?
Mr Davidson:

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

  1. Air mail for Royal Australian Air Force personnel in Thailand is despatched from Sydney three times a week and surface mail at intervals of approximately a week, depending on the shipping available. Special arrangements have been made for the handling and despatch of these mails at the Sydney General Post Office and the Thailand postal administration has assured us of its utmost co-operation in the expeditious handling of the mails upon receipt in Thailand. Inquiries reveal that no delay is being experienced in handling this mail matter by my department.
  2. At present, the surface letter rate to Thailand is 8d. for the first ounce and 5d. each additional ounce and the airmail rate is ls. 6d. for each half ounce. Consideration is being given, however, to the extension to service personnel in Thailand of the special concession rates prescribed for mail to Australian servicemen in defined overseas areas.
  3. Whenever possible, it is the practice to contact senders of any underpaid air mail letters to give them the opportunity of paying the deficient postage, rather than forward the letters surcharged double the deficiency in accordance with the prescribed procedure.
  4. The above action is usually appreciated by the senders and does not result in considerable delay to the mail concerned.
  5. I fully appreciate the importance of mail to servicemen overseas and can assure you that the Post Office arranges for such mail to be handled as expeditiously as possible.
  6. Action has been taken to remind all Post Office staffs of the appropriate postage rates for mail matter addressed to Royal Australian Air Force personnel in Thailand.

Course for Bankers at Moscow University.

Mr Don Cameron:

n asked the Minister for External Affairs, upon notice: -

  1. Is he able to say whether certain Australian bankers are attending a course at Moscow University?
  2. If so, with what bank in Australia were these bankers associated?
  3. What course is being studied?
  4. Who is paying their fares?
  5. What is the duration of the course, and when are the bankers expected to return to Australia?
  6. How many Australian bankers are attending the course?
  7. Does the Moscow University offer more advanced teaching facilities than the universities in Australia or Britain?
Sir Garfield Barwick:

– The answer to the honorable member’s questions is as follows: -

I have made inquiries into the matters raised by the honorable member. Neither I nor my department has any information about Australian bankers attending a course at Moscow University, and I am accordingly unable to offer any observations on the points raised in the honorable member’s questions.

Northern Territory

Mr Whitlam:

m asked the Minister for Territories, upon notice -

  1. How many (a) aboriginal and (b) other Australian children of school age live in the Northern Territory?
  2. How many (a) aboriginal and (b) other Australian children in the Northern Territory attend (i) administration and (ii) mission (a) primary, (b) secondary and (c) technical schools?
  3. How many (a) aboriginal and (b) other Australian children from the Northern Territory are assisted to receive (i) primary, (ii) secondary, (iii) university and (iv) other education elsewhere in Australia?

Mr. Hasluck: The answers to the honorable member’s questions are as follows: -

In the answers the term “ aboriginal “ is applied only to those children who are wards of the Administration. There are considerable numbers of children of aboriginal race included in the figures for “ Other Australian Children “.

  1. A three year programme designed to bring education to 90 per cent, of all aboriginal children of school age in the Northern Territory was introduced in the 1961-62 financial year. The aim of the programme is to provide teachers and school accommodation is to provide teachers and children by the 1964 school year, and already 262 additional children have been brought into school. The programme is initially concentrated on building up facilities on existing government settlements and mission stations, but the programme for next year will involve establishing new schools on some of the more remote pastoral properties.

New Guinea Resources Prospecting Company Limited

Mr Ward:

d asked the Minister for Territories, upon notice -

  1. What did it cost the Commonwealth to secure an interest in the New Guinea Resources Prospecting Company?
  2. What amount was contributed by its partner The British Aluminium Company Limited?
  3. What were the assets of the New Guinea Resources Prospecting Company at the time the Commonwealth reached agreement with the British Aluminium Company Limited for the disposal of the Commonwealth’s interest?
  4. What amount is to be paid to the Commonwealth?
  5. What are the terms of sale?
Mr Hasluck:

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

  1. The Commonwealth, as an original partner in the formation of New Guinea Resources Prospecting Company Limited, has contributed £153,000 in share capital.
  2. £147,000.
  3. The assets consisted mainly of base camp buildings at Kairuku. Papua, drilling and field equipment for survey parties, and technical information about the potential hydro-electric power resources of Papua. 4 and 5. I do not consider that information of this nature should be released until the necessary documents to complete the sale have been executed.


Mr Webb:

b asked the Treasurer, upon notice -

  1. Is it a fact that school teachers appointed to taxation zones A and B in Western Australia do not obtain the full concessions available to residents in those zones owing to their being appointed in January?
  2. If so, will he arrange for the concessions to be granted to school teachers for the full period they are in those zones?
Mr Harold Holt:

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

  1. School teachers residing in zones A or B are entitled to zone allowances on the same basis as other persons residing in those areas. It is understood that, in some circumstances, school teachers and other persons may reside in one or other of the zones for a period of more than six months but that a zone allowance is not available because the basic test of residence of six months in the income year is not satisfied.
  2. Following other representations on this question, I have arranged that the matter be kept under notice in the event that a review of the zone allowance deductions is undertaken in the future.
Mr Webb:

b asked the Treasurer, upon notice -

  1. Is it a fact that under the age allowance provisions referred to on income tax personal return Form A income means the amount shown in item 18, plus exempt income and exempt pensions, and less only deductions claimed under items 19 to 25 and 45?
  2. Will he consider applying the age allowance to item 47 on Form A?
  3. If not, why is this allowance applied to net income and not to taxable income?
Mr Harold Holt:

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

  1. Yes. 2 and 3. Item 47 on Form A refers to “ Taxable Income “ which, briefly stated, is a person’s assessable income reduced not only by direct expenses incurred in gaining that income but also by deductions of a concessional nature and other allowances which have no relation to the production of assessable income. The objective of the age allowance provisions, introduced by this Government in 1951, is to exempt from income tax aged persons in the lower income groups. The exemption applies where a person qualified by age derives income up to the total of the Commonwealth age pension and other income the age pensioner may derive without reduction of that pension. An aged person in receipt of an income not exceeding the sum of the age pension and the permissible income for the purposes of the age pension is thus placed in a taxation position no less favorable than that of an age pensioner. This comparison would be destroyed if the age allowance were applied in relation to the net income after allowance of concessional deductions. Whilst the present total exemption points of £455 in the case of a single eligible aged person and £910 in the case of an eligible aged married couple provide considerable tax relief to these persons, the age allowance provisions are subject to periodical review and the honorable member’s suggestion will be kept under notice for consideration at an appropriate time.

Commonwealth and State Financial Relations

Mr Whitlam:

m asked the Treasurer, upon notice -

What amount of revenue and what percentage of its total revenue did each State receive in 1960-61 from (a) Commonwealth sources, and (b) its own sources apart from business undertakings?

Mr Harold Holt:

– The information requested by the honorable member is set out in the following table: -

Cite as: Australia, House of Representatives, Debates, 14 August 1962, viewed 22 October 2017, <>.