25th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
– I wish to inform the House that the Minister for the Navy left Australia on 29th April for the United States of America and for British Guiana. In the U.S. he will be present at the launching of the guided missile destroyer, H.M.A.S. “ Brisbane “ and will attend to other matters concerning the Navy. The Minister will then visit British Guiana where he will be Australia’s representative at the independence celebrations to be held there late in May. The Minister for Health will- act as Minister for the Navy during this period.
– I direct a question to the Acting Attorney-General. Has he had referred to his attention comments by Mr. Justice Joske criticising the delay in amending the provisions of the criminal law in the Australian Capital Territory? Has the Minister been told that Mr. Justice Joske said that the provisions of the criminal law in the Australian Capital Territory were quite inadequate and completely confused but that he did not seem to get anywhere when he made these remarks? He said that if the authorities did not choose to alter the law the fault was theirs. Can the Minister say where the blame, if any, lies for the failure to amend the law?
– I have had my attention drawn to the statement by Mr. Justice Joske. For some time the Attorney-General’s Department has been considering an amendment to the law relating to bonds. This is under examination at present; the examination is not yet complete. Opinions are being sought as to proposed changes and the desirability of certain changes in the law.
– I direct a question to the Minister for Shipping and Transport in his capacity as Acting Attorney-General.
Has the Minister received the views of the Association of Australian Record Manufacturers - naturally enough in record form - as to amendments to the Copyright Act? If so, can he assure the House that they will receive a good hearing?
– Both I and the AttorneyGeneral have received a long playing record which accompanied other representations made by the Association of Australian Record Manufacturers. I must say that I think the record will certainly receive a good hearing. It takes about 35 minutes to play, but I understand it is most persuasively couched and has various types of music on it. Many a member of Parliament, 1 am sure, has been subjected to far more difficult interviews.
– My question is addressed to the Minister for Civil Aviation. I ask: Is it true that in a report to this House on 21st October 1965 on the proposed construction of the international terminal at Sydney airport the Public Works Committee recommended that a searching inquiry be held into the planning of commercial airline operations in Australia to reduce peak loading of airport facilities and to produce a more economic use of installations and staff? Did the Minister’s predecessor state in November 1965 that he was considering setting up a committee of inquiry headed by a senior barrister? Does the Minister’s recent announcement, made five months later, that the committee is to comprise departmental officers, indicate that the inquiry will have less status or be any less searching? Finally, is the development of further proposals for the provision of additional terminal facilities at major airports being deferred in his Department until the committee has completed its inquiry?
– There has been no deferment of any planning as far as future airport development is concerned. I have read the report of the Parliamentary Standing Committee on Public Works in relation to airport matters which did not concern Sydney only. Also I think a particular reference was made principally to Adelaide airport. But the planning of future development of airports in Australia is going ahead Certain announcements have been made over recent months regarding changes which are contemplated in the near future and the works which are already on hand. Regarding the appointment of the committee, which I announced in this House in response to a question a couple of weeks ago, I can say that the decision to set up an expert committee rather than a judicial type committee will mean that the investigations will be far more searching. I say that because the people who will be appointed to the committee - and I hope to be able to announce the personnel involved this week - will be those who have had vast experience in this particular field. As a result they will be able to make a quicker assessment of the situation and the recommendations which they will make to the Government, will be, I am sure, because of their experience, far better than those which could come from a body without any previous experience in this field. I am sure that the results which will be obtained from the type of committee which is being established now will be far more satisfactory than the one suggested by my predecessor who was only searching for ideas on this subject at that particular lime.
– Has the attention of the Minister for External Affairs been drawn to a recently published statement by Professor H. W. Arndt, Professor of Economics at the Australian National University, and a member, for the time being at least, of the Australian Labour Party. concerning the policy of the Governments of the United Stales of America and of Australia in relation to Communist aggression against South Vietnam? If the right honorable gentleman has seen this statement can he tell the House whether he discerns in it any note of disagreement with present Government policy?
– 1 rise to order.. Mr. Speaker. The question invites comment.
– Order! There is no substance in the point of order.
– It is not necessary for any honorable member to draw my attention to this article. I read it with a great deal of interest when reading the morning newspaper. I have always admired the lucidity with which Professor Arndt expresses himself and the logic with which he develops his arguments. On this occasion, I found myself in complete agreement with the conclusion he reached. I think the conclusion he reached was not so much that he was in agreement with the present Government, which is a non-Labour Government, but that he found himself fully in agreement with the Wilson Government of the United Kingdom, which is a Labour Government. He said, in effect, that he found that the Labour Government of the United Kingdom thought soundly, clearly and truly on the Vietnamese situation and that the Labour Opposition of Australia did not do so. Happily, the” Australian Government, although a nonLabour Government, and the Labour Government of the United Kingdom agree fundamentally on the importance of the issues in Vietnam and the necessity to resist the aggression that is occurring in that country.
– I address my question to the Minister for Social Services. He will be aware that all recipients of repatriation pensions do not pay income tax on war pensions; that these pensions are not treated as income until the recipients become age pensioners. I ask: Will the Minister, in his Budget proposals, exempt those age pensioners who receive war pensions in excess of the permissible income for age and invalid pensions?
– As the honorable member for Reid knows, I am not responsible for the administration of income tax, but I shall be happy to direct the honorable member’s question to the attention of my colleague, the Treasurer.
– My question is directed to the Treasurer. It refers to the Government’s policy of expediting loans to rural producers. Are trading banks now in a position to make loans available to these producers, particularly the smaller ones, from the Farm Development Loan Fund of $50 million? If so, will such loans be available for periods of up to IS years and will conditions for servicing such loans relate to circumstances appropriate to the farm programmes for which they are made? Will loans from the Farm Development Loan Fund be directed predominantly to developmental purposes and be additional to facilities available on an ordinary overdraft basis?
– I have been advised by the Reserve Bank that the trading banks are now in a position to make loans under the farm loans scheme announced by the Prime Minister in this House on 8th March. It will be seen that little time has been lost in preparing .the scheme and bringing it into active operation. I would like to congratulate the Reserve Bank and the trading banks for the rapidity with which they have arranged the administration of this scheme. As to the second part of the question relating to the terms of loans, it is true that the terms will be related to the purposes of the loans and will in many cases be for periods of up to IS years and in some cases even longer periods. It is also true that the loans will be made available mainly for developmental purposes. They will be supplementary to the advances that can be made by the trading banks and it is expected that they will be extended to small farmers rather than to the larger producers.
– My question is directed to the Prime Minister. In view of the announced political and military objectives of the Government in committing Australia to participate in the Vietnam conflict, did the Prime Minister, when visiting Vietnam during the last couple of weeks, take the opportunity to inform himself as closely as possible of the complex internal political situation in that country and assess its effect on military policy and the attitude to such policy of the various Vietnamese elements pressing for a democratic general election? Did he also inform himself as to the prospects of the South Vietnamese people forming a self-governing nation capable of standing on its own feet both now and in the future?
– Naturally I took all opportunities available to me to inform myself as best I could on the situation in
Vietnam and I hope later this week to report in more detail to the Parliament on the situation. There were clearly limitations, both of time and opportunity, on my ability to go beyond the sources normally available to visiting representatives of governments, but I did have the most frank and thorough discussions with representatives of the Government of South Vietnam, with the United States authorities, both military and diplomatic, and with our own Australian diplomatic and military representatives. As a result of those discussions I feel very much better equipped to deal with the kind of question the honorable gentleman has put to me, but I shall be giving the Parliament an assessment of what I saw during my visit to South Vietnam and neighbouring countries, I hope, on Thursday night.
– I wish to ask the Acting Minister for Supply a question. Has his attention been directed to a statement that the French Government is endeavouring to squeeze Australia out of the European space programme? If this statement is correct, can the Minister inform the House what is the United Kingdom Government’s altitude to such a move by France?
– I do not think it is quite true to say that the French Government is trying to push Australia out of the European space programme, though I am well aware of some quite legitimate commercial competition setting in for the development of a space vehicle launching platform which will be used for the next European Launcher Development Organisation experiment and which is required to be somewhere in the equatorial regions. As the honorable member may know, the French have developed an equatorial launching site in French Guiana. Australia has sent a powerful delegation Jed by my colleague, the Minister for Supply, to France with a proposal for the possible establishment in the Darwin area of a space launch centre for Australia. These two proposals are in competition for the approval of E.L.D.O. In the meantime, however, some problems concerning the Organisation have to be solved. The United Kingdom has let it be known that she is not very happy about the escalation of costs and it may well be that she will feel disposed to retire from the Organisation. This, of course, would leave France as the predominant voice in E.L.D.O. if the Organisation is to continue in existence. At present it is a little too early to say what the outcome of the present negotiations will be. However, as I have said, we are not being forced out, though we are up against some stiff competition.
– My question, which is directed to the Minister for National Development, relates to a question that was asked last week about the tabling of a report resulting from an investigation into beef roads. Answering that question the Minister said that the report was confidential between the Department and the Cabinet. He subsequently found that the document had been available in the Parliamentary Library for some time. Will he now lay this report on the table of the House so that all honorable members may have access to the information contained in it?
– Perhaps I should answer this question. I have read something of the difficulty that has arisen, but I have not yet had an opportunity fully to inform myself on it. I intend to discuss the matter with my Cabinet colleagues and I should then be in a position either to make a statement myself or to have my colleague, the Minister for National Development, make a statement to the House. At this stage I prefer not to make any statement on behalf of the Government or to suggest that any finality has been reached in our consideration of the matter.
– My question is addressed to the Minister for Trade and Industry. Is it a fact that two or three years ago the Lord Mayors of the six State capital cities in Australia calculated that they would need $6,358 million over the next 10 years to solve their traffic problems? Does not this example of huge expenditure alone highlight the tremendous costs of centralisation and underline the need for drastic measures to counter the ever increasing expansion of the populations of our capital cities? Can the Minister say whether action to compile other costs of centralisation is being taken by any committee at government level?
– It is a fact that several years ago the Lord Mayors of the six State capital cities accepted an estimate that an expenditure of more than £3,000 million would be required within the succeeding 10 years to deal with traffic problems in those capital cities. Naturally enough they concluded that the Commonwealth Government should find the money. No committee is explicitly and exclusively calculating the cost of this kind of centralisation but, following agreement reached in the Premiers* Conference a couple of years ago, a committee of Commonwealth and State officials has met on a number of occasions to consider decentralisation. Some work is being done within my Department and other Commonwealth Departments in studying the matter in general terms. The committee of Commonwealth and State officials has not yet reached the stage of being able to submit a report to the State or Commonwealth Governments, but 1 would expect that it will be ready to do so in the not loo distant future.
– 1 ask the Prime Minister a question. 1 remind him that last year I urged the Government to consider increasing the number of Australian hospital, surgical and medical teams working in South Vietnam as a major contribution by Australia to building up goodwill in Vietnam and attacking the shocking backwardness and shortage of expert medical aid available there. As a result of the Prime Minister’s recent visit to South Vietnam, will the Government consider sending more hospital, surgical and medical teams from Australia to that war ravaged country?
– 1 am glad to be able to say that the positive and constructive side of activities in South Vietnam has been regarded as a matter of importance by all of the participants concerned - the South Vietnamese Government; the United States authorities, who, of course, are present in very considerable numbers; the Australian forces; and other friendly forces participating. In addition to the kind of assistance that can be given by military medical teams, the medics in the ranks of the troops take such opportunities as they can in the villages to give direct assistance in dealing, to the best of their ability, with medical cases. We have in South Vietnam two surgical teams of which we have read a good deal and I was able to inspect one in operation at first hand. I agree with the honorable gentleman that if this process could be extended it would be welcomed by the civilian population and would cater for a very real need. The ratio of doctors to population in South Vietnam is very much lower than it is in Australia, although we recognise that in certain areas of Australia there are shortages in this field which causes us some concern. I shall be studying this matter. Indeed, I have immediately under consideration an offer from one hospital to staff a gynaecological unit. The honorable gentleman may be assured that these matters will receive sympathetic consideration.
– I ask the Minister for the Interior a question. As agent for other Commonwealth departments wishing to find sites for the construction of buildings, does the Department of the Interior exercise every effort to co-operate with local government authorities in respect of existing zoning and building regulations? If the Minister is not in possession of the facts will he kindly investigate the building of a soil testing laboratory in Malvern Street, Rivervale, in my electorate, in contravention of the residential zoning for this area and without any discussion with the local shire authorities? May I be advised whether an alternative site in an industrial area may be chosen even at this late stage?
– I am surprised to hear the suggestion that there has not been consultation on this matter between my Department and local government planning authorities. I will certainly have the matter investigated and see what can be done about it.
– I preface my question, which is addressed to the Prime Minister, by referring to a newspaper report of the intervention over the weekend of a group of Nazis on the Yarra bank at a May Day celebration. If the right honorable gentleman has not already done so, will he arrange for the Security Service to check up on these people and to take the same precautions against their spreading influence in Australia as the Service has already taken against the influence of the Communist Party in Australia? If the right honorable gentleman does not already know, will he find out and tell me whether these people are naturalised? If they are naturalised, how does he reconcile the naturalisation of Nazis with his refusal to naturalise Communists?
– I read that Mr. Rylah, the Chief Secretary of Victoria and the Acting Premier at present, was making inquiries into this matter.
– In Victoria.
– In Victoria, yes. I shall follow up the suggestion of the honorable gentleman to see what information I can obtain through Commonwealth sources about these activities, which, I am happy to say, have not revealed themselves extensively in this country.
– My question is addressed to the Minister for External Affairs. Has the Minister seen a copy of the German “Tribune” of 23rd April of this year? I might explain for Australians that the word “Tribune” applies in this case to an airmail edition of the great national dailies of Germany, a synopsis of which is made available by the German Embassy. The “ Tribune “ contains an article entitled “ Behind the Scenes in China - Vietnam, an Ideological Testing Ground - Frustrations of Chen Yi’s Catastrophic Foreign Policy “. The article goes on to say-
– Order! The honorable member will put himself out of order if he quotes from the article.
– The article can be summarised as saying that the die will be cast-
– Order! The honorable member is now out of order.
– My question is addressed to the Minister for Labour and National Service. On 2nd December 1965 and again on 16th March 1966, ] asked a question relating to national service training covering migrant youths naturalised under the sponsorship of their parents. On both occasions I was promised an answer as soon as possible. I ask the Minister: fs he yet in a position to advise the House as to whether any decision has been made on this matter?
– As the honorable member realises, this is a very complicated matter in which many issues are involved. It has been under intensive study for some time and I hope that before long I will be able to give him and the House a complete answer.
– My question is directed to the Minister for Labour and National Service. Is there any reason why there should be a lapse of time, considerable in some instances, between the medical examination of a draftee for national service and the notification of the result in country areas? How long after notification of acceptance does the call-up usually take place?
– Unfortunately, in country areas delay does occur following medical examinations. Clearcut cases in which a man is quite fit from the start are fairly simple, but in many cases further tests have to be made. Sometimes, arrangements have to be made for a man to be examined by a specialist. There is also the problem of X-rays. Very often X-rays are taken and reports are not immediately available from the expert radiologist who is required to read them. Unfortunately, due to forces beyond our control, delay does occur. However, we give all persons a month’s notice before they are required to march into camp. That is the vital thing. We ensure that a person will not be suddenly surprised by notice that he is required to go into camp within a week or two.
– My question is directed to the Prime Minister. Since the Govern ment insists on carrying out its cradle snatching policy of conscripting fresh faced, voteless boys and sending them into the filthy jungles of South East Asia from which they might never return, and noting that the Libera] Party holds the view that Australia’s security-
– Order! The honorable member will place himself out of order if he continues in that vein, because the Prime Minister is not answerable to the House for the point of view of the Liberal Party.
– Noting that the Prime Minister holds the view that Australia’s security is at stake in Vietnam, can the Prime Minister advise the House why his party continues to select young sods of wealthy parents as candidates for seats at the forthcoming Federal general elections when these young men should, according to Government policy, be defending their country-
– Order! The honorable member is out of order.
– I desire to ask the Treasurer a question. As the consumer price index figures for the March quarter indicate an increase of only 1 per cent, in average costs in Australia, can the Treasurer explain the disputation of these figures by the President of the Australian Council of Trade Unions? Is Mr. Monk’s assumption correct that the Statistician’s figures were taken on 15th February, that is, one day after the changeover to decimal currency? Does the increase also indicate that a man on, say, $50 a week would have his costs increased by only 5 cents a week?
– As to the facts, the prices of the food items, which are far and away the most important items in the index, were taken on the 15th or 16th days of January, February and March. The figures are an average of the three monthly figures and were not all taken immediately after “ C “ Day. The second point to be remembered is that when the figures were taken - and some were taken immediately after decimal currency day, on 15th February - many of them were taken in pounds, shillings and pence rather than in the converted currency, so I do not think that any strong conclusions can be drawn from the date on which a figure was taken. As I am able to interpret the question relating to the statement made by Mr. Monk, I would say that the statement attempts to create the impression that significant price increases did occur as the result of the conversion of decimal currency. Already two inquiries have been held and both of them have found that no significant increase occurred as a result of the change. The Decimal Currency Board has itself carried out a widespread inquiry and has found that although in some cases there were rises, in others there were compensatory falls. So I do not think that any person can gain a great deal from this - particularly before the Commonwealth Conciliation and Arbitration Commission - in trying to prove that as a result of the change to decimal currency-
– I rise to a point of order. Is the Minister entitled to canvass the possibility of a decision of the Commonwealth Conciliation and Arbitration Commission while answering a question in regard to price rises?
– Order! I point out that the Treasurer has a right to answer the question as he thinks fit. If he runs the risk of intruding into a case on which the Commonwealth Conciliation and Arbitration Commission has not made a finding, that is his own risk.
– I think it is in bad taste and is disgraceful. The Minister is trying to influence the Commission against the workers.
– As to the last part of the question, as to whether a person on, say, $50 a week would have a rise in costs of 5 cents a week, I think that the substance of the honorable gentleman’s question is correct.
– I ask the Treasurer: Is it a fact, as reported, that at a public meeting in Sydney, while defending the use of Australian Service personnel in Asia he described Communist Chinese ambitions as the largest threat to world, as well as regional, security? If so, does it indicate that he believes that Communist China is actively supporting Vietcong forces in Vietnam in a war in which Australian soldiers are engaged? If so, will he explain how he justifies, and supports, through his Department, the Government’s policy of trading with the enemy?
– I thought that in cases like this it was not within Standing Orders to answer a question of this kind.
– Mr. Speaker, I rise to order. The Minister is reflecting on the Chair when he says that the question is not within the Standing Orders.
– Order! The Treasurer is in order in answering the question.
– To give an explicit answer, I did state, and it has been stated by many of my colleagues, that the great danger to peace - in fact the main danger to peace - in South East Asia is the intrusion of Communists into the affairs of other countries. This must be stated in clear and explicit terms. I went on to explain also that a declaration of war has not been made.
– If the honorable gentleman will wait a second he will get an answer. I am glad to find that Mr. McNamara, in the course of a statement made in the United States within the last few days, has given five good reasons why the United States should not declare war in South Vietnam. Exactly the same reasons would apply here. As to the final point raised by the honorable member for Grayndler, it has been pointed out that we do not trade with Communist China in strategic or warlike materials and we do not carry out trade with North Vietnam. The goods in which we do trade with China are readily available in other parts of the world, and if we refused to supply them other countries would do so. It would do harm to Australia if we refused to trade in such items as wool, wheat and other commodities. What the honorable gentleman has to answer very clearly is this: Does he want us to stop the supply of wheat, wool and other commodities to Communist China? If so, he should have the courage to say so.
– I direct a question to the Minister for External Affairs. A copy of the German “ Tribune “, an air mail publication which is issued through the German Embassy and gives a synopsis of comment during the past week in the great dailies of Germany, contains an article entitled “ Behind the Scenes in China - Vietnam, an Ideological Testing Ground - Frustrations of Chen Yi’S Catastrophic Foreign Policy “. As this article appears together with news of greatly increased West German aid to South Vietnam, will the Minister examine the article with a view to assessing its importance to Australian thinking and making copies of it freely available to all honorable members?
– I certainly will examine the article. It has not come under my notice up to date. I assume that the German Embassy has already distributed copies of it to quite a number of honorable members.
– To every member.
– If not, I will see that others obtain it.
– Is the Treasurer aware that the Government Statistician recently issued a document which showed that the balance of payments deficit was $700 million, being $174 million more for the last nine months than for the corresponding nine months of 1964-65? Is the right honorable gentleman aware that statements are being published throughout Australia that at the end of the March quarter of the year 1965-66, Australia’s balance of payments deficit was $156 million less than it was for the previous nine months? Is he also aware that the same Press statements claim that figures issued by the Commonwealth Statistician show that the balance of payments deficit for the first nine months of 1965-66 was $34 million less than it was for the first nine months of the year 1964-65?
– Order! I thought the honorable member was asking a question for the purpose of obtaining information.
– I am asking for information.
– The honorable member is giving information; I suggest that he ask his question.
– Will the Treasurer see to it that the Sydney “Daily Telegraph” corrects these outrageously misleading statements?
– It would be unusual, in financial matters like this, if the “ Daily Telegraph” made a mistake of the kind suggested by the honorable member’s question. Let me mention some conclusions that can be drawn from the figures. First, the deficit on our balance of payments is much smaller today than was anticipated at the time when the Budget was presented. If we examine the latest figures available - those for March - we see that our international reserves rose by $17 million. They did not fall. We still anticipate that there will be a substantial deficit in our balance of payments on current account, but this will be neutralised to a considerable extent by the very substantial inflow on capital account that is now occurring.
– Give us the facts.
– The Opposition is very t’oey today. 1 wonder whether it has anything to do with the decision of its committee not to permit of any improvements in the vote for independent’ schools. I come now to one more conclusion that can be drawn from the figures. In a statement I made in this House about two or three weeks ago 1 said that we could look forward - not in the immediate future it is true but at the end of next financial year - to the achievement of an approximate balance in our external payments position. Most of the things that are happening today indicate that the opinion that I then expressed to the House will turn out to be a correct assessment.
– I address a question to the Minister for External Affairs. Is the right honorable gentleman aware of an interview which took place with the Leader of the Opposition in the television programme “ Four Corners “ at the weekend? Is he aware that the Leader of the Opposition stated that, if elected as Prime Minister, he thought he could solve the situation in Vietnam so that the United States and Australian troops could leave within six to eight months? Will the right honorable gentleman confer with the Leader of the Opposition to ascertain by what means he proposes to achieve such a desirable result?
– I rise to order. I suggest that this question is highly hypothetical.
– Order! I thinkthe honorable member for Angas is seeking some information.
– I find it difficult enough to keep track of the changes in events in the world without trying to keep track of changes in the policies of the Opposition.
– I direct a question to the Minister for Trade and Industry and refer to the new farm loan scheme to aid primary industry through the infusion of $50 million in long term loans into the rural sector of the economy. I ask: Are world markets for beef, butter, wheat, wool and other commodities attractive both from the viewpoint of potential sales of Australian primary produce and of reasonable returns? Will the further development of primary industry as a result of the Government’s recent action also boost the nation’s balance of payments position to the general benefit of all sections of the community?
– It is true that the new farm loans arrangement announced by the Prime Minister and in which the Commonwealth Bank and private trading banks are co-operating will be of great value to primary industry, not merely to those who are suffering from the drought but also to those who are developing properties and those who wish to get greater production and more economic production that can come from further investment. In these days in modern farming considerable investment is involved in securing the most economic and profitable forms of production. The honorable member asked about markets for certain items. There is evidence that the world market for beef is good. I hesitate to anticipate the state of markets but I have great confidence, which is widely shared throughout the beef industry, that the prospects for beef are very good indeed. There is a market for butter,’ principally. in the United Kingdom, but it is not a very attractive market. This is not so with other forms of dairy produce. The market for cheese is good. The market for powdered milk and condensed milk is very good. All products of the dairy industry, otherthan butter, have good prospects at present. Due to the stabilisation plan and the big consumption of butter at home, the overall position of butter is good.
It seems to be generally accepted that the huge surpluses of wheat that existed, particularly in North America, are almost worked off. There is no great accumulation of wheat and the market for wheat and other cereals ought to be good. There are circumstances, of which I spoke the other day, in which I regard the open market price of wheat as not as strong as it ought to be, but by and largeI think there need be no doubt that whatever wheat is produced can be readily sold. All of these products are, with wool, the major items that contribute to strengthening Australia’s balance of payments position. To the extent that the farm loans scheme supports and extends that, it will be doing a very good thing for the whole economy - in providing employment and in creating stability - as well as for particular farmers.
– On Thursday last the honorable member for Macquarie made a statement in the House in connection with a report dealing with beef roads in Northern Australia on loan to him from the Parliamentary Library which had disappeared from his room during the previous evening. The nature of the building makes it impossible to supervise at all times all means of access to corridors but, as far as can be ascertained, no stranger was on the members’ floor between the times mentioned by the honorable member. Inquiries made to date give no indication of by whom or in what way the document was removed. The document was not recovered by the Library, nor has it been returned to the Library.
It is a strict rule of the Library that no material is recovered from members’ rooms except at their request and, even then, it is recovered in the presence of a responsible officer of the Senate or the House of Representatives, as the case may be. As it has been stated that the report was confidential to the Department of National Development and had not been released and there has no doubt been some conjecture as to the way in which copies found their way to the Library, the position should be clarified. Several copies of the report were received by the Library in October last in the routine way in which most Government publications are received. This is either through the post or by hand delivery and without any letter or explanation applying to the particular item, of which there are many thousands each year. As there w,as no indication that the report was restricted or confidential, the copies were processed and made available for use by senators and members in the usual way. They were never at any time asked for by the Library.
Honorable members may be assured that, within the limitations imposed by the nature of the building and the wide range of its day to day activities, all possible precautions are taken to protect the privacy of members and their property. Subject to the necessity for attendants, cleaners and other officers of the Parliament to enter rooms from time to time for such functions as mail deliveries, cleaning, maintenance, fire protection, etc., members may keep their rooms locked and for this purpose may obtain a key.
– I wish to make a personal explanation.
– Has the honorable member been misrepresented?
– Yes. I refer to an incident in the House last Thursday night during the adjournment debate. This is my first opportunity of doing so since I have checked the “ Hansard “ report of the matter. I was accused by the honorable member for Scullin (Mr. Peters) of misrepresenting him. The matter referred to appears on pages 1351 to 1353 of “ Hansard “. I was accused of having said that the honorable member for Scullin had asked for some postponement of the setting up of an investment bank. He did, because he said the information which he required should be made available before we decide whether we can have such a corporation. Later on he denied this and said -
At no time did I say that I was opposed in any way to the immediate creation of a corporation. . . .
The facts show that he was wrong. I do not accuse him of making his accusation malevolently. I think he is just another one of the old men of the Australian Labour Party whose memory has failed.
– I wish to make a personal explanation.
– Does the honorable member claim to have been misrepresented?
– Yes. I desire to inform the honorable member for Mackellar (Mr. Wentworth) through you, Mr. Speaker, that what I intended to convey was that I was in favour of any action, including the creation of an institution, bank, or organisation, that would restrict the flow of overseas capital to this country or would regulate it. If, unfortunately, my words did not convey the impression that I desired to convey I apologise for my inadequacy, but I take this opportunity of pointing out that that is exactly what I desired to convey.
– I accept the honorable member’s explanation.
– by leave - I wish to inform the House that the SecretaryGeneral of the United Nations is being informed that Australia will once again accede to his request for the continuation of an Australian police element in the United Nations force in Cyprus.
This will be the third group of Australian police to serve with the United Nations force in Cyprus. The House will recall that Australia provided 40 police in response to the initial appeal of the Secretary-General in 1964. They were made available with the active co-operation of the State Governments and they served in Cyprus for 12 months from 25th May 1964. The second group is drawing to the end of its 12 month tour of duty and the Government’s decision will mean that it will be returned to Australia late in May this year and a new contingent sent in its place. The AttorneyGeneral (Mr. Snedden) has begun the necessary negotiations with State Governments to this end and it is hoped that there will be no break in the continuity of an Australian contingent in Cyprus.
The role of the United Nations force in Cyprus was laid down by the Security Council on 4th March 1964. In the interests of preserving international peace and security, the force was directed “ to use its best efforts to prevent a recurrence of fighting and, as necessary, to contribute to the maintenance and restoration of law and order and a return to normal conditions “.
The United Nations force is a mixed one and includes some 5,000 troops from 7 countries and 175 police from 5 countries. One of the important functions of the force is concerned with police duties and it is appropriate that they should be carried out by civil policemen who are trained to such duties, rather than by military personnel. The Australian members, as in the past two years, will perform liaison functions between the United Nations force and the Cyprus police and local authorities. They will undertake joint patrols with Cyprus police, establish joint checking posts and police posts to control and protect civilians. They will assist in the investigation of incidents and will undertake special investigations as necessary.
The Australian police in Cyprus have performed their duties with distinction. This has been recognised not only by United Nations officials but by the Cyprus authorities and others who have been concerned with the situation in Cyprus. There has been a widespread wish that the Australian police will continue to serve in the United Nations force.
It is a matter of regret that the problems which have beset Cyprus have not yet been settled. While the situation has been relatively calm for some time, due, no doubt, mainly to the continued presence of the United Nations force, there is still a need for constant vigilance. I have no doubt that the third Australian contingent which will go to Cyprus will maintain the high standards which have been set by its predecessors.
The Australian Government has agreed to meet the cost of salaries and allowances and transport to and from Cyprus for members of its police contingent and in addition has so far contributed$US786,875 towards the cost of the United Nations force in Cyprus. I present the following paper -
Cyprus - United Nations Force - Continuation of Australian Police Element - Ministerial Statement, 3rd May 1966- and move -
That the House take note of the paper.
Debate (on motion by Mr. Allan Fraser) adjourned.
Assent to the following Bills reported -
Loan (Housing) Bill 1966.
Post and Telegraph Bill 1966.
Debate resumed from 28th April (vide page 1350), on motion by Mr. Howson -
That the Bill be now read a second time.
.- In my opinion, this measure is important, not so much because of the amount of money which it allocates out of Consolidated Revenue towards the establishment of the Asian Development Bank, but because of the principles that the measure serves to advance, and because of the further fact that it brings us into close ties- -and ties of a confidential nature - with a number of Asian countries which have agreed to participate in this scheme. If I may say so, the debate, to which I listened with great interest on Thursday night, began on a very high plane with a speech by the honorable member for Melbourne Ports (Mr. Crean). Although I may not have agreed with everything that he said in his speech it was, in my judgment, a most valuable contribution to a subject matter upon which there is perhaps not enough discussion in this House. Matters dealing with foreign policy have tremendous importance for this Parliament because they are of tremendous importance to the nation. I think we lend to over-emphasise certain aspects of foreign policy - perhaps this is inevitable because of the political overtones - to the exclusion of those very important aspects which have to do with our contribution- to the economic advancement of the countries in this region on ,the periphery of which we live. For my part, I welcomed the very constructive contribution made by the honorable member for Melbourne Ports. I cannot say that I welcomed as much, or at all, some of the contributions that came later in the evening from the members of the Opposition. But about that I may say more later if I have time.
The essential features of this Bill are, first, that it authorises the appropriation from Consolidated Revenue of SUS85 million towards the capital of the Asian Development Bank. Of that sum, half, or SUS42.5 million, will be paid or secured by the Commonwealth in the next five years. Of this contribution, SUS21.25 million will be paid in convertible currency in equal annual instalments of 5US4.25 million. The remainder of the sum of SUS42.5 million, which will be our called subscription to the capital of the bank, will be provided as may be needed in Australian currency and need not be made available in cash in the first instance but may be secured by notes or other securities. The balance of our contribution - that is the remaining SUS42.5 million - will be callable but will not be paid in until it is called. It is obvious that this uncalled liability will be a significant factor when the bank seeks funds, as it inevitably will, in the international money market.
It is interesting to notice just how this Asian Development Bank is constituted. There are 19 regional members, all of which, except Australia and New Zealand, are Asian nations. The membership ranges over countries as diverse in their geographical situation as Afghanistan and Western Samoa, and as diverse in their respective political outlooks as Cambodia and the Republic of Vietnam. There are also eight non-regional members, the principal of them being the United States of America and the Federal Republic of Germany. I speak of principal members in the context of the amount of money they are putting up.
Australia can, I believe, take some credit from the fact that it is the fourth largest contributor to the capital of the Bank, coming next in line after the United States,
Japan and India. The United States and Japan have put up $US200 million each and India has agreed to subscribe $US93 million. The amount of subscription varies considerably, the smallest contributor in the list I have before me being Western Samoa, which is providing about $US60,000.
As one looks at the list of capital subscriptions contained in annexure A to the agreement for the establishment of the Bank, which is in turn annexed to the Bill, one is left with the realisation - perhaps a most significant one - that of the 19 regional countries two only, Australia and New Zealand, have populations of European racial origin and the remaining 17, leaving on one side Japan for the moment, are countries which in the main are obviously making substantial sacrifices to get this project under way. In some cases these financial sacrifices are quite disproportionate to the means of the countries making them. They are sacrifices which will impose strains upon the economies of the countries concerned. This is perhaps an earnest of the importance which the participating Asian countries attach to the establishment of the Asian Development Bank.
The .total capital of the Bank is SUS 1,000 million. It is worth noticing that of this total S650 million will be provided by the regional countries including Australia and New Zealand. Again it is significant that the Asian regional countries are contributing no less than SUS542 million of the total of $US1,000 million. The relevance of this observation is that the Asian participating countries will have the major shareholding, if I may call it such, in the Bank. In this connection I should remind the House that the Bank’s daytoday affairs will be run and its day-to-day policy decisions made by a Board of directors, and it is clear from the Articles of Agreement that the majority voice on the Board of Directors will be the voice of the Asian participating countries. The President of the Bank, who will have very wide powers, will be, in all probability, a national of one of the Asian countries participating in the scheme, because it is provided that the President must be selected from the regional countries. The chances are very strong, therefore, that he will be a national of one of the Asian countries.
The purposes and functions of the Bank can be summed up very briefly, and I think I ought to try to sum them up before I pass on to what should be the main part of my speech, namely an evaluation of the importance of this scheme from our viewpoint and from the viewpoint of the contributing Asian nations. The purposes of the Bank, expressed very shortly, are to promote and foster economic growth and regional co-operation in the Asian sphere - in the sphere covered by the activities of the Economic Commission for Asia and the Far East. So this is a proposal that is designed to foster and promote regional cooperation and regional economic development. This will be done by the selection, to be made in all cases by the Board of Directors of the Bank, without regard to political factors, of suitable projects which, in the judgment of the directors, are viable projects and which, without the aid of the Bank, would never get off the ground at all. Priority is to be given, according to the Articles, at all times to projects which will promote economic development looked at from the regional or sub-regional viewpoint.
Why is this measure important? 1 believe it is important for two main reasons. First, we are helping to promote an institution which was founded upon Asian initiative and the planning for which developed principally as the result of Asian initiative. Despite the rather cool and condescending remarks made in the debate last week by members such as the honorable member for Oxley (Mr. Hayden), the fact is that whatever that honorable member may think - and I rather gather that he thinks this is a measure to be praised only faintly, if at all - it is quite clear that the Asian countries which thought of and promoted this scheme are entirely in favour of it and want it in the form in which it now appears. This was made clear at the 1965 meeting of the Commission which was examining the proposal and completing the formulation of the proposal by U Nyein, who described it as a great step forward in the United Nations development decade. The Asian nations have been wholehearted in their support for the proposal. It is a great pity that at the present time one Asian nation with tremendous significance is not a member of the Asian Development Bank. I refer to Indonesia. There is provision in the rules for the admission of new members and I am sure that all honorable members hope that in the fullness of time, and in the not too distant future, room can be made for participation in the work of the Bank by this great country to our near north.
Another significant omission from the list of members is Russia. That country was invited to join the Bank, but for reasons that perhaps are not hard to guess at she has declined to become a member, although, in fact, her representatives attended some of the meetings that were held to get the scheme on foot. I suppose that a correct guess at the reason for Russia’s refusal to play a part in the development of this scheme is that Russia, having regard to her policies in Asia, does not see it as altogether in her interests to promote a scheme of regional economic co-operation. However, one can only hope that she will undergo a change of attitude, because economic co-operation in the underdeveloped countries of the Asian area on a multilateral scale is a cause that should appeal to every country with resources at its disposal, regardless of political and ideological considerations.
I believe that the first important aspect of the measure now before us is that Australia, by the vote of this Parliament on this Bill, will demonstrate to our Asian friends - a great many of them, if we look at this from the standpoint that Australia is in the same region with them - that we are prepared with confidence to back their judgment with our money. There may be room for disagreement about whether we are putting in enough. But I remind the House that our contribution is significant and a large one in the scale of contributions that are being made. Indeed, it is the fourth largest. I believe that it is tremendously important and highly significant that we as a Parliament should be prepared to demonstrate to our Asian friends that we have confidence in their judgment and that we are prepared to support it with tangible resources. If one reads the proceedings of the meetings that led to the formulation- of the Charter of the Asian Development Bank, one sees clearly - and I think it needs to be emphasised - that the initiative in the foundation of the Bank and the ideas about the form that the Charter should take came principally from the Asian members. They sec in this sort of institution a useful function.
Criticism has been voiced in this House by the honorable member for Reid (Mr. Uren), among others, of the fact that the Bank will be conducted on commercial lines and that most of its loan transactions will be subject to what he described as a commercial rate of interest. I understand that the rate proposed is 5i per cent. If I may say so, the point that he missed was that the Government does not regard this measure as the be all and the end all in terms of the forms of economic aid to underdeveloped nations in Asia. Our contribution to the Bank represents only a small fraction of what we are doing and of what we should do. I remind the House that our bilateral aid has been increasing significantly over the years as our multilateral aid has done. The point is that in addition to the bilateral and multilateral aid that we already give, there is room in the Asian community for a commercial bank, capitalised by countries in the region and by interested countries outside the area, to lend funds at commercial but not high rates of interest for useful schemes calculated to promote general development in the region. We see this measure as filling usefully a great gap, and for that reason we regard it as worthy of warm support by the House.
I believe that there is significance in the fact that we propose to provide this not inconsiderable sum. Perhaps at another time we may argue about whether we are giving enough aid. But by doing what is proposed now, we shall show our confidence in our Asian friends. We shall demonstrate to them that we believe they are good judges of what is suitable for them and what is needed to overcome some of their economic problems. That is one important aspect of the measure. The other point that I would like to make is that the decision of the Asian countries to participate in the Asian Development Bank represents an important milestone along the road of regional economic co-operation in an area that is of great concern to Australia because we live close to it. Indeed, we are on its very periphery. This is a valuable step along a road that has not always been easy. I agree that this step has been preceded by several other important ones, for example, the proposal for the construction of the Asian Highway and the undertaking of a scheme for the development of the lower Mekong Delta. Those two proposals have developed out of Asian initiative and cooperation. The measure that we are discussing today represents another step along this road of regional co-operation.
As I have said, this road has not always been easy, lt is interesting to recall that after the Second World War the United States of America, to her great credit, poured large funds info schemes to provide multilateral economic aid for Europe under the European Recovery Programme. There were not many independent nations in Asia at that time, but the Asian nations were very anxious to persuade the United States to undertake a similar programme in Asia. Rightly or wrongly, the United States took the view that a Marshall Aid plan was not the sort of scheme suited to Asia or South East Asia at that time. This view was based on the idea that as most of the Asian countries were colonial appendages of European powers it was primarily the responsibility of those powers to look after the economic development of their respective areas in the Far East.
From what I have been able to read on this subject, I understand that this was a great cause of disappointment to the Asian nations in the early postwar years. Thereafter, the Asian nations, as they came out of their colonial status and developed their independence, looking at matters in the light of what they regarded as the rebuff that they had received over their proposals for a scheme similar to the European Recovery Programme, for many years turned away from the notion of multilateral aid schemes under which various developed countries would pour funds indirectly into the development of the undeveloped area through the medium of a central agency. The Asian nations turned away from multilateral aid and concentrated on persuading - they did not have much difficulty in doing this - the Western powers, predominantly the United States, to give them bilateral aid. So wedded did the emerging Asian nations become to the notion of bilateral aid as opposed to multilateral aid that in 1955 at a conference at Simla they were unable to agree to accept a fund of S200 million which the United States then offered them for regional development on a multilateral basis. It has therefore been only in relatively recent years - the last 10 years - with the development of the
Mekong delta project, the Asian highway and now this bank, that there has been a development, in relation to this Asian sphere in which we are so intimately concerned and interested, of the notion of multilateral assistance on the economic level. Because the Asian nations are turning now more than they did before to multilateral aid they are beginning to realise that they have great interests in common and they ate realising and acting upon the realisation that co-operation will pay. They realise that co-operation is in many cases preferable to an attempt to play off one Western power against another - conducting a kind of political auction in which both sides tak? part to see how the greatest amount of aid can be channelled into one country. Having got the background that I have endeavoured to etch in very briefly, it will be seen that this represents a great step forward in regional co-operation ia the area, lt is important to us, I believe, on the additional ground that we are demonstrating to our great friends in Asia that’ we believe that they know what is for their own good and demonstrating that we are prepared to act on that belief. For those reasons I support the measure very warmly.
.- The best that can be said of this legislation is that it provides too little too late. I do not want to damn the measure with faint praise, but it is very small economic beer indeed. If I may be permitted to vary the metaphor, the financial mountains of the world have been in labour and have produced a very insignificant mouse.
Nominally, a sum of one billion United States dollars would seem like a very large sum of money. In actual fact, only half of that amount will be immediately mobilised and available. Even then, it will not be $US500 million in terms of sterling but half of it will bc in the currencies of the various participating countries and some of those currencies will be fairly soft, to use current economic jargon. If this legislation is to be taken as the measure of friendship that we possess towards the people of Asia - I am using now the words of the honorable member for Parkes (Mr. Hughes) - our friendship is minimal indeed. The attitude of Government supporters has been, largely, that they have not yet come out of the banking chamber or the counting house, because when we consider the continent of Asia we have to consider the sum total of human misery, human want and human suffering.
The honorable member for Melbourne Ports (Mr. Crean) made a very notable contribution to the debate. He thoroughly analysed the financial implications of the measure and particularly stressed what is of the utmost importance not only to Asia but also to Australia. That is the export price difficulties under which all primary producing countries labour. In the world today there are two distinct groups of nations - those which have advanced industrial technologies and those which depend primarily on primary produce for their main export income. While we have made vast strides internally in industrialisation and while we are proud of our own Australian technology, at the same time we depend largely on the vagaries of the overseas commodities markets for the prices we will receive for our primary production. Therefore, we have a very considerable vested interest in the welfare and prosperity of the various nations of Asia and other nations around the Indian and Pacific oceans. We have a vested interest in their ability to buy and to trade.
What is Asia? Various speakers have approached this legislation from various angles, but I feel that not sufficient attention has been paid to a definition of Asia. Tritely, it is the largest of all of the continents. It possesses 52 per cent, of the world’s population. Perhaps it is too big - too diverse - to be considered as a continent. It is rather a collection of subcontinents which are divided amongst themselves as separate entities. According to those who have studied pre-history, Mongolia was the cradle of the human race as we know it today - of homo sapiens. Asia has been the epicentre of some of the greatest storms and upheavals which have occurred in recorded human history. The economic vicissitudes of Asia have caused attacks to be made on Europe and on Africa, which have left their mark on world history.
Asia is the birth place of every major religion and form of philosophy accepted as a code of life by the major portion of the world’s population. Christianity, Judaism, Hinduism, Islam and Confucianism all have their origin in this great continent. According to the theories of Hanshofer Asia is the centre of world power and is the world “ Heartland “. It was Hanshofer who said that Asia was the world island and that whoever is the ruler of the Asian “Heartland” is the ruler of the world island and therefore ruler of the world. The centre of Asia is Sinkiang, formerly known as Chinese Turkestan. Significantly, that is at the meeting point of three major Asiatic powers - Russia, China and India. The axis of world power has been said to run from Sinkiang through to Singapore. According to Lord Roberts, Singapore is the crossroads of the world and I might say that if that axis is continued it runs through Darwin and Australia. That being so, we in Australia have, from every point of view - historically, geographically and in terms of economy, trade, physical safety and our future national development - a very great vested interest in the affairs of Asia.
Asia at present is suffering from the effects of World War II. World War I brought the end of the crowned monarchies of Europe, except for those of the Nordic countries. World War II saw the end of colonialism in Asia, and there has been nothing yet to replace it. No balance of power has been re-established there. As a matter of fact, the means of international communication in Asia were supplied largely by the controlling, exploiting colonial powers prior to World War II, and nothing has yet replaced them. Today the struggle in Asia is, in a broader sense and forgetting the ideological prejudices that are sometimes attached to it by the Government, a battle for the balance of power in Asia. In our own country, by tradition we have always looked with great concern towards Asia and wondered what our ultimate relationship to it would be. I have always taken the view that we can be the bridge between the East and the West. We are by geography of the East and by tradition and culture of the West. We could be the best exponent of European culture and industrial technology to these people and I believe they would be prepared to accept us in that capacity. Unfortunately, because of certain commitments in Vietnam, we have blotted our copybook and today we are viewed with a good deal of suspicion on the mainland of Asia.
The Asian Development Bank, though very laudable in itself, follows the normal, orthodox, stilted procedures of banking. It is true that ils objectives are very broadly stated and they are most laudably humanitarian, in the widest sense of the term. But’ from another point of view this is the approach of the desiccated calculating machine. The sum total of human misery and the economics of scarcity must be considered and, above all. the feelings, the welfare, the lives and the health of half the human race are at stake, depending on the attitude that the more powerful, more wealthy and more developed nations take towards the future of Asia. The capital of the Bank is pathetically inadequate. In terms of aggregate figures for the world, we are spending $120 billion dollars annually for rearmament. In the space race alone, the total world national expenditure is estimated to be very close to $10 billion annually. The cost to the United States of America of the Vietnam war is of the order of $1 billion a month. With these figures in mind, we see the picture in true perspective when we talk of a miserable, paltry, mean half a billion dollars to cope with the problems of 1,700 or 1,800 million people.
I think the position was clearly expressed by the great historian, Arnold Toynbee, who said that this age would be remembered as the first generation in history in which mankind has dared to believe it would be practical to make the benefits of civilisation available to the whole human race. That is a most worthy sentiment. But let us look at the other side of the picture. Let us take the opinion of Dr. Han Suyin, who is a very cultured woman of Chinese descent and of British nationality. Dr. Han Suyin thinks that revolution is inevitable in the impoverished countries. She says that there is more hunger, more poverty today than there was 10 years ago and, as the people get poorer and poorer, civil government becomes impossible. She sees Indonesia, Africa, India and South America moving towards an era of warlords, such as China experienced in the 1920’s, when warlords fight warlords and the seeds of a people’s revolution are sown. Dr. Han Suyin says that there is no other way out, but America cannot understand this. She cannot buy off a national revolution. She offers the developing countries financial enslavement and makes the acceptance of her views a condition of receiving aid. She cannot see that if China is Communist today the actions of the Western powers in the 1930’s made it inevitable. That is the opinion of Dr. Han Suyin, and her diagnosis is remarkably accurate. Let us look at the experience of the major countries of Asia today. Pakistan has what we will call a benevolent military dictatorship. A general is in control in Siam. A military junta controls Vietnam. The various countries in Africa that have been liberated from colonialism have not viable economies and. in the main, after a period-of attempted parliamentary democracy, financial crises have brought them to the point of virtual collapse and a military leader or a military junta has taken over. Indonesia is passing through a crisis and there the Generals and a military junta are playing a very important role in determining the destinies of the country.
Various points of view on the world population explosion are being expounded today. Some of them are the pessimistic views of the followers of the Reverend Dr. Thomas Malthus. Of course, his Malthusian theories are well known. But other points of view are being expressed today. In a world of technology, the imbalance between the rich and the poor countries is becoming more intense than it has ever been before. Left to itself, technology, for all its marvels, is not capable of alleviating poverty and under-development. We must have imaginative economic and social planning on an international scale. There is a need for another body, an international bank of developmental brains, to work parallel with the Asian Development Bank. Until we have assessed the problem thoroughly, we cannot supply the answers. If the sole approach of this Bank is to be one of orthodox banking with orthodox methods of security, the orthodox collection of capital and the due extraction of interest, it will not achieve its objectives and in the long run it can only make confusion worse confounded.
The greatest problem that faces Asia today is the population explosion. It varies from country to country, because the economic development of Asia is most uneven. In Japan, we have a country with the most highly advanced technology. Sig nificantly, Japan was the only country that in fact resisted the impact of Western colonialism. It opened its doors to the Western powers only a century ago. It retained its traditional structure and its traditional means of control by oligarchy, and it was able to absorb the Western technology for its own purposes, aggressive as they may have been some 20 years ago. We can go from this to the other extreme, which is found in some of the most backward countries in Asia today. The first problem, of course, is the control of population. This is by no means easy to solve, because whilst in certain countries birth control is advocated, on religious and social grounds it is opposed in many others. I do not propose to enter into a controversy on that score, but it should be said that human beings are human beings and that in certain societies family planning is not acceptable. In some countries of Asia where there is subsistence farming, in many cases if a man does not have a family, and in particular does not rear sons, he may starve in his old age, because it is the obligation of sons to support the father and mother.
The question of increasing world food production, and particularly food production in Asia, has been very well covered by Mr. Colin Clark in a book entitled “The Economics of Subsistence Agriculture “. Mr. Clark disagrees to some extent with the prognostications of Lord Boyd Orr, but he agrees with him on one point at least, namely that about half the world’s population still lives by subsistence agriculture. Although only a minority are actually hungry, according to Mr. Colin Clark, they do however live on a monotonous diet with the threat of famine ever present. The remedies he suggests are under five headings. The first is the extension of the areas under cultivation. In that regard it should be noted that of the land surface of the earth, about 3,500 million acres is under cultivation. And all of that land is not under cultivation at one given time. Even if it were there would be less than one acre to sustain each human being in the world today by its production of food and raw materials. It has been correctly said that the most valuable contribution which could be made to human development and to the relief of the world food shortage would be a satisfactory economic process for the desalination of sea water. Irrigation is essential if food production is to be increased. and there are very considerable arid portions of the world surface which are capable of food production provided the necessary water can be supplied to them.
The next method of tackling the world’s food production problem, particularly in Asia, is by increasing crop yields. There is no need for me to expiate on that score beyond saying that, since perhaps 70 per cent, of the subsistence farmers in Asia are using wooden ploughs and wooden hoes, the provision of even such elementary equipment as steel ploughs, ordinary steel farming implements and irrigation piping ought to be one of the first matters to be considered by a bank or by any other organisation interested in expanding food production.
The third method of increasing food production is, of course, by increasing the output of livestock products. In that regard it is a matter for regret - even whilst the average commentator pays due deference to the religious traditions of the Indian people - that there are some 90 million cows roaming India and playing havoc with its agriculture. This is allowed because of the special veneration that the Hindus have for the cow. What is to be done to correct the situation is a matter for a very enlightened and tactful approach, but the problem should be noted when any scheme for increasing food production in India is being considered.
Another way to increase food production, which has been overlooked during the course of time, is production from fisheries. More than 75 per cent, of the world’s surface is covered by water. Perhaps 10 per cent, of the proteins consumed by the human race comes from the sea, but in the aggregate only about 1 per cent, of the world’s total food supply comes from the ocean. It should be remembered also that leaching of the soluble elements from the world’s soil has resulted in a considerable amount of the world’s fertility being on the bottom of the ocean today. That needs expert scientific attention.
The final method of increasing food production is by the proper use of forestry and reafforestation, In India - and I do not want to be scathingly critical of the Indians - the dung of the cow which ought to be normally returned to the soil as fertiliser, is being used as a fuel. Reafforestation in
India and China would considerably improve the prospects of a balanced agriculture by providing fuel. The situation has been well summed up in these words in the publication “Trends” of the Rural Bank of New South Wales -
The principle doubts about the adequacy of food for the world’s population arise because the necessary efforts to raise food production may not be made, the financial resources required to develop the world’s agriculture may not be made available, the incentive to expand production may be absent in many parts of the developing world, and the underdeveloped countries may be unable to purchase the food supplies they require because of Balance of Payments difficulties.
It has been correctly said that we are on the threshold of the world’s most exciting, most fearful and yet most hopeful period. Of all our problems none is more urgent than that of hunger. War, according to Clausewitz, is the continuation of diplomacy by other means. Revolution is undoubtedly the ultimate product of hunger and underprivilege, and food, social and economic justice, and development are the real panaceas for revolution. In the world today 1500 million people go to bed with insufficient food, with some form of unstayed hunger each night. The man who is hungry is a social liability. He cannot work effectively; he cannot think effectively and above all he is incapable of education. One of the greatest problems in Asia, apart from the production of food, is the raising of the general standard of literacy. If Asia is to bring itself up to the normal standard of the rest of the world - or rather, if we are to do this, because it is we who have the responsibility to do it - we must engage in one of the most fantastic programmes in re-education in world history. I would say that at present no more than 30 per cent, of these people are literate. This low level of literacy is one of the great handicaps to the future development of Asia. Whereas Britain had a generation in which to adapt itself and raise its standards of education to cope with the requirements of the Industrial Revolution, Asia has to adapt itself within a period of years, and that will be a tremendous task.
I do not want to protract this debate. I feel that we should adopt the approach of Christian charity in this matter. A duty is incumbent on the affluent nations. If
Christianity means anything at all it means a message of progress, of development and of caring for the welfare of our fellow human beings. The development of Asia and the production of food for Asia are matters of world social insurance and should be considered in that light alone. Toynbee was undoubtedly correct. We should make an attempt for the first time in history to provide a genuine, decent living standard for every person made in God’s image and likeness.
.- I am sure that people who listened to the honorable member for Cunningham (Mr. Connor) would agree with his motives and the expressed intention and purpose of most of what he said. There are some things in detail and other things in terms of comment on which, however, I would beg leave to differ. First of all, however, I should like to take up the question that the honorable member raised in terms of the adequacy of the capital of the Asian Development Bank. He said that it is pathetically inadequate. His general approach to the question was that we in the West, who have been some of the prime movers in the establishment of this new Asian banking development, have not been able to divorce ourselves from the attitude of the banking chamber. I feel that here the honorable member has done less than justice to Australia’s overall outlook in terms of financial assistance to underdeveloped countries. To begin with, this is only one sector - a highly specialised sector - of Australian activity in this field.
The question of banking and of the Asian Development Bank is highly specialised and the intention is that the funds of the bank will demonstrate to the world that it does operate precisely as a bank. It has a nominal capital of S US 1,000 million most of which is not called. It is there as a potential liability. The Bank’s operating fund is, of course, extremely small with regard to the objectives. The honorable member for Cunningham has very widely, and I think very accurately, painted for us some of the tremendous potential development in the area where this Bank will operate. But the important thing is that the Bank does not set out to be a lender to all and sundry nor a lender with sufficient capital to meet the requirements of the kind of development of which the honorable members speaks. The important thing is that this Bank is setting itself up as an instrumentality with the ability to tap the capital markets of the world. It will be able to go to the great centres of internationally available capital - New York, Germany, Switzerland or Holland. Reading through the Articles of Agreement and studying the purposes behind the establishment of the Bank, one comes to the conclusion that its main purpose is to set up a new era and a new ground of confidence in this part of the world, to establish the confidence of the financial world. Therefore, it must operate prudently and wisely within the confines of normal banking practice. This, in itself, is not a bad thing.
I made some inquiries of persons who were economic experts and I quote one who said to me that he believed this banking method was one of the best in terms of rendering international aid. I would beg to differ with him in terms of the overall blanket nature of his statement, but there is a great deal of sense in what he said in terms of putting the onus on the country itself to develop the kind of self help, the kind of industry and the kind of demonstration of its own ability to think through and use its own resources. This is inherent in the approach of the Bank. Naturally, of course, those who would borrow from the bank are not able to establish credit or collateral in the same sense that normal banking practice at the individual or industrial level requires. But at the same time there is the exciting possibility of development in countries that will become borrowers. There will be the challenge all the time for these countries, first, to demonstrate their potential and, then, to give effect to it in their activities. This is precisely the thing that my friend had in mind when he spoke of the banking method as being one which will address itself particularly to those kinds of things which were pointed out by the honorable member for Cunningham.
The honorable member quite rightly turned to India because India is one of the hinge countries of the whole Asian situation today. India, as he again pointed out to us, is a country which has enormous internal problems. But the late Pundit Nehru made the statement that all the external aid in the world would not solve India’s problems. Eventually her problems of hunger, her problems of population and the economic situation have to be solved on her own terms, on her own soil inside her own boundaries. The Bank is precisely directed at this kind of thing, getting away from the hand out approach of economic aid, getting away from the sense of one “ have “ nation handing out to the “ have not “ in the way that is so undesirable. No one wants charity. Charity is undesirable in a great number of ways, other than economically. We want to develop and stimulate in the countries concerned their own self help, their ability to stand on their own two feet. This is precisely one of the directions in which the Bank will direct its attention.
I think we should not underestimate the role that our own country has played in this field. This was not a development of those who were interested in banking for banking sake. If it were. I venture to say that there would have been a number of much more profitable ventures for anyone approaching it from that direction. This was something that came alive under the vision of the Economic Commission for Asia and the Far East, an instrumentality of the United Nations. It was organised by this Economic Commission which set itself up to draw up the kind of bank which I have described and which will, in the Asian scene, with the prudence, initiative and mature experience of men of economic ability lay hold of the potential of this area in such a way that it will win the confidence of the financial world and, as I say, tap the capital markets of the world. This, I hasten to add, is not the only approach in which Australia is involved. It is true that we are a very large contributor to the capital - to the nominal capital, anyway - of this Bank. We rank fourth with the United States and Japan leading the field with a contribution of $US20 million and after that following the great country of India about which I have been speaking. Australia comes next. With the dozen or more countries involved in this, we in Australia, which is a relatively small country and a capital hungry country, have something of which to be proud in that we have been prepared to underwrite development to the extent that we have.
But I should like to go on from there and point out that Australia is giving other forms of economic and external aid which will go pari passu with this to strengthen the countries around us. For instance, I feel that all too many Australians are unaware of the kind of contribution that Australia is making in direct external aid in the form of grants. Since World War 11 the Australian Government has spent more than SA840 million on external aid, and in the current financial year is budgeting to spend more than SA121.5 million. This is ten times the amount of aid that Australia was spending 20 years ago and represents a contribution for every Australian of SAIL In the last financial year aid contributed by Australia amounted to the equivalent of SUS8.5 per head of population. Let me give the background to that because Australia ranks fourth among all the countries in the world in terms per capita of her contribution to external aid. The United States, naturally enough, comes a long way to the fore and then follow, interestingly, France and then Great Britain. Then follows Australia. So Australia is well up to the fore in terms of her contribution to external aid, having spent 0.6 per cent, of her national income on aid during the past few years.
But among the countries which are rendering aid, as one looks through the list one sees that Australia is one of only two countries which have been steadily increasing the quantum of their external aid. Australia and Canada, of all the countries that I have mentioned and others which are in a position to give aid externally, have been gradually stepping up the amount of their aid to overseas countries. Australia is one of only two countries to do so. When we have said that we have not staled the whole position because the other three contributors I have mentioned give their aid in a form which is not as free as Australia’s giving of capital is. Australia is the only major donor giving all its bilateral aid in the form of gifts. Most other countries give a substantial proportion of their aid in loans on which interest payments and capital repayments must be made. Australia, for the vast part of her contribution, asks for no return, so no burdens are imposed on the foreign exchange holdings of the countries receiving aid. That applies to this specialised field in which Australia has gone so wholeheartedly - the Asian Development Bank. By her contribution of SUS85 million, Australia has become the fourth largest contributor to the Bank. This is exactly in proportion to the kind of direct aid that Australia has been giving to countries less developed than herself. Clearly Australia is not lagging behind in her sensitivity to the needs of other countries.
Nevertheless, I believe we must also face some of the other questions which the honorable member for Cunningham raised. For example, he went on to quote statements by Dr. Han Suyin about revolutionary processes being inevitable in Asia. He interspersed his remarks on the Asian Development Bank Bill with this kind of comment -
Because of certain commitments in Vietnam we have blotted our copybook and are viewed with a certain amount of suspicion in Asia.
From there, he went on to quote references by Dr. Han Suyin to the revolutionary processes as being inevitable, and as being the only answer to the admittedly difficult, indeed dangerously difficult, situation that he painted for us in countries such as India and Indonesia. I recently had the opportunity of seeing how revolution, goes about solving the economic problems of one of the countries that he mentioned. I refer to Indonesia. If there was anything about which I came back disturbed, it was not the military situation in Indonesia. That did not worry me nearly so greatly as this blind adherence to the idea that revolution in itself, of itself and for itself can in some magical way hold a balm to the sore and hurt that is being suffered by the Indonesian economy.
There we had a country which stepped out from under the yoke of what its people called imperialism. It stepped out from a situation of overlordship and rule in the imperial sense by the Dutch, with the brave hope that it would set itself up as an independent Asian country, a proud country of now 100 million people. What has been the result? In Indonesia immediately prior to the coup and counter coup, everywhere one travelled one saw banners and headlines, especially at the time of the Afro-Asian Islamic conference. That conference, which allegedly had a religious basis, attracted political slogans on all sides in Indonesia. There was talk everywhere of the great revolution that was being pursued. Indeed, when I came back I had formed the opinion that what was happening in that country was not so very much different from the primitive cargo cult outlook of Papua and New Guinea.
If we transpose the situation I suggest we get something like this: Here was a country faced with the hard, long grind of establishing herself industrially and economically in the modern world. I believe that Indonesia, challenged by this tremendous step forward’, turned her back on it and began to mouth these meaningless incantations about revolution. Like the exponents of the cargo cult, the Indonesian apparently believed that if they screamed “ revolution “ loudly enough and long enough, if they went through all the exercises .of revolting and confronting, shouting slogans such as “ Ganjang Malaysia “, then, somehow, in a magical way there would come out of this a strong brave new economy with all the answers to the people’s needs. But what happened? Certainly they screamed “ revolution “. They made a noise in the world, and cargoes certainly did seem to come. They came from Russia, from China, from the United States of America, and’ from many other places, in the form of elaborate buildings and new roads in Djakarta, in the form of stadiums and department stores, and in the form of elaborate facades which had nothing of substance behind them. So, when the testing time came, all the talk of revolution amounted to precisely nothing because hunger went hand in hand with it.
The rice situation became more desperate. Prices rose alarmingly until Indonesia was faced with economic collapse. In the year when 1 was there the country was earning SUS500 million in external exchange. Of that SUS500 million, she was budgeting to spend SUS120 million stocking one huge luxury department store. This crazy outlook is the kind of thing that comes out of the mouthing of the cry “ revolution “ in the old pedantic, pedestrian, doctrinaire, Marxist way; the kind of way which, as Marx said originally, convinces people that if they go on with this dialectical process of revolution, confrontation and clash, out of it, in some miraculous unexplained way, there will come about a brave new world.
This, I believe, is utter nonsense. It does not hold the answers for the future and it is not the inevitable process that will be worked out in Asia. I do not believe that this revolutionary process holds the shadow of an answer for the countries of which we are speaking. I believe that the only answer for those countries is, as Nehru said, for them to get down to work and to develop their own resources. In India today land used for wheat cultivation is producing an average of two bushels per acre compared with 30 bushels in Australia. The soil has been so exploited over the centuries that today dust bowl after dust bowl is developing and the whole future looks indeed bleak unless there is massive application of superphosphate and other fertilisers. But where can the people of India find the means of revitalising the soil?
I agree completely that the whole situation is bedevilled by the religious and quasireligious background. Cattle roam without let or hindrance amongst the crops and, as the honorable member for Cunningham said, the final stupidity is the use of the dung for burning instead of revitalising the soil. Consider the economic problem that confronts this enormous country, this hinge country, the only country which has a population balancing out in any kind of way the development of China. There are 12 million more mouths to feed every year, to say nothing of educating these children later. To apply superphosphate to the farm lands of India at the same rate as it is used in Japan, would take more superphosphate than is available in the entire world. This is the mammoth kind of problem that confronts us in the future.
What are we to do? Are we simply to say that the only way out of this is revolution? Revolution for what? In which direction are they to turn? In which way are they to revolve? Are they to be continually spinning on the one spot or are they to go places? Are they going to develop a plan? If so, what is to be the basis of that plan? I believe that this is the kind of thinking which should be developed through the United Nations Economic Commmission for Asia and the Far East. The thinking should be directed towards putting the Asian people into line with prudent economic work and planning. This is one method which, taken hand in hand with the other things I have mentioned, will enable coun tries such as India and Indonesia themselves to work out on their own soil, within their own boundaries and with their own resources, the kind of things that will make them proud, equal members of the world community of the future, in both an economic and an international sense.
I find in this Bill the means by which this sparsely populated country of Australia can add one more chapter to the long story that I have mentioned - a chapter of which we in Australia know too little but of which we should be very proud, a chapter in which we occupy a position amongst the foremost donors, per head of population, to the needs of the underdeveloped countries. We are giving aid in this specialised field. Admittedly we are not giving all the aid that is necessary to meet all the requirements of those countries, but we are giving it with the intention of establishing integrity where in the past there has been mistrust, and of establishing fair dealing and honest scrutiny where in so many places in Asia there have been corruption and suspicion. In this kind of way - not through the mouthing of revolution but through the steady planning of an economy - we in Australia are adding a very important chapter to the story of the development of our neighbours.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr. Howson) read a third time.
CUSTOMS TARIFF BILL (No. 2)1 966. In Committee.
Consideration resumed from 27th April (vide page 1265).
Tariff Amendment 10.
.- I propose to move as an amendment -
Omit the Tariff Amendment.
This concerns peas and beans and the Opposition is opposed to the proposals included in it.
Strictly speaking there is no need to move an amendment. What the Opposition should do is to vote against the Tariff Amendment being agreed to.
.- The Opposition proposes to vote against the adoption of this tariff amendment. I take it from your remarks, Mr. Chairman, that if we vote against the adoption of this Tariff Amendment that will be sufficient to indicate our opposition to the reduction of duty on beans and peas. Sub-item 07.02.1 refers to beans and peas that are preserved by freezing. It is proposed that there shall be a gradual phasing out of duty on frozen peas and beans. This phasing out process v/ill be accomplished in five stages, with the duty being reduced by 20 per cent, of its present level at each stage. The first reduction is to take place on 1st January 1967, one year after the Agreement commenced to operate in January 1966. Subsequent reductions will take place biennially, the duty being totally eliminated nine years after the entry into force of the Agreement. With dehydrated peas - and this is another provision that the Opposition will vote against - the duty will be phased out in a similar manner, but the first reduction will take place from 1st January 1966, the duty being eliminated after eight years.
I do not intend to canvass the arguments advanced by the Opposition and by myself during the second reading debate. We have indicated our strong objection to any phasing out of the duty on frozen peas and beans and have mentioned the various reasons advanced by the industry for opposition to the proposal. It is important to note that we believe the phasing out of the duty will do great harm to the industry in Tasmania where 60 per cent, of Australia’s requirements of frozen peas and beans are grown. As I mentioned last week, New Zealand enjoys a far better climatic range for the growing of peas and beans than does Tasmania. This is borne out by surveys that have been made from time to time. Although Tasmania’s climate is favorable to the production of vegetable’s for processing purposes New Zealand has a climatic advantage, particularly because of its consistent and regular rainfall. In Tasmania irrigation is necessary and consequently production costs are fairly high. This is a problem that we are up against in Tasmania. New Zealand also enjoys an advantage with regard to the wages paid in the industry. In Tasmania the wage paid to a worker engaged in the industry is £17 2s. 6d. a week whereas in New Zealand the wage, converted to Australian currency, is £13 5s. Od. - a differential of almost £4 a week in favour of the New Zealand farmers. Because we are closer to the main market of Sydney we naturally thought we would enjoy a freight differential in our favour, but this is not the case. The freight rate from the northern ports of Tasmania to Sydney for frozen processed vegetables is 217s. a ton whereas from Auckland to Sydney the rate is 222s. 6d. a ton, the difference being only 5s. 6d. The farmers in Tasmania considered that whereas they would miss out on the one differential they may pick up on freight rates because of their nearness to the Australian market. But they find that this does not work out.
The economic minimum farm size in Tasmania is considered to be 150 acres. Yet 53 per cent, of the farmers in my State are living on farms which are considered to be below this minimum economic acreage. Those farmers are assisted by this very valuable cash crop which is in production for about 15 weeks. As I said the other day, and as I have always maintained, these people are entitled to as much protection as they can get. I feel that if the Government is not careful and something happens to this industry the drift of our population to the towns will be accentuated again as it has been in the past. I want to point out that in the last 15 years the number of farmers in Tasmania has decreased by 50 per cent. That is an alarming percentage. In the last 10 years the number has decreased by 25 per cent. I think that all those who are interested in the development of Australia must do everything possible to assist these people. If we do not do something to assist the man on the land who is working on these small farms, and if we do not stop the drift of our population to the towns, which is occurring all over the place, then I think we can look for some repercussions on the economy of this nation.
For all these reasons the Opposition considers that the industry should not be faced with an open go from the New Zealand producers. We say that, also, for the various reasons that have been canvassed in this House before. We have found that this is a very valuable industry. It is worth a great deal to the growers. The pea crop is worth about £li million to the Tasmanian farmers out of a total cash crop worth £5J million. That alone indicates the financial value that this crop is to the people. In 1964-65, 918 growers produced this crop and at the present time it is a rapidly expanding industry. Tasmania grows this particular crop on about 16,000 acres. The Tasmanian Department of Agriculture has proved, after surveys were taken, that there are at least 32,000 acres of suitable land on the north-west coast of Tasmania which could be used for this crop. So there is ample room for expansion and the Tasmanian growers do not want any competition from New Zealand, or anywhere else, if they can possibly avoid it.
This industry is important to these people. Over 1.000 factory workers who are engaged in the industry earn almost £1 milllion a year. In addition there are several hundred permanent factory employees and more than 100 people working for the factories in the field. Then there are all the subsidiary industries. Payments for the containers for this product, which are of Tasmanian origin, were worth almost £700,000 last year. Then of course there are the transport services engaged in the carting of the peas to the vining stations, and then from there to the factories which later despatch the packaged peas to the wharves. The transport services alone earned almost £500,000 last year.
Numerous representations have been made to the Minister for Trade and Industry (Mr. McEwen) on this subject and the Opposition does not intend to canvass the whole matter. It is all right to say that the industry will not be harmed this year because this tariff amendment we are discussing - the first amendment relating to item 07.02.1 - will not operate. That is quite true. But in the next eight years this tariff protection will be phased out and in the ninth year the industry will be faced with open competition. It is for this reason that a great deal of concern is felt Speakers on the debate on this measure last week said that the Opposition was making a fuss about imports from New Zealand and asked why we did not make a fuss about imports from the United States of America. I think that the Canning Pea Growers Association of Tasmania has made representations at all times for this question of imports from New Zealand to be investigated. The figures available to us indicate that imports from New Zealand have risen from about 45 per cent, of our total imports of frozen peas and beans to 52 per cent, last year. The Opposition fears that once the phasing out period has passed growers will be faced with open competition from New Zealand. Despite all the provisions that are contained in the New Zealand-Australia Free Trade Agreement, we feel that there is insufficient safeguard in order to protect the pea and bean industry in Tasmania.
– What price do the Tasmanian farmers get for peas?
– They average about 5d. a pound. It is impossible to say to these Tasmanian growers that they should become more efficient in order to withstand this competition. I say that because these people have not had a price rise for the last five years. By becoming more efficient they have been able to absorb all the increased costs while receiving the same price from the processors for the last five years. The Opposition feels that these growers have made a valuable contribution to the economy of Australia, lt is a small man’s industry. Most of the production is carried out on small farms of from seven to ten acres. This crop is a very valuable source of revenue.
– Order! The honorable member’s time has expired.
– First, I wish to say that I owe honorable members an apology for not having been present during the second reading stage of the debate. I was Acting Prime Minister at the time and there were matters that commanded my attention. I apologise for not having been present previously because, although I am not in charge of this matter, I am responsible for policy relating to it. This item now under debate gives expression to one part of the New Zealand-Australia Free Trade Agreement. Although it comes before the House not as part of that Agreement but as part of the tariff schedule, in fact it is inviting the House to confirm one aspect of this Agreement. This Agreement was not negotiated in any haste or secrecy. It was negotiated over a two year period during which I was present in the House at all times to be questioned as to the trend that negotiations were taking. There were debates, there were consultations. 1 do not wish to lead anyone to believe that I went to every industry and said: “ Would you like us to reduce the duty on your products? “ I knew perfectly well what the answer to such a question would be. It was for me to form a responsible judgment, after consultations, as to whether a reduction of duty in a particular instance would harm a particular industry. While it is inevitable in trade negotiations that bargaining will take place, I say straight, as I have said many times before, that I have never bargained in the past, nor will I do so in the future, for harm to one industry in order to gain an advantage for another industry. If a duty on the product of one industry is reduced on my initiative it is because I have formed a conclusion, valid or not, that no harm will come to that industry from such reduction.
It was well and widely known over a protracted period that these negotiations were going on. The Agreement was signed last August. The Parliament was informed that it was signed and the new tariff schedule was brought in on 1st January 1966. As I have said, this legislation ratifies the tariff changes. The Agreement was of such a character that it was necessary for us to approach the General Agreement on Tariffs and Trade, in which about 60 nations are represented, explain the full purport of the agreement and seek the approval of G.A.T.T. We did this not on behalf of the Department of Trade but on behalf of the Australian nation. It would be quite a serious matter for Australia if the Parliament now were to abrogate the Agreement - which it has not shown any signs of wanting to do - or to mutilate important parts of the Agreement. I am not arguing that even this should not be done if the Parliament were convinced that very serious harm to Australian interests would result, but I am inviting the Parliament to satisfy itself fully, before it mutilates trie New Zealand-Australia Free Trade Agree* ment, that serious harm would be done to an industry.
New Zealand is our biggest market for manufactured goods. The value of our sales to New Zealand in the last three or four years has increased by, from memory, about £17 million. New Zealand is a very good customer of ours and its purchases give employment to a great many Australians. This Agreement is designed to do no harm to any industry in either Australia or New Zealand but to do good to a whole range of industries in both countries.
Let me turn now to a particular item Iq the Agreement, frozen peas. Let us have a look at the change in volume of local production of frozen peas, in an atmosphere in which a trade treaty was impending and when it was known that such a treaty would probably provide for a reduction of duty on imported frozen peas. The fact is that local production has been going up. I cannot think of any Australian farm commodity the production of which has increased in the last year or so at such a rate as the production of frozen peas has increased. In the last statistical year, 1964-65, production of frozen peas was 50 per cent, higher than it was in the previous year. This shows a degree of confidence in the industry, and I am able to tell the House that the Secretary of the Canning Pea Growers Association of Tasmania has informed my Department that contracts have been renewed with the processors for the coming year at the same price and for approximately the same acreage as were involved in the previous year’s contracts - and this is with a knowledge that the New Zealand-Australia Free Trade Agreement is now in operation. So it cannot reasonably be argued that there is any danger impending for this industry when the processors have readily negotiated contracts for the coming year.
– That is only for this year.
– That is only for this year, but the Agreement is in operation and the processors, I do not know with what validity, have constantly affirmed that they import to make good the short-fall in Australian production. This is what they say, and I have no reason to believe that it is not valid because they have overwhelmingly sought to procure peas on the local market before importing from New Zealand or from the United States of America. I remind the House that New Zealand is not and has not been our biggest supplier of imported frozen peas. The honorable member for Wilmot (Mr. Duthie) was in error in a figure he quoted and I will give my figure from the official records in a moment. However, I can give figures for the last full statistical year showing the measure of competition. Local production of frozen peas amounted to 57 million lb. and total importations of frozen peas from all sources amounted to 5i million lb. Of this, speaking in round figures, 2 million lb. came from New Zealand and 3 million lb. from the United States. No other country is a significant supplier.
There has been a sliding scale of duty and it was believed that American exporters took some advantage of a device that I will not bother to describe to the House, but the result has been that there has been an alteration of customs regulations to prevent the United Stales exporters from taking advantage of an invoicing situation in respect of which court proceedings are, I am told, at present in train. One could expect from this that importations from the United States will fall. Eight months of the present financial year have gone by, and whereas in the previous full year a total amount of 2 million lb. cf frozen peas was imported from New Zealand, in the eight months of this year the amount imported has been only 900,000 lb. In the previous year the United States sent us 3 million lb. of frozen peas but the total quantity coming from that country in the first eight months of this year has been only 1,200,000 lb. So the trend of local production is upward while the trend of importations is downward, particularly the trend of importations from New Zealand. If the processors wanted to lean heavily in the future on supplies from New Zealand I should think they would gear themselves to New Zealand production and try to keep New Zealand producers in business by importing from that country as they have been free to do under the existing tariff schedule. But this is not what is happening.
Honorable members can name any industry they like; if the total importation of the product is very much less than 10 per cent, of the market this should not represent a threat to local production unless the price of the imported product is distortedly low. No-one has ever suggested that the landed cost of imported frozen peas, or the possible landed cost in the future, is distortedly low.
These are the facts which give me confidence in defending before the Parliament this trade treaty. I can say, as I have said in defending other trade treaties, such as the treaty with Japan, that the fears - which I quite comprehend - entertained about damage to a local industry resulting from a concessional arrangement with an overseas supplier of an item which is produced in Australia have been the subject of exhaustive study extending over a couple of years, and I have complete confidence that no serious damage will be done to the Australian frozen pea industry. Our per capita consumption of frozen peas is about half the per capita consumption in New Zealand and in the United States, and I expect the trend of local production in the last year, which has resulted in a 50 per cent, increase, to continue and to be accentuated. Opportunities for Australian producers of peas will expand. As I have said, I can think of no other agricultural item the opportunities for which have expanded as fast as has been the case with the item under discussion. The total local market is now more than 60 million lb. and imports in the first eight months of the current financial year amounted to 2 million lb.
This is not a picture of calamity. This is not a situation in which the Australian Parliament ought to put itself in the position of abrogating part of a trade treaty and arousing bad feelings in New Zealand against Australia, Mr. Chairman. I am sure that all members of this Parliament, whatever may be their political affiliations, want good relations with New Zealand, as I do. Anything that we contemplate doing to obstruct New Zealand’s trade opportunities in this country ought to be based on a sound factual premise. But that is not the situation in this instance. As I have said, contracts between processors and growers have been negotiated, not under any protest thatI have heard, for a price this year the same as that of last year and for a quantity approximately the same as that of last year. I have heard not one syllable of protest about this. So I hope that the Committee will not change the rates of duty provided for in the Schedule, which, asI have said, is designed to give expression to an important part of the New ZealandAustralia Free Trade Agreement. New Zealand is a country with which we ought to cultivate closer associations, for it makes a tremendous contribution to the Australian economy since it is the largest purchaser throughout the world of Australian manufactured goods.
Finally, Mr. Chairman,I remind the Committee that in the Department of Trade and Industry, since the Japanese Trade Agreement was entered into, we have established a system under which any industry that claims that it is in trouble or fears that it could get into trouble as a result of imports is invited to establish an industry panel. To that panel, the industry may appoint whomever it likes and as many members as it wishes. The panel can keep in touch with the Department and ask for information about any trend or any fact of local or overseas concern. The study of this material brings to light evidence of trouble before the trouble arises, if it is likely to occur. I now say to the producers of peas that they ought to take advantage of this kind of standing arrangement. They ought to establish a panel for consultation, not wilh me, but with officers of the Department. If this were done and if there emerged evidence of any trend damaging to the industry as a result of this Free Trade Agreement, we would have early warning of it. I remind the Committee that on previous occasionsI have explained that the Agreement does not forbid the Australian Government from taking appropriate steps to protect an Australian industry from serious damage by New Zealand imports.
.- Mr. Chairman, the speech just made by the Minister for Trade and Industry (Mr. McEwen) will do nothing to remove the chill that has gripped the hearts of the farmers who will be affected by the new rates of duty proposed in the item that we are now discussing. The producers of peas and beans will be greatly affected by the proposed rates. I have no personal knowledge of the situation in Tasmania, but I was much impressed by the speech in which my friend, the honorable member for Braddon (Mr. Davies), so well put the case on behalf of the producers. I am concerned particularly about the producers in Queensland, especially those in the area immediately to the north of Brisbane. Many farmers in that area produce peas and beans. They engage in mixed or diversified farming and do not depend entirely on one form of production. Earlier, the Minister for Trade and Industry, discussing exports, mentioned the difficulties facing dairy farmers, particularly in relation to butter. I am aware of those difficulties. In some parts of Queensland, the dairy industry is very inefficient and some dairy farmers have been compelled to turn to other forms of production. One locality readily comes to mind. Some four years ago, there were 1,000 dairy farmers supplying cream to the butter factory at Kingaroy. Today, the number is down to 300, because dairy farmers are turning to other forms of production.
In the Gympie area, to the north of Brisbane, the production of peas and beans constitutes a quite large industry. This form of production is undertaken in association with other forms. The report submitted by the Department of Primary Industries in Queensland to the State Minister for Primary Industries for the year 1964-65, refers to the efforts that are being made to promote the production of peas for processing in the area immediately to the north of Brisbane and goes on to state -
Pilot plantings (about 200 acres) of peas for processing in 1964 proved satisfactory. . . . The 1965 target amounted to 1,000 acres but this had to be scaled down because of restrictions on the use of water for irrigation.
For a long time, Governments of different political colours in Queensland have been expanding the State’s irrigation system. As is pointed out in the report of the Queensland Department, irrigation is used largely in the production of peas and beans. Let me just illustrate how the use of irrigation for this purpose is progressing. In 1958-59, 26,597 acres of irrigated land in Queensland were devoted to the production of vegetables. By 1962-63 - the latest financial year for which figures are available in the statistics provided by the Commonwealth
Statistician - the area had grown to 34,258 acres.
Under the terms of the New ZealandAustralia Free Trade Agreement, the duty on imports of peas and beans from New Zealand will be phased out over a period. There will be a further reduction of duty next year and in succeeding years until the existing duty is completely removed. This means that farmers who have committed themselves to heavy capital expenditure and have supported the Queensland Irrigation and Water Supply Commission in its efforts to provide water for irrigation will have to turn to other forms of production. The production of both peas and beans in Queensland has been steadily increasing, and the producers are entitled to protection. It is a sorry thing for us to be discussing a proposal to reduce the degree of protection that a significant section of primary producers has enjoyed for a long time.
I am afraid that the farming community is most concerned about prospects for the future. This Agreement is a live topic in Queensland and the interest displayed in it by farmers some months ago should cause concern to Government supporters, particularly the Leader of the Country Party. I refer to the recent voice of the people as expressed in the Dawson by-election. I regard the result in Dawson as a vote by the farming community more than any other section against the Government for its callous disregard of the welfare of the farming community in that area. Last week we debated the Government’s action in reducing the duty on imported pig meat, another product of the farms of my State. Now the Government is going further and legislating to reduce the duty on imported peas and beans. I have been most concerned by the Government’s proposal. I speak out, not because there is a farming community in the city area of my electorate of Griffith, but in a desire to see fair play and as one who has been reared in a primary producing area. 1 am well aware of the hard life endured by the farming community, due to the vagaries of the weather and because of other troubles that beset them from time to time. The Government’s proposal is a blow below the belt to this very worthy section of the community in Queensland. I know that the farming community of Gympie will be most concerned about this matter. I feel that within a month or so they will have expressed themselves as the people of Dawson did.
.- The honorable member for Griffith (Mr. Coutts) has spent his time in this debate playing politics with an eye to the forthcoming State elections in Queensland. This is all he has done. He has produced some obtuse arguments to try to support Labour’s case in the Queensland elections. I am sure that the people of Queensland, if they are listening to the debate, have more sense than to pay any heed to the remarks of the honorable member for Griffith.
The Minister for Trade and Industry (Mr. McEwen) dealt effectively with the arguments against the importation of New Zealand peas and beans. The honorable member for Braddon (Mr. Davies) claimed that the farmer would be badly damaged if the duty on New Zealand peas and beans coming into this country were removed. It was noticeable that in his remarks he quoted the views of such organisations as the Pea Canners Association-
– The honorable member is wrong.
– Notwithstanding which organisations the honorable member referred to, let us turn to his submissions. By way of interjection, I asked him how much the farmers were getting for their peas which were marketed as frozen peas and he courteously replied that they were getting 5d. per lb. I know from my own experience that farmers are getting about 3id. per lb. for their beans. That is the price the farmer gets for his product off the farm into a truck to Melbourne, freight paid by the companies doing the snap freezing. That is not the net price to the farmer. Do not think the beans are weighed as they come out of the paddock, the farmer getting 3id. per lb. The beans are transported to the factory, graded and assessed. The price to the farmer is discounted for lack of quality. There may be too much leaf or, if it has been raining, too much dirt. The farmer gets 3£d. per lb. less 10 per cent, or some other percentage, which in the view of the company should be taken off for lack of quality. I do not think the honorable member for Braddon can claim that the Australian pea or bean farmer will be damaged by the importation of New
Zealand peas or beans when the New Zealand price f.o.b. is ls. 10id. per lb.
– Correct: 2s. 2d. landed cost. These facts suggest to me that the Australian processors of peas and beans may have some argument to raise on the score of efficiency and their competitive ability as compared with the New Zealand companies, but the argument that the importation of New Zealand peas and beans will damage Australian farmers falls to bits. I do not need to go over the ground covered by the Minister for Trade and Industry. He referred to the protection available to the pea industry should it feel at any time that it may be damaged. I want to make those points.
.- We are very grateful that the Minister for Trade and Industry (Mr. McEwen) has entered the debate. We commenced to debate this Bill last week, but we did not have the pleasure of the Minister’s presence at that time.
– Fair go. He has already apologised.
– I am not criticising the Minister. This Bill was debated at length last week. The honorable member for Gippsland (Mr. Nixon) entered into the debate viciously. The honorable member for Braddon (Mr. Davies), the honorable member for Grayndler (Mr. Daly), the honorable member for Bendigo (Mr. Beaton), the honorable member for Lalor (Mr. Pollard) and I also look part in the debate. Now the Minister has entered the debate. We were glad to hear him this afternoon. Although we listened to a stirring speech in defence of the New Zealand - Australia Free Trade Agreement as it relates to the importation of New Zealand peas and beans, I still feel that there is something about the Agreement that is not completely convincing. The Minister cited authentic figures, claiming that we produced 57 million lb. of peas and that we import 5i million lb., about 3 million lb. coming from the United States and about 2 million lb. coming from New Zealand. On those figures it would appear that about 38 per cent, of our imports of peas comes from New Zealand. But in a letter dated 25th March this year, Mr. Brian Bonney who lives in Latrobe in my electorate, and who is Secretary of the Canning Pea Growers Association of Tasmania - the honorable member for Gippsland please note - said that of the total value of imports of frozen peas and beans and other vegetables from all sources into Australia, 52 per cent, came from New Zealand.
– The honorable member ls referring to value. That must make New Zealand peas very dear if only two fifths of our imports come from New Zealand. You cannot be damaged by dear competition.
– That is what I am getting at. I ask the Minister: Does the Agreement control the price at which New Zealand will land peas in this country? Suppose New Zealand wanted to get into our market in a big way and for a few years made maximum use of the Agreement in order to put peas on the market at a lower price. New Zealand could subsidise her growers.
– The honorable member is describing dumping and there is complete protection against dumping in the Agreement.
– I think that is what I was describing. I have just had it straight from the Minister’s mouth that Australian farmers who grow peas and beans are protected against dumping by New Zealand. Dumping is concerned with low prices. I am glad to know that the protection is available. The Minister also said, quite reassuringly, that the processors in Tasmania have signed up with the growers for the next 12 months. That is true. He also said that this is at a satisfactory price. That is true. It is also probable that the acreage will be increased. But he is speaking of a situation that exists only a few months after the Agreement was signed. I wonder what the processors will do with the Tasmanian growers in three or four years’ time or even in five or six years’ time when the duty has been reduced so much that it has almost been phased out.
– Surely the honorable member will not abrogate a treaty on the basis of what he fears will happen in five of six years’ time. That is very serious.
– That is the test of it. But, in my opinion, the New ZealandAustralia Free Trade Agreement is very hazy on this point. When the duty has been phased out and when we have no protection at all, how will the growers compete with the increased imports from New Zealand? This will be the position in eight or six years’ time. I think that the Minister should have acted in this way: If he wanted to, he could have reduced the duty to a certain level and left it there, but he should not have planned to phase it right out and destroy our protection entirely. When the duty has been removed completely, we will be open to wholesale competition from thu New Zealand growers of peas. The New Zealand pea is remarkable. It is most acceptable, especially the “Surprise” pea. This pea is made by a special process, which is not available to us in Australia and which we cannot get without stealing it from Mew Zealand, and we do not want to do that. We will need to improve the quality of the Tasmanian and mainland peas if we are to compete with the peas from New Zealand. The Tasmanian farmers have read the Agreement carefully, They have carefully read all the Minister’s speeches and, if they can, they will listen to the debate today. If the debate is reported in the Press, they will read the Press reports with interest. They read the Minister’s statement of 26th August last with considerable interest. But they are still not absolutely convinced as to its merits. Most of them are not Labour supporters at all. They are supporters of the Government, but they are still concerned and they are still afraid. We on this side of the chamber express their fears quite sincerely. I know that the Minister is sincere in his defence of the Agreement, but we must wait for five or six years to learn who is right. At this time, we cannot say who is right.
– The honorable member has found that he was wrong about the Japanese Trade Agreement. He voted against it.
– I was not here at the time. 1 was home sick when the vote was taken on the Japanese Trade Agreement in 1957. I want to make this quite clear. I had a breakdown in 1957. I was at home receiving treatment from the doctor for six months and I had leave of absence from the Parliament for the whole of the Budget session in 1957. I am not joking about this.
– Does the honorable member agree with his party’s stand on it?
– I am in favour of that Agreement. My colleagues can put me out of the Party if they like. After all, we on this side have some right to express our personal views in the Parliament, even if honorable members on the other side have not.
– Order! Some allowance is made during the debate at the Committee stage, but I think it would be a good idea if we returned to the point before us.
– Mr. Chairman, you must admit that your colleagues have been most provocative. We appreciate the Minister’s sincerity, but, despite the facts he has given us, we are still convinced that the testing time will come in the next few years. We will then find whether the Agreement can and will protect the growers or whether it will be disastrous for them.
– Is that not the time to yell?
– We have every right to point out the dangers in every agreement that comes before the Parliament, whether the dangers will come in six months or in six years. I think that is only right. Honorable members in the present Government parties did this when we were in office. We believe that there are dangers in the Agreement and that the Government has not answered our submission. We have taken a stand on behalf of the hundreds and hundreds of growers in Tasmania, who grow an excellent product and who depend on the pea crop to offset losses they incur in growing other primary products.
.- I accept that the Minister for Trade and Industry (Mr. McEwen) was unable to be here during the second reading debate on the Bill. However, he has come along today and participated in the debate at the Committee stage. As is his habit when he meets with opposition to anything that he believes in, he has become very dramatic. He spoke about mutilating and abrogating the New ZealandAustralia Free Trade Agreement although he knows full well that the parties to the Agreement, at the time they signed it, were aware that the amendments to the tariff schedules arising from the Agreement still had to run the gauntlet in this Parliament. No blame can be attached to any honorable member if his speeches against the amendment of items in the tariff schedules result in one of the signatories running out on the Agreement. The Minister said that he met various sections of the industries interested in the Agreement, but did not find any objections to it. This is strange, because I produced correspondence from the processors who form the manufacturing side of the pea industry.
– That is not what I said.
– The Minister said he conferred with people, but did not find difficulties.
– I reached a conclusion.
– .1 correct my comment. The Minister reached a conclusion. But, of course, he reached a very poor conclusion based on insufficient information. During the second reading debate. 1 produced correspondence from the manufacturers, who are united in their opposition to the Agreement. I produced correspondence from the Victorian Branch of the Australian Primary Producers Union and I produced correspondence from the Victorian Chamber ot Manufactures. The only people from whom 1 did not get any correspondence were the Central Executive of the Australian Labour Party and the trade unions, who, above all others, would have some reason to support the Agreement. But the Australian Labour Party has always supported the people generally, and especially those who may be subjected to some injustice. lt is all very fine for the Minister to say that the imports will be infinitesimal, lt is true that they are small. But on the other hand the Minister has pointed out that the Australian industry is growing. It certainly is. lt deserves to grow, but, during its period of growth - that is a term generally used by the Minister - it is proposed to ease the way for more imports to come from New Zealand. Of course, imports come also from the United States of America, and it is to the Minister’s discredit that he did not stop these imports of products such as peas long ago. But the way will be eased for more imports to come from New Zealand. If this is not so, why is the duty on peas and beans being reduced? Why has a small segment of primary producers been selected for this treatment? They are producing a most valuable commodity that is increasing in popularity with the consumers every day. It ii> a credit to the processors. The Minister has argued that the imports are really small and therefore cannot adversely affect the Australian producers. But the situation is serious for producers of a particular primary product in a particular district. Let us consider the Werribee district or the district at the foot of the Blue Mountains. Take any geographical situation where peas or beans are grown. Take for instance the Gippsland area, where beans are grown. The producers in these areas have formed a business liaison with the processors who give them the highest price they can and the most satisfactory deal. Invariably that liaison is formed because of the situation of the particular processing factory, lt is within the bounds of possibility that a very shrewd processor, such as Gordon Edgell Pty. Ltd. at the foot of the Blue Mountains, or somebody somewhere else contiguous to the source of production, may suddenly get the idea of importing a substantial parcel of green peas or beans or frozen peas from New Zealand, process them and retail them out from the factory. The moment the processor brings in this large parcel to his factory he is in a position to bargain with his producers. The producers may ask him what price he is going to pay them. He may have been paying them 2d. or 3d. per lb., or whatever the figure may bc. but having imported these peas from New Zealand he will tell the producers that he has on his hands substantial imports of peas or beans and that therefore he will not be able to pay them a very high price. He may have thought that the season was going to be bad. However, as the result of late rains the producers may have had a magnificent crop. Notwithstanding the position of the producers the processor will say to them: “ That is all very nice, but I am up for so much on these peas or beans and I can only afford to give you a lesser price “. That is the result of the impact of a particular geographical situation at a particular time.
It is interesting te have a look at this Agreement and to have a look at the modus vivendi adopted by the Minister and by the
Government. They did not do anything about butter, though they did hurt the dairying industry by doing something about pigs. The example 1 have given applies with regard to the impact on pigs. I do not want to get away from the subject matter of this legislation but I emphasise that the Government did not touch butter because it knew that the butter producers are very strongly organised. Australia produces 200,000 tons of butter a year and exports about 1 30,000 tons. It would not have mattered if 3,000 or 4,000 tons of New Zealand butter had been allowed to enter Australia. The effect would have been infinitesimal and would not have been likely to have affected the position of butter producers. However, the Government did not do anything about butter. It selected weak people, people who are not strongly organised.
– Order! I remind the honorable member that that matter was debated previously.
– I am only making a comparison. 1 am endeavouring to keep to the subject matter of the debate. The Minister for Trade and Industry practically made a second reading speech on this during the Committee stage. However, I bow to your ruling, Mr. Chairman. As a sector the people producing peas and beans in this country are little people, just as other groups are comparatively small. I will not categorise these others, or single them out but organisationally they are very weak. There are other producer organisations such as the dairy people who are very strong indeed. The point I make is that the pea and bean producers have been severely victimised.
Have no doubt about it, there is a vast amount of capital invested in this industry in Australia, which can be adversely affected. 1 am not a pea grower. I have a remote association with this sort of agriculture because 1 have a vast population of market gardeners in my constituency depending on market gardening and pea growing, as well as farmers who grow peas in very large quantities. So highly specialised is the industry that processors have imported very large machines which are so expensive that individual pea or bean growers would not be able to buy such machines. These machines range over a fairly wide area. I saw one of those huge machines pass the gate of my old farm at Woodend two or three months ago. It had been down in the slightly higher rainfall area a’. Trenton in the rich volcanic country where the man operating it had pulled up some peas with this great machine. No doubt he had processed them and they had gone down to the factory to be converted into the finished article.
The industry is stretching its operations far and wide and now suddenly it is slapped in the face with this legislation. I am not a bit impressed by the case put up by the Minister. Because somebody in this country - General Motors-Holden’s Pty. Ltd. or somebody else - can get an enlarged market in New Zealand, as a recompense to New Zealand the pea and bean growers are to be thrown to the wolves. We might say that they are to be thrown to the pigs, because at some particular time at a particulary factory their peas might not be accepted. Although I am putting up a case for the manufacturers as well as the growers, everybody knows that the people who run processing factories can be tough. They are hard bargainers and when they know that a primary producer is up against it with a rapidly ripening crop, or is facing some difficulty in connection with the quality of their crop, they can be ruthless. Who can be more ruthless than the man who buys? I cannot imagine the processors in such a position being soft any more than 1 can imagine the right honorable gentleman being kindly to a bloke who is drought stricken. If the right honorable gentleman wanted some good store sheep he would strike a hard bargain, though he might throw in another threepenny bit on some ewes. This is how the pea grower is jammed, and can be jammed.
After all, why is the Government offering this inducement to New Zealand if it is practically worthless to New Zealand? This is the treacle that the Government put out on this particular item. Cannot we visualise the New Zealanders saying to themselves: “ The tariff is coming down. Hey presto boys, shiploads of peas for Australia! “ That is the natural corollary, otherwise the Agreement would be completely worthless to them. Why was it offered if it was no good to them? Why was it snatched up if it was no good to them? Why does the Government, if the Agreement does not mean much, put this into it? The Government always sells the little fellow down the drain, and in this case it is selling the big fellow down the drain along with the little fellow. I will leave it at that and await the vote on this matter.
Mr. McEWEN (Murray - Minister for Trade and Industry [5.53]. - I do not wish to speak at length on this matter, but I wish to make a comment on two things that the honorable member for Lalor (Mr. Pollard) has said. He has repeatedly spoken about what we offered New Zealand. He has said that the Government chose this item of peas and beans. The honorable member has been Minister for Commerce and Agriculture and he knows, I am sure, how trade treaties are negotiated. They are not negotiated by one country offering something. They are negotiated by the two parties asking for something.
– I have said that.
– It is not an offer. The New Zealanders asked for frozen peas to be included in this Agreement. We did not select peas and offer to put them in the Agreement. They asked for their inclusion as they asked for other items. It became my duty finally to advise the Cabinet and this Parliament. Using all the skills of which I could take advantage - I mean not my own skill but the skill of others - I had to try to ascertain whether compliance with the requests of New Zealand would result in harm to the Australian industry. The conclusion in this case, as in other cases where lower duties will operate, was that it would not harm the Australian industry.
– Whom did the Minister ask in the Werribee district?
– I did not go down to Werribee.
– Whom did he inquire from down at Orbost?
– 1 would not have inquired from the honorable member, because he has just disclosed in his speech that he knows nothing about the frozen pea industry at all.
– That is very cheap.
– Let me explain how he disclosed this in his speech. He talked as though this industry is conducted on the basis of someone growing a paddock of peas and when they are ready offering them to a processor. That is sheer nonsense. It is not the way this industry is run at all.
– I did not say that.
– The honorable member did say that. His whole speech disclosed that he knows nothing about this industry. This is an industry which is conducted on a contract basis. Now the honorable member is nodding his head in agrement, after I have told him.
– But there is no obligation to continue contracting.
– I remind the honorable member that no-one grows peas for a processor unless he has first been offered a contract or has solicited a contract, been satisfied with its terms and has accepted them. Only then does he put a plough in the ground. The Labour Party is under a misapprehension if it thinks that this is an industry where someone produces the product and then offers it for sale in circumstances in which an avaricious processor could beat him into the ground. He goes along with his eyes open. He has alternative land use. He knows that growing peas is a suitable land use. He negotiates a contract and presumably he is satisfied. If he is not satisfied with the terms of the contract and does not squeal blue murder if he is offered a contract that is unsatisfactory, he is different from any kind of farmer that 1 have ever met. I have had no protest from the pea producers about the terms of the contract which has been offered to them and which they have negotiated.
– You had no protests from the pea processors?
– That is right, no protests.
– What about the next few years?
– The honorable member for Wilmot voices a fear at which I do not sneer. I am too familiar with it as a farmer myself. We can all be fearful of things that may happen to us in the years to come. We know what is going to happen to us this year, subject to weather, but we can be fearful of the years to come, whether we are farmers or not. But I am putting to the Committee the fact that the history of this Government is that it has protected Australian industry, primary or secondary. Whether by stabilisation scheme, trade treaty, trade agreement, credit or rates of interest, industry has been protected. 1 am saying that within this treaty there is an absolute uninhibited right to protect these people and every other Australian industry against dumping. That is the first thing. We are as free as a bird, just as if there was no agreement to protect them against dumping.
There is also the provision that if in unexpected circumstances any Australian industry is being seriously damaged by New Zealand imports, successive steps can be taken. There is provision for consultation between the Governments. The two Governments with good will, as our two Governments have and always will have, can be expected to take some action in those circumstances. But in the ultimate, if an Australian industry is being seriously damaged, the treaty still contains the provision to enable the Australian Government to take the action necessary to protect the Australian industry. I appeal to honorable members not to have it believed in New Zealand that a treaty of this kind will be mutilated. J used that term, and 1 think it was correctly used, but it was not used offensively. I hope it will not be said in New Zealand - a country which although terribly short of exchange, buys from us in some years five times as much as we buy from them, although it is not as wide a range as that now - that we would obstruct them selling to us when they have asked for the right to sell and when it will not harm Australian industry. I hope that will not be said.
Sitting suspended from 5.59 to 8 p.m.
Mr. DAVIES (Braddon) [8.0J.-1 take this opportunity to assure the Minister for Trade and Industry (Mr. McEwen) on some of the points that he raised prior to the suspension of the sitting. I think he was most unfair in his remarks to my friend and colleague, the honorable member for Lalor (Mr. Pollard). I remind him that we have amongst us on the Opposition side men who have grown peas and beans under contract and who can, therefore, speak with some experience of this industry. We have amongst us, too, men who have had to irrigate pea crops during dry spells and who can, therefore, speak with some knowledge about lnc climatic advantage enjoyed by New Zealand, with her regular rainfall, compared with Tasmania, the Slate which I represent. 1 hasten to assure the Minister also that I appreciate the reasons why he was absent last week, just as I appreciate the possible reasons why he is absent now. The Minister said again today that he had taken the industry into his confidence; that he had discussed fully with the representatives of the industry the implications of this Agreement. The people who grow 60 per cent, of Australia’s production of peas and 35 per cent, of Australia’s production of beans do not agree that he took them into his confidence. We have never had from the Minister himself, or through Press statements, any refutation of the leading articles which have been published in the Tasmanian newspapers. 1 have no doubt that the Minister saw those articles because he receives an excellent Press service. 1 refer in particular to articles published in the “ Tasmanian Farmer “, the official organ of the Tasmanian Farmers Federation.
The Minister has visited Tasmania on several occasions. He has even officially opened conferences of the Tasmanian Farmers Federation and 1 know that many members of this organisation are friends of his. I mention these things to emphasise that the “ Tasmanian Farmer “ is not just some obscure newspaper published in an isolated part of the Commonwealth. 1 have no doubt that the right honorable gentleman has had drawn to his attention such articles as the one headed: “ Guilty Conscience “ and another headed: “ Victimisation “. In the second article, the farmers claim that they have been victimised by the Minister’s actions. Another article clearly asserts that the Minister gave the industry two days in which to prepare its case. No doubt my friend, the honorable member for Gippsland, (Mr. Nixon) believes that anyone should be able to prepare a case in two days. Without disrespect to the honorable member, I remind him that these men are not gentlemen farmers; they are hard working people. They had to do a lot of research, prepare facts and figures and at the same time carry out all the work necessary on their farms. I still hold the view that it was a most difficult job, and that it was unfair to expect these men to be able in only two days to prepare sufficient facts and figures to enable them to conduct discussions with officers of the Department of Trade and Industry in Canberra.
– They put up a good case.
– They put up a very good case and they will continue with their efforts to obtain some sort of recognition for their industry. The Minister for Trade and Industry claimed that the Agreement contains adequate safeguards for the Australian growers. I suggest that it is possible that the position has not been explained fully to those people in Tasmania who are interested in the Agreement. It is my belief that many of their fears about the Agreement stem from the fact that they have had no proper explanation of what safeguards are provided. I know that all sorts of Press statements have been issued by the Minister, that the Minister has conducted meetings, in different parts of Australia and offered explanations, but I do not think he has discussed this matter fully with the Tasmanian growers. They entertain certain fears in connection with Article 9 which relates to the temporary suspension of obligations. That Article provides that a member state may make representations to the other member states if it fears injury. I do not wish to canvass the whole of the Agreement but I would point out to the Minister that the full implications of Article 9 have not been explained to the Tasmanian growers. After hearing what the right honorable gentleman had to say late this afternoon, I think they may have some justification for their fears.
The Minister is very proud of this Agreement. He has concluded it after exercising a great deal of his usual vigour, determination and ability. We give him full credit for that, but we in Tasmania fear that, despite any representations that might be made to him, he will not be inclined to do much for a small industry such as this which affects only the north west coast of Tasmania - a very small part of Australia indeed. 1 can understand the fears of the Tasmanians that the Minister might feel that this industry is not big enough to warrant special consideration over all the industries covered by the Agreement.
Article 10, which relates to dumped and subsidised imports, provides that if one member state gives the other member state written notice that in its opinion goods are being dumped then the member states shall consult together. The important point to note here is that sixty days must elapse before the Agreement -may be suspended. Following suspension, the Special Advisory Authority will hear the complaint of the member state and then make a decision within four weeks. This means that a total period of three months will elapse after the giving of notice. It would seem, therefore, that nothing can be done for an aggrieved member state for three months. As the pea and bean season lasts for only fifteen weeks, I suggest that the fears of these producers are well grounded.
Another criticism expressed by the people whom I represent relates to the provision of Article 10 which would prevent Australia - if we were the complaining nation - from making any inquiries in New Zealand into such things as cost of production, export marketing arrangements, whether the industry is subsidised, and so on.
– You do not take that seriously, do you?
– 1 do take it seriously. I am only a bush lawyer, but I have had the Agreement interpreted for me by experts. If no variation is made, then Tasmania will have to abide by what is now contained in Article 10. We are not permitted during this period to collect information to substantiate any claims of injury to the industry. I hope that the Minister for Trade and Industry will be able to reply to some of these criticisms and objections on which the Labour Party has been requested to vote against sub-item 07.02.1 dealing with the phasing out of duties on frozen peas and beans. I know that the right honorable gentleman has spoken twice during this particular part of the debate but later when the Committee discusses “ Surprise “ peas and beans under sub-items 07.05.211, 07.05.291, 07.05,412 and 07.05.492 the Minister may see fit to explain why he considers the safeguards are adequate whereas the people we represent believe they are inadequate. Nothing that the Minister said before the suspension of the sitting has changed my belief that danger is threatened to my constituents. For this reason I am delighted that the Opposition intends to vote against the sub-item we are discussing in the hope that it will be omitted.
– 1 think that the honorable member for Braddon (Mr. Davies) can accept the last sentences of the first speech of the Minister for Trade and Industry (Mr. McEwen) at this stage of debate wherein he said it was open for the pea and bean industry to set up immediately a panel to keep in continuous consultation with the Department of Trade and Industry and that this panel can bring forward evidence of injury immediately it occurs. Article 9 of the New Zealand-Australia Free Trade Agreement provides for immediate consultation between the two Governments. As soon as the consultations occur the status quo takes effect until there is a decision between the two Governments.
The honorable member for Braddon also referred to the question of price. There was earlier reference to New Zealand dumping goods here or using lower prices to come onto the Australia market. This, of course, is covered by Article 10. lt is good to see that the honorable member has taken a much more reasonable attitude today than he did last week when he inferred that the Leader of the Country Party, the Minister for Trade and Industry, had singled out the Tasmanian growers simply because the Country Party was unable to set up a branch in that State. That was rather unfair. The relevant passage appears at page 1228 of “ Hansard “.
– He was right.
– He said that the Agreement was written because the Country Party was unable to set up a branch in Tasmania.
– He was right.
– That is a strange suggestion. If the Tasmanian growers set up the panel that has been suggested they will have the protections that are written into the Agreement and will be able to have consultations. As has been said time and time again in this debate, this is an agreement between two countries who are friendly and who are endeavouring to promote the economic growth in this area for their mutual benefit and not for the
Question put -
That Tariff Amendment 10 be agreed to.
The Committee divided. (The Chairman - Mr. P. E. Lucock.)
Question so resolved in the affirmative.
Tariff Amendments 1 1 to 13 - by leavetaken together, and agreed to.
Tariff Amendment 14.
Mr. POLLARD (Lalor) 1.8.21].- by leave - I move -
The subject matter now under discussion by the Committee is dealt with in Tariff Amendment 14 in the First Schedule, lt refers in the first instance to beans which are pricked, slit or subjected to any similar process designed to facilitate dehydration and subsequent hydration. They are dealt with in Item 07.05.211. In addition there is Item 07.05.291 which refers to beans which are pricked, slit or subjected to any similar process designed to facilitate dehydration and subsequent hydration. Then there is item 07.05.41.2 which refers to peas which are pricked, slit or subjected to any similar process designed to facilitate dehydration and subsequent hydration. The final of the four items is Item 07.05.492 which refers to peas which are pricked, slit or subjected to any similar process designed to facilitate dehydration and subsequent hydration. The impact of these proposals is just the same as the proposals in regard to peas which were dealt with earlier. I. now take the opportunity to say to the Minister for Trade and Industry (Mr. McEwen) that he made somewhat of a song and dance and alleged that I knew nothing about the pea industry because I claimed that individual sales did take place. There are some cases of individual sales taking place during a season, as the Minister well knows. It is perfectly true that a practice has grown up in the industry whereby contracts are made early in the season. In affirming that that particular practice exists, the Minister is emphasising the dangers I have pointed out in regard to this particular tariff reduction because the plain fact is that any group of growers or any individual attempting to write a contract with a processor early in a season is dealing with a processor who does not know at what stage after the writing of a contract there may be a substantial quantity of New Zealand peas or beans admitted to this country. Consequently the processor would tend, I believe, to be more cautious than he otherwise would about the contract and would offer a lower price than otherwise would be the case. That is one situation.
The other situation I want to touch on relates to the statement made by the honorable member for Robertson (Mr. BridgesMaxwell). He pointed out that growers are protected by a variety of means. There is a proviso in the New Zealand-Australia Free Trade Agreement which enables the Government to deal with dumping. Let us have a look at that matter. Whilst it is true that that proviso is in the Agreement, the damage may be done long before the dumping provision could be put into effect. I do not think any honorable member would dispute that. There is another suggestion which the Minister commended to honorable members and to the Parliament and that was that the industry should set up a panel of growers and of people concerned with the industry to enable discussions to be held with the Department, with the Tariff Board, with the Minister himself, or with whosoever may be in charge of this particular phase of activities. I would say that that is a very desirable proviso. I would not disagree with it. But, after all, advisory panels are not always successful in achieving their aims in discussions with a department.
There is nothing definitive about such a suggestion. There is nothing definite. I would say that nobody would swallow this proposal to produce beans and peas and then depend on consultations by panels representing the producers and processors and other people involved to get them out of any trouble that may occur by virtue of the operation of these reductions of tariff. All that could be said about such a proposal is that it is better than nothing. The horse will get out of the stable before the advisory panels can be working satisfactorily. After all, when they do satisfactorily work together they then come into head-on collision with the ministerial authority or with the particular department concerned. All these things take a good deal of processing. There would be consul tations with the panel, consultations between panel members, consultations with people involved in the industry far removed from Canberra, Melbourne, or as the case may be, and before the discussions concluded the damage would be done. So I would suggest there is not much of an alibi for the Government there. The Opposition will vote against these four subparagraphs.
.- The Opposition, as indicated by my friend and colleague, the honorable member for Lalor (Mr. Pollard) will oppose the Government’s amendments. They relate to item 07.05.211, which refers to dehydrated beans put up for retail sale; item 07.05.291, which refers to beans which are dehydrated and then put up for bulk sale; item 07.05.412, which refers to dehydrated peas - we know then now more commonly as “ Surprise “ peas - which are put up for retail sale; and item 07.05.492, which refers to dehydrated peas put up for bulk sale in Australia and which are imported from New Zealand. The Government’s proposal, which the Opposition opposes, and the system of phasing out the duties on these articles, is explained in the second reading speech of the Minister for Air (Mr. Howson). The Government’s proposal indicates quite clearly that, in the case of dehydrated peas and beans, duties will be phased out in the same manner. Every two years there will be a reduction. The first reduction will take place in the case of beans on 1st January 1966. So far as frozen peas are concerned the first reduction in this phasing out operation will take place on 1st January 1967. The duty on the dehydrated peas and beans will be eliminated after eight years.
I would like to direct a few remarks to items 07.05.492 and item 07.05.412 which deal with dehydrated peas. We do know a considerable amount, now, about this process of dehydration of peas but as yet we do not know anything about the dehydrated beans which are included in item 07.05.211 and item 07.05.291. All we know about this process is that the patent for the process to dehydrate peas includes the word “ beans “. I presume that it is for that reason that beans have been included in the Bill. As I have already said, we now know a considerable amount about these dehydrated peas. They are known to us as “ Surprise “ peas. We intend to vote against the two sub-items dealing with peas for retail sale and peas for bulk sale.
We believe that it is here that the greatest threat to our industry lies. These dehydrated peas represent a much greater threat than imported frozen peas and beans. The process that has been developed and patented involves the individual piercing of the peas by a needle, followed by dehydration. The finished product is then packed and sent to this country. The dehydrated peas are not perishable and they come here in polythene bags. As I said on the last occasion I spoke about this matter, these peas are being sold in my area for less than 2s. a packet. A comparable package of frozen peas would contain 10 oz. and would be sold for between 2s. 4d. and 2s. 6d. There is, therefore, a considerable price differential in favour of the New Zealand product.
As the honorable member for Gippsland (Mr. Nixon) said, let us make no mistake about these “ Surprise “ peas. They are a very fine product indeed. The process is simple. In New Zealand the water is extracted from the peas, which then of course have less bulk. They are sent over here at the general freight rate which is lower than the frozen freight rate. In Australia the housewife simply puts them into water, adds a bit of mint and brings them to the boil. The water enters the pea through the hole that was originally pierced. Presumably beans are subjected to the same process, although we have not yet seen the processed beans.
The advantages of the process for the New Zealand growers and processors are obvious. The water is removed from the peas, so that it is not necessary to pay freight on the water content. They can be sent here at the general freight rate and they arrive in this country in an attractive package. There is, as I have said, a price differential in favour of the New Zealand article which is important in a time of rising costs, particularly for people on fixed incomes such as pensioners and others. It is of great importance to people drawing up family budgets when they have little money to handle, as is the case with so many families these days. A housewife going through a supermarket will buy this product irrespective of the country of origin because it costs less than 2s. as against 2s. 4d. or 2s. 6d. for the comparable local product.
I referred last week and in a debate last year, as well as in the debate on this measure this afternoon, to the other considerations that act in favour of the New Zealand growers. There is, for instance, a wage advantage of about £4 a week. The wage for farm workers in Tasmania is about £17 a week as against £A13 for farm workers in New Zealand. The New Zealand growers have the advantage of consistent and regular rainfall, lt is of no use to say to the Tasmanian growers: “ You are all right this year “; we have to look to next year and the year after, and we have to remember that after eight years there will be no duty at all on imported peas and beans. I do not know whether we could use the patented Unilever process or whether we would have the technical knowhow to do so. I do not know whether we could devise some other system for economically treating peas with a dehydration process such as that which has been so skilfully developed in our sister dominion.
I have said before that 60 per cent, of Australia’s production of frozen peas conies from my area. I can fully understand the concern of the farmers. I am delighted that the Labour Party has decided to vote against the four sub-items that have been grouped together dealing with dehydrated peas and beans. As I said a while ago, we have not the numbers in this chamber to defeat the introduction of these sub-items, but I hope that Tasmanian members of the Senate will stand up and speak for the small farmers who produce this commodity. More than 50 per cent, of these people are living on farms smaller than 150 acres, which is said to be the minimum living area. These products are very important to the small farmer because they represent the cash crop that enables him to carry on from year to year. We are alarmed in Tasmania at the fact that during the last 15 years more than 50 per cent, of our farmers have left their holdings. In the last ten years 25 per cent, of the farmers in my State have left their farms. It is no use saying that we will have consultations later. The Agreement is in existence and under this legislation the duty will be gradually phased out. Strong competition must eventuate and it is no use telling these farmers that it will not eventuate. If we are going to do anything to safeguard them, this is the time and the place for us to register our opposition to the Government’s action in phasing out the duties and allowing free entry of a product that will compete with the product of an industry of such value and importance to the small man on the land in my State.
– The honorable member for Braddon (Mr. Davies) has raised once again the problems of pea and bean farmers, particularly in Tasmania. He raised the specific problem of “ Surprise “ peas, and he asks what guarantee the growers have with regard to future competition from this product. 1 might remind him at this stage of a letter that was read out in the Senate on 5th October 1965. It appears in “Hansard” for that date but perhaps it would be worth reading the letter again. If was from the Unilever organisation, which has been mentioned by the honorable member for Braddon. It dealt with “ Surprise “ peas which are covered by a Unilever patent, and it said -
Wc desire to undertake the manufacture at these peas in Australia, but before installing the required plant, which is very costly, we have to be reasonably sure that it would be a sound proposition. To assess the possibilities we need local information both from the marketing and technical aspects, and it is entirely to gain the required marketing knowledge that we are importing peas from New Zealand. Likewise to gain the required technical information we are carrying om growing trials in various parts of Australia, and conducting pilot production runs.
This is interesting -
Our present operation in importing peas from New Zealand is unprofitable, and from the information we have it would seem most unlikely 1hut the importing of “ Surprise “ peas from New Zealand could be developed into an economic proposition, even if there were no dirty payment.
As the present Minister for Supply (Senator Henty) said when he read the letter, it went on -
I mention this to indicate the scale of our interest in Australian primary and secondary industries, and the “ Surprise “ pea project i.i a further expansion of this interest. 1 presume that the honorable member for Braddon has had an opportunity to see the quotation that was read in the Senate last October, but I believe that this Committee should be reminded of it. It is plain that it is too early yet to get a clear indication of the likely effects of this New Zealand product on the local growing and processing industry. It seems probable, however, that if it finds sufficient consumer acceptance production will be undertaken in Australia. If all the things that’ the honorable member for Braddon has said about consumer preference for this product are correct, one would surely think that more peas and beans would be grown in Australia to meet the demands of the increasing market. We would expect the facts that have already been stated by the company to be known to the honorable member. Above all. even if they are not, there is still the point that was made so clearly by the Minister for Trade and Industry (Mr. McEwen) and the honorable member for Robertson (Mr. Bridges-Maxwell). They pointed out that if trends in the industry are such as to arouse the fears of the growers, the way is open to them to establish an industry panel for consultation with the Department of Trade and Industry. Such a panel could watch trends from week lo week.
I believe that in all these matters we ure going over the same ground once again. The honorable member for Braddon has raised a special item and I refer again to the information that has already been given. I believe that the information given in the letter that I have quoted and the remarks of the Minister for Trade and Industry show that the Government clearly is watching the interests of :h]s valuable industry by studying developments. Not only has the present situation been taken care of, as has been so well illustrated bv what has been said, but also there will bc ways open in the future to watch the trends that may develop. All these facts indicate, particularly in relation to the “ Surprise “ pea, that there are good prospects that the market will develop and that Australian growers will benefit.
Question put -
That the tellers, figures and words proposed lo be omitted (Mr. Pollard’s amendment) stand part of the Tariff Amendment.
The Committee divided. (The Chairman - Mr. P. E. Lucock.)
Majority . . 17
Question so resolved in the affirmative.
Tariff Amendment agreed to.
Tariff Amendments 15 to 245 - by leave - taken together, and agreed to.
Tariff Amendment 246.
.- This tariff deals with the temporary protection awarded to polyethylene monofil and polyethylene rope. I had hoped that, having regard to the strictures contained in the Vernon Committee’s report, the shuttle service would cease; that once the Tariff Board had had a close look at an industry and recommended a level of protection the case would be disposed of and would not, almost immediately, go back to the Special Advisory Authority for further action. But the practice continues, as I will show.
In January 1965 the Tariff Board’s report dealing with polyethylene monofil was signed. It recommended a general rate of protection of 20 per cent. The Government took action on the report on 6th May 1 965. Yet, six months later the Minister referred to the Special Advisory Authority, Sir Frank Meere, the question of whether ‘he industry should receive more protection.In its report in January 1965, the Board said that it was doubtful whether the polyethylene section of the industry was economic and efficient but that it hoped that the only manufacturer - Synthetic Yarns Pty. Ltd. - might be able, with closer attention to costs, to operate profitably under the 20 per cent. duty recommended. But evidently the company could not and so has sought more emergency protection.
Synthetic Yarns Pty. Ltd. imports high density polyethylene crystals from overseas and extrudes them into a monofil fibre. It evidently employs about 10 people in this process. Sir Frank Meere reported on 24th December last year and, as usual, awarded increased protection. His reports may have become longer since the Vernon Committee urged that they include more information, but in this report there was not one measurement of the percentage rate of protection which the Vernon Committee urged as being necessary to a proper understanding of tariff matters. There are also many other omissions in the report which I shall spell out later.
Sir Frank recommended a sliding scale duty with a base value of 40c per lb. f.o.b. At present f.o.b. prices in Japan of 36c per lb. the additional duty works out at 12 per cent, which, with the old duty, makes a total protection of 32 per cent. But this is not the end of the exercise, as Sir Frank admits. The only important use of the polyethylene monofil is to make polyethylene rope, which has become very popular with fishermen, particularly cray fishermen. It is lighter and stronger rope than the old sisal rope and it lasts at least three times as long. The local manufacturers of rope used to get, before this report, a 50 per cent, protection, but they were using imported polyethylene monofil to make the rope. Obviously it was no good protecting the monofil section of the industry unless there was a market for it when it was produced, so the Australian rope makers had to be induced to use the local filament. Yet, if they used it their costs would rise, making them more liable to competition from imports, even behind their 50 per cent, tariff wall. But giving them protection by the tariff would expose the whole position to ridicule, because it seems certain that the required rate of protection would be well over 100 per cent., and even those who do not think that these are very high rates of duty would be a bit hesitant to ask publicly a primary industry to carry an impost of this magnitude. In this regard Sir Frank Meere reported -
The industry using most of the Austraiian requirements of polyethylene rope is a primary industry largely competing in world markets and could not be expected to bear the increased costs which such a duty would involve.
So he recommended a quantitative restriction instead, allowing importers to import one third of their past importations, leaving two thirds of the market to the local rope manufacturers. Now, Sir Frank Meere should know that giving protection by quantitative restrictions in this way is, in theory, at least as harmful to the consumer as giving aid by high tariffs. In fact, the position is generally worse than the theory would indicate. If Sir Frank Meere wants confirmation of this I refer him to paragraph 14.49 of the Vernon Committee’s report.
T think it is very remiss of Sir Frank Meere not to spell out why he thought that giving protection by quantitative restrictions in this way would not impose such a high cost to the export industries as by imposing high duties. He just assumes that it would not, whilst all the weight of theory and practice is quite against him. One would have thought that a decision of this kind warranted at least a sentence of explanation.
Well, what coes it add up to, anyway? The annual demand for polyethylene rope appears to be about 300,000 lb. The duty free landed cost of the rope is about 50c per lb. Before the extra duty was placed on the monofil the price to the fishermen’s association for the Australian rope was 82c per lb. Since the temporary duties were imposed the manufacturers have increased their prices to 95c per lb. This means that the cost to the Australian fishing industry would be 45c per lb. on 300,000 lb., or a total subsidy paid by the consumer of $135,000 a year. Now, there are about 300 commercial fishermen in South Australia who use about 90 per cent, of the polyethylene rope that is made. This means that each fisherman pays a subsidy of SRI a year. I would like to ask all fishermen, when they come in after a bad night with their attitude of disappointment, whether they think this is a good thing.
But there is still worse to come. The Australian rope manufacturers have an association called the Australian Rope, Cordage and Twine Association - A.R.C.T.A. for short. When speaking in the House on baling twine I have referred to the restrictive trade practices used by this group. Recently I have been studying the transcript of current Tariff Board hearings relating to baling twine, polyethylene rope and so on, when the activities of the Association were exposed for everyone to see. In fact. I would recommend everyone to read the evidence given on 15th December last year by Mr. Malone, spokesman for the Australian British Trade Association, who exposed the whole sorry picture to public view. Then read the evidence of Mr. Maudsley, General Chairman of A.R.C.T.A. I do not think I have seen its equal. Those gentlemen admit that there is absolutely no competition between their organisations, either in price, services or terms. For instance, let me quote portion of a letter, written on 8th September 1965, from A.R.C.T.A. to wholesale buyers of reaper and binder twine. The letter is a direction to handlers of the product and reads -
This year my members will suggest to all who sell to consumers that sales should be made at not less than £7 ($14.00) per bag for baler twine and ti 5s. ($14.50) per bag for reaper and binder twine, less 21% cash discount for payment during month following month of supply, and plus freight to the area of distribution. . . . Under no
The letter continues -
The special wholesale list price offered to your company is subject to your acknowledgment of this letter, signifying your agreement to subscribe to the following special conditions:
To confine your purchases of reaper and binder and baler twine to those made in Australia.
To take the initiative in co-operating with other distributors in the maintenance of a uniform selling price per bag in all consuming areas.
To give an absolute assurance that under no circumstances will your price to distributor type buyers be less than that advised in this letter.
There is not much doubt that A.R.C.T.A. is enforcing price maintenance and trying to prevent the importation of rope and twine. But now imports are to be severely curtailed, and this will allow them an even freer hand to fix things between themselves. Yet Sir Frank did not even mention the existence of this Association. I consider this to be a glaring omission from the report.
Members of the Association were not doing really badly before. Sir Frank mentioned three companies as appearing before him individually. One was M. Donaghy and Sons. This is evidently a private company and I cannot find anything about it. Another was George Kinnear and Sons Pty. Ltd. Their profit rate last year was running at 14.3 per cent, on capital. The other company. George Miller and Co., was doing even better. Its return on capital was 17.7 per cent. They were not exactly withering on the vine. Since the duties were increased, and particularly since the price has been raised to 95 cents a lb., there has been a switch in demand to polypropylene rope, which is lighter and so has a greater length per lb. There is no Australian industry to protect, but the duty on this rope is still 45 per cent, plus 5 per cent, primage. At least the temporary duties have not been imposed on this rope, which can be landed after paying duty at 85 cents per lb. The result of the imposition of the temporary duty is to help the inevitable switch to polypropylene rope, which has already occurred in the United States of America, without benefit to the Australian manufacturers of either the filament or the rope. The fishermen will be paying a 50 per cent.
However, we are not at the end of the story. Concurrently with Sir Frank Meere’s inquiry, the Tariff Board was also inquiring into the industry yet again as part of the general textile inquiry. The duties that were altered in May 1965 and were altered again as a result of this inquiry in January 1966 will be altered yet again in about a year’s time. But let us hope that this time the Tariff Board will have a long hard took at the Australian rope industry. As I have said before, the previous protection was 50 per cent, and this is very high indeed, particularly as all the raw materials are imported. In fact, it would be interesting to work out the effective rate of protection or value added, as set out in the report of the Vernon Committee. I would assume that the effective rate would be near 100 per cent, before the duty was raised. If the manufacturers get what they are seeking. I should think that the effective rate would be well over 200 per cent. Surely there must be considerable doubt as to whether the industry is economic and efficient, and, while it continues its self-confessed restrictive trade practices. I would be even more doubtful.
Mr. COLLARD (Kalgoorlie) [9.41. - I rise to speak on the items relative to polyethylene monofil. Like the honorable member for Wakefield (Mr. Kelly). I oppose the proposition as it appears in the Schedule. Synthetic Yarns Pty. Ltd. applied for protection against monofil imports and the Australian Rope, Cordage and Twine Association lodged an application against imports of polyethylene rope. This application, no doubt, was made because polyethylene monofil was being used mainly in the manufacture of polyethylene rope, which is now becoming very popular in the fishing industry, particularly in the crayfish industry. We find a rather peculiar, but a very serious and disturbing, position in these two applications. According to the report of the Special Advisory Authority, Synthetic Yarns Pty. Ltd. claim that, while the main outlet for its product is for polyethylene rope, it had not been able to make any sales to rope manufacturers after about the last half of 1963. We are told also that the rope and twine industry said in its evidence to the Authority that the sale of polyethylene rope represented only a fraction of the business that had been lost in sisal rope.
Synthetic Yarns Pty. Ltd. made its application because it could not sell monofil, as it was available to rope manufacturers at a much cheaper rate from Japan, and the rope manufacturers made their application on the ground that fishermen would not buy rope from them because the rope was available from Japan at a cheaper rate. So Synthetic Yarns Pty. Ltd. want a heavier duty imposed on monofil so that the Japanese product will not be so attractive to the rope manufacturers and the rope manufacturers ask for a heavier duty on rope so that the rope from Japan will not be so attractive to fishermen and they will purchase locally. All this seems very nice and cosy. It is quite a simple arrangement, and both Synthetic Yarns Pty. Ltd. and the rope manufacturers finish up in a reasonably protected position. But the fishing industry to which these items will eventually be sold is out on a limb. The fishermen receive no protection whatever and they become the target for the sale of these items and must meet the increase in costs that will flow from this measure. It seems that, in protecting these items, the Government and the Special Advisory Authority are setting out to protect two industries at the expense of at least one other industry, and that is the fishing industry. As the honorable member for Wakefield said, the protected industries do not really need the protection anyway.
One section of the fishing industry can be seriously affected and that is the crayfish section, which is a very good dollar earner but which, unlike the rope industry, for instance, is unable to determine for itself the price at which it will sell the articles it produces. The price of crayfish is governed by the price America is prepared to pay. Whilst local consumers no doubt think they are paying a pretty high price for crayfish, the point remains that, if it were not for the American, French, German and Singapore markets, there would not be a crayfish industry of any moment in Australia. Our export income would be very seriously affected and. of course, there would be other indirect effects. On the other hand, the rope and twin/; industry can itself determine the price it will charge for the articles it produces, especially if a restriction or prohibition is placed on the import of the articles. This would mean in turn that the articles could be obtained only through one source and a monopoly would be created. The restriction placed upon the import of polyethylene rope simply means that, when the amount allowed in under the restriction is exhausted, the remainder of the requirements of the crayfish industry must be obtained through the rope and twine industry at whatever price this industry feels inclined to charge. If the monofil itself becomes dearer because of the extra duty, it is obvious that the price of rope will go up. Again the honorable member for Wakefield made it clear to us what the increases are likely to be. In turn, the rope and twine industry will be almost completely protected while the crayfish industry and others that use polyethylene rope will have no protection at all.
I want to quote some figures to give a comparison between the value of the crayfish industry and the value of the rope and twine industry. According to the 1965 “ Year Book “, the rope and twine industry in 1962-63 employed 2,307 persons in 26 factories. The value of the production was £4,752,000 or $9,504,000. In the same year, 2,526 fishermen were employed in the crayfish industry. This is some 200 more than were employed in the rope and twine industry. That does not include those in the processing part of the industry. The value of the catch was SI 2,034,000 while the value of exports was $11,295,924. This indicates that the crayfishing industry is at least as important as the rope and twine industry in relation to both employment and production.
I want to point out also that in 1964-65 the value of the crayfish output in the various categories of whole crayfish, cooked and uncooked crayfish, crayfish tails, etc. was $17,323,000 and the value of exports for 1964-65 was $14,054,434, which I suggest is certainly no mean effort in relation to export income. This is certainly an industry which should not be retarded or have obstacles placed in its way if it can possibly be avoided. The “Australian Fisheries Newsletter” of 1965, reporting on the economic survey of the crayfish industry of Western Australia had this to say -
The Western Australian crayfish industry based on the marine crayfish or spiny lobster is the most valuable commercial fishing enterprise in Australia.
Surely that must mean something. Surely it shows that the industry is worthy of favorable consideration in relation to costs, and is also worthy of protection?
Rope is a big item in the crayfish industry. Fishing is carried out in waters up to 30 fathoms for smaller craft and at greater depths for larger craft - up to 50 fathoms. It is necessary to have a length of rope almost double the depth at which you are actually fishing. As the average catch per lift of pot ranges from 2.3 lb. to 3.5 lb. depending on the area in which you are fishing, it can be realised that full use must be made of the equipment. If the cost of rope is to be substantially increased, as seems to be certain, then the increased duty on monofil, and the restriction placed on imports of polyethylene rope, can have a serious effect on the crayfishing industry and particularly on those crayfishermen who are in the industry in a smaller way. On 26th November 1964 the Minister for Trade and Industry (Mr. McEwen) submitted to the Special Advisory Authority of the Tariff Board a question whether urgent action was necessary to protect Australian industries producing monofil and polyethylene rope. Less than a month later the Authority submitted its finding. I appreciate that the Authority must make its finding within a month, but because of the urgency of this matter, and the haste with which this investigation was carried out, I suggest that full regard was not given to what could be the result of the recommendation on the fishing industry.
It is agreed that over recent years there has been a pronounced change over from sisal rope to polyethylene and that this is largely because polyethylene is stronger and much easier to handle. However, it must be pointed out that the people in the crayfishing industry in Western Australia, with whom I come into contact quite regularly, would much rather use an Australian product and much rather support an Australian industry if they could get their requirements at a reasonable price and also when they wanted them. But I am informed from a very reliable source that they cannot always get this polyethylene rope when they want it. Of course, any delay in supply means a loss of income to the fishermen.
The recommendation of the Special Advisory Authority is set out in the report and I think I should have it placed on record in “ Hansard “. It reads -
in respect of polyethylene twine cordage rope and cable falling within paragraph 59.04.99 of the Customs Tariff 1965 protection cannot be appropriately provided by means of a temporary duty but it can appropriately be provided by means of the temporary restriction of the importation of these goods. In this connection I further recommend -
As I said earlier, there has not been a proper realisation of what the effects of those restrictions will mean to the fishing industry; or, if it has been realised, I cannot understand why the Government has accepted the recommendation. Rope manufacturers told the Special Advisory Authority that they were selling polyethylene rope at a special price of 8s. per lb. in an endeavour to capture the business of the fishing industry. They said that the 8s. did not cover the cost of producing the rope. It is obvious that they will not continue selling at 8s. per lb. It is quite obvious that they will want to sell at a price not only to cover their costs but also to make a profit. I was about to say a small profit, but that is something about which we cannot be sure. From what we can gather from the report it seems that the increase could be fairly significant, because this is what the report has to say -
A temporary duty sufficient to cover the difference between the industry’s special price to the fishing industry and the lowest landed cost of imported rope of which I have knowledge and, in addition, to cover the extra cost involved in using locally produced monofil, would be substantial. The industry using most of the Australian requirements of polyethylene rope is a primary industry–
He was referring to the fishing industry - largely competing on world markets and could noi be expected to bear the increased costs which such a duty would involve.
If a substantia) increase in duty would be required on polyethylene rope to offset the cheaper cost of imported rope and the increased duty on monofil it would appear to be certain that the price of rope will also have to be increased considerably to meet the same position. Once th£ restricted import supply is exhausted there is nothing to prevent the rope industry increasing its prices considerably, and no doubt it will do so. The report also states that annual quotas should be established in favour of importers during the calendar years 1964 and 1965 equal to half their imports by weight during those two years.
I have just received a telegram from Geraldton which is a very large crayfish industry centre, as honorable members know. The telegram says -
Quote for January June 1966 period is one twelfth of total weight imported in calendar years 1964-65. lt is not one half, but has become one twelfth. So now we have this position: If the one twelfth difference applies everywhere - and no doubt it does - the cray.fishermen will be able to procure one twelfth of their requirements at this cheaper rate and for the rest they will have to pay the price determined by the rope industry. If this is the method that is to be adopted to protect the rope industry and to protect the monofil industry then surely something should be done also to ensure that the crayfishing industry is also protected by having some outside authority determine what the price of this rope should be. Nowhere in the report nor in the Minister’s statement is there any suggestion of what this move will mean to the crayfishing industry. Until such time as we can be sure that its effect will not be harmful this restrictive move should not be imposed. I suggest that Government supporters should support the opposition to this item; otherwise the Minister should move to have the item deleted when the legislation reaches another place.
– Order! The honorable member’s time has expired.
– I hate to cross swords with the honorable member for Wakefield (Mr. Kelly) although I probably will be doing so on many occasions during the rest of this evening. After listening to the honorable member for Kalgoorlie (Mr. Collard) we should remember the history of this item. We ought to consider not only what is in the Special Advisory Authority’s report but also to go back to the original Tariff Board report of 1964. What was the situation at that time? We had an industry that was producing monofil at 100d. per lb. The imported price was considerably above 48d. f.o.b. The fact is referred to in this report. The Tariff Board found that the industry was worthy of assistance so long as it was able to reduce its selling prices.
– That is the point.
– But they reduced the selling price from 100d. to 62d. per lb. and became quite efficient. As a result of that the imported price came down, first, to 48d. per lb. f.o.b. Gradually, as they reduced their price still further, the imported price fell below the cost of production.
– Which cost of production?
– That of the people overseas. The decision we first have to make is whether this is an industry that is worthy of protection. The Tariff Board said very definitely in 1964 that it was, so long as the industry could get its price down. The industry got its price down. Having done that, surely we should continue to give the industry protection and keep it going in Australia. Having done that I believe quite clearly in the statement of the Special Advisory Authority, Sir Frank Meere, at page 4 of his report -
In order to give the industry some stability I propose to recommend that a temporary duty be imposed on imported monofil and strip equal to the amount, if any, by which the f.o.b. price of the imported product is less than 48d. per lb. i.e. the approximate f.o.b. price of Japanese monofil at the time of the Board’s last inquiry.
As a result of having an industry in Australia the price of rope has come down. If we did not have this industry the Japanese price would go back to where it was before we had an industry and the cost to the local fishermen would be well in excess of what it is at the present time.
Having got the price down it is quite clearly in order to protect the industry. Then what happens is that the rope makers have to be given some means whereby they can keep down the price to the fishermen. The quantitative restrictions aim to do just that. As a result of having this industry, we are getting cheaper monofil and cheaper rope than was the case before the Tariff Board report in 1964. If we feel on balance that there is an industry here that is worthy of protection, as the Tariff Board felt was the case, and if as a result of having that industry we have cheaper rope than otherwise would have been the case because we have competition with the imported article, then I believe that this is the fairest way in which we can get the best out of a rather difficult situation. 1 do not think the honorable member for Wakefield or the honorable member for Kalgoorlie has gone sufficiently into the history of this matter to put a fair case before the Committee.
.- There is just one other matter which I want to bring forward and on Which I hope the Minister will be able to give me some information. In the “ Australian Fisheries Newsletter” of September 1965 a letter appeared in the name of Geoffrey P. Smith, Managing Director of C. H. Smith and Co. Ltd., a firm in Launceston. Writing on this subject he said, talking about rope manufacturers -
Australian manufacturers have no doubt been prompted to make on application to increase duty on imported synthetic cordage because of the present duty on polyethylene and other monofilament yarns and the move to increase this duly to 30 per cent. No raw material for manufacture of the finished product m Australia should pay such an impost.
I come now to the point on which I would like some clarification from the Minister. The letter continued -
However, Australian rope makers could avoid it by installing their own extruding machinery. 1 do not know what extruding machinery is, but Mr. Smith said -
The cost of extruding polyethylene “ chip “ is about £165 to £180 a ton sterling CIF, or less than 2s. a lb., so there are possibilities for an enterprising manufacturer to make fair savings if he makes his own yarn.
I was wondering whether in his inquiry into this matter the Special Advisory Authority looked at this aspect and considered whether there were possibilities in it. If so, I wonder what bis decision on it was.
.- I want to reply to four points made by the Minister. He said that the price of synthetic filament is falling and that it has fallen as a result of the internal competition within Australia. If he looks at the whole synthetic picture he will find that this is something that is happening all over the world. The price of synthetics is coming down and I have no doubt whatever that the lowering price in Australia is due to the same factors that have operated to bring it down all over the world, that is, that the overhead cost of the amortisation of the works, as in Japan, has been paid for. I do not think the Minister can sustain his argument that the price to Australians fell because of the existence of Australian manufacturers. To deal with this subject thoroughly I should have got a corresponding figure for New Zealand and I will endeavour to do this. I will apologise with my usual characteristic courtesy if I am wrong.
The second point is that there is evidence that the Australian price went up after the duty was introduced. There is no argument about this. As soon as the duty was imposed the Australian price of rope went up. I repeat that there is no argument about that. The third thing is very important. Synthetic rope is made from high density polyethylene resin which comes into Australia duty free. The queer thing is that only ten people are engaged in the original industry. We import all the raw material and squeeze it through a hole. If we had to pay a duty on the high density polyethylene as I am afraid we do with low density polyethylene we could justify the price, but we import it duty free. How can there be this difference in price? If high density polyethylene resin is bought cheaply on the world market, one would not think it could be made as dear as it is just by squeezing it through a hole. For the life of me I cannot understand why this price differential occurs. I take issue again with the Minister. I am afraid that I have not the original Tariff Board report with me but the Board had much scepticism about the economic worth of the industry.
– That is not what we find in this document.
– If the Minister looks at the original report he will see the situation spelt out rather differently. The point is that if we are going to look at this as an emergency action and have to take these rather hurried measures, we must admit that the Minister did not pay attention to the point I raised about the restrictive price operated by the manufacturers. This, I think, is a direct invitation to the Tariff Board and to the Minister to use their full powers, as I shall point out later, when they find an industry abusing its protection in this way.
I do not think anybody could deny that the protection is being abused when the price is fixed in this cold blooded way. Any user of the material anywhere in Australia will tell one how this price differential works. To say that we should not pay any attention to this aspect of it is not good enough because here we have an industry with a 50 per cent, protection by the use of a by-law protection or whatever it is. It imports all its raw material and then behaves in what I would call this irresponsible or reprehensible manner in fixing a price to sustain a profit level which I think is unduly high. I am glad to have the opportunity to ventilate this to the Committee. I think that here again is a case where protection has been carelessly awarded. I think we ought to take it as a general principle that if protection is accorded in this way there is a particular duty on those to whom it is accorded to see that they do not abuse it. In my opinion, the protection has been abused in this instance. I wei],t to the particular trouble of circulating to A.R.C.T.A. copies of the speech I intended to make. I did that to give the Association an opportunity of replying. I thought it would have supporters on both sides of the House who would take up my challenge. It is interesting to see that it has not.
.- I listened with considerable interest to the speeches of the honorable member for Wakefield (Mr. Kelly) and the honorable member for Kalgoorlie (Mr. Collard) and I am wondering just where the honorable member for Wakefield will be if the Opposition should decide to call for a vote on this matter.
– Try it and see.
– I know where the honorable member will be. He is great at talking in one direction and voting in the other. However, the Opposition agrees substantially with what the honorable member for Wakefield has said. I am satisfied that this industry which has been established for 70 or 80 years in this country now is still able to stand on its own feet. It already has a substantial measure of tariff protection. I have never heard of any branch of the industry going insolvent. I do know that it employs something like 2,400 men throughout Australia. I am not sure whether it treats them generously or not, but I do know that, for a long period of years, it has charged the man on the land excessive prices for baling twine, binder twine, rope and every other commodity that the farming community buys from it.
I am quite sure there is a great deal of truth in what the honorable member fox Wakefield has said. The industry has a very strong association. Whether the farmer buys twine from George Miller and Co… Donaghy and Sons or George Kinnear and Sons Pty. Ltd. the price is the same. There is no price cutting with these people. Their tariff protection may well be in excess of what they deserve.
There may be a good deal in the suggestion that by the investment of perhaps a few thousand pounds on the installation of the necessary extruding machinery, these manufacturers could produce the fibres that are used in the manufacture of rope for the fishing industry. It is all very fine to talk about protecting old industries, and it is all very fine for the Tariff Board and the Special Advisory Authority to recommend protection, but I should like to know whether the Tariff Board or the Special Advisory Authority has had adequate time to investigate thoroughly the history of this industry and the handsome profits it has made over a very long period of years, irrespective of the economic position of the people to whom it has supplied its products.
My friend the honorable member for Kalgoorlie has stated a powerful case for the cray fishing industry. What he has said applies not only to the cray fishing industry but to the fishing industry generally. Surely the men engaged in this industry are entitled to some protection. I have very strong doubts as to whether the Opposition is justified in approving this proposal. Let me say at this stage that the rope and cordage industry can take it from me that the Opposition in this Parliament will be keeping a very close watch on it. We will want to know why the restrictive trade practices legislation is not applied to it in due course, or why some investigation is not made into its activities if we are not satisfied about what is going on. 1 doubt very much whether there are more than a dozen firms engaged in this industry in Australia. I know there are some in Sydney, some in Melbourne and one in Geelong. I have not forgotten that this industry played an active part during the war when Australia had very little linen flax to produce thread for the making of boots, shoes, railway tarpaulins, tents, water bags and many other products.
– You are getting a little away from filaments.
– I know I am. But I am dealing with an industry to which the Government proposes to give additional protection. The tariff proposal before us does not deal with the whole of the industry’s activity but only one section of it. I think the industry as a whole could well afford to carry some diminution in its excessive profits. I issue the warning that we will want to know more about future protection proposals relating to this and other industries. It is very easy for an industry such as this to say that it employs 2,400 or more people. It does not employ them because of their good looks; it employs them because the exploitation of their labour is a good proposition. Admittedly the industry is justified in obtaining an adequate return for its investment and for its managerial experience. I leave it at that. 1 am very tempted to put the matter to a vote and we may well do so on some future occasion when protection for industry is again before us.
– The honorable member for Kalgoorlie (Mr. Collard) suggested that the rope makers could put in their own extrusion plant. 1 should point out that the effect of that would be to fragment the industry still further and that this in turn would mean increased overhead costs and, therefore, added costs to Australian industry as a whole. I presume that the Special Advisory Authority had a look at that matter.
I am sure that all the points raised by the honorable member for Wakefield (Mr.
Kelly) will be examined in the Tariff Board inquiry that is now being conducted. If Sir Frank Meere misconstrued what the Tariff Board’s original report of 1964 said, the Board will have an opportunity to correct any false impression in the very near future.
– I did not say it was misconstrued. I said it was not all contained in the report.
– Then I am sure the matter will be brought to mind again during the current inquiry and we will be able to have a look at it later.
Tariff Amendment agreed to.
Tariff Amendment 247.
Mr. KELLY (Wakefield) [9.371.- This item again depends upon a Special Advisory Authority report. I think the honorable member for Bendigo (Mr. Beaton) will remember that we discussed this item al some length and with some heat in the chamber recently. For my own benefit, I think I should run briefly through the structure of the man made fibre industry. Let me explain first that polyamide yarn is the same as nylon. I am not an authority on this but the structure of the nylon industry seem to me to be roughly as follows: There is at present only one manufacturer of raw nylon or polyamide yarn. This is Fibremakers Ltd., a subsidiary of Imperial Chemical Industries of Australia and New Zealand Ltd. This firm imports nylon chips from overseas and makes them into raw nylon yarn. This yarn is then prepared, or processed, or thrown by many firms. “ Thrown “ is a queer term, but that is the one used. Some of these firms who specialise in processing raw nylon yarn are Johnson Brothers Pty. Ltd., Peerless Silk Mills Pty. Ltd., Qualitaire Mills, B.L.B. Corporal ion of Australia, Robal Textiles Pty. Ltd. and Viel and Co. Pty. Ltd. They all gave evidence to the Special Advisory Authority. These companies only process the fibre and sell the yarn to the weavers. Other firms both process the raw yarn and then weave it themselves. Examples of these are Holeproof Ltd., Bruck Mills (Aust.) Ltd., Silk and Textile Printers Pty. Ltd. and Elastic Webbing (Aust.) Pty. Ltd.
The processed yarns are then woven into man made fibre piecegoods and sold to garment manufacturers who make them into garments which we wear. So it is clear that this new duty on the raw yarn will adversely affect the competitive position of all the various processors further down the production line. But, only three weeks after this duty was imposed, the Government applied a general duty of 55 per cent, on man made fibre piecegoods. We will be discussing this matter later, I think on the next item. The Government accepted the Board’s report, but now the Government has imposed duties that make more difficult the position of the industries that use the fibre yarn. Here we have an example of one arm of the tariff machine imposing a permanent protection and the other arm of the tariff machine - the emergency section - making recommendations that automatically make the recommendations of the permanent part of the machine more difficult to operate.
The competitive position of the weaving section of the industry will certainly be adversely affected by this duty, so imports of the material will be even more of a problem than they are now; yet I think we will all admit that to make the duty on the woven cloth still higher seems unthinkable, ft is 55 per cent, now, and this is a high duty - almost twice as high as the Vernon Committee gave as a general bench mark. If the weaving section does not get increased protection it is difficult to see how it will meet the competition of imports that are made from cheaper fibre yarn. In the report we are going to discuss shortly the Board makes the point that its recommendation of 55 per cent, was sufficient to make allowance for the handicap of using the yarn at the then rate of protection - but under this report the rate has already been increased. When we examine with more detail the Special Advisory Authority’s report it is even more difficult to see why these temporary duties are awarded. Fibremakers, which is, in effect, I.C.I.A.N.Z., is not a poor struggling company. It is now getting 80 per cent, of the market and claims it should get 90 per cent. Imports are not increasing - at least the Special Advisory Authority says they are not increasing, although they might - and one would think that if Fibremakers wanted to ensure that it got a greater share of the market than 80 per cent, the natural thing to do would be to reduce prices. I think that is a reasonable attitude. Evidently what stops Fibremakers doing this is that it may not be able to hold its profit rate at the present level. Mr. Wilson of I.C.I.A.N.Z. evidently feels that a return of 20 per cent on total funds is a reasonable expectation for large scale industries. For confirmation of this I suggest that honorable members read his evidence to the Tariff Board on 9th August 1965 when he made a statement to this effect. Because I.C.I.A.N.Z. expects this kind of return the processor of the yarn and the weaver of the processed yarn will have to pay more for their raw material and so will be more susceptible to competition from imports.
Even while the Special Advisory Authority was making its inquiry the Tariff Board was holding an inquiry into nylon and other yarns. Public evidence had been taken but the report was not to hand. I just cannot understand why I.C.I.A.N.Z. could not battle it out until the Tariff Board report was received. It is interesting that this company, which together with its subsidiaries, is one of the largest companies in Australia, comes cap in hand to the Government more often than any other company asking for, and getting, ever increasing subsidies from the consumer and from the user industries further down the production line. We hear a great deal nowadays about the problem posed by overseas capital in Australia. I have never been a general critic of the increasing amount of overseas capital coming in, but I am critical of those critics of this process who at the same time are prepared to featherbed it into the economy at the expense of both the consumer and the user industries.
– I want only to say that, as the honorable member for Wakefield (Mr. Kelly) knows, this report will also be going for Tariff Board inquiry. The Board will have a long time in which to make up its mind on this matter and on all the matters the honorable member has put before us. We shall have an opportunity to have a look at the position after the Tariff Board has submitted its report to us.
Tariff Amendment agreed to.
Tariff Amendment 248 agreed to.
Tariff Amendment 249.
.- On behalf of the Opposition I move -
Omit sub-paragraph 51.04.929.
The proposal before the Committee rests on the basis that there would be significant changes in the tariff policy towards this man made fibre industry which would bring about quite a radical change in the pattern of production in the industry. Indeed, in his second reading speech the Minister for Air (Mr. Howson) indicated in respect of this particular section of the textile industry that there could be undue dislocation in the industry because of this change in tariff policy. Consequently the Government, in its wisdom or otherwise, has modified the Tariff Board’s recommendations upon this particular industry. The Opposition is very doubtful whether any benefits would accrue from the change in tariff policy towards this division of the textile industry. The Government has indicated that it will apply, by this Bill, minimum and maximum rates of duty. This is in an endeavour to minimise the dislocation that the Minister mentioned in his speech. It is a direct change in tariff policy and it is a change from the levying of speci fic duties upon the man made fibre to a general ad valorem duty. In my speech on this matter during the second reading debate I queried the reason for the change in the industry. I am not going into this in particular detail.
It is true that at page 1 1 of its report the Tariff Board in a majority decision - there was a dissenting opinion and a dissenting recommendation from Mr. J. R. Murray, a member of the Board - sets out several reasons, three as I recall them, for this change in policy. The Opposition is concerned that the benefits to which the Tariff Board refers might not accrue to the industry. Mr. Murray indicates that in his opinion there should have been no change in the policy that has been in vogue up to this time and which has served the industry well. Mr. Murray suggests that the change would bring about a drastic rearrangement of market and production and he points out reasons for the previous policy. In the Opposition’s view they were good and valid reasons. He said, of course, that because of the long runs which were available in the lower priced field of fabrics - that is those valued at under 60 pence per square yard principally - obviously there were economies related to the quantity of production. He said that these economies were apparent to everyone and that this was a good reason why the tariff policy applied before should be retained now. He said that this was a good reason why the specific duty should be retained. Mr. Murray, in his dissenting report, is quoted at page 15 of the Tariff Board’s Report on Woven Man-made Fibre Fabrics as having said -
In the cases under review it cannot be conceded that circumstances exist to sustain a uniform level of protection for these two important textile industries.
Honorable members may remember that in my speech on the second reading of the bill r said that it appeared to me that the Tariff Board’s Report had sought to place the two particular sections of the industry - the woven cotton fabrics which 1 think I discussed at the time and these man-made fibres - on a similar level of protection. Mr. Murray went on and said -
Nor can it be conceded that the interests of companies producing both man-made fibres and cottons are sufficiently involved to permit such a drastic change in their patterns of production. Historically, the man-made fibre weaving industry has, for tariff purposes, been isolated from other sections of the textile industry and evidence continues to strongly support a retention of this policy.
The Opposition is in accord with Mr. Murray in respect of this particular report and this particular section of the industry. Mr. Murray pointed out, of course, that a large proportion of the output of Australian mills is sold at ex-mill prices below 60 pence per square yard. 1 think this statement is borne out in the table available in the Board’s report. I refer to Table No. 8 which appears at page 7 of the Report. I will not quote specific figures but the table indicates that from 40 per cent, to 44 per cent, of the fabrics produced in the last five years from 1961-62 to 1964-65 have been those valued at under 60 pence per square yard. In addition, there is a similar or slightly higher percentage in the fabrics selling at from 60 pence per square yard to 120 pence per square yard. I quote from the Report which stated -
Price information supplied by the nine companies indicates that sales of fabrics in the 60d. to 120d. price groups are concentrated mainly in (he lower end of this group.
So the great proportion of Austraiian production is in the lower price range, t his is the important point I wish to make. I want to quote some figures in a moment on this particular aspect. Mr. Murray went on to cite several examples of reductions in the level of protection which would have come about if, in fact, the majority report of the Board had been accepted by the Government. 1 note that this Report was introduced prior to the introduction of decimal currency. Mr. Murray indicated that on imported fabrics valued at 40 pence per square yard f.o.b. the proposed ad valorem rate would produce a duty lower by 101 pence per square yard. In the price range for imported fabrics of 30 pence per square yard or below the reduction in duty would be 16 pence or more per square yard. Mr. Murray went on to indicate how high volume textile buyers appeared to be influenced by price variations as low as, or perhaps lower than, Id. per square yard. So, as far as Mr. Murray was concerned at the time, this majority recommendation of the Board indicated quite clearly very substantial and drastic reductions in protection for fabrics which are of the lower price range and which, as I said, covered the great proportion of production in Australia.
The Government has modified this particular report. It has not accepted the report entirely but has modified it by providing for higher protection than 55 per cent, for some of the lower range groups. I would like to quote from a paper which was supplied to me by my friend the honorable member for Wakefield (Mr. Kelly).
– It is a unity ticket.
– The honorable member could call it that. On page 5 of the Report of the Tariff Board on Woven Man-made Fibre Fabrics there is a comparison given of the various rates of protection. It sets out the former substantive rate of protection, the former substantive rate plus temporary duties where applicable, and the requested rate of protection sought by the industry, It gives the majority recommendation of the Board. It gives also the equivalent of the minority recommendation - that of Mr. J. R. Murray - and then it gives the rates adopted by the Government as a result of this Report.
We should take into account of course, first of all, that the great proportion of production is in the lower price range. Comparing the protection applied before with the protection sought under this particular Bill, a projection of Table No. 3 shows that there is a fall, for instance, on fabric of a value of 24 pence per square yard, from an ad valorem equivalent of 135.4 per cent, to an ad valorem equivalent of 100 per cent. For fabrics with a value of 36 pence per square yard there is a fall from 90.3 per cent, to 66.6 per cent. Again, there has been a substantial fall in protection on the lower price range of fabric. Again, for fabric priced at 48 pence per square yard we find that there has been a fall from 67.7 per cent, to 55 per cent. - and that is the general run from there down.
– What the honorable member is trying to say is that this is too great a burden?
– Yes. These are falls from what was applied in the past to what will apply now. There is a lowering of protection for the great volume of production in the Australian industry. The Opposition fails to see that Australia is going to get any benefit from this change. If we look again and compare the majority recommendation of the Board with Mr. Murray’s recommendation, there is a clear indication that here again he proposes that fabric valued at 24 pence per square yard should have an ad valorem equivalent of 120 per cent. The majority recommendation was 55 per cent, but the Government’s recommendation is 100 per cent, and this is provided for in this Bill.
In my view, and in the view of the Opposition, that is a reduction which the Government is not entitled to make. We compare again Mr. Murray’s minority recommendation with the rate requested by the Authority. Quite clearly Mr. Murray has not gone overboard for protection for the industry. He has not recommended that all the protection sought by the industry should be given to it. Probably, anyone seeking a concession or protection asks for more than he expects to get. Quite clearly Mr. Murray has not gone overboard for the industry. He has recommended what we consider is a reasonable level of protection for the industry. Here again the protection which he sought and recommended for the higher price range of fabrics is lower than that which will in fact be given by this Bill.
Again the Opposition considers that this change in tariff policy has not been justified by any argument put up by the Tariff Board or by the Minister. We consider that the policy should not have been changed. We will vote against this measure and we can agree to a change only when good and sufficient reasons are given for it. The plain fact is that the great volume of production is in the lower price range of fabrics. We fail to see any good reason for a change. As Mr. Murray said, the arrangement up to date has been satisfactory. We cannot understand why this change has been brought about. The Tariff Board report has not given sufficient reason for this change in tariff policy concerning this section of the textile industry.
.- It is with great satisfaction that I support the Government on this occasion. Let me just make my position clear. I cannot remember how many speeches I have made on man-made fibre fabrics.
– Neither can I.
– I thought the honorable member for Indi was keeping a running total. There have been seven Tariff Board and Special Advisory Authority inquiries since 1958 and I seem to have spoken in discussions of most of them. I hope this will be my last speech on the subject for some time, and I am sure that this hope will be shared by all members of the House.
This industry has been in continual trouble since it was established. The first reason for this is that when we have protected the yarn industry we have made the raw material for weaving dearer. Secondly, the industry is labour-intensive, which naturally puts it at a disadvantage in competing with cheap labour countries. But the chief and fundamental problem is that the Australian market is not large enough. This is not because we have too few people in Australia; the fundamental reason is that women are women and they just hate wearing uniforms. No doubt you, Mr. Temporary Chairman, have had the experience of being in the company of your charming wife when she has seen another woman wearing a dress of the same material as her own, and you have sensed the feeling of blind rage that has come over even such a charming lady. There is nothing we can do about this. We do not want women to be different, but the fact is that because they do not want to wear uniforms the industry faces the problem of short runs, particularly in the production of fashion lines. It must provide for short dyeing runs and short weaving runs. This is a fundamental difficulty that the industry faces. I once suggested to my wife that she wear a uniform and she did not speak to me for months. I then said to her: “ The least you can do for the country is to advocate that women wear uniforms.” She did and none of her women friends spoke to her for a week, except in the nice way that women do when dealing with someone of their own sex.
So the industry has been in continual trouble since its inception. There has been a spate of Tariff Board reports. Mr. John Burgess, a director of the Textile Federation, has been very critical of the frequency of these inquiries. However, the tariff is a subsidy paid by consumers and the imposition of a tariff must be justified. In its report on woven man-made fibre fabrics of 6th August 1965 the Tariff Board discussed the operation of the then specific duty of 2s. 8id. a square yard plus the temporary duties and pointed out that this give an ad valorem rate of more than 100 per cent, on low priced lines. This tended to over-protect the utility or cheap section of the industry and perhaps to under-protect the fashion lines. The Board recommended a fiat rate of 55 per cent., which reduced the duty on the cheap fabrics and raised it on the dear ones. The Board went on to make these comments, which appear at page 1 1 of the report -
The tariff costs of the industry are, however, already high particularly in terms of the value added in local production. For reasons similar to those canvassed in its report on “ Woven Cotton Fabrics, Bed Linen, Etc.”, the Board does not thus believe any substantial expansion of the industry to be warranted, lt will in consequence recommend that level of protection most likely to secure for the local industry its present propor tion of the market. The Board considers that duties keyed to a General rate of SS pet cent, ad valorem would achieve this purpose by providing adequate assistance for such of the fabrics under reference as can be most economically and efficiently produced in Australia. This recommendation is based on the industry’s achievements under existing tariffs. It has also been made with due regard to the costs of using locally produced yarns and the disabilities which the use of these yarns involves.
Though this type and level of assistance should provide adequate protection for efficiently produced lower cost fabrics and will protect heller than at present many of a higher cost, it is, as mentioned, not calculated to extend substantially the proportion of the market produced locally. However, the Board points out that no specific area or proportion of the market can be guaranteed to local weavers. Should the industry thus desire to supply a higher proportion of the local market than at present, the Board would expect it to achieve this by its own efforts and nol by seeking further additions to tariffs which ate already high.
There at last is a clear statement from the Tariff Board that the industry should expand only if its performance is good enough. Surely no one would deny that a tariff rate of 55 per cent, is a high enough rate. After all, I repeat, it is almost twice as high as that recommended by the Vernon Committee as a general disability rate, particularly in terms of value added. There is great value in having the duty expressed as a percentage or as an ad valorem rate. It is now there for all the world to see and understand. It was very difficult - at least I found it so - to understand the full implications of the old specific duties. One had to be in the trade to understand their real meaning. I particularly commend the Board for setting out in table 3 the ad valorem equivalent of the then existing duties.
The Government did not follow the Board’s report exactly, but 1 do not regard the departures as serious. The Department of Trade and Industry has prepared a table setting out, for various grades of fabrics, the ad valorem incidence of the old duties, the Board’s recommendations, the minority report recommendations and also the Government’s decision. This table sets out clearly what happened. It was referred to by the honorable member for Bendigo (Mr. Beaton) and I am sure it will assist us to understand the position. With the concurrence of the Committee 1 incorporate it in “ Hansard “.
1 congratulate the Board on a good, hardheaded report and 1 also congratulate the Government for, in the main, accepting it. Let us hope that this will be the last occasion for a long time on which I will have to make a speech on the subject.
Before I conclude 1 would like to reply briefly to some points made by the honorable member for Bendigo. The Opposition obviously believes that the minority report signed by Mr. Murray was closer to what it would like to have seen. The members of the Opposition evidently feel - at least the honorable member for Bendigo does - that the new duties will upset unnecessarily the existing pattern in the industry. I would like the honorable member for Bendigo in particular, and the Minister, to look at the table that 1 have received permission to incorporate in “ Hansard “, and particularly at the line commencing with the figure “ 36 “ under the heading “ Value for Duty “. They will see that the old duty, the permanent duty if you can call it permanent - it does not seem to have been very permanent because it was always going up and down - was 90.3 per cent. The temporary duty was still the same. The industry asked for duty at the rate of 1 15.3 per cent., but the Tariff Board, in the majority report, recommended duty at the rate of 55 per cent. The minority report recommended 86.6 per cent. The Government decided on a rate of 66.6 per cent.
So it is clear that the Government steered a middle course in relation to these low price fabrics. I am not critical of it for departing in what I regard as an understand able way from the recommendation of the majority of the members of the Tariff Board. But the thing that is important - I want the honorable member for Bendigo to hear this - is that the Board in general constructed a uniform tariff wall of 55 per cent, behind which the industry was to manoeuvre and find its own level. I read the remarks made by the honorable member for Bendigo at the second reading stage when he dealt with cotton. I believe that we shall consider a tariff amendment related to that shortly. He instanced the difficulties that we get into when we make dividing lines in the market. The Tariff Board was determined not to make in the market divisions that would artificially force production into certain areas. It declared, quite rightly, in my view: “ Let us have a tariff wall of 55 per cent, and then let the best man win. Let the industry settle down behind that wall and find out which areas of production suit it best.” No-one can truthfully say that a tariff wall based on a protective duty of 55 per cent, is not high enough. Surely it is high enough to meet the needs of efficient manufacturers. The imposing of specific duties which force production into certain areas, as has happened in the past, raises a problem to which, I think, the honorable member for Bendigo will devote himself in his next speech when we come to the item related to cotton. He will then deal with the problem concerning cotton that he illustrated at the second reading stage.
I believe that the Tariff Board has made a clear eyed decision on this matter. I repeat that the decision will not satisfy everyone. The duty recommended will not be enough to meet the wishes of the inefficient section of the industry, if there are any inefficient manufacturers. But it provides a model according to which the industry ought to be able to work efficiently. For this reason, I shall vote against the Opposition’s proposed amendment, trie honorable member for Lalor (Mr. Pollard) twitted me earlier and said that 1 would not vote with him. I would just like to assure him that if I was sure I was right, I would be happy to vote with him at any time. In this instance, I am sure that the Government is just about right. It is certainly near enough to right and a good deal more right than the Opposition is on this occasion.
.- Mr. Temporary Chairman, I want to say a few words about the Tariff Board’s report on woven fabrics of man made fibres, with particular reference to its effects on the man made fibre industry. I say at the outset that in my opinion the report of the majority of the members of the Board underlines the peculiar attitude that most members of the Board seem to have adopted with respect to the textile industry as a whole in Australia over the past seven or eight years. The honorable member for Wakefield (Mr. Kelly) mentioned that the industry has made repeated submissions to the Board. In my view, there is more than one reason for this. It is obvious that the duties recommended by the Board on previous occasions have not been sufficiently high to protect either the whole industry or certain sections of it. This could be a very good reason why repeated appearances of the industry’s representatives before the Board and the Special Advisory Authority have been necessary.
I believe that Mr. J. R. Murray is to be complimented on his common sense and his individual approach to the inquiry into woven fabrics of man made fibres. I do not wish to debate the whole subject with the honorable member for Wakefield, but I would like to touch on a couple of the comments that he made. He spoke of wives appearing in uniforms. I believe that this was a lighthearted comment. It certainly was not accurate. I presume that he was talking about people in garments of the same colour. I know that Bruck Mills (Australia) Ltd. at Wangaratta has produced fabrics in more than 50,000 shades. I am sure that the various textile factories in Australia would have produced a similar range of colours over the years. The honorable member also stressed that short runs were the basic trouble. The majority of the members of the Tariff Board said exactly the same thing when they stated that because of the inability of factories to achieve long runs their production is not competitive. But surely the fact that short runs represent one of the troubles does not mean that this is a decisive factor. We have to ask ourselves why there are short runs. By comparison with what are they short? By comparison with runs in which country are they short? Is comparison made with the United States of America, which has a population of about 190 million people, and with Japan, which has a population of approximately 100 million people? Factories in those countries are able to undertake longer runs of production of particular fabrics and sell most o.c the output on the home market at very good prices, disposing of the remainder to Australia and similar countries with small populations at extremely low prices. So I ask the Tariff Board: Why should short runs be a decisive factor?
The Board, in its report, used the words “ economic “ and “ efficient “. 1 do not believe that the terms “ economic “ and “ efficient “ cao. be defined. I believe that, to a degree, the Government is wrong when it constantly declares that it will protect factories that are economic and efficient for the actual meanings of these two expressions are governed by many factors and circumstances. I make this point as strongly as I can, Mr. Temporary Chairman: The words “ economic “ and “ efficient “ have been used loosely and frequently when their use has not been proper. There have been various critics of the textile industry, including the Tariff Board. The truth is that our industry is manufacturing for 1 1 million people but is increasing its exports all the time, particularly its exports to countries like New Zealand and Japan and its sales to the armed forces of the United Kingdom and the United States. These are just some of the outlets that our textile industry is gradually achieving for its production. I quote a report of the views of Dr. F. A.
Fox, Superintendent of the Defence Standards Laboratories, in support of my contention. These views, which were expressed at the National Textile Congress in Canberra in October of last year, are, 1 think, extremely pertinent to the progress and efficiency of the industry. The views of Dr. Fox were reported in these terms - . . almost half of the textiles ordered from Australian manufacturers by the Supply Department last financial year was being used by U.K.. forces in South East Asia. “ This is an achievement by the Australian army designers and a compliment to Australian industry thai the quality of their product should receive such recognition,” he said. “ This has come through the excellent performance of our equipment in the tropical areas. lt has been achieved only by skill, care and vigilance by all concerned in design, production and inspection.”
Doubtless, a lot of this material came from factories which would have been seriously affected had the majority report of the Tariff Board been adopted by the Government, The report continues - “ This could be only the beginning of a policy to use Australian Sources for the supply of requirements in these areas,” he said.
The “ Daily News Record “ of 27th September 1965 reported -
United States troops envy the Australian and New Zealand forces in Vietnam who have a wide range of jungle equipment devised over the years for use in the Malaysia war. These include lightweight nylon air mattresses and mosquito nets that can be folded into the palm of the hand. 1 am proud that Bruck Mills (Aust.) Ltd. of Wangaratta has supplied 150,000 yards of material known as Q.I 627 from which some of those articles have been made. The company has received a further order for 100,000 yards of the material to be made into similar light-weight equipment for the British Government. 1 give those instances to illustrate the progress the Australian textile industry is making, notwithstanding its severe battle lo survive against overseas competition. In his minority report, which has been referred to by other honorable members, Mr. Murray pointed out that there is extreme competition amongst textile factories in Australia. This point is often overlooked. I compliment the Government on adopting Mr. Murray’s recommendation that a minimum duty of 2s. a yard be imposed on textile fabrics entering this country. I will not quote too much of Mr. Murray’s report, but it is extremely significant to point out that he said -
For example, on fabrics imported at 40 pence per square yard f.o.b. the proposed ad valorem rate would produce a duty lower by 10 1/2 pence per square yard than that now applying. This is a most significant reduction when considered in the tight of the fact that high volume textile buyers will be influenced by a price variation as low as, or perhaps even lower than, 1 penny pet square yard.
As Mr. Murray indicated, adoption of the majority report would have resulted in an overall loss of sales, which could be significant and could result in unprofitable operations and the eventual reduction in the number of mills operating. This could be of serious consequence where the industry is of special economic significance. lt is in this respect that the decisions of the Tariff Board astonish me. The Board is prepared to recommend such a reduction in duty as to mean the closure of a number of mills in Australia. I cannot follow the Board here. It sometimes uses arguments which appeal to the economists and the theoreticians but which do not always have practical application. The Government is to be congratulated on fixing a minimum duty of 2s. a yard in conformity with Mr. Murray’s recommendation. This lower end of the textile industry, which will be particularly affected by the 2s. per square yard duty and which would have been more adversely affected if the duty had been at the ad valorem rate of 55 per cent., still will have its troubles, I am sure, but at least it now has breathing space. I trust that when the Tariff Board next reviews this section of the industry it will take into account the stated Government policy that Australian industries and Australian jobs will be preserved, particularly decentralised industries. As Mr. Murray said, the man made fibre weaving industry is extensively decentralised. T have heard some honorable members say that this fact should not be taken into consideration. Australia is one of the most urbanised countries. More than 50 per cent, of our population is in two capital cities. There is a prospect that this figure will increase in the next 20 or 30 years to 66 per cent. Of course these are factors proper for the Board to consider. When deciding what protection should be afforded an industry, the Board should pay regard to the location of that industry. It is generally agreed that there is a need to take industries away from Melbourne, Sydney and Brisbane, but this need is not observed as yet by governments or industry. This is a national problem. This is not a matter in which only the Country Party is interested. This is a matter for the National Parliament and the State Parliaments. They must see that the centralisation of population in the capital cities is discontinued. They must encourage the establishment of industries outside the metropolitan capital cities.
[10.28J. - The arguments in favour of the Government’s policy in relation to the tariff now before the Committee have been capably advanced by the honorable member for Wakefield (Mr. Kelly) and the honorable member for Indi (Mr. Holten). In a majority report, the Tariff Board has said clearly that whilst up to now there has been protection in the lower end of the industry, in recent years there has been a significant development of production in the medium and high price field where variety and fashion have more prominence and where longer production runs are not always practicable. The Board therefore felt that the time has come to remove the industry from what was almost a strait jacket in the lower end of the trade and spread protection more evenly throughout the whole range of fabrics produced. The Government, on the other hand, has felt that the change that this would involve to the industry would be too great to bring about all at once. The Government feels therefore that it has taken a course midway between the recommendations in the majority report and those in the minority report.
The Government has decided that there should still be a fair level of protection in the lower end of the trade. As the honorable member for Wakefield said, protection in the lower end will still amount to an ad valorem equivalent of 100 per cent., which in any language is a pretty fair measure of protection, and the Board will carry out further investigations in two years. I believe that, in the interests of the whole man made fibre industry, it is desirable that there should be a change in the pattern of duty. But I believe also that it is wise that this change should take place gradually and not as rapidly as the majority report of the Tariff Board suggested. I think, therefore, that the Government is right in rejecting the Opposition’s amendment and is correct in having a look at the position again in two years’ time. One can only hope that when the report does come down from the Tariff Board in two years’ time, the honorable member for Wakefield will be as good as his word and will not be talking again in the debate. I recommend that the amendment be rejected.
Question put -
That the sub-paragraph propose.] lo be omitted (Mr. Beaton’s amendment) stand part of the Tariff Amendment.
The Committee divided. (The Chairman - Mr. P. E. Lucock.)
Majority . . . . 15
Question so resolved in the affirmative.
Tariff Amendment agreed to.
Tariff Amendments 250 to 255 - by leave - taken together, and agreed to.
Tariff Amendment 256.
.- I want to discuss the item, woven cotton fabrics, and the Tariff Board report on which the duty was founded. This report is a companion of the report on the man made fibre industry. The evidence in both cases was taken contemporaneously, both were decided about the same time and in both cases the Government accepted the recommendations almost exactly. Again, a small variation was made, but I do not think the variation was important. The chief components of the Australian cotton industry are Australian Cotton Textile Industries Ltd., Bradford Cotton Mills Ltd. and Davies Coop. Pty. Ltd., with some smaller weavers who did not give evidence. They either import the cotton at world prices or use increasing quantities of Australian grown cotton, which is available at the world price because of the operation of the bounty.
The Australian market is divided into two broad groups. The first division is sheeting, a little more than half of which is used for bed linen and the rest of which is used as a base for plastics, to make coated plastics. A lot goes into motor car seats and the like. The second division, and the bigger, is apparel fabrics, which is used for dresses and materials worn by people. The Australian manufacturers supply about 15 per cent, of the total market, which is estimated by the Board to be 350 million square yards. The Australian manufacturers asked the Tariff Board to increase the range and level of protection so that they could get 25 per cent, of the market. The Tariff Board inquiry was notable for the quality and the scope of the evidence that was given by the importers, particularly that given by Mr. Dennis Wood, then of Caesar Fabrics Ltd. Caesar Fabrics Ltd. both imports and manufactures fabric. So Mr. Wood was able to take a careful and authoritative look at the whole industry.
The cotton textile industry has been in continual trouble since its inception. It suffers from some of the fundamental problems of the man made fibre group about which we have just been talking. It is comparatively labour intensive, and the smallness of the market means that in the fashion lines the small runs tend to be uneconomic. The Australian industry has always been trying to obtain an increasing share of the market, and to gain this it has continually been asking for increased tariff assistance. One of the reasons given to justify its requests has been the effect on employment and decentralisation. But it is worth noticing that there are a great many more people employed in making up the fabrics into garments than there are in making the fabrics. Evidently there are about 1,900 people engaged in the weaving side, and there are said to be about 70,000 engaged in making the fabrics up into garments. A great deal of this garment section of the industry is in decentralised areas and a large increase in the cost of fabrics caused by protection would jeopardise employment in the garment making section.
I will spare the House the details of the ramifications of the industry. I will deal specifically with the Board’s reasons for its recommendations. First, the Board realised that the industry was already costly. I quote from page 15 of its report -
If it is assumed that Australian prices for all protected local production reflect the whole of protection afforded the industry by the tariff Australian users would be paying about £4 million more per year for these fabrics than if all requirements were imported.
I want to make sure that a really important quotation from the report is incorporated in “ Hansard “ and gets the attention of the House. The Board dealt with the effects of protection. I am obviously one of the few people in this House concerned about these effects. It said -
The protection to be recommended is designed to provide the industry with a market that expands with the growth of population. However, neither this nor the existing market can or should be considered guaranteed. The industry must help itself by taking full account of market requirements and by looking less to the Tariff than hitherto as a means of meeting its problems. With such an approach coupled with efficient production the Board considers that the duties to be recommended will be at least adequate to sustain the present industry, and to allow for some growth due to population increases.
This is the kind of clear thinking that has been criticised in the House tonight. It spells out the cost of protection, and because it does not appear that the Australian industry can better its performance owing to the fundamental problems I mentioned before it gives clear warning that the industry should not be encouraged by tariff assistance to expand still further. It goes on to recommend a 55 per cent, duty which surely is high enough in all conscience. It is about twice as high as the general cost disability featured by the Vernon Report.
There is great value in having this duty again spelt out in this ad valorem form instead of in the form of the old specific duties which I, and others I think, found difficulty in understanding. I can well imagine that the Australian manufacturers will feel hesitant in approaching the Government again and saying that a protection of 55 per cent, spelt out so clearly is not enough.
The only complaint I have with the report is that there is no table similar to Table 3 in the man made fibre report giving the ad valorem equivalent of the specific duties. This would have made it an even better report but in the main I think that our thanks and the thanks of the country should go to the Board for having set out so clearly the fact that the industry should not expand unless it can do so inside this tariff wall of 55 per cent, which, goodness knows, is high enough.
I want to deal briefly with some of the points raised by the honorable member for Bendigo (Mr. Beaton) in his speech during the second reading debate. He posed the problem of a manufacturer - I think in his district - who wanted to import dress shirt material. He was having difficulty in getting by-law entry. I am not familiar with the particular case, but the general guideline followed by the Department of Customs and Excise is that if the material to be imported is not to be a substitute for a material made in Australia, it should obtain by-law entry. Honorable members will remember that the honorable member for Bendigo referred to the problem of the increased cost of the dress shirt material. His point illustrates yet again the effect of increasing tariff protection on a product which is the raw material of the next manufacturer further down the line. Investment and employment in that next industry are placed in jeopardy.
The honorable member for Bendigo said that he does not have a dress shirt. I do not have a dress shirt either. I have been saving to buy one for a long while, but always a disaster strikes me to prevent it. I might get rust in the wheat or be hit by the effects of drought. Something goes wrong. However, at this stage I have just about steeled myself to invest in a dress shirt and this kind of thing happens. This is the effect of taxing luxuries in this way. All of us can do without dress shirts, although with difficulty. I was interested in another point raised by the honorable member for Bendigo and I am glad to see that the honorable member for Scullin, (Mr. Peters) has now entered the chamber. The honorable member for Bendigo said -
The consumers are the people who ought to determine whether a particular material is needed.
That is not my statement. It is a statement made by the honorable member for Bendigo. He went on to refer to a consumer of a cotton shirt. Is that expression exactly right? I suppose it ought to be the “ user “ of a cotton shirt. In any event, the honorable member for Bendigo has said that the consumer is entitled to say whether he wants a particular shirt fabric. This is in direct opposition to the stand usually taken by the honorable member for Scullin, who would say that the importation of any kind of material such as this should not be permitted. I would be inclined to say that the imported chicken, about which the honorable member has so often been critical, would fall into the same category as a dress shirt. I think we ought to accept this provision, as 1 accept the attitude of the honorable member for Bendigo. The consumer ought to have a say. I support that attitude.
I rose to speak in this debate to support the Government in its action and to congratulate the Tariff Board on taking a long, clear and thorough look at an industry that has been in continual trouble and has cost the community a great deal in the form of consumer subsidies. I hope that here again we will not have a Special Advisory Authority report to upset an industry that from now on should be stable, if allowed to settle down behind the tariff wall with an ad valorem equivalent of 55 per cent.
– I wish to make a personal explanation, Mr. Chairman. I have been grossly misrepresented.
– Has the honorable member for Scullin spoken in this debate?
– I have not spoken on this matter, but my name was mentioned by the honorable member for Wakefield.
– Order! The honorable member has not spoken on the proposal before the Committee. Therefore he could not have been misrepresented by the honorable member for Wakefield.
.- I should like to draw attention to one particular anomaly in this item, that is, with regard to cotton fabrics of a flannelette nature over 6 oz. in weight. I believe that the imposition of the 55 per cent, ad valorem duty in this case has brough a considerable amount of distress, particularly to pyjama manufacturers, some of whom are operating in my own area. The reason for this is that the duty as it is applied will mean that the cost of Australian manufactured pyjamas will be out of all proportion to the cost of imported pyjamas made from precisely the same material. For some months I have been attempting to get clarification of this situation, because, to the best of my knowledge, this material is not and has not been made in Australia.
I spoke to the largest manufacturer of pyjamas in Australia, and I assure the Committee that he informed me that it was his opinion that the whole industry had no desire or intention to get into this field. What is more, when an attempt was made to get an evaluation of what it would cost for this same material to be made in Australia, one large manufacturer gave a price which was virtually double that which is now being paid to import the material from overseas. I take it that this was a prohibitive price, simply to indicate to the inquirer that the mill in question had no intention of attempting to supply an order and that it had no desire to move into this manufacturing field. Yet the manufacturers are continually faced with this very high rate of duty which puts them clearly out of court. I have seen confidential figures from Victorian and other New South Wales manufacturers. I have the figures before me, but they are confidential so I shall not quote them. But the figures add up to almost the same picture. They show that a difference of approximately 4s. per pair of pyjamas is caused by the imposition of this duty to protect an Australian industry that does not exist and does not intend to exist. Where inquiries have been made of Government departments by manufacturers of pyjamas, no indication has been given of there being available samples of future supplies, nor has there been any kind of attempt to give a firm price.
I speak only of this particular fabric which is over 6 oz. I believe the imposition of this duty is an anomaly which should be looked at carefully. I believe in the integrity of the people who have given me, over a period of months, the figures to which I refer. I believe that the duty applying in this case is something which is completely anomalous, when its aim is to protect an industry which at the present moment does not exist and when no evidence can be given, either of quality or price, for the future supply of this material in Australia.
– I am glad that the honorable member for Wakefield (Mr. Kelly) has given the Committee such a good synopsis of the Tariff Board report. Nothing more needs to be said on that. Regarding the detailed matter raised by the honorable member for Evans (Dr. Mackay), 1 should say that the local industry has been given by-law entry of this material until the end of March to enable it to cover production for the whole of this winter period. There will be, I gather, further talks between the industry and the Department of Trade and Industry to ascertain whether in the next 12 months the industry, on its revised basis, will go into production of this material or whether by-law entry will be continued as it has been for this year. The honorable member can rest assured that this matter is being watched and will be investigated and that there is plenty of time in which a decision can be made.
Tariff Amendment agreed to.
Remainder of First Schedule - by leave - taken as a whole.
– I want to speak only briefly on item 313, which relates to tinned iron and steel hoop, strip, plates and sheets. If any free traders are left in the chamber, they have been suspiciously silent of late years. If there are, they would be interested to look upon this report as a justification of wise protection. This is the way protection ought to work. I thought that as I am usually criticising duties or the effect of duties it was only proper for me to pay a tribute in this case to protection when it has worked well. At the time of the report of the Tariff Board on tinned iron and steel hoop, strip, plates and sheets, the duty was 7i per cent, on the most favoured nation basis. But back in 1920 there was a deferred duty of £5 15s. a ton. This was put on, but it was not to apply until the industry came into production. These duties were to operate when the Australian production commenced, if they were then found to be necessary. In actual fact, these deferred duties were never used and they have been abolished now as the result of this report.
The fact that these duties were in existence gave the Broken Hill Pty. Co. Ltd. the confidence to go ahead and incur the considerable capital cost involved in setting up a tinned plate mill. The production of hot dipped plate steel began in August 1957. The production of electrolyte plate commenced in 1962. The Tariff Board found that B.H.P. did not need the deferred duties. This company does not need them now. Nor did the Tariff Board feel that the company would need them in the future, so it recommended their abolition. As 96 per cent, of the tinned plate produced is used for food canning, a serious handicap would have been incurred if the deferred duties had been imposed. I think it is a great credit to B.H.P. that these duties have been proved not to be necessary. I only wish that the performance of the company in this regard could have been followed in relation to stainless steel plate. Recently we had a report from the Special Advisory Authority dealing with stainless steel. We are not discussing that report at this time. The report imposed very high duties which I think are calamitous. I pay tribute to the performance of B.H.P. in this industry. I think that this is something that illustrates the fact that protection, if wisely used, is a very proper weapon in our economic armoury.
Remainder of First Schedule agreed to.
Second to Ninth Schedules - by leave - taken together, and agreed to.
Tariff Amendments 1 to 3 - by leavetaken together, and agreed to.
Tariff Amendment 4.
House adjourned at 11 p.m.
The following answers to questions upon notice were circulated -
r asked the Minister for Trade and Industry, upon notice -
– The answers to the honorable member’s questions are as follows -
m asked the Minister for Trade and Industry, upon notice -
What arrangements have been made or are contemplated for transporting the products subject to the trade agreement made with the Union of Soviet Socialist Republics on 15th October 1965?
– The answer to the honorable member’s question is as follows -
The U.S.S.R./ Australia Trade Agreement provides for an exchange of most-favoured-nation treatment in respect of tariffs, quotas, licensing and other restrictions to trade. It does not provide for special arrangements for particular products.
There are no commitments on shipping. As in the past, Russian and Australian interests will continue to make shipping arrangements to suit their particular requirements.
y asked the Minister for Territories, upon notice -
– The answers to the honorable member’s questions are as follows -
y asked the Minister for Territories, upon notice -
– The answers to the honourable member’s questions are as follows -
b asked the Minister for Labour and National Service, upon notice -
– The answers to the honorable member’s questions are as follows -
y asked the Minister for the Interior, upon notice -
– The answers to the honorable member’s questions arc as follows -
Cite as: Australia, House of Representatives, Debates, 3 May 1966, viewed 22 October 2017, <http://historichansard.net/hofreps/1966/19660503_reps_25_hor51/>.