20th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Edward Mattner) took the chair at 3 p.m., and read prayers.
– I wish to direct a series of questions to the Minister for Trade and Customs. They are: 1. When the Government agreed to sell its interest in Commonwealth Oil Refineries Limited, was it aware of the existence of a report by a committee of the United States Senate, which was kept secret for. one year and was not released until the 24th August last, because it was thought that its contents might do harm to international relations? Did the Government know that that report alleges that seven international oil companies–
– I rise to order. Senator Cameron is seeking to canvass a matter which is the subject of legislation that is still under discussion in this chamber.
– Senator Cameron is not in order in asking that question.
– Order ! Before 1 allow any further questions to be asked I desire to say that I was mistaken a few moments ago when I ruled that the question asked by Senator Cameron was out of order. The fact is that he was quite in order in asking that question, and I now give him the call.
– The remaining questions are as follows: - 2. Was the Government aware that the report alleged that seven international oil companies, namely, the Standard Oil Company (.New Jersey), Standard Oil Company of California, Socony-Vacuum Oil Company Incorporated, Gulf Oil Corporation, Texas Oil Company, the AngloIranian Oil Company Limited and the; Royal Dutch Oil Company, held a monopoly of most of the world’s oil, divided markets between them and fixed prices? 3. Was the Government aware that the report stated that officials of the’ major companies, who are described as participants in the cartel, have been subpoenaed to appear at a grand jury investigation in Washington, which began on the 23rd September, 1952, the purpose of the inquiry being to determine whether the practices of the companies violated the anti-trust laws of the United States of America? 4. Was the Government aware that the report stated that four of the companies, with six of their subsidiaries, had been sued in the United States District Court in New York for the recovery of 67,000,000 dollars, which is equivalent to £24,000,000 sterling. This sum represents alleged overcharges ou shipments of oil bought for Marshall plan countries under the United State’s foreign aid programme? 5. If the Government was not aware of the existence of the United States Senate Committee report referred to, in which the AngloIranian Oil Company Limited is involved, will it be prepared to have it examined with a view to reconsidering its decision to sell the Commonwealth’s interest in Commonwealth Oil Refineries Limited, in order to protect the people of Australia from the alleged malpractices’ of the Anglo-Iranian and other oil companies?
– This is hardly the time or the place to embark or elaborate upon the wide range of knowledge possessed by the Government in relation to this subject. However, 1 assure the honorable senator that th, Government in making its decision acted on all relevant knowledge and information, and exclusively in the public interest.
– I have been informed that the vessel Barossa, which is owned by the Adelaide Steamship Company Limited, has been delayed at Newcastle with a cargo of coal for South Australia for approximately five weeks. “Will the Minister for Shipping and Transport say whether my information is correct, and, if it is correct, whether the dispute has yet been settled? What were the causes of that dispute which has delayed the sailing of the vessel?
– I understand from reports that I have received from my department that Barossa has been held up at Newcastle for five weeks in consequence of a complaint made by the seamen about the quality of its coal. The complaint was investigated by technical experts, and Mr. Conciliation Commissioner Knight, who mediated in the dispute, found thatthe quality of the coal was quite satisfactory. Nevertheless, the seamen, who had declared the ship black, have refused to offer for engagement on the vessel. Of course, that is not new, and is a part of general Communist tactics. Under our present legislation, honorable senators will appreciate the difficulty that theGovernment is experiencing in handling disputes such as the present one in which members of the Seamen’s Union have been advised by their officials to declare the vessel black and have refused to offer their services. However, officials of the Department of Labour and National Service are watching the matter closely, and they are doing all that they can to persuade the union leaders concerned to displaya little intelligence and revoke the black ban.
– Recently, Senator Paltridge asked me a question regarding the number of ships delayed on the Australian coast during the last three months. I now supply the following information concerning vessels delayed and periods of delay during the three months which ended on the 30th September last: -
– I ask the Minister for Shipping and Transport whether it is a fact that in the course of negotiations for the sale of the Commonwealth shipping line, a private company has made an offer for one vessel for the specific purpose of putting that ship on the run between Tasmania and the mainland ? Should this sale take place, will the Government ensure that a clause shall be inserted in the agreement to bind the purchasing company to keep the vessel on the run for which it is to be bought?
– The honorable senator’s question relates to a matter of Government policy that is now under consideration and I remind him that it is not the practice to answer such questions without notice. However, I can assure the honorable senator that nothing would give me greater pleasure than to be able to ensure that the Tasmanian shipping service shall be maintained, and that everything possible will be done to deal with the rebel element that is causing all the trouble.
– Has the attention of the Minister for National Development been directed to a report in to-day’s Sydney Morning Herald to the effect that the central executive of the miners’ federation would call upon its members to resist any dismissals or retrenchments, after Mr. Williams, the president of the miners’ federation, had stated that notice of dismissal had been given to the miners at the Belmont and Neath open cut mines, despite the fact that an assurance had been given by the Minister that coal production would be maintained until the Commonwealth and the New South Wales Government had considered a report by the Joint Coal Board?
– A deputation from the miners’ federation asked me whether the Government would be prepared to purchase and stockpile coal in order to obviate the risk of unemployment in the coalmining industry.I discussed the matter courteously, fairly and at considerable length with the deputation. I paid a good deal of attention to the fact that it included men like Mr. Nealley and Mr. Cockerill, whom I believe to be responsible union officials. Although they are not supporters of tho Liberal party, I am sure that they have the best interest of their union at heart.
I also discussed the matter with the Joint Coal Board, and was informed that there would be a risk of loss if inferior coal were stockpiled. I agreed to purchase and stockpile coal in the interregnum period and asked the Joint Coal Board to take whatever action was possible to minimize the risk of loss to the Government. I think I did what was reasonable and fair in the circumstances. It seems to me that much depends upon the maintenance of good industrial relations in the coal-mining industry. Because I wish to do all that I can to maintain such relations, I do not like the newspaper reports, nor do I like the report in Common Cause, the journal of the miners’ federation, which grossly misstated the atmosphere that prevailed at the conference and the nature of the decisions arrived at. That report gave the impression that I had been coerced or forced into the action that I have taken. That was not the case. Those who were present at the conference asked me to do certain things, and I did them because I believed that they were correct. I do not think that the position is helped at, all if the men in the industry are given a grossly incorrect report, by their official journal, of the proceedings at that deputation.
asked the Minister for National Development, upon notice -
-‘ The answers to the honorable senator’s questions are as follows : -
– Will the Minister for Trade and Customs inform the Senate of the present landed cost per lb. of tea? Will he also state the amount of subsidy paid by the Government on each pound of tea, and the retail price of that commodity ?
– Senator Aylett asked me a question on the same lines approximately a month ago. If the honorable senator is not able to find that question in Hansard, I shall obtain the information for him.
– I address to the Minister for Shipping and Transport a question which refers to protests that have been received by me and also, I understand, by the Government, regarding legislation dealing with explosives which is to be introduced in the Parliament at some future date. Has the Minister received protests from harbour authorities throughout Australia concerning this legislation? If he has, what consideration has he given to delaying the bill until these authorities have had time to consider the matter?
– The bill relating to explosives which is before another place gives legislative effect to the provisions of National Security Regulations concerning the handling of explosives which were in force during the war. I appreciate the point of view of the port authorities. The bill gives the Government power to make regulations and these would be submitted to the chairman of the port authorities for his consideration. Mr. Mackenzie, of the Melbourne Harbour Trust, who is chairman of the port authorities of Australia, has drawn my attention to matters to which the authorities object, and in view of the fact that these authorities have complete administrative power in relation to these matters I have arranged for the passage of the bill to be delayed. This delay will provide an opportunity to make an amicable arrangement on which to base a bill which will enable the greatest possible co-operation between the Commonwealth and the port authorities who are responsible for the handling of hazardous cargoes of explosives. The Government will not proceed with the bill until a conference has been held on this matter.
– In view of the decisive lack of confidence in the Government that was recorded by the people of the Flinders electorate last Saturday, will the Minister for Trade and Customs state whether the Government will drop its proposal to sell the people’s assets until they have been consulted on the matter ?
– The honorable senator’s question does not call for an answer.
– On the 7th October, Senator Maher asked the following question : -
Will the Minister representing the Minister fur Territories try to arrange for the Administrator of the Northern Territory to furnish for the information of the Senate a reasonably accurate estimate of the devastating losses that have occurred in the Barkly Tableland and other parts of the Northern Territory?
The Minister for Territories has supplied the following information in reply to the honorable senator’s question: - in the Barkly Tableland cattle losses are estimated at approximately 40,000- adult beasts and 34.000 calves, valued at approximately £1,000,000. In the Victoria River District, losses are estimated at up to 25 per cent, of breeders on some stations and up to 50 per cent, of this year’s calvings. Total losses are estimated to’ be 50,000 breeders and 30,000 calves, valued at approximately £700,000. In the Alice Springs District, losses have been light, though starting now on stations to the north. No reliable figures are available. In the Darwin and Gulf District, losses have not greatly exceeded those usually regarded as normal. The general condition of stock in this district has been better than normal and the light season has improved the nutritive value of the usually rank tropical growth. The estimates given here do not take into account the serious disorganization of the industry caused by the drought nor the effect of breeding failure in 1952 on future brandings. If rains fail to bring relief a steep rise in losses can be expected during the next three months.
– Is the Minister for National Development aware that the sirex wasp lias been introduced into Tasmania in imported timber for prefabricated houses stored at Llanherne aerodrome near Cambridge? Is it a fact that a forestry officer of the Commonwealth Scientific and Industrial Research Organization, has reported that the sirex wasp has spread to nearby pine forests and thus is threatening all pine reafforestation areas in the State? Will the Minister advise what steps, if any, are being taken by the Commonwealth, in conjunction with the State governments, to eradicate this menace to Australian forests ?
– I have not received n report, on the matter to which the honorable senator has referred. Primarily, of course, the problem is one for the Tasmanian Government, which, I assume, is the purchaser and importer of the houses concerned.
– The houses have been imported for Commonwealth jobs, including aerodrome construction.
– I shall have inquiries made as soon as possible. The honorable senator has indicated that an investigation has already been made by the Commonwealth Scientific and Industrial Research Organization, and it is probable that the Minister in charge of that organization is already dealing with the matter.
– As the air services of Australian National Airways Proprietary Limited and TransAustralia Airlines are about to be rationalized, will the Minister representing the Minister for Civil Aviation give consideration to the rationalization of the services from Perth to the eastern States? At present aircraft of the two companies depart from Perth simultaneously.
– I shall be pleased to bring that matter to the notice of the responsible authorities.
asked the Minister representing the Minister acting for the Minister for Civil Aviation, upon notice -
– The Minister representing the Minister acting for the Minister for Civil Aviation has supplied the following information: -
asked the Minister representing the Minister acting for the Minister for Civil Aviation the following questions, upon notice -
– The Minister acting for the Minister for Civil Aviation has supplied the following information : -
The subject of the relationship between Australian National Airways Proprietary
Limited and Trans-Australia Airlines is under consideration. The question involves a matter of Government policy, and a decision will be announced at an appropriate time.
– On the 15th October, Senator Robertson asked the following question: -
Some months ago I addressed questions to the Minister representing the Minister for Health and the Minister for Trade and Customs concerning the illegal use of drugs and their entry into Australia. In reply to those questions, the Senate was informed that an extensive inquiry was being made and that a report would be furnished. Can the responsible Minister now say when the Senate may expect this report ?
The Minister for Health has now furnished the following reply: -
Following inquiries by the World Health Organization, my Department, in conjunction with State health authorities, is conducting an investigation into an apparently excessive consumption of certain narcotic drugs in Australia. Consideration is being given to uniformity in drug control throughout the Commonwealth and draft legislation for that purpose is being prepared by my Department foi’ reference to the States.
– Is the Minister for Trade and Customs aware that Mr. O. N. Callow, an Albury veterinary surgeon, claims that dairy cattle in the Albury district had suffered sickness and had died as the result of having contracted myxomatosis, a. disease spread by the Commonwealth Scientific and Industrial Research Organization to combat the rabbit menace? As myxomatosis virus has been released throughout the Commonwealth, will the Minister cause the fullest inquiries to be made into the deaths of cattle said to have been caused by this disease? Will he arrange for a full statement on the matter to be made by the Commonwealth Scientific and Industrial Research Organization ? If it is found that myxomatosis has spread to stock and to animals, other than rabbits, will he endeavour to have information released by the Commonwealth Scientific and Industrial Research Organization which will enable veterinary surgeons to treat the disease when it becomes manifest?
– When my attention was directed to a report on this matter yesterday I made inquiries of the Commonwealth Scientific and Industrial Research Organization with regard to it. Information furnished by the officers of the organization indicates that there is no foundation for the suggestion that the cattle in question had suffered from myxomatosis. A number of inquiries have been directed to the organization by persons who have suggested that animals have been suffering from, this disease. Upon investigation in no instance was it discovered that an animal was, in fact, suffering from the disease. On the basis of the information furnished to me yesterday, the honorable senator can rest assured that whatever disease may have afflicted the cattle in the Albury district to which lie lias referred, it was not myxomatosis. However, I shall direct the attention of the officers of the Commonwealth Scientific and Industrial Research Organization to the honorable senator’s question. If there is any further information that I can obtain, I shall be glad to furnish it to him.
– Can the Minister representing the Minister acting for the Postmaster-General inform me whether any of the tenders received for the construction of line yard depots for the PostmasterGeneral’s Department at Deloraine, Oatlands, St. Mary’s, Cygnet, Scottsdale and Wynyard have been accepted? Is he aware that the conditions under which the employees work at these line yards could scarcely be worse than they are at present? Has the Minister any information regarding the construction of depots for the PostmasterGeneral’s Department at Sheffield and Huonville ?
– The honorable senator’s question raises a number of matters of detail that will require careful examination, and I cannot give him an answer “ off the cuff “. However, I shall take up the matter with the Minister acting for the Postmaster-General and obtain a reply for him.
asked the Minister representing the Minister acting for the Postmaster-General. upon notice -
Sena/tor COOPER.- The Minister acting for the Postmaster-General has furnished the following information: -
The supply of general forms for use in the Postmaster-General’s Department is a matter to be dealt with by the Commonwealth Stores Supply and Tender Board, which comes under the jurisdiction of the Treasurer. The Treasurer has supplied the following replies: -
The policy of the Commonwealth Stores Supply and Tender Board is to invite public tenders for all goods and services. This practice was followed in the case in question and tenders invited for the supply under several categories of 48,000,000 telegram forms required for all States. Tenders were received from 21 firms, including one from Coronation Printery for the requirements of Queensland under two categories. The tender of that firm for supplies under one category was the lowest received and it was accepted in accordance with usual practice. The value of the tender was £170 for the supply of 3,000,000 forms.
– Will the Minister representing the Treasurer inform the Senate: 1. How much money has been paid into the National Welfare Fund since it wa3 established in 1943 by (a) social service contributions ; (Z>) payroll tax; (c) lump sum payments other than amounts covered in (a) and (h) ? 2. Since the fund was established, how much has been paid out each year in respect of child endowment, unemployment benefit, sickness benefit, age pensions, invalid pensions, widows’ pensions and so on? 3. How much was in the fund at the 30th June last?
– I think that the information requested in the first question was furnished during the recent debate on the National Welfare Fund Bill 1952. The information requested in the second question is published each year in the annual report of the Director General of Social Services. The information sought in the third question asked by the honorable senatorwas also made available during the recent debate on the National Welfare Fund Bill. However, if the honorable senator cares to place his questions on the noticepaper I shall obtain the information he desires.
– On the8th October SenatorReid asked whether it was intended to submit to a poll of wheat growers proposals to extend the present wheat industry stabilization plan. I have received the following information from the Minister for Commerce and Agriculture: -
The resolution passed at the conference of Commonwealth and State Ministers on the 2nd October did not envisage a poll of growers concerning the extension of the plan for one year. The extension is intended togive an immediate assurance to growers concerning the 1953 crop, although the governments do not consider that the details of a long-term wheat stabilization plan can be considered until the results of discussions early next year about the International Wheat Agreement are known.
– On the 25th September last I asked the Minister representing the Treasurer for certain information concerning the sale of a number of Commonwealth industrial undertakings. Can the Minister inform me when I may expect the courtesy of a reply to my question ?
– Order ! I understand that the Minister will furnish the information sought during questions on notice. I now call upon questions upon notice.
– I have another question that I desire to ask, Mr. President.
– Order! The honorable senator has had ample opportunity to ask his question. The time available for questions without notice is limited, particularly when the proceedings of this chamber are being broadcast. I have given honorable senators every opportunity to ask questions without notice, and some of them have asked two questions. In fact, the honorable senator has himself asked two questions.
– It will keep.
– On the 25th September, Senator Cooke asked the f ollowing questions : -
Will the Treasurer furnish full particulars relative to and including the conditions of sale and/or proposed sale of the following Australian assets: -
The Treasurer has supplied the following answers to the honorable senator’s questions : -
Amalgamated Wireless (Australasia) Limited.
The Commonwealth Oil Refineries Limited.
There were no particular conditions attached to the sale, but the Anglo-Iranian Oil Companyhas undertaken to use its best endeavours to complete its proposed new oil refinery at Kwinana, near Fremantle, in Western Australia as early as practicable.
The moneys received from the. sale of these shares were paid into Consolidated Revenue.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has furnished the following information : -
I understand from the Attorney-General that judgment has been reserved.
asked the Minister for National Development, upon notice -
– The answers to the honorable senator’s questions are as follows : -
Never before in Australia’s history have such large amounts of American capital been committed for investment in this country as in the past fifteen months.
Since June, 1951, new investments totalling nearly £50,000,000 have been announced by American companies either extending their present interests in Australia or setting up entirely new enterprises.
The £50,000,000 new investment announced since June, 1951, is nearly double the comparable figure of the previous six years and is about twelve times greater than the figure of 1950-51.
Wo have no information on this point. No reports on the subject have been received from the Trade Commissioners in the United States of America.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has furnished the following information: -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has furnished the following information : -
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
– I move -
That the bill be now read a second time.
This measure provides for an increase of £100 per annum in the salary of the AuditorGeneral to take effect from the 1st July, 1951. The present salary of the AuditorGeneral is £3,250 per annum. The Government decided, in October, 1951, that, in view of cost-of-living increases since salaries werereviewed in 1950, a general increase of £100 per annum as from the 1st July, 1951, should be granted to permanent heads and certain other full-time officers, including holders of statutory offices, whose salaries are determined by the Government. The Government further decided that this adjustment should be met from the appropriation for ordinary annual services. The salaries of the holders of statutory offices were accordingly increased without amending the acts authorizing such salaries.
The AuditorGeneral has expressed the view that it is not appropriate that a portion of his salary should be subject to control by the Government of the day by its inclusion in the annual Estimates and that, to preserve his independent status, the increase in salary should be authorized by an amendment of the Audit Act. In the existing circumstances, he has declined to accept the increase of £100 per annum approved by the Government. The Government, after considering the views of the AuditorGeneral, has decided to amend the Audit Act to provide the necessary statutory authority to increase the salary of the AuditorGeneral by £100 per annum as from the 1st July, 1951. Provision is made accordingly in the bill now before the Senate.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator O’Sullivan) read a first time.
– I move -
That the bill be now read a second time.
The purpose of the bill is to enable the Government to transfer ex-enemy assets at present held by the High Court of Australia to the Controller of Enemy Property. This will enable effect to be given to the Government’s decision to distribute the proceeds of the sale of Japanese assets in Australia amongst former prisoners of war of the Japanese. Although the bill relates to the control of all ex-enemy assets, and not specifically to the control of Japanese assets, it lays down a plan of disbursement of the proceeds of realization of the Japanese assets only. It would, I think, be helpful if I were first to outline the steps already taken by the Government to compensate in some small measure former prisoners of war, who suffered distress or hardship by virtue of their captivity.
Honorable senators will recall that the Government appointed a committee consisting of Mr. Justice Owen of the New South Wales Supreme Court, Sir Stanley Savige, and Dr. W. E. Fisher to consider certain proposals which were advanced for the payment of a subsistence allowance to former prisoners of war. This committee found that there had been a general failure by Japan to treat Australian prisoners of war in accordance with the provisions of the International Convention of 1929, to which that power had pledged itself, and that, as a result, the great majority of prisoners suffered undue hardships and privations. The committee further observed that capture was one of the hazards servicemen must face, and that a claim for hardship money under these conditions was without a just or logical basis. The committee pointed out that the responsibility for failing to observe international law governing the treatment of prisoners of war rested upon the captor power. Following the report of this committee, the Government established the Prisoners ofwar Trust Fund, and an amount of £250,000 was appropriated from consolidated revenue and made available to trustees, under the chairmanship of Brigadier Blackburn, V.C., for the benefit of former prisoners of war of both Japan and Germany, who suffered mental or physical hardship which was directly referable to their captivity.
In the negotiations leading up to the peace treaty with Japan the Australian Government used its best endeavours to secure general acceptance of a provision in that treaty for compensation to those who had suffered at the hands of the Japanese. It was not practicable, however, to reach any general agreement among our allies on the question of monetary reparations, because the extent of the prior claims of countries, which had assisted Japan to obtain some stability after the cessation of hostilities were such that if all claims were accepted, Japan could not possibly Lave regained economic stability. It was possible, however, to make provision in the treaty for the handing over by Japan of its assets in neutral and ex-enemy countries, and, as honorable senators are aware, these assets will be assembled by the International Committee of the Red Cross and the proceeds will be made available to the respective countries concerned for distribution for the benefit of former prisoners of war and their families. By virtue of the provision, which was inserted in the treaty largely owing to persistent efforts by Australia, the whole of Japan’s external assets will become available for the benefit of former prisoners of war. In addition, under the terms of the Japanese Peace Treaty, the Japanese assets in Australia become the property of the Australian Government. These assets have an estimated value of £770,000. Accordingly, the total of the fund to be distributed under this bill will be approximately £770,000.
In considering the disposal of these assets, the Government had in mind that the prisoners of war and civilian internees had been captured and interned by an enemy who did not observe the rules of international law. As a consequence, their health was impaired and they were left with much less capacity to restore their fortunes. The Government felt, in the circumstances, that it was fitting that responsibility for compensation for these disabilities, many of which will only become apparent as the years go by, should rightly rest with the Japanese, and consequently the Government decided to distribute these assets amongst those affected. These assets represent the whole of the Japanese assets in Australia. It was found difficult to differentiate between prisoners of war and Australian civilians who were pursuing their lawful business in territory overrun by the Japanese, and who thus became internees. It was considered that these civilians should receive some compensation from the funds available. The Government therefore decided that the proceeds of the sale of Japanese assets in Australia should be distributed as follows: -
Members of organizations such as the Young Men’s Christian Association and the Red Cross Society who were in uniform and attached to the Australian forces, and who were captured by the Japanese and held as prisoners of war, will be treated on the same footing as prisoners of war as regards participating in the distribution of the fund. The Government is eager that the distribution of these funds should be made as soon as possible. Hence, the bill gives authority to the Attorney-General to move the High Court to make available the moneys, investments, books or accounts which are held by that court. These moneys and investments, together with moneys and investments already held by the Controller of Enemy Property, will be realized, and, subject to the payment of the necessary expenses of the Controller of Enemy Property in the administration of the National Security (Enemy Property) Regulations, and such other claims as may be made on the funds, and the payment of £25,000 to the trustees of the Civilian Internees Trust Fund, the balance will be transferred to a distributing authority who will then make it available as directed by the Prime Minister.
Action has already been taken to complete the rolls covering those entitled to participate in the distribution. It should be possible, therefore, for the distribution to proceed at an early date, and no doubt a public announcement will be made by the distributing authority in due course if it should be necessary for ex-prisoners of war to make any application for payment of the money. With regard to payments to be made to the dependants of deceased prisoners of war, the term “ dependants “ will be interpreted liberally and the prescribed authority will be given discretionary power, should circumstances warrant it, to make payment to such other person or persons and under any conditions he sees fit. In the first instance, however, payment would be made to such person or persons who stood to the deceased in the relationship of wife, child, parent, step-parent, oi” foster-parent, or persons who were actually dependent on the deceased at the time of his death. The distributing authority proposes to make an initial payment of £32 to each ex-prisoner of war or dependant as the case may be, and I trust that it will be possible to make this payment with a minimum of delay. I commend the bill to honorable senators.
Debate (on motion bv Senator McKENNA) adjourned.
Debate resumed from the 21st October (vide page 3379), on motion by Senator Spooner -
That the bill be now read a second time
– This measure seeks parliamentary .approval for a loan of 50,000,000 dollars from the International Bank for Reconstruction and Development, and as a Labour representative, I wish to offer certain criticisms of the Government’s action in negotiating that loan. The Labour party is not opposed to reciprocal trade arrangements between Australia and other countries. In fact Labour governments have done everything possible to foster such trade and to encourage the investment of overseas capital in the Commonwealth. Government supporters who have spoken in this debate have failed completely to justify the loan. We are told that certain capital equipment that is unprocurable in this country and in other sterling countries must be obtained from the United States of America if Australia is to be developed. I should like to know what section of the Australian community urged the Government to seek a dollar loan. What representations were made to the Government by business executives? Was a thorough investigation made of Australian industry to ascertain whether some at least of the machinery and equipment that is to be imported from the United States of America could be produced in this country? My inquiries convince me that no such investigation was made. I have consulted with representatives of various business organizations and of the trade unions, and not one of those people had any idea, prior to the official announcement of the loan, that the Government was even contemplating borrowing more dollars. I should like to know why an exhaustive examination of our own manufacturing resources was not made before the decision to approach the International
Bank for Reconstruction and Development was taken. There are many authorities in this country that could have advised the Government. I remind the Senate that, during the war, special committees were set up under the auspices of the Department of War Organization of Industry to investigate and co-ordinate essential manufacturing industries for war purposes. Surely the advice of members of those committees would have been of great value to the Government in determining the extent to which Australia’s developmental requirements could be met in this country. Was the National Security Resources Board consulted about the proposed loan? I should like to know just what the functions of that board are. So far, we have had only minor reports from it. I am inclined to wager that, in spite of the information that the board must have at its disposal about Australian industries, no attempt was made by the Government to seek the board’s opinion on the proposal to import machinery and equipment from the United States of America and pay for it out of further borrowings. The Government’s failure to consult appropriate authorities on this matter is in consonance with its past failures to seek the advice of the trade union movement in framing its industrial legislation. Trade unionists were always consulted on such matters when Labour was in office, and the result was that the industrial movement co-operated wholeheartedly in the Government’s efforts to bring the war to a successful conclusion. Apparently the trade union movement has been ignored again on this occasion. In our industrial unions we have a great reservoir of skill and knowledge that is second to none in the world. These are the criticisms that are being voiced by the man in the street. He wants to know why this loan was sought, because he is fearful of its repercussions. He is afraid that it will result in increased unemployment. Australian manufacturers are afraid that the loan will seriously affect their activities. The Government has already invited foreign investors to invest their capital in Australia with conspicuous success. The beneficial effect of the introduction of overseas capital is reflected in current statistics relating to trade and commerce.
Members of the Government display pique when they are questioned on matters of policy. They resent any suggestion that the Opposition should share in the administration of the affairs of the nation.
Some weeks ago I directed a series of questions to the Minister representing the Treasurer (Senator 0’ Sullivan) in an endeavour to ascertain the reasons for the negotiation of this loan. Among other questions I asked the Minister how the securing of a dollar loan would enable the Government to honour its pre-election promise to maintain full employment. That was a proper question to address to the Minister in view of the disquiet in the Australian community concerning the features of this loan. In a fit of pique, the Minister treated my question with great discourtesy, and said -
An answer to the honorable senator’s question would be entirely wasted.
He went on to say that if I were interested in further details, he commended to my attention the statements that had already been made on the subject. I made it my business to examine those statements in an endeavour to ascertain why the loan should be raised. The Prime Minister’s statement in regard to the loan contained a tabulated list of the categories of goods and commodities which it was intended to cover. I do not propose to read through the whole of the list. I content myself with saying that the categories included iron and steel, railways, power, road transport, non-ferrous metals and industrial minerals and industrial development. I also ascertained that the purpose of the loan was principally to secure capital equipment. No provision was made in the agreement for capital or credit to be made available exclusively to Australian manufacturers of section 3.01. Article III. of the first schedule to the bill reads as follows : -
The borrower shall cause the proceeds of the loan to be applied exclusively to the cost of goods which will be required and used exclusively in the carrying out of the programmes as described in Schedule II. to this Agreement. The specific goods to be purchased out of the proceeds of the loan shall be determined by agreement between the Bank and the borrower, and the list of such goods may be modified from time to time by agreement between them.
The second schedule contains a description of the capital equipment to be obtained from the proceeds of the loan. Although the prime purpose of the loan is to secure capital equipment, the equipment to be obtained has been determined by the International Bank for Reconstruction and Development. No other capital equipment is to be covered by the loan. The Opposition contends that the negotiation of this loan is detrimental to the interests of Australian manufacturers and workers. The Minister for National Development, in his secondreading speech, informed us that among other things the loan will be used for the purpose of financing the importation of agricultural equipment of a value of 29,000,000 dollars, or approximately £15,000,000. From the manner in which honorable senators opposite have debated this bill one would imagine that they regarded the Australian manufacturers of agricultural machinery and implements are mere juveniles. A. little investigation on their part would reveal that in that field Australian manufacturers are the third largest manufacturers in the world. Notwithstanding the importance and the large output of the agricultural implement industry in Australia, the Government proposes to encourage the importation of agricultural implements of American origin. On many occasions the press has reported that thousands of agricultural tractors are held in stores in Australia because primary producers are unable to pay for them. Government supporters are willing to add to the number of tractors already unsold in Australia the products of the United States of America. Such a policy is detrimental to Australian manufacturers and workers alike. Another important consideration is that Australian manufacturers possess patent rights in respect of a comparatively large number of mechanical inventions, and they will not hesitate to enforce those rights.
Australian manufacturers of agricultural implements contend that the implements which they produce compare more than favorably with those manufactured in the United States of America. Furthermore, I understand that many Australian mechanical designs have been taken into use by implement manufac turers in the United States of America. Members of the Opposition protest most vigorously against the iniquitous and unjustifiable proposal to expend dollars in importing machinery which can be manufactured here.
The Minister said in his secondreading speech that the importation of crawler tractors and earth-moving equipment will absorb 24 per cent, of the 50,000,000-dollair loan, or approximately £12,000,000. Incidentally, I noticed in the course of the debate on this bill yesterday that those supporters of the Government who commended the bill all represented Western Australia. Whether any significance should be attached to that fact I do not know.
I regret that Senator Scott, who had something to say on this matter yesterday, is not present in the chamber now, because I propose to deal with some of the points he endeavoured to make.- Senator Scott asked where Australia could obtain sufficient earth-moving equipment to carry out its developmental projects, and he went on to argue that the only nation which produces sufficient machinery of the kind required is the United States of America. Although that view is apparently shared by a number of honorable senators opposite, the slightest inquiry on their part would have removed that misconception. The fact is that most extraordinary mechanical development has taken place in Australia during and since the recent war. and we can now produce practically all the machines we require. However, if production is to be stimulated, it is obvious that we must give every encouragement to our local manufacturers who, of course, maintain tens of thousands of Australians in employment. Senator Scott contended that the Snowy Mountains project could not have been carried out but for the availability in the United States of America of earthmoving equipment, but that is a gross misstatement of fact, as I shall endeavour to show.
I have with me a statement which appeared in the press recently, and which indicates the great production of heavy developmental machinery that is already occurring in this country. For example, the most powerful bulldozer that has ever been made in any part of the world is one that was manufactured in Australia. This enormous machine, which is driven by a 186 horse-power motor, weighs 15 tons and cost £13,400 to make. It is able to shift 4 tons of rock and soil at a time, and it is at present in use on a dam site in New South Wales.
Mr. J. Murray Gosper, who is a Sydney engineer and a director of the firm of Tutt Bryant (Australia) Limited, said in the course of a statement that he made in Adelaide a few days ago, that Australian factories are producing nearly £10,000,000 worth of earthmoving equipment annually, and that we are already the second largest producer of earth-moving equipment in the world. The only nation whose production of earth-moving equipment exceeds ours is the United States of America, and I think that that is a remarkable achievement on our part, and one of which every Australian should feel proud, more particularly when we contrast the enormous population and great wealth of the United States of America with our own limited resources and population. Mr. Gosper went on to state that most of the shortages of earth-moving equipment, of this kind in Australia have disappeared, and that we are now able to export surplus production of certain kinds of machinery to the United Kingdom, Scandinavia, India, South Africa and South America. In fact, we have actually exported to the United States of America itself a special machine of the type known as an “ earth scraper “. Units of earth-moving equipment already produced in this country include, in addition to the most powerful bulldozer in the world, a power shovel, which is able to load 3 tons of soil in 40 seconds. That machine, which weighs 80 tons, cost £33,000 to manufacture. Our manufacturers also produce giant scoops which are able to handle 18 tons of rock and earth in a minute. They manufacture an earthboring machine which can sink holes in the ground 60 times faster than they can be dug by hand. I particularly commend to honorable senators opposite Mr. Gosper’s statement that it has been possible to proceed with the construction of the huge Snowy Mountain hydro-electric project and many other developmental works of national importance only because the requisite equipment has been made available by Australian manufacturers. Those statements flatly contradict the assertions made by Senator Scott yesterday.
– Does the honorable senator realize that General Motors Limited supply the engines for all that equipment ?
– The point is that the equipment itself is manufactured entirely in Australia. I have devoted a good deal of time to inquiring about the production of mechanical implements, and I have also discussed other important phases of our economic life with experts. I am qualified, therefore, to enlighten honorable senators opposite about the great progress made by the Australian motor industry, and would do so if time permitted. Instead of belittling the efforts of our own manufacturers, we should give them every encouragement. The experts in various economic fields whom I have consulted have assured me that from 60 to 70 per cent, of the capital goods and equipment that will be purchased from the United States of America with the proceeds of this dollar loan could be manufactured in Australia, and that if the machinery-manufacturing industry were given proper encouragement it would be possible for it to increase its production by an additional 20 per cent. From 80 to 90 per cent, of the goods that it is proposed to import could be manufactured in this country. The average man in the street is apprehensive of the provisions of the bill, because he fears that its ramifications may cause unemployment. The provisions of the measure will not stimulate Australian manufacture, or bring hope and uplift to the Australian community.
– Senator Cameron has stated that the provisions of the bill are contrary to the interests of Australia, and that the measure will further Americanize this country, to the detriment of Great Britain. It is not so very long ago that the Australian Labour party, which Senator Cameron supports, was very favorably disposed to the United States of America. I refer to the policy of the Curtin Labour Government in 1942 in Australia’s hour of need. It ill-becomes honorable senators opposite to decry the seeking of American assistance to develop this country.
Senator Ryan has delivered a most humorous speech. He asserted that he had consulted all the experts of this country and that they believed that the proposed loan would promote unemployment and operate to the detriment of Australian manufacturers generally. The main purpose of the bill is to authorize the consummation of an agreement that was concluded in the United States of America on the 8th July, 1952, by Sir Percy Spender, the Australian Ambassador to the United States of America. I submit that the Senate should pass the measure without delay. About two-thirds of the loan of 100,000,000 dollars that was negotiated by the Prime Minister (Mr. Menzies) in 1950 has been availed of, and it is expected that the remainder will be expended by next year. The proposed loan will be utilized to continue the work that was undertaken with the 1950 loan. I pay tribute to the Prime Minister for his negotiation of the proposed loan from the International Bank for Reconstruction and Development, the head-quarters of which are situated in the United States of America. It is generally recognized that the citizens and banks of the United States of America can command rates of interest for loans considerably higher than the rate that will be payable on the proposed loan. It is a tribute to the skill of the Prime Minister that he has been able to negotiate the proposed loan on such favorable terms.
– “What will be the rate of interest, in Australian currency?
– I shall refer to the rate of interest in a few minutes. It has been the practice of the International Bank to grant loans for straight-out projects, such as hydro-electric undertakings and railways. “With consummate skill, the Prime Minister has been able to negotiate the loan for the purposes that I shall enumerate. The right honor able gentleman surmounted a difficulty that arose. I refer to the constitutional provision that a loan negotiated by the Commonwealth shall be expended in the main by the several States, although a small amount may be expended in Commonwealth territory. The Prime Minister was able to persuade the International Bank to depart from its usual procedure of granting loans for specific projects. The International Bank has approved of the proposed loan being expended on the purchase of plant with which to develop this country. The money will not be expended on the general running of the country.
When Mr. Black, a representative of the International Bank for Reconstruction and Development, visited Australia about six months ago to ascertain the manner in which the previous loan had been expended, he was shown everything that he wished to see. The proposed loan will attract interest at the rate of 4j per cent. One per cent, will be credited to the reserve capital of the International Bank, of which Australia is a shareholder. No capita] repayment will be required before 1957, but the loan must be repaid by 1972. The proceeds of the loan will be utilized for the purchase of dollar goods, but licences to import such goods will not be granted if comparable goods can be obtained readily from local or non-dollar sources. This provision should dispel completely the fears that Senator Ryan has expressed. I understand that the Government will strictly enforce this provision. The obtaining of the proposed loan will fit in with the general pattern of the Government’s policy. The Government’s drive to increase primary production has been hindered by shortages of materials and man-power. Some of the materials that are required for this purpose can be obtained only from dollar sources, and the shortage of man-power will be partially overcome by the importation of laboursaving machinery.
I remind the Senate that the Government has provided several incentives to farmers to increase primary production. In June last the Government brought in legislation to permit of the capital cost of certain agricultural plant to be written off at the rate of 20 per cent, a year for five years, as an allowable depreciation deduction for income tax purposes. A.s a result primary producers will be encouraged to purchase and use the kinds of agricultural implements and machinery that are mentioned in the bill. The sales tax legislation that was recently passed by this chamber provided for the granting of remissions and exemptions of sales tax on heavy earth-moving equipment, dragline equipment, and equipment for use in connexion with irrigation and drainage. By purchasing essential equipment and machinery from the great United States of America we shall obtain the benefit of patent rights in relation to that equipment, as well as the American “ know how “, which has played such an important part in the development of that vast nation. I cannot see that there is anything wrong in our seeking the assistance of the United States of America to help to develop this country. Already we have signed the Anzus pact, and honorable senators have admired the assistance that has been rendered by the United States of America to restore devastated parts of Europe. We remember the part that America played in connexion with the Berlin air-lift and other matters.
The proposed loan will be a gesture to Australia, through the agency of the international Bank for Reconstruction and Development, which is controlled largely by the United States of America. The decision to import the equipment that I have mentioned is a part of the Government’s scheme to fight inflation. As honorable senators are aware, the shortage of goods has contributed to the inflationary pressure in this country. The plant and machinery that will be imported will assist to increase the production of goods, and so reduce prices. It is quite logical for the Government to encourage the importation of the equipment that is required in this country. I remind honorable senators that our pioneers brought capital equipment to this country. In effect, they did the very thing that the Government proposes to do now to help overtake the leeway of production that was caused in the main by the war.
Senator Ryan has stated that damage will be occasioned to South Australian industries by the proposed loan. I remind honorable senators that the schedule to the agreement specifically refers to projects of interest to South Australia, which State I have the honour to represent in this chamber. In general, the objective of the proposed loan is to facilitate the purchase of goods that will help to develop and expand our productive facilities. These programmes will be executed partly by tha Commonwealth and its instrumentalities and partly by the States. What is most important, they will be executed partly by private enterprise. That means that goods purchased by this loan money will find their way into the hands of Commonwealth and State instrumentalities and, most important of all, into the hands of private individuals.
Honorable senators will notice that in the first schedule to the bill, which deals with agriculture and land settlement programmes, the principal undertakings in South Australia will be land settlement on Kangaroo Island and provision of farms for fat lamb and wool production ; land development and closer settlement in the South East and in the Eyre Peninsula and the Ninety-mile Desert areas. That programme illustrates the wide vision of the American authorities in making available equipment for use in such areas where vast war service land settlement schemes are at present being carried out. Almost 100 ex-servicemen are being settled on Kangaroo Island. They would not be on their blocks if it were not for the fact that heavy equipment is available, much of it having been obtained from the proceeds of the first dollar loan. In the south-east of South Australia more than 100 ex-servicemen will benefit directly or indirectly from the proposed loan. On Eyre Peninsula, the Wanilla soldier settlement scheme has been establised near Port Lincoln. As I have stated in the Senate on other occasions, a great developmental project, sponsored by the Australian Mutual Provident Society, has been undertaken in the Ninety-mile Desert area. I have seen in that area tens of thousands of pounds’ worth of equipment which was brought here as a result of the 100,000,000-dollar loan. It seems to me that Senator Ryan went to the wrong experts to ascertain the use to which those dollar loans are being put.
The first schedule to the bill also refers lo coal-mining programmes. I wish to ileal particularly with the reference to “ development of the Leigh Creek openrut field by the State Electricity Trust to increase annual production by 500,000 tons by 1956 “. Surely that is a project of enormous importance to South Australia. It staggers me that Senator Ryan, who also comes from South Australia and is my friend and colleague, although in the Opposition party, and other honorable senators opposite should not apply their minds to the importance of this loan to their respective States. The first schedule also deals with iron and steel programmes for New South “Wales, South Australia and “Western Australia. Reference is made specifically to the provision of “ additional plant and equipment for extraction of ore and other raw materials; improvement of transport including improved mechanical handling and wharf facilities”. Some of the richest iron deposits in the world are in South Australia, and this loan will help to obtain iron ore so that it can be made into steel. The schedule also deals with electric power programmes. In that connexion, it refers to the provisions of a 90,000-kilowa.tt generator at Osborne, and another at Port Augusta.
I come now to the important part oi the bill which deals with the regeneration of the South Australian railways. Honorable senators may remember that diesel-electric locomotives were brought to this country under the 100,000,000- dollar loan. Two of those locomotives are now being used by the South Australian Railways. I should like to give to honorable senators an illustration of their great value to South Australia since they commenced to operate approximately eight or nine months ago. Their regular routine is to take the Melbourne express to Serviceton, leaving Adelaide at twenty minutes to seven’, change to the MelbourneAdelaide express at Serviceton, return to Adelaide by a quarter past nine the following morning, having worked all night; then take a freight train to Tailem Bend, work all the morning, and work all the way back to Adelaide in the afternoon to be ready to go to Melbourne at twenty minutes to seven that night. That routine is carried out for seven days a week. The locomotives probably have travelled 500,000 miles already. ‘ Thaiillustration should indicate to honorable senators the difference which those two locomotives have made to the railways of South Australia. Yet honorable senators opposite question the wisdom of this loan. It should not be forgotten that motors to haul small rail cars in outback areas have also been obtained from the dollar loan. I cannot understand why Senator Ryan and other honorable senators opposite criticize this bill. In my opinion, the proposed loan will no’ increase unemployment in South Australia, nor will it damage South Australian manufactures. On the contrary, it will provide our manufacturers and producers with faster transport of the goods which they produce and with uptodate machinery, which will help to lower the costs of production.
It 13 proposed that money will bc available from this loan for the development of mining and concentrating plants at Nairne, which will enable the development of pyrites extraction. This mineral is used in the manufacture of superphosphate, which is so urgently required for our food production drive. Prom the illustrations that I have already given, it should be perfectly clear that the negotiation of this loan ties in with the food production programme of the Government, which is well under way. It may be asked whether the loan will be swallowed up by the Australian Govern ment at the expense of the State governments. All I wish to say in that connexion is that, knowing the South Australian Premier, Mr. Playford, I feel sure that South Australia will at least obtain its share. It may even secure a little more than its share. Senator Ryan need not fear that South Australia will fail to derive benefit from this loan. If South Australia is well looked after, in my opinion, the Commonwealth will go from strength to strength.
Senator MORROW (Tasmania) [5.10”. - Senator Laught stated that the proposed loan will be beneficial to South Australia. I ask the honorable senator what could be more beneficial to his State than that goods should be produced by South Australians, instead of being imported from overseas? Senator Ryan argued in favour of local production and stated that if goods are obtained from America there is a possibility that South Australian manufacturers will suffer. The question is whether this loan is necessary or otherwise. I believe that it is absolutely unnecessary. Senator Ryan has proved that machinery, particularly heavy earth-moving equipment, can be produced efficiently in this country. In fact, so much of it can be produced that we are able to export it at the present time. That being so, there is no occasion to import such equipment.
It seems to me that history is repeating itself. When the British nation discovered the way to harness steam, an industrial revolution occurred. British manufacturers were then able to send goods all over the world and to command trading rights in different countries. It was on that basis that the British people commenced their empire. That trade made England a manufacturing centre. We now find that the United States of America is following the same pattern and is endeavouring, by means of these loans, to get different parts of the world in the palm of its hand. I know that the International Bank for Reconstruction and Development is an international undertaking; nevertheless, we must borrow dollars from America, and we shall be obliged to repay our debt. That, to me, is the most important matter in this connexion. Honorable senators should ask themselves: What goods does America buy from us? That question is important because we shall be obliged to repay this loan with goods, not with money. What can we export to America to meet this proposed debt?
– The honorable senator has put his finger right on the spot. The Americans are to be allowed to control our uranium output. Uranium, which is our future source of power, is to be Americanized. That is the point to which I was moving. In my opinion, such a policy is not only dangerous but is also treasonable. It is against the interests of Australia.
Why is it necessary to obtain a loan from the International Bank for Reconstruction and Development for the purpose of importing heavy equipment from America when we already have a credit balance of approximately £300,000,000 in the United Kingdom? Why cannot we purchase such equipment which is not unobtainable here in the United Kingdom, where we should not be obliged to pay such a high rate of interest? When I asked in this chamber seme time ago why the Australian Government had purchased diesel-electric locomotives from America, I was informed that such locomotives were superior to those made in England. i happen to know something about this matter and I say definitely that the British locomotive is equal to, if not superior to, the American product. We are blinding ourselves to the facts and are allowing ourselves to be led astray. Let us get all the equipment that we can from the United Kingdom, which has been our best customer. Senator Vincent said that we should not act to the detriment of the Mother Country, but did not the Government do that very thing when it imposed import restrictions? It forced traders to cancel orders in the United Kingdom mid prevented the exchange of goods for goods. England must export to live, but the Government did not care about the effect of its action on that country. It did not worry whether England lived or died. We have lost our trade with the United Kingdom, which is now trading with Russia and China. It cannot be blamed for doing that. It must trade somewhere.
Here is an opportunity for reciprocity with our own kith and kin, but the Government has declined to take advantage of that opportunity. Its members are lip loyalists. As I said before, when the United Kingdom was the greatest exporting nation in the world it was able to get control of many countries. Now the centre of the financial world is the United States of America. By the use of tactics similar to those used by British interests in the past it is trying to control the world. Senator Laught said that we were pleased to have Americans here in 1942. I agree. We appreciated the presence of Americans in 1942. But they did not come here only to assist us. They caine here for reasons of selfpreservation also. When the Japanese reached the Philippines the Americans had to make Australia their base. We paid clearly for American assistance under the lend-lease arrangements. For every £l.-worth of goods received from the L ui ted States of America we had to pay £2-worth back because the inflationary spiral in the United States of America drove prices higher after the war. If we allow the United States of America to Americanize Australia and control our greatest asset, uranium, we shall lose our independence. We shall have to do as we are told. I believe that the Government has done what it has been told to do by American dictators. As Senator Ryan explained, wo do not require heavy earth-moving equipment from the United States of America because we could produce it here.
The bill provides for the repayment of this loan on a basis which the United States of America shall dictate - whether in goods or gold. As the United States of America does not purchase goods from us the repayment will probably have to he made in gold or uranium. The Government is trying to put Australia in pawn to the United States of America., lt has been stated that equipment is required for the development of coal mines and that by purchasing that equipment in America we can increase the production of coal from open-cuts by 5,000,000 tons a year by 1954. Why is it necessary to increase open-cut production to that extent? I have asked the Minister for National Development (Senator Spooner) for a copy of the report which was made by the Joint Coal Board. He refused to supply it to me, but I have obtained information concerning it from the newspapers. Every day, one finds a little more of that report appearing in the press.
– Did not the Premier of New South Wales give the honorable senator a copy of that report?
– I do not know the Premier of New South Wales. .1 wanted to study the report in connexion with this bill. Last year the target for open-cut coal production was 4,000,000 tons, but that quantity was not produced because it was not required. Now, according to the newspapers, the production of coal from open-outs will be reduced from 3,500,000 tons to 2,250,000 tons. In other words, 1,250,000 tons less than last year’s target will be produced next year and £5,000,000 worth of coalmining machinery will lie idle. Why do we require more machinery when machinery already in Australia will lie idle next year or will not be used to its fullest capacity? It is absolutely unnecessary to borrow dollars for the purchase of coal-mining equipment. Honorable senators have also been told that this loan is necessary to assist the development of electricity projects. Why is it necessary to obtain electrical equipment from the United States of America ? Most of the equipment needed in Australia which cannot be made here can be obtained from England. Honorable senators will find all the electrical machinery that we require offered for sale in Lloyd’s Monthly Machinery Catalogue in the Library. Why not purchase this equipment in the United Kingdom, where we have a credit balance of a little over £300,000,000? This would obviate the necessity to pay interest on this loan. I have come to the conclusion that the purpose of the loan is the boosting of American industry at the expense of the Australian people. What is the reason for this desire to boost American industry? The reason is that American financiers wish unemployment to exist in other parts of the world rather than in the United States of America. They want to keep industry in operation there so that unemployment in their own country will be reduced. In this country we shall suffer the effects of that policy and have unemployment because the Government is foolish and unpatriotic enough to borrow money to purchase equipment from the United States of America. Are we going to put up with this state of affairs? That remains to be seen. The people might have something to say about it. I understand that Mr. Cahill, the Premier of New South Wales, negotiated for a 800,000 dollar allotment for the purpose of buying electrical equipment. What happened? The
Prime Minister (Mr. Menzies) informed him that there was no occasion to get this equipment from the United States of America because it could be supplied by firms in the United Kingdom and France. I agree with the Prime Minister in this instance. If it is not possible to make this machinery- in Australia it’ should be purchased in the United Kingdom. That would assist the United Kingdom to keep its people in employment and help to keep our people in employment, because the machinery would then be paid for by goods which we would export to the United Kingdom.
I also noticed a report that the Joint Coal Board stated that it is planning to have the Government subsidize the production of coal for export. Apparently they wish to import machinery from America for the production of coal, the export of which will be subsidized by the money of the taxpayers. That is a most ridiculous proposition. There is no occasion for the procurement of this loan whatsoever. The Senate has also been informed that this loan will assist in the rehabilitation of the railways. We built railways long before we imported equipment for them from the United States of America. Most of our steel rails were bought from England. Our own steel is the cheapest in the world. We should either produce our railway equipment here or import it from a country that will exchange its goods for ours. It has been stated that this loan will assist in the production of non-ferrous metals and industrial minerals. Lead, zinc, tin, and tungsten are all falling in price.
– The price of tin went up the other day.
– According to yesterday’s Melbourne Herald, the price of tin has fallen. A fall in the price of base metals is a sign of a big slump. The Government has tried to make it appear that there is no possibility of a slump in the near future. If there is no such possibility, why are there unemployed ? The reason is that when the warehouses are full of goods the employers will not continue manufacturing but will dismiss their employees. Our first duty is to our own people, who must be kept in employment.
Our second duty is to the people of the United Kingdom, not to the United States of America. If we can assist them, we should do so. The plan of the coal-mine owners to subsidize the export of coal would result in higher taxation and more unemployment. Why bring more coalmining machinery to this country while £5,000,000 worth of similar machinery is lying idle? If the Government insists on closing its eyes to those facts, we cannot help it. I shall not embark upon the field of discussion that has already been covered in this debate. I wish only to make it clear that there is no need for this loan. We have all the heavy equipment that we need. In some parts of Tasmania there are bulldozers that are not being used. The Trevallyn scheme is well on its way. Already the tunnels have been driven half way through the hill, and I know of no reason why additional equipment is necessary. Whether schemes such as the Trevallyn undertaking are merely the excuses for the proposed loan, I do not know, but I firmly believe that there is no need for us to undertake further dollar commitments. The addition of another 50,000,000 dollars to our overseas indebtedness will serve only to shackle Australian people to American imperialism and we all know what to expect when that has been accomplished.
Motion (by Senator Spooner) put -
That the question be now put.
The Senate divided. (The President - Senator the Hon. Edward Mattner.)
Majority . . . . 5
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 3 agreed to.
Clause 4 (Loan agreement and loan regulations).
– This clause refers to the loan agreement which is set out in the first schedule to the bill. I wish to deal with Article II. of the agreement.
- (Senator George Rankin). - Order! The honorable senator may not discuss the schedules at this stage.
– Clause 4 relates to the agreement which is contained in the first schedule. Nevertheless, I accept your ruling, Mr. Chairman, and I shall take a later opportunity to refer to the matter that I have in mind.
Clause agreed to.
Clause 5 (Treasurer may borrow 50,000,000 dollars).
– This clause is the kernel of the bill. It empowers the Government to borrow 50,000,000 dollars. I regret that the closure was applied to the secondreading debate because quite a number of honorable senators, including, I am sure, some Government supporters, were prevented from speaking on the measure at that stage. I have no great objection to the proposed loan. It is quite probable that certain types of heavy machinery and equipment can be obtained only from the United States of America, but I am not very enthusiastic about the bill. The Chifley Government was able to do much to foster reciprocal trade with the United Kingdom, and to obtain much of our requirements of agricultural machinery from that country. The result was that a record acreage of wheat was planted in this country. Most of that work was done by machinery, including tractors, manufactured either in Australia or in the United Kingdom. Great pressure was brought to bear on the Chifley Government, particularly from primary producing interests, to permit the importation of machinery from the United States of America, but, as I have said, it was found that most of our needs could be iri et either by Australian manufacturers or by United Kingdom manufacturers. I realize, of course, that the dissipation of our sterling balances in the United Kingdom has necessitated a curtailment of our imports from that country, but I believe that our dollar expenditure is excessive. The United States of America is curtailing its imports. We are finding it more and more difficult to export our wool to the United States of America because of the increasing tariff on that commodity. If the United States of America were prepared to take more of our wool, we should be able to purchase heavy machinery direct from that country instead of by means of a dollar loan from the International Bank for Reconstruction and Development. I should like to know the state of our dollar funds generally. For instance, to what degree has dollar expenditure on newsprint been increased since Labour was in office? I was Minister for Trade and Customs in the Chifley Government and I know that, in those days, great pressure was brought to bear upon that Government to permit increased imports of newsprint. Most proprietors of large newspapers believed that newsprint should have a higher priority than agricultural machinery.
– Perhaps the honorable senator would like to know why the Sydney Daily Telegraph is treating the Government so favorably !
– I admit that there is nothing in the attitude of that newspaper to suggest that the Government has heeded its demands for more newsprint. However, I should like to have some details of our dollar expenditure. The United Kingdom is the only safe market for our primary products. For that reason the Chifley Government was most eager to improve trade relations between Australia and Great Britain. The British Government was interesting itself in Australia’s needs, and United Kingdom manufacturers were producing tractors and other agricultural machinery that was satisfactory to this country, 1 appreciate the value of bulldozers and other heavy American equipment in the preparation of land, but I believe that the Government should husband its dollar funds more carefully. I am confident that Australian manufacturers are capable of producing much of the machinery that is required for the development of this country. There is no great urgency for the provision of the dollars that will be obtained by this loan. As Senator Morrow has said, excellent machinery of all kinds is manufactured in the United Kingdom and in Australia and should be purchased instead of our importing American machinery. As honorable senators all are aware, Chamberlain Industries Limited, which manufactures wheel tractors on a large scale in Western Australia, is unable to sell the whole of its output because many farmers are unable to pay for the tractors; yet the Government proposes to import tractors from America and to pay for them out of the proceeds of this loan. Action of that kind may well ruin the Australian tractor industry. The Government is keen about this loan only because great pressure has been exerted upon it by interested parties who support it.
A Labour government was in office when the International Bank for Reconstruction and .Development was established. Our initial contribution to the capital of the bank was £1 0.000,000. We have a perfect right to borrow from the bank if we desire to do so, but we should restrict our borrowing to the limits necessary to finance urgently required capital goods. The proceeds of this loan should not be utilized for the purchase of goods, machinery and equipment that can be manufactured in Australia or obtained from the United Kingdom. Why should we continue to expend dollars on the importa- lion of American motor vehicles when the Holden, an Australian production, is satisfactory for Australian conditions and first-quality motor vehicles can be obtained from the United Kingdom? The expenditure of dollars should be most carefully scrutinized.
Sitting suspended from 54S to S p.m.
– I contend that Australia should be most cautious about borrowing money overseas. In any event, it is fundamentally unsound for a country to borrow money while it is enjoying prosperity as we are now enjoying, because that means that the money borrowed during a time of high prices may have to be repaid when our overseas income is least able to bear the burden. Undoubtedly, it is better to borrow money from the United States of America in preference to permitting the direct investment of American capital in this country. The circulation of loan money will stimulate productivity, assist our defence preparations and encourage the absorption of immigrants. However, notwithstanding those advantages, il do not think that we should borrow money at the present time, and still less do I think that we should borrow money from a country in the hard currency area. If it is really necessary to borrow money, we should borrow it from the United Kingdom or from some other nation in the sterling area.
Apparently some of the loan money will be used for the purchase of additional quantities of newsprint. Whilst I have no dislike for the Australian newspaper industry, and would not do anything that would reduce the scope for the employment of journalists, I cannot help wondering whether it is really necessary for our newspapers to use so much newsprint. In this connexion I recall a conversation that I had with a member of the House of Lords of Great Britain, who contrasted the quantity of newsprint used by Australian newspapers during the war with the quantity used by the British press. Even the Times was reduced to about half a dozen pages. I have already referred to the huge expenditure of dollars for the purchase of tobacco. I do not believe that there is any real need for this expenditure. If the Government did its duty by encouraging the production of Australian tobacco, I do not think it would be long before we could supply all our own requirements.
Finally, I point out that notwithstanding the unprecedented demands made on our financial system during the recent war and in the immediate post-war era, the Labour Administration of that time did not find it necessary to borrow one penny overseas, but, on the contrary, actually reduced our overseas indebtedness. Although I shall not vote against the bill, I do not give my blessing to it. I repeat the view that I expressed earlier, which is that we should do our utmost to reduce our expenditure in the dollar area.
– IE do not agree with the reasons advanced by the Government to justify the borrowing of an additional 50,000,000 dollars. Despite all the pretexts advanced by the Government to justify its action, the unpleasant fact remains that the expenditure of this loan money in the purchase of goods, not in this country but in the United States of America, must result in increased unemployment in Australia. If the Government really believed that it was necessary to borrow money I cannot understand why it could not have obtained its requirements from countries in the sterling area.
Although the anti-Labour parties have made a great parade of their intention to stimulate primary production by importing machinery and agricultural equipment from the United States of America, Senator Ryan showed very clearly in the remarks that he made this afternoon that Australia is quite capable of manufacturing all the machinery that it needs to stimulate primary production. An indirect result of the expenditure of huge sums for the purchase of machinery and agricultural equipment from the United States of America must be to restrict the activities of British factories. The emptiness of the Government’s claim that it has been virtually compelled to borrow money overseas is proved by’ the fact that Australia was able to make its enormous war effort without borrowing one penny piece overseas. If our primary production were wholly dependent upon the supply of overseas capital we could not have sustained our production throughout the long, exacting period of World War II.
– Australia had the benefit of the lend-lease agreement with the United States of America during the
– I am quite aware of that. However, the fact is that throughout the war we were earning dollars by our trade with the United States of America, and we are still conducting a substantial trade with that country. Do we not still export a considerable quantity of goods to the United States of America ? I cannot understand, therefore, why we cannot pay for any American capital goods that we might need from the proceeds of our exports to that country.
Government supporters interjecting,
– Honorable sena- tors opposite have quite a lot to say about the lend-lease agreement that operated during the war. However, when the war ended the Labour Administration in power at that time was able to discharge our total obligations to the United States of America by the payment of the comparatively insignificant sum of £8,000,000. When Labour vacated office it left to the incoming anti-Labour Administration a sterling credit balance of £600,000,000.
– Rubbish !
– If the credit balance did not amount to £600,000,000, the very substantial balance of almost that amount that accrued under Labour’s Administration enabled the present Government, in a very short, time, to increase our favorable trade balance to that sum. Later, because of the inflated price of wool, the credit balance in our favour reached £850,000,000. However, within twelve months the maladministration of the Government supported by the honorable senators opposite reduced that balance to approximately £360,000,000. Although the Menzies Administration permitted a flood of imports to enter this country, with most disastrous effects on our economy, it has the audacity now to contend that it is necessary for it to borrow dollars to import more American goods into this country. I remind the Government that it has virtually squandered our former credit of approximately £500,000,000.
– Does the honorable senator say that that was dollar credit
– I am speaking of sterling credit. “Why could not capital goods for the development of primary production and of the textile, printing, engineering and steel industries have been purchased in the sterling areas? In an effort to justify its policy, the Government has talked a great deal about (he need to import American tractors and agricultural implements. What is the matter with the Fordson tractors that are manufactured in this country? There is no shortage of those tractors but, on the contrary, salesmen are busy throughout Australia trying to sell them. Senator Vincent contended that heavy earth-moving machinery cannot be manufactured in Australia, and he asserted that we could not manufacture a bulldozer of more than 100 horse-power. Senator Ryan told us of the production in this country of an earth-moving machine driven by an engine of 186 horse-power.
Australia is already committed to the United States of America for the payment of interest on its previous loan amounting to 10,257,000 dollars, and our total indebtedness to that country amounts to 253,697,000 dollars. Even the payment of interest must be made in dollars. Undoubtedly, one of the reasons why the Government has sought this further loan from the United States of America is that it needs dollars to pay the interest on the money already borrowed from America. Is there any real demand for dollars by Australia’s industrialists i I recall that when the earlier loan of 100,000,000 dollars was negotiated, the Government found it necessary to spend thousands of pounds in newspaper advertisements urging private enterprise to apply for dollar exchange to purchase goods in the United States of America.
One other consideration that disturbs me is the imposition of a “ commitment charge “ of £ per cent, interest on this loan. We shall have to pay that charge on money lying in the bank. Our economy is still buoyant, and wool is selling at 250d. per lb. What need is there, then, to borrow at all? The catchcry used by the Government to justify this loan is that Australia cannot be developed without introducing new capital.
– Hear, hear !
– I am glad that the honorable senator can agree with me on at least one matter, because it indicates that common sense may yet penetrate the minds of supporters of the Government. The fact is that there is more capital available in Australia today than has ever been available before. In fact, the Government was complaining, only a short time ago, that there was too much money in circulation, and it proposed to take control of the surplus money by increasing taxes. What was the result of its action? The Government completely lost the confidence of the people, who will not now entrust it with their savings. Statistics show that bank deposits aggregating hundreds of millions of pounds are lying idle. Why then should the Government pretend that it is necessary to borrow money from overseas money lenders at high rates of interest? If it really needed money why could it not utilize the resources of the Commonwealth Bank ? The people of this country have previously tasted the fruits of excessive borrowing overseas. One consequence of excessive borrowing by earlier anti-Labour administrations is that we still owe the Government of the United Kingdom £353,S3S,000. We still have to pay interest each year of £11,267,000 on money that we have borrowed from Great Britain, in addition to interest of £77,946,000 on our internal loans. I am not so concerned about the interest payments on our internal loans because the money remains in this country, but if we continue to borrow from other countries, ultimately a foreign power will dictate our internal policy. I am reminded of the famous statement by Rothschild to the effect that the man who controls the finance of a country controls its government.
– Is that the reason why Labour opposed the re-institution of the Commonwealth Bank Board?
– Yes. The present Government had as much power over the Commonweatlh Bank when it was controlled by a governor, but it did not have the courage to exercise that power. Obviously, the Government prefers to mortgage Australia to overseas interests. The recent visit to Australia of a delegation of American bankers to ascertain whether Australia was worthy of a loan from the International Bank for Reconstruction and Development was reminiscent of the visit some years ago of Sir Otto Niemeyer, on behalf of the mortgagees of this country. It is obvious that those bankers represented American financiers, because only the United States of America and Canada have subscribed dollars to the International Bank. I believe that the Prime Minister (Mr. Menzies) sought a dollar loan from the International Bank only because the British financiers would not trust him. The right honorable gentleman’s application for a sterling loan was rejected. If he had been able to obtain a loan from Great Britain I do not believe that ho would have negotiated for a dollar loan.
– What rubbish !
– The honorable senator who has just interjected knows little about the political history of this country other than what she has picked up since she has been a member of this chamber.
- (Senator George Rankin). - Order! The honorable senator’s time has expired.
– I congratulate Senator Aylett, on-
– Resinning his seat?
– Yes. Of course, he has done a marvellous job in getting rid of the Communists from the trade unions in Tasmania.
– What has that to do with the bill?
– It may have something to do with the measure before the committee. However, the honorable sena tor is very much at sea when he attempts to deal with financial matters. The Government proposes to borrow 50,000,000 dollars for use in connexion with the development of this country, which is something that Labour was unable to do. The American people want in office in. this country a government that they can trust. That is the reason why America has never granted a loan to Australia, when Labour has been in office in thi country. Senator Aylett has mentioned! the visit to Australia of Sir Otto Niemeyer in 1932. I remind the committee that Labour was then in office in this country, and the then Prime Minister, Mr. Scullin, invited Sir Otto Niemeyer to come to Australia.
The purpose of the bill is to authorize the borrowing of 50,000,000 dollars from America, to be expended on plant and equipment.
– Not from America.
– We are considering a proposed loan in dollar currency from the International Bank for Reconstruction and Development. The money will be expended in dollar areas.
– Not necessarily.
– The Minister for National Development (/Senator Spooner) stated in his second-reading speech -
I should like to make it clear, however, that dollar goods will not be .licensed for importation against the loan if comparable goods are readily available from local or other nondollar sources. Perhaps I should add that goods required for defence purposes arc also not eligible for loan finance from the International Bank, which is limited by its charter to assisting normal economic development in its member countries.
Obviously goods will not be purchased in the dollar areas if comparable goods can be obtained from the sterling areas or can be manufactured in this country.
– That is nonsense.
– This country can be developed only by the introduction of outside capital.
– We need plant and equipment in order to increase our production of food. I do not believe that Senator Aylett has read cither the schedules to the bill or the Minister’s second-reading speech. The Second Schedule provides that the loan shall be expended only to finance the importation of wheeled tractors, crawler tractors, earth-moving equipment, ploughs and other agricultural equipment. Western Australia is a backward State, compared with New South Wales and Victoria.
– And South Australia.
– I do not include South Australia. I do not believe that as much progress could have been. made with the scheme for the land settlement of ex-servicemen in Western Australia without the assistance of plant and machinery that was purchased with the 100,000,000-dollar loan that was raised about two years ago. The land at Rocky Gully in Western Australia is being cleared by the use of imported equipment at the rate of 30,000 acres a year. A much slower rate of progress was made in clearing land for group settlement after World War I. by the use of the axe and the horse. I consider that this Government should be commended on borrowing money from the dollar areas, which has been utilized to purchase the heavy equipment that is now being used so advantageously in this country. I venture to say that equipment that is capable of the heavy clearing work that is at present being undertaken in Western Australia can be obtained only from the dollar areas.
– The honorable senator should not talk nonsense.
– The Americans have specialized in the manufacture of crawler tractors for a long time. Tractors that are not so good as are American tractors can be obtained from other areas, but governments and private individuals prefer the American tractors. At Rocky Gully men using two tractors are clearing about 30 acres daily. It would take a man twelve months to perform by the use of the horse and the axe the work that those two tractors do each day. Senator Aylett has condemned the proposed loan from every point of view.
– Of course I have!
– Yet, when the vote is taken, I believe that the honorable senator, having received instructions from the Australian Labour party junta, will vote in favour of the bill.
– How does the honorable senator know that I shall vote in favour of it ?
– I should like to see more evidence of sincerity in this chamber. Why has every Opposition speaker opposed the measure?
– We are opposed to the way the Government intends to expend the money.
– I believe that when the matter is submitted to a vote the Opposition will approve the passage of the bill. Although the development of Australia is a subject that should be above party politics, honorable senators opposite have spoken against the measure in an attempt to influence the people who are listening to a broadcast of the proceedings in this chamber. However, the people are keenly interested in the development of this country and they know, as well as do honorable senators opposite, that it is necessary to introduce outside capital for that purpose. How could S,000,000 people possibly develop this country sufficiently to enable them to hold it by an expenditure of £200,000,000 a year on defence ? I remind honorable senators that 100 years ago the United States of America borrowed large sums of money from Great Britain in order to develop its resources. To-day, the United States of America is the richest country in the world. By a continuation of this Government’s policy Australia could become as great as the United States of America within the next 50 years. I cannot understand the attitude of the Opposition in this matter. Honorable senators opposite have offered only a weak criticism of the measure. They have not advanced any constructive proposals. We need the proposed loan of 50,000,000 dollars in order to develop this country to meet the needs of the coming generation.
– Senator Scott was probably right when he stated that the Opposition will support the measure. However, the people of Australia are entitled to knowhow the proceeds of the proposed loan will be expended]
– That information is contained in the Second Schedule to the bill.
– As I have had the benefit of only an average education, I am unable to read into the schedule the limitation on the expenditure of the proposed loan that lias been mentioned by supporters of the Government. I wish to know how this 50,000,000 dollars will be expended and what goods it is proposed to purchase with it. In my opinion, an explanation should have been given to the Parliament when this measure was introduced. Senator Scott was somewhat astray in his reference to the economic debacle of 1931, when Sir Otto Niemeyer came to this country. Mr. Scullin was defeated at the polls on the 8th December, 1931.
– Sir Otto Niemeyer came here at the invitation of Mr. Scullin, who was then Prime Minister.
– That is correct, but the honorable member should remember the circumstances which forced Mr. Scullin to invite him to come. Australia was being pawned to financial interests overseas. Senator Guy should know that that is so, because he was then a member of the Australian Labour party. Mr. Scullin was forced to ask Sir Otto Niemeyer to come to this country to try to do something about our national finances. Sir Otto did not come here because of any maladministration by the Labour government of that day or any other Labour government.
– Order ! The honorable senator must return to a discussion of the clause.
– I shall do so. I repeat that honorable senators on this side of the chamber are entitled to an explanation of the way in which this dollar loan is to be used. I do not know whether it is necessary to borrow this amount, and I doubt whether any member of the Opposition has such knowledge.
– The honorable senator should read the schedules to the bill.
– It is all very well for the learned gentleman oppo-. site to say “ read the schedules “. I believe that, the majority of the electors of Australia have had much the same kind of education as that which I received, and they also need such an explanation. I point out to honorable senators opposite that the patience of the electors has been sorely tried. The result of tha Flinders by-election last Saturday indicates that they are not prepared to standi for any further humbug on the part of this Government. It is my opinion that the people wish to see in office a government led by an every-day Australian, such as the late Mr. Chifley.
I also wish to know the fate of the previous 100,000,000-dollar loan from the International Bank for Reconstruction and Development.
– It was put in the trunk.
– If that is so, I hope that I shall be able to find the trunk and get my hands on some of the money. Senator Henty appears to be conversant with the subject of trunks, and I suggest that he and I should share the spoils. Seriously, we on this side of the chamber do not know what has become of the previous dollar loan. Honorable senators opposite have stated that the proposed loan of 50,000,000 dollars will be used to purchase tractors and heavy earth-moving equipment. I suggest that the position on the coal-fields to-day, as far as mechanical equipment is concerned, should be considered. It is a fact that open-cut mining operations, in which heavy earth-moving equipment is used, are being gradually terminated. Yet the Joint Coal Board, the Minister for National Development (Senator Spooner) and the Premier of New South “Wales, Mr. Cahill, have stated that it is hoped to export open-cut coal. Are we to borrow dollars with which to purchase machinery from the United States of America in order to develop open-cut coal mines so that we may be able to sell coal to countries which are not in the dollar area? If we are, I suggest that the position is a ridiculous one.
The Minister for National Development will no doubt admit that in Australia to-day heavy earth-moving equipment worth more than £20,000,000 is lying idle. It, therefore, seems to me that there is a sinister plan behind this proposed loan. Why should not the people be told the nature of the goods which we are to receive in return for the goods which we send to the United States of America? I do not know whether it is true or not, but it may be that Australian newspaper proprietors will receive more dollars for the purchase of newsprint than they are entitled to receive. An extravagant amount of petrol is being imported at the present lime.
– Does the honorable senator wish to return to petrol rationing ?
– The people of Australia would have been wise to accept the suggestions of the Australian Labour party in that regard. Honorable senators should also consider the position of our trade in tobacco with the United States of America. I have had an opportunity to visit the tobaccogrowing areas of Queensland. The racket in Queensland should be investigated and cleared up before we expend any more dollars on additional tobacco imports.
– This bill was designed to assist tobacco production in Australia.
– I suggest that it will not do so. In my opinion we could smoke Queensland leaf just as well as we now smoke the imported American leaf. I have had the opportunity to smoke Queensland tobacco, and I know something about this subject. The British-Australasian Tobacco Company Proprietary Limited and other companies, which have the tobacco industry in Australia tied up, are forcing Australian tobacco-growers out of production. The combine pays the growers such low prices for their leaf that it is not profitable to grow tobacco.
– The honorable senator should tell that to the Victorian tobacco-growers.
– I remind the honorable senator that had Mr. Scullin been allowed to continue in office after 1931, the Victorian tobacco industry might well have been the salvation of this country. When the Australian
Labour party was in office during World War II., production of tobacco in Australia reached record proportions, although such production was attained with the use of improvized equipment. Since the present Government came to office it has borrowed 100,000,000 dollars for the professed purpose of increasing primary production, although such production is, in fact, declining.
Senator Scott does not know all that there is to know about Western Australia. For instance, he apparently is not aware that there are many square miles of country in that State which are suitable for cultivation and which do not require the use of bulldozers and draglines. I agree with the honorable senator that lend-lease was of great assistance to this country. That statement will be supported by all who are jealous of the freedom of Australia. However, it should not be thought for a’ moment that the Americans poured their wealth into Australia and that we took it willy-nilly and gave them nothing in return. On the contrary, we repaid the United States of America with gold foi1 every item of war equipment which came here under lend-lease.
– That is not true.
– It is perfectly true. We repaid the United States of America with gold. We produced for the United States of America commodities such as wheat, wool and meat, which are as necessary for the conduct of a war as are aeroplanes and other armaments for which the great productive capacity of the United States of America is suitable. The Australian Labour party always remembers that our cardinal loyalty is to the great British Mother Country. Despite criticism from honorable senators opposite when they were in Opposition, during World War II., the Labour Government attempted to preserve our relations with the United Kingdom. Because reactionary governments existed in Great Britain and Australia, we were forced to accept the patronage of the United States of America.
– I rise to a point of order. What has this subject to do with the dollar loan, Mr. Chairman?
– No point of order is involved.
– It has a great deal to do with the proposed loan. If Senator Wood has any loyalty to Great Britain he will agree with me that that is so. Unless this Government is able to demonstrate to the Opposition, and also to the people of Australia, that this loan is necessary in the interests of national development, the proposal should be dropped. I point out to the Government that the previous Labour Government enabled the International Harvester Limited to become established in this country, as well as many other industrial concerns. This Government could act similarly, if it so wished. If it is necessary to borrow money overseas for the purchase of goods which cannot be produced here, well and good; but I suggest that we do not need more newsprint if it is to be used primarily for running down the Australian Labour party. The dollars used on the purchase of such newsprint could be used to purchase goods which would be more beneficial for the country.
Honorable senators should not overlook the fact that despite my lack of academic qualifications, the electors of Victoria sent me to this chamber with the greatest majority of any Victorian senator in the history of federation. That being so, I submit that I am entitled, on their behalf, to an explanation of the purpose to which the 50,000,000-dollar loan will be applied. I know that the Government is undergoing certain difficulties and is experiencing hardship at the moment. I know also that the Treasurer (Sir Arthur Fadden) is sharpening his dagger, and that the Prime Minister (Mr. Menzies) is doing likewise. The Australian Labour party believes in Australia and in our way of life. I implore the Government not to let the country drift into the position that existed in 1931. Do not let us be left with our pockets empty because of maladministration, or of the snide efforts of persons who wish to pawn this country to the mighty dollar.
– Order ! The honorable senator’s time has expired.
– There is an old piece of advice which
I think honorable senators on the other side of the chamber would do well to absorb. It is to the effect that if you are arguing a case and are weak in law, argue the facts ; if you are weak in facts, argue the law; if you have neither law nor facts, thump the table and shout. I suggest that that is what Senator Hendrickson has done. I should not have intruded in this debate had it not been for some extraordinary and astounding statements which were made by Senator Aylett. The honorable senator should stick to the subjects he knows. It is obvious that he knows nothing of capital finance. Every country and every business has, at some time, borrowed capital for its development. This practice is well worth while. In criticizing the borrowing of 50,000,000 dollars when it has already supported the motion for the second reading of the bill, the Opposition is guilty of sheer hypocrisy. It knows full well that the Labour Government was unable to borrow from the United States of America which did not consider that Government to be creditworthy. After investigation by the International Bank for Reconstruction and Development the present Government has been proved to be a credit-worthy government. The bank made 100,000,000 dollars available to it two years ago and is now prepared to advance a further 50,000,000 dollars because the Government has shown its capacity to spend money wisely.
A great deal of criticism has been levelled at the payment of interest at the rate of f per cent, on the unused portion of the loan. We have arranged to borrow 50,000,000 dollars from the International Bank for Reconstruction and Development on which we have agreed to pay interest at the rate of 4f per cent. However, the Bank has permitted us to pay only f per cent, on any portion of the loan which remains undrawn. That will be a lot better than paying interest atthe rate of 4f per cent, on 50,000,000 dollars. This is a good business deal and those who contend that it is not only demonstrate their ignorance of capital finance. It is clearly laid down in the bill that dollars will not be made available for the purchase of goods that can be purchased from sources outside the dollar area. That fact has been completely ignored by honorable senators opposite unless they have not read the bill which I am beginning to suspect. A tremendous amount of rubbish has been talked, to the effect that we are trading with America and should be able to buy from America with the money that we receive from our exports. Surely Opposition senators have not forgotten that we are part of the British Empire and have pooled our dollar resources. One part of the Empire helps the other in meeting the total dollar deficit. We are proud to do that.
In a very eloquent address Senator Ryan said that 1S6 horse-power bulldozers had been produced in Australia, lie did not mention that they had been manufactured by an American firm. Senator Armstrong has advocated that our industries should expand into other countries in order to bring income to Australia. The Americans have adopted that policy. I invite the attention of Senator Ryan to the fact that we have been using American equipment for our development during the last two years and the work that we have done is amazing. Does he suggest that we should have sat in our seats and done nothing for the past two years except wait for the production of an Australian 100 horse-power bulldozer? A credit-worthy government lias been able to secure the dollars to assist our development for a period of two years. As a result we are now producing equipment which we did not produce before. If sound equipment of any type is being produced in Australia the same kind of equipment will not be purchased from the dollar area. But we must not sit down and wait for two years.
The Snowy River scheme which was started by a Labour government has been developed during the last two years by the Menzies Government in a very practical manner by the use of equipment that was purchased under the terms of the last dollar loan. One has only to see the immense amount of work that has been done on that scheme to know that it was very good business to borrow the money to purchase this equipment. The
Opposition have cried out that it did not know what the loan was to be expended upon. That information is laid out in black and white in the schedules to the bill so that even one with Senator Hendrickson^ education - which I do not disparage - could read it. The Opposition has only attempted to appeal to the less thinking element in the community by alleging that there is something snide about this loan. The conditions of the loan have been clearly set out. The dollars that are borrowed will only be appropriated according to the law that is passed by this Senate. The Opposition has overlooked the fact that we have an efficient civil service and an Auditor-General who will ensure that the loan is spent according to the manner in which the Parliament decides that it should be appropriated. Surely honorable senators can discuss this matter in the light of Australian development. I think that both sides of the chamber have the future of Australia at heart. It is good business to borrow these dollars; it is good business to buy this equipment; and it is good business to assist in securing an adequate supply of basic materials in this country. We have urgent need of coal, steel and other materials which are basic to development. The ready supply of such materials will bring clown the cost of production tremendously. A great deal of the cost of production in Australia has been occasioned by delays in the supply of materials. It stands greatly to the credit of the Government that it has been able to borrow this money after thorough investigation by a very competent band of business men. The Americans are not fools. Having made a thorough investigation of our position they have decided that it would be good business for them to lend the money and good business for Australia to borrow it.
I have often heard it said in this chamber that the Scullin Labour Government invited Sir Otto Niemeyer to come to Australia because it had a hostile Senate. The truth of the matter is that that Government did not have the courage to face a double dissolution as the Menzies Government did when it found itself in a similar position. The Scullin Government would have avoided a lot of trouble if it had done what it was frightened to do and rid itself of the hostile Senate. lt was not game to take that step and Australia has been saddled ever since 1931 with the effects of the administration of that terrible regime. “When Opposition senators referred to the Flinders by-election in this chamber earlier to-day, they were reminded by the Minister for Trade and Customs (Senator O’Sullivan) that the present Government parties within two years of the loss of that by-election were returned to office for a period of ten years. History repeats itself. The Government has done a great job in bringing the negotiations for this loan to fruition and it is to be congratulated–
– Order ! The honorable senator’s tune has expired.
– The clause before the committee has nothing to do with the Flinders byelection or the other extraneous matters that have been introduced into this debate. It seeks to authorize the Treasurer to borrow !”j0,000,000 dollars from the International Rank for Reconstruction and Development. The discussion on this subject is rather late because the Government has already decided to borrow the money. One would have thought that as the Government proposed to depart from the long-established practice of obtaining Australia’s loan requirement from within this country, the opinion of the people, through their representatives in the Parliament, would be sought on the matter, but apparently this Government, which has now been in office for a few years, no longer regards the opinion of the people as being worthy of consideration. Once again, the credit of the nation is being pledged to overseas money lenders. I am not going to suggest that I do not know what the Government intends to do with the 50,000,000 dollars. That information was given by the Minister for National Development (Senator Spooner) in his second-reading speech, but I am still far from convinced that there is any need for us to borrow American dollars. The loan is to be made, of course, by an international body, on which many nations are represented, but the fact remains that we shall be borrowing American dollars. Why has the Government found it necessary to depart from the desirable procedure of financing essential developmental works out of our own resources? Some honorable senators opposite have suggested that the Chifley Labour Government was not able to secure dollar loans from America. The truth is that the Labour Government did not find it necessary to seek financial accommodation in any overseas country. Let us consider for a moment what this country achieved during the war. Our war expenditure totalled many hundreds of millions of pounds. Even under a non-Labour government, expenditure in the early years of the war totalled £225,000,000. Under four years of Labour administration, war expenditure reached the huge total of £1,855,000,000. The Australian people heeded our appeals to invest their money in war loans, but now public confidence in government loans has been destroyed. This Government has been unable to float internal loans successfully, regardless of the inducements that it has offered to investors. I should be much happier to-night if we had before us a bill to authorize the raising of an internal loan. To what use is the 50,000,000 dollars to be put? We. have been told that some of the money will be. used to purchase plant and equipment required by the State Electricity Commission of Victoria for the extraction, briquetting and gasification of brown coal in the Latrobe Valley.
– I rise to order. I submit that the honorable senator is discussing the schedules to the bill, and not the clause that is now before the committee.
– The point is well taken. I ask Senator Sheehan to confine his remarks to the clause now before the committee.
– Apparently honorable senators opposite do not want to hear what I have to say. I am discussing whether it is desirable for the Government to borrow 50,000,000 dollars, and I believe that, in so doing, I am entitled to refer to the manner in which that money will be expended. One avenue of proposed expenditure is the development of the brown coal resources in Victoria.
At present, millions of pounds’ worth of heavy machinery is lying idle in that State. Indeed, the State Electricity Commission is endeavouring to dispose of some of its machinery which undoubtedly was purchased from the proceeds of the 100,000,000-dollar loan obtained from the International Bank for Reconstruction and Development two years ago. Why is that machinery idle ? Why are the ‘State Electricity Commission and other similar authorities finding difficulty in carrying out essential developmental work in this country? Their difficulties are not due to any lack of materials or of technical knowledge. The work of the State Electricity Commission is hampered, not by any lack of American dollars, but by the lack of sufficient good Australian currency to pay workmen to operate bulldozers and other machines that we have already purchased with American dollars. Two years ago it might have been possible to make a good case in favour of this measure, but that cannot be done to-day.
– The honorable senator did not vote against the second reading of the bill.
– What would be the use of voting against it? Australia, is already committed to the loan. I venture to suggest that even the AttorneyGeneral (Senator Spicer) was not consulted about the Government’s intention to place this country in pawn to overseas financiers. That is my complaint. The Government has acted without consulting the Parliament. How are the interest charges on the loan to be met? They are not to be met by exports to the United States of America. International loans are usually arranged through the interchange of goods, but the agreement set out in the first schedule to this measure provides that for every dollar that we borrow from the bank, we must place in a special fund the equivalent in Australian currency. Therefore, notwithstanding the shortage of good Australian currency due to the unwillingness of Australian investors to subscribe to internal loans sponsored by this Government, we are to be committed to placing a substantial sum of money in the Commonwealth Bank as security for the dollars that we are to borrow from the
International Bank for Reconstruction and Development.
– What is wrong with that?
– Where are we to get the money? If Australian investors are not providing sufficient funds to keep Australian workmen in employment so that they may operate the machines purchased from the United States of America by the previous dollar loan, how are we to meet our obligation to pay money into the Commonwealth Bank as security for the dollar loan? That is the issue that confronts us, disguise it as you may. The introduction of extraneous matters cannot blind us to the facts. However, the 50,000,000-dollar loan has already been made and there is little that we can do about it at this stage. Nevertheless, it is regrettable indeed to see Australia’s future being pledged overseas once more.
– I suspect that Senator Sheehan is losing his memory rapidly. He said that the Labour Government had not found it necessary to borrow dollars in America. I remind him that, as recently as 194S, the Chifley Government obtained 20,000,000 dollars from the International Monetary Fund. That loan was repaid, but, unfortunately, the repayment was belated, and this country had to pay out a few million dollars extra as a result. I cannot understand the honorable senator’s strong opposition to this measure, in view of the fact that a government of which he was a supporter was also guilty of the apparently heinous offence of borrowing dollars. Senator Sheehan also asked, “ Why can we not find the money locally?” and Senator Aylett said, “What is wrong with the way Labour financed the war? We raised the money locally”. With the very greatest respect, I point out that it would not matter how many millions of pounds we raised locally because our Australian £.1 notes do not buy dollars. If we took millions of Australian pounds to the United States of America we could not obtain dollars for them.
– How can we buy dollars?
– We can buy them only by selling goods to the United States of America. The Americans want Australian goods and gold; they do not want our £1 notes. The suggestion that we should raise loans locally, because we were able to do so very successfully during the. war, is quite irrelevant to the point. Obviously, honorable senators opposite have the vaguest idea of the purposes of this bill. It has nothing to do with local borrowing: it relates to the borrowing of dollars from the Internationa] Bank for Reconstruction and Development. We may be able to raise loans locally, but the proceeds of such loans will not buy one American bulldozer.
In a very spirited speech, Senator Hendrickson demanded to know what we are to obtain from this loan. Apparently the honorable senator completely overlooked the allimportant schedule to the bill, which sets out very clearly the types of plant and equipment that will be purchased out of the proceeds of the loan. I emphasize that the proceeds of the loan will be used for the purchase of plant and equipment that cannot be obtained locally.
– That is nonsense!
– Any honorable senator who suggests that the loan is unnecessary because money is procurable on the local market displays an abysmal ignorance of the principles of the bill.
Senator Aylett has advanced the proposition that the goods to be covered by the loan could be obtained in the United Kingdom and by implication has suggested that we should raise a sterling loan for their purchase.
– The Government unsuccessfully tried to raise a sterling loan.
– It is well known that Great Britain is grievously short of foreign exchange. If Senator Aylett’s proposition was carried to its logical conclusion it would mean that the British people, who are already short of food, should do without still more food in order to provide our needs. Does the honorable senator seriously advance that proposition? Does he suggest that the British people should go even more hungry so that we may be able to procure goods with sterling of which Great Britain is already extremely short? An honorable senator who advocates such a terrible proposition is completely ignorant of the purpose of this bill.
Finally, I refer to the statement by Senator Sheehan regarding the vote to be taken on this measure. The honorable senator asked, “ Of what use is it for us to vote against the bill because, in any event, the Government has decided to borrow the dollars? “ The purpose of the bill is to approve of the loan. If this chamber does not approve of it, the dollars will not be obtained. If Opposition senators do not believe in the fundamental principles upon which the bill is based, they should have the courage to vote against it.
– It is evident that Senator Vincent has not read the clause.
– The honorable senator cannot read.
– Then perhaps I can help him. The clause reads -
The Treasurer may, on behalf of the Commonwealth, borrow from the International Bank for Reconstruction and Development, in accordance with the provisions of the Loan Agreement, moneys not exceeding in the whole the amount of fifty million dollars in the currency of the United States of America or the equivalent in other currencies.
– The Government proposes to borrow the money in dollars.
– The loan may be granted in a currency other than dollars.
– Would the honorable senator like to receive it in francs?
– The International Bank has the right to decide the currency in which the loan shall be granted. It is wrong for Senator Vincent to attempt to convey the impression that the clause relates solely to the borrowing of dollars. The loan may be made in German marks, in French francs, or in the currency of any other country that the bank determines. We have either to take it or to leave it; but if we leave it, we shall have to pay interest on it. Under the provisions of this clause we are caught both ways. Senator Vincent tried to mislead the committee about the real meaning of the clause. The International Bank may say, “We shall lend the money to the Australian Government in Australian currency “. If that is so, why could we not use Australian currency to finance the purchase of the needed machinery and equipment instead of depending on a loan from the bank? I mentioned that aspect of the bill in my second-reading speech, but the Minister did not see fit to reply to my remarks. I now invite the Minister to indicate the exact meaning of the term “ other currencies “. I suspect that the second-reading debate was gagged so that the Minister would not be embarrassed by having to answer the point I had raised. In Australia unemployment is increasing, and vast quantities of machinery and capital equipment, some of which was purchased out of the proceeds of the 100,000,000-dollar loan raised in August in 1950, lie idle. In view of the vacillation indulged in by honorable senators opposite, particularly by the Minister for National Development (Senator Spooner), I suspect that this loan is required to pay the interest charge on the earlier loan and not to purchase additional equipment.
In the absence of a proper explanation on the part of the Minister and his supporters I am entitled to place my own construction upon the purpose of this bill. It is of no use for honorable senators opposite to think that they can bludgeon the measure through the committee without protest. Do they think that they are addressing a lot. of neophytes who do not understand its implications? To use the classic language of the man in the street, their attempt to bluff and bounce will not’ get them anywhere with us. We are entitled to ask what is intended by this bill because, since the 100,000,000-dollar loan was raised in 1950, Australia’s economic position has very gravely deteriorated. We have the machinery to raise a loan in Australia which will provide employment not only for our idle man-power, but also for our idle machinery and equipment. Although the ostensible purpose of this loan is to provide equipment, in reality its purpose is to hide the Government’s incompetence and to provide additional income to American bond holders at the expense of the people of Australia. Again, to use a classic expression of the man in the street, this is a proposition to sell out in favour of the American bondholder and to load on to the shoulders of Australian workmen an additional debt which is entirely unwarranted and unnecessary. If the Minister cannot explain the real purposes of this measure’, let him admit his ignorance and we shall do our best to forgive him. If he is able to explain why the words “ other currencies “ have been included in the clause, let him do so. Although the Government has insisted that the real .purpose of the loan is to obtain dollars, the fact remains that the clause refers to the borrowing of “ 50,000,000 dollars in the currency of the United States of America or the equivalent in other currencies “. I should like the Minister to tell me exactly why reference to “ other currencies “ has been included in this clause. On the face of it, the clause does not commend itself to the intelligence of members of the Opposition, and I am equally sure that it will not appeal to intelligent members of the public. When a proposal is not explained intelligibly to the people it is inevitable that a feeling of antagonism to the Government should develop. Furthermore. if the people of Australia really understood the purpose of the Government in obtaining this loan, I feel sure that we should have within 24 hours something like a revolution, because the bill will ratify a deliberate sell-out of Australia to the American bondholders.
– I intervene in the debate in order to point out that honorable senators opposite have expressed their concurrence in the purpose of this bill by voting for it at the conclusion of the second-reading debate. They did so, no doubt, because they realize the enormous good that this loan will achieve for Australia and also because they know that it has the approval of the great majority of Australians. However, having voted for the measure, they are now seeking to destroy its effectiveness by opposing this clause. They have not the courage of their convictions. Having supported the bill, they are now attempting to run away from their action by indulging in all sorts of unfounded and absurd criticism.
Honorable senators on this side of the chamber have, I hope, learned one lesson from the debate that has taken place this evening. The lesson to be learned is that for months past we have taken far too cheaply the propaganda disseminated by members of the Labour party in thi.’, chamber. Until a few days ago I did not believe that it was possible that the Australian people would pay serious regard to arguments of the kind advanced by honorable senators opposite to-night. However, it is abundantly plain now that if we allow this type of nonsense to go unanswered we shall deserve to suffer tli.3 consequences. . have stigmatized the criticisms made by honorable senators opposite as being completely unfounded and absurd. Lel nic illustrate my contention. The concluding statement made by Senator Cameron was that the Government intends to use this measure in order to sell out this country to American bondholders. Ha? tIll V more nonsensical statement ever been made? Could any more fantastic statement he made? The whole purpose of the bill is to authorize the borrowing from the International Bank for Reconstruction and Development for reconstruction purposes the sum of 50,000,000 dollars or, in other words, £A.20,000,000. Senator Cameron, who is a former Minister and who has had long experience in the Parliament, had the effrontery to assert in. this chamber that the purpose of the Government was to sell out Australia to American bondholders.
– Quite right!
– And now the honorable senator echoes “ Quite right! “. One would hardly credit that such an absurd statement could be made in the Parliament. Let me deal now with the extraordinary remarks made by Senator Hendrickson. Shedding crocodile tears, the honorable senator pleaded to be told on what the money would be expended. He hoped, of course, that members of the public who were listening to the broadcast of his remarks would believe that he was making a genuine inquiry. He believed, no doubt, that his listeners would not realize that while he was sobbing out his inquiry, he had in front of him a copy of the bill, three pages of which set out in precise detail the projects on which the money i3 to be expended. That is the sort of “ tripe “ with which we have to contend. Then Senator Aylett made the absurd assertion that the effect of the loan will be to place thousands of Australians out of employment.
– That is perfectly true.
– It is difficult to believe that any one could contend that the passage of a bill to provide money for developmental works would have the result of putting people out of employment. However, that statement by Senator Aylett is typical of the illogical and absurd assertions made .by members of the Opposition generally. Displaying considerable ingenuity, Senator Aylett sought to discredit the Government by suggesting that we could have borrowed the money we need in the sterling area. Although I realize that I should not overrate the knowledge of the honorable senator, even he must be aware that a conference is to be held in London within a few months for the express purpose of considering means of strengthening our sterling balances and of providing additional dollar funds for the British Commonwealth.
Senator Courtice, whom I do not often criticize, sought to discredit the Government by saying that when Labour was in office it did not find it necessary to borrow money overseas. That is perfectly true, but there is no analogy between the circumstances of war-time and those which obtain to-day. The conduct of the war was financed by the issue of treasury bills. Furthermore, our finances were greatly strengthened by the inflow of considerable sums of American currency which large numbers of American servicemen brought with them. In addition, Australia had the benefit, at that time, of the lend-lease agreement. Australia, does not enjoy any of those advantages to-day, and it -is intolerable that a former Minister should attempt to mislead the people by asserting that the conditions which obtained during the war are in any respect comparable with the present conditions.
Senator Cameron entered the realms of socialist fantasy in his criticism of the “ American bondholders “. One day he may meet an American bondholder, and he will probably be astonished to find that the average American is merely a human being like any of us. In reply to Senator Cameron’s request for elucidation of the phrase “ the equivalent in other currencies “, which occurs in the clause, I refer him to the Second Schedule to the bill, which contains a detailed explanation of the point that he raised.
I did not ‘intend to speak at length; I rose merely in order to point out the completely illogical approach of honorable senators opposite. “Whilst I do not object at all to fair or reasonable criticism, I must say that the attitude of honorable senators opposite, who voted at the conclusion of the second-reading debate for the passage of this bill but are now seeking to destroy it, is quite beyond my comprehension. Some of them have endeavoured to mislead the Senate by suggesting that the money obtained from this loan will be used in the purchase of plant that can be manufactured in Australia. Of course, they do not themselves believe that statement. Everyone who has had any experience of these matters knows that it is extremely difficult to obtain an allocation of dollars for the purchase of goods, and every such application is submitted to the most exacting scrutiny by expert officials of various departments. Honorable senators opposite who were members of the former Labour Administration are thoroughly acquainted with the procedure. The Minister for Trade and Customs will not issue a certificate to authorize the import of goods from the dollar area until he has been assured by the Government’s expert advisers in the various departments that it is not possible to procure the goods in Australia or in the sterling area. In fact, there is no more chance of obtaining a permit to import goods from the dollar area that can be produced in this country than there is of Labour defeating the Government parties at the next general election.
Finally, I express my disappointment that the debate on this important measure, which the Opposition is supporting despite all its shrill cries to the contrary, could not have been conducted on a level more in keeping with the dignity of this chamber. I dissociate myself entirely from the spurious, illogical and misleading statements made by members of the Opposition in the course of the debate. As I said earlier, it behoves honorable senators on this side of the chamber to controvert such arguments whenever they are advanced.
– I listened carefully to the speech made by the Minister for National Development (Senator Spooner), and it was obvious to me that the honorable senator was conforming to the present Government’s policy of withholding information and of sidetracking members of the Opposition. The Opposition does not object to the Government’s loan proposal to obtain finance from the United States of America or, for that matter, from any other country. Our criticism is directed at the irresponsibility of the Government’s whole financial policy, which appears to be following the “ borrow, boom and bust “ pattern of previous antiLabour administrations. In fact, the present Minister for Health (Sir Earle Page), became notorious as “the tragic Treasurer “ because of the wild borrowing policy of his administration.
The bill embodies a proposal for the repayment of the loan by 1972 in halfyearly payments. I point out that the Government is borrowing this money at a time of comparative prosperity. Although the present prices of our wool and other exports are high, those prices will probably have declined considerably by the time repayment of the loan must be made. Supporters of the Government have said nothing about that aspect of the matter. The previous 100,000,000- dollar loan has been expended irrationally. Admittedly, some plant has been purchased, but the Government has indulged in an extravagant dollar expenditure on a scale that would never have been entertained by the previous Labour Government. Neither the Minister nor any supporter of the Government has informed honorable senators how the Government has changed the national policy in relation to dollar expenditure. I do not believe that the heads of departments decide the Government’s policy in that connexion. Prior to the introduction of the bill to this chamber, I and other members of the Opposition had sought information from the Minister on five occasions about the expenditure of dollars. “When I asked whether steps would be taken to ensure that all States would be treated equally in the allocation of dollars the Minister refused to answer because the question related to Government policy. The people of this country will not accept such evasiveness, and I am not prepared to accept it. The Minister should be frank about the matter. Although the Opposition decided not to divide the Senate on this bill, its members were left free to demand an explanation of its provisions and to criticize its unsatisfactory features. Some supporters of the Government have referred to Mr. Scullin’s predicament when his government was called upon to repay moneys borrowed by successive Liberal and coalition governments, known by many aliases. His problem was not the outcome of bad administration by a Labour government; it arose as the aftermath of unrestricted borrowing by previous non-Labour Governments. The Opposition is concerned about the repayment of such money. As surely as night follows day, its repayment will again necessitate a lowering of the standard of living of the people of this country. It cannot be undertaken other than by cutting down expenditure in other directions, with consequential unemployment and part-time employment. It is all very well for the Government to negotiate a dollar loan in order to gain political popularity, at a time when there is an American demand for the commodities that we produce, and when the prices for our exports are high, but when repayment becomes due we may be passing through the period of sweat, blood, and tears that the Prime Minister (Mr. Menzies) has warned us is ahead. When we shall have to amortize the proposed loan we may find that production in various countries has returned to normal and that world conditions have become stabilized, with the result that there may be no markets for Australian products, or, at least, that export prices have fallen much lower than they are to-day. I remind honorable senators that if we should enter a period of internal disequilibrium the agreement to which Australia is a party, provides that the International Bank for Reconstruction and Development may step in and direct our internal policy. It would not be necessary for Australia to invite the bank to do so. The bank would be able to direct the rate of employment in this country, decide the quantities of commodities that we should produce, and direct which of our industries, public works and development programmes, should be kept going and those that should be closed.
– There is no such provision in the bill.
Motion (by Senator Pearson) put -
That the question be now put.
The committee divided. (The Chairman - Senator George Rankin.)
Majority . . 7
Question so resolved in the affirmative.
Clause agreed to.
Clause 6 (Application of loan).
– I assume that dollars from the proposed loan will be drawn from time to time as required. I should like the Minister for National Development (Senator Spooner) to inform me whether a portion of the first drawing will be allocated for the payment for a 13.000-ton ship that has been purchased by the Government from the dollar area for a private company. Obviously, if we have not available a surplus of dollars with which to pay for that ship, it will be necessary to borrow dollars for the purpose. I fail to see how we could pay for it otherwise. I do not think that that would ‘ be a correct usage of borrowed dollars, because the required ship could have been constructed in this country by men who are now looking for jobs. If the ship is required for the purpose of conveying imported motor vehicles to this country I do not consider that an expenditure of 800,000 dollars on it is warranted, because motor cars are being manufactured in this country.
– Honorable senators opposite have referred during this deplorable debate to the application of the loan moneys. I doubt whether even 5 per cent, of the people of this country would contend that we do not need increased capital moneys with which to undertake the development of Australia in order to enhance its prosperity. The fact that the International Bank for Reconstruction and Development has agreed to lend Australia 50,000,000 dollars for that purpose, is evidence of the bank’s confidence in the stability of this country. As some honorable senators opposite have descended to a miserable form of misrepresentation, by stating that they did not know how the ‘proposed loan would be applied, and that they doubted whether it would be used for worthy purposes, I shall read to the committee the relevant section of the measure.
– I rise to a point of order. I suggest that we are discussing clause 6 and that the honorable senator is referring to the position generally.
– No point of order is involved.
– Even the artfulness of the old war-horse will not prevail against this simple recital of the terms of clause 6, in which the bill expresses the application of the loan. The items to which the money will be applied arc agriculture and land settlement programmes
– I rise to order. It has been clearly stated that the schedules cannot be discussed under this clause of the bill.
– The honorable senator may not discuss the schedules at this stage.
– I am addressing myself to clause 6, and I pause again to note with what enthusiasm those who have indulged in misrepresentation nob resort to futile artifices to frustrate my reading from the relevant provisions of the bill. Did ever parliamentary standards sink so low ! There is only one word for such standards, and that word is “ contemptible “.
– I rise to a point of order. Clause 6 of the bill, which we are discussing, refers to the application of the loan. It provides what is to happen to amounts borrowed from time to time under this legislation. The purposes to which those amounts are to be applied are not at all relevant to the clause under discussion. In order to determine how the proceeds of the loan are to be allocated, one must refer to the schedules. The honorable senator who is so contemptuous of the submissions that have been made, may have his opportunity, at the proper time, to discuss the allocation. I am certain that no honorable senator on this side of the chamber would deprive himself of the pleasure of hearing Senator Wright upon any subject upon which he wishes to speak. I point out to him, however, through you, Mr. Chairman, that the particular clause with which we are dealing has nothing whatever to do with the purposes to which the loan is to be applied. Those purposes are dealt with plainly in the schedules to the bill. I submit very strongly that the honorable senator is out of order.
– I have allowed the debate to spread fairly widely on bo th sides, but I think that Senator Wright should keep a little closer to the clause and leave discussion of the schedules until later, when he will have an opportunity to discuss them.
– I was about to indicate that the purposes to which the loan that is being so much criticized by the Opposition and to which the Leader of the Opposition (Senator McKenna) has lent his artful aid, will be devoted, are clearly shown within the bill. Those purposes are the promotion of agriculture and land settlement programmes-
– I again rise to order. The honorable senator is defying your indication to him, Mr. Chairman, and is persisting in his defiance. I again point out to him, through you, that his opportunity to discuss the schedules will arise at the proper time.
– The point of order is well taken. The honorable senator must confine himself to the clause.
, - Previously I sought information from the Minister for National Development (Senator Spooner), and I think that he might have the courtesy to reply. Honorable senators will note that clause 6 reads, in part -
Amounts from time to time borrowed under this Act shall be paid to the credit of the Commonwealth . . .
I wish to know whether the first amount paid by the bank will be used for the purpose of purchasing a ship which is not referred to in the schedules.
. - The answer to the question asked by the honorable senator is a short one. The transaction to which he has referred is not eligible for inclusion within the confines of this bill. I believe that the honorable senator was well aware of that fact when he raised the point.
Clause agreed to.
Clause 7 agreed to.
Clause S (Payment of interest and other charges.
– During the course of the discussion re garding the purposes for which this loan is being raised, it was suggested that the interest would not be payable in Australian ‘currency. I point out that clause S states that -
Interest and other charges payable on the amounts borrowed under this Act shall be paid out of the Consolidated Revenue Fund, which is, to the extent necessary, appropriated accordingly.
Charges have been made by honorable senators opposite that propaganda was indulged in by honorable senators on this side of the chamber. In connexion with such charges, I ask whether this clause does not specifically state that the interest must be paid in Australian currency.
– Would the honorable senator rise to his feet and let the Senate know something about this matter ? I challenge him to state that the interest will not be paid in Australian currency. As I said during the course of my earlier remarks, ordinary international loans are repaid by an interchange of goods between one country and another. There is something specific in regard to this loan, however, which means that Australian currency must be used.
– If the honorable senator refers to page 11 of the bill he will see the answer to his question.
– I have already looked at page 11. We are now considering clause 8. I have no doubt that the Minister for National Development (Mr. Spooner) has at his disposal the information which I seek. I hope that he will explain this matter, because I know that Australia is experiencing considerable difficulty at the present time in trying to develop trade relations with America. It has been suggested by honorable senators opposite that this money will come from the International Bank for Reconstruction and Development, and not from the American nation as such. If that is so, I wish to know how it is that facilities have been provided for the International Bank for Reconstruction and Development, which has its head-quarters in America, to purchase Australian goods. Possibly the Minister can enlighten me on that matter.
– It was as a result of an interjection of mine that Senator Sheehan issued a challenge to me to rise and explain why I thought he was wrong in his statement. His statement in connexion with clause S was that interest is payable in Australian currency. If he looks at page 11 of the bill he will see, in section 3.04 of Article III. of the second schedule, a reference to “ Currency in which commitment charge is payable “, and the statement -
The commitment charge shall be payable in the currency in which the Loan is denominated.
Section 3.03 is as follows: -
Currency in which interest is payable.
Interest on any part of the Loan shall be payable in the currency in which the principal of such part of the Loan is repayable.
I n other words, the interest and commitment charges are payable in the currency in which the loan is denominated, which means that they are payable in dollars. Obviously, the method by which this loan, and all international loans, are repayable is in terms of goods, as Senator Sheehan has indicated. Those goods are sent to the United States of Am erica, in this case, and the dollars which they earn are credited towards the interest and other commitment charges. But since those goods emanate from this country, the payment in this country for them to the producers of those goods is in Australian currency. The return for them from the United States of America is in dollars, and those dollars are applied to the payment of interest and commitment charges.
. -I wish to add to the remarks of Senator Gorton by rebutting the tenor of the statements that have been made by honorable senators opposite this evening, in which they charged the Government with disloyalty to the concept of the “ Mother Country”. If the Commonwealth of Australia so desired, it could make its own arrangements for direct repayment of principal and interest charges, because Australia is a substantial dollar earner. Therefore, the problem that confronts the people of Australia, and also this Government, is whether it shall make direct arrangements for the repayment of capital charges and interest, or whether it will, in furtherance of the concent of the British Commonwealth of Nations, put its dollar earnings into a pool that will assist the Mother Country and its people to extricate themselves from the financial difficulties which they now face because of their efforts to save our civilization. I wish to make that general statement to correct the impression, which honorable senators opposite sought to convey to-night, that the Government is seeking a way to dodge its responsibilities. In fact, the Australian people can be proud that, of all the people of the British Commonwealth of Nations, they have borne the heaviest burden of assistance to the Mother Country.
The schedules to the bill amply demonstrate the manner in which the principal charges and interest shall be paid. They will be paid by the dollar earnings of the Australian people in the British Commonwealth dollar pool. They will not be repaid by direct trading between the Commonwealth of Australia and the United States of America, but simply on the balance of payments that will result from international trade within the sterling group. Honorable senators opposite have said, in effect, that if our wool is sold to Italy and the woven garments are subsequently sold by Italy to the United States of America, Australia should be directly credited with the dollar earnings which result from that tertiary transaction. In order to overcome this problem a control has been set up to pool the dollar earnings of the British Commonwealth. Honorable senators who have wept crocodile tears during this debate should learn that elementary lesson in trading which the Opposition has never understood.
– I do not know whether the Minister for National Development (Senator Spooner) is prepared to accept the mysterious solution of Senator Cormack. If we are to pay this money back out of Australia’s dollar earnings, why do we need to borrow it? Is it not simply because we have an adverse trade balance with the United States of America, because the United States of America refuses to trade with Australia to the same extent as other countries, and because embargoes have been placed upon the entry of Australian goods into the United States of America? If it is correct, as Senator Cormack has suggested, that the British Commonwealth has agreed to pool its dollars, will not the withdrawal of dollars by Australia for the purchase of this machinery adversely effect the British dollar pool ? It is not machinery that we want. It is Australian currency to work the machinery that is already in this country.
Clause agreed to.
Clause 9 agreed to.
. - The committee has heard many protestations from the Opposition to the effect that they had no guarantee of the purpose to which this loan would be applied. I wish to read the description of the programmes contained in the first schedule.
– We have all read them.
– Members of the Opposition either have not read the schedules or they have not understood them. The purposes to which the loan will be applied have been listed as -
Agriculture and Land Settlement Program.
Each of these programmes comprises a detailed statement, which has no doubt been derived from the responsible executives of the Commonwealth and the States, indicating the main developmental works of which the Commonwealth and the States have need. To ensure that members of the Opposition shall know what is printed in the bill I propose to read the first of these programmes. The Leader of the Opposition (Senator McKenna) will then be able to decide whether or not these needs of Australia should be financed by such a loan as this. The agriculture and land settlement programme reads as follows : -
Queensland. - Development of large areas of central and southern Queensland from exten sive grazing to more intensified animal husbandry based on large-scale fodder grain production; irrigation development in the centra! coastal and north coastal regions, particularly in the Mareeba-Dimbulah, Dawson Valley and Emerald and Burdekin River areas.
I make no apology for reading the schedule because certain Opposition senators said that they had no guarantee that the purposes of the loan were laudable and necessary. I continue-
New South Wales. - Land development and closer settlement; irrigation development in southern areas of the State, such as the Riverina 1,500farm project; extension of existing irrigation areas resulting from enlargement of existing dams or for new dam construction.
Victoria: Land clearing and development, such as dairy farm development in the Heytesbury area; irrigation development and enlargement of existing projects covering dairying, fat lamb and horticultural production.
South Australia: Land development on Kangaroo Island and provision of farms for fat lamb and wool production ; land development and closer settlement in the south-east and in the Eyre Peninsula and Ninetymile Desert area.
Western Australia: Land development and closer settlement in the south-west designed to increase production of fat lambs, wool, dairy produce, beefand tobacco.
Tasmania : Land development and closer settlement in the Montague Swamp area and on King and Flinders Islands designed to establish additional farms for dairy, beef and fat lamb production.
I pause to express my enthusiasm for the development of the State of Tasmania. Entreaties have been made constantly by the Premier of Tasmania for additional funds to enable developmental works in that State to proceed. Yet I find here the pitiable spectacle of several Tasmanian Labour senators who have not even read the bill in order to ascertain how it provides specifically for the development of Tasmania. The schedule states similar purposes in relation to the Northern Territory and concludes by stating that it includes imported equipment to be financed out of the proceeds of the loan including wheeledtype tractors, crawler tractors, earthmoving equipment, ploughs, cultivating equipment, harvesters, pick-up hay balers and side delivery hay rakes and quarry harvesters. Those who have claimed that these purposes were not guaranteed in the bill either have not taken the trouble to read the measure or have deliberately misrepresented the terms of the measure for contemptible propaganda purposes.
Senator GRANT (New South Wales) [10.27 J - Enough extraneous statements have been made already in this debate and it would take a long while for me to reply to them. A loan at a good rate of interest may be quite acceptable, but whatever justification there was for the first dollar loan there is certainly very little justification for a. second loan. The loan has been negotiated for the purpose of financing projects most of which have started to collapse already because the Government has made such a mess of the economy of the country. So many projects are intended to be financed by the loan that each will benefit only to a very small degree when the total sum is allocated to them. The Government has waited until the Australian currency was at its lowest possible level before it obtained this loan.
– The Australian £1 is equal to only 2.32 dollars.
– Quite so. Our commodities can now be bought very cheaply although we have to pay a high price for goods from the United States of America. How this loan will be repaid I do not know. I understand that from 1957 repayments of principal and interest will require about 12,000,000 dollars a year. It seems to me that the whole proposition is fantastic. According to Senator McMullin it is impossible to export Australian meat to the United States of America.
– What about gold ?
– People speak about being “on the gold standard” and “off the gold standard “. I believe that we have never been “off the gold standard “ and I do not think that we can ever get “off” it. I know that Senator Vincent’s mentality starts and finishes at Kalgoorlie. I believe that one of the commodities in which we could pay the interest charges on the 50,000,000 dollar loan is uranium. According to the Minister for Commerce and Agriculture (Mb McEwen), America has restricted the importation of Australian cheese to half a ton a year, and no Australian butter will be imported. How are we going to meet the interest charges? Nobody will tell me. When money is borrowed internally, the interest payments do not go out of the country. They are expended internally. I believe that the chaos in the transport systems of most States to-day is due to past borrowing from the United Kingdom. Interest payments on the New South Wales railways have exceeded the original capital cost, and still the loans have not been redeemed.
– Does the honorable senator not believe in interest payments?
– That is not the point. I am endeavouring to show that all the projects to which Senator Wright has referred are collapsing.
– Ask the Premier of New South Wales, Mr. Cahill. Men are being paid off every day from public works undertakings in that State.
– What does Mr. Cahill know about Tasmania?
– If he does not know more than the honorable senator knows, he knows very little indeed. Ask the Premier of Victoria, whoever he may be, what is happening to works projects in his State. Although Senator Gorton comes from Victoria, I am sure that even he does not know who the Premier is at the moment. However, there was a Premier named McDonald, and he made it quite clear that unless Victoria could get more money, many more men would have to be paid off. I do not accept the Douglas credit theory. I do not believe that it is possible to live entirely on credit, but I do know that since this Government has been in office, the deterioration of the Australian economy has been more rapid than that of any other country, excluding the Asian countries. That is borne out by statistics published recently in the Sydney Morning Herald. I object strongly to the remark of the Minister for National Development (Senator Spooner) that he did not think that the Australian people would take seriously such “ tripe “ as we were talking. Unfortunately last year, the Australian electors took seriously the “ tripe “ that was being talked by honorable senators opposite and returned them to office. The Minister for National Development has said many times that he is prepared to accept as a criterion of prosperity the success of internal loans ; yet every loan that the Government has floated in the last year has been a complete failure. The Minister has cast reflections on the intelligence of the Opposition, but he is obviously suffering severely from the beating that was administered to the Liberal party’s candidate at the Flinders by-election. The people obviously know all about the “ tripe “ of the Government parties. Whatever use the 100,000,000 dollars loan may have been, the loan for which authority is sought in this measure will be completely useless because our national economy has collapsed. I am one of those who believe that the deterioration has gone so far that a great economic crisis is almost inevitable.
– Vote against the bill.
– I shall vote as I please. I repeat that the 50,000,000 dollar loan will be useless because the economy of the country has collapsed. The Government is borrowing dollars at a. time when currency is at its lowest ebb, and the dollar is at its peak. We are in the hands of a panic government. At one moment it says “let everything come in “ and at the next moment it says “ keep everything out “ and so on. The proposed loan will only add to the difficulties in which this Government has placed the Australian economy. The International Bank for Reconstruction and Development has laid down loan conditions with which we cannot possibly comply. The purposes for which the money is to be borrowed include the expansion of coal-mining; but already we are producing more coal than we can use. This Government, which declared that it would solve the coal problem by importing coal from India, now has so much coal that it has to send some back to India. The loan is to be used also to assist the electric power programme. I invite honorable senators opposite to ask the honorable member for Bennelong (Mr. Cramer) how the Sydney County Council feels about the electric power programme. The council has been severely hit by price and wage increases which could have been foreseen by anybody outside a lunatic asylum and probably by many people inside a lunatic asylum.
– Is the honorable senator speaking for the “ ins “ or the “’ outs “ ?
– The honorable senator himself is “ in “, but he should be “ out “.
– And Senator Grant is “ out “, but should be “ in “.
– Dollar funds are to be used also to assist the road transport programme but the New South Wales Minister for Transport, Mr. Sheahan, could tell us how much the dollar loan will be worth to road transport in that State. Its capital equipment is completely out of date and so much money has been paid out in interest on borrowed funds that this small dollar loan can do absolutely nothing to straighten out the mess. My contention is that this Government has reduced the Australian economy to such a low ebb that, whatever assistance the first dollar loan may have been, the second will be of no help at all. Another purpose for which the money is to be borrowed is to assist the industrial development programme. That is the eighth and last heading. As I have said, in every one of those fields, more and more men are being dismissed every day. I fail to see of what use the loan will be in agriculture and land settlement. Perhaps the Government intends to increase wheat production; but where will we sell our wheat? Already there is a surplus in the United States of America and there will be a surplus in Canada also. I excuse the Minister’s unkind remarks about some members of the Opposition on the ground of his suffering as a result of the Government’s defeat at the Flinders by-election, but if he were as honorable as I hope he is, and as genuine as he claims to be, he would say quite frankly “ We have made a mess of things, and to remedy the position will be a tough job for members of the Opposition, but they managed it before, and we shall give them an immediate opportunity to tackle the job again “.
Motion (by Senator Spooner) put -
That the question be now put.
The committee divided. (The Chairman - Senator George Rankin.)
Majority . . . . 8
Question so resolved in the affirmative.
First Schedule agreed to.
– Senator Wright went to a great deal of trouble to read portions of the bill, but he omitted to say that the schedules contain the terms of the agreement entered into between the Government and the International Bank for Reconstruction and Development and prescribe the conditions under which the loan is to be granted. Provision has been made in the schedule for the purchase of mining machinery and plant for opencut mining. As there is already a surplus of coal in Australia I should like to know whether the Government intends to import additional opencut mining machinery. Of what use is the importation of mining machinery when miners are already being dismissed from their employment? Senator Wright said that provision has been made in the schedule for the purchase of machinery for agricultural development.
– The honorable senator is referring to the first schedule, which has already been agreed to by the committee. We are now dealing with the second schedule.
– I am addressing my remarks, not to Senator Guy, but to the Chair.
– The honorable senator is addressing the committee.
– Has provision been made to enable this machinery to be utilized? The loan allocations of the States have been severely curtailed because of the seriousness of our economic position. The Government has been in office for almost three years, but never in our history has the value of the£1 been at such a low level. In 1949, when the Government assumed office, it inherited an overflowing Treasury and the people enjoyed the benefits of full employment and a measure of unprecedented prosperity. People were arriving in Australia from all parts of the world seeking opportunities for investing their capital here. That position no longer exists. Now we are trying to borrow money from the United States of America to carry out developmental works. Our economic position has steadily declined since the Menizes Government has been in office. How does the Government intend to utilize this American machinery for irrigation and water conservation?
– I rise to order. I submit that the honorable senator is out of order in discussing the first schedule to the bill which has already been agreed to.
– The point of order is upheld. Senator Ashley must confine his remarks to the second schedule to the bill.
– I am dealing with the. second schedule, which prescribes the conditions under which the proceeds of the loan shall be expended. In every paragraph of the schedule reference is made to the expenditure of the proceeds of the loan. I invite the Minister for National Development (Senator Spooner) to State the areas in which this projected development is to take place. Only last week the State Premiers came to Canberra in an endeavour to obtain large allocations of loan funds to enable them to carry on their public works and avoid the wholesale dismissal of their employees. How can additional machinery and equipment for irrigation and water conservation works be utilized if the States are unable to carry on their public works because of the shortage of funds?
Motion (by Senator Spooner) put -
That the question be now put.
The committee divided. (The Chairman - Senator George Rankin.)
Majority . . . . 5
Question so resolved in the affirmative.
Second Schedule agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Motion (by Senator Spooner) pro posed -
That the bill be now read a third time.
– During the committee stage the
Minister for National Development (Senator Spooner) treated the Opposition with grave discourtesy and did not even reply to the questions that I addressed to him. I think that it is outrageous for the Government to have treated the Opposition as it has been treated, and I make my most emphatic protest against the Minister’s attitude.
– Order ! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the negative.
– As Senator Wright pointed out, the bill sets out the particular projects on which the 50,000,000 dollar loan is to be expended. However, he might have been fair and gone on to recite the conditions of repayment of the loan, the first instalment of which is due in June, 1961.
I am particularly concerned about the proposed allocation of dollars for expenditure on the coal industry. Paragraph A of section II. of Schedule 2 of the Agreement states that it is expected to increase the production of black coal in New South Wales in mines owned and supervised by the Joint Coal Board by 5,000,000 tons a year. However, that statement is grossly misleading, because the Minister himself has admitted in the Senate that the Government has abandoned that programme and has reduced its objective to the production of 20,000,000 tons of coal annually. The paragraph I have mentioned refers to the expansion of the productive facilities by “ the introduction of new earthmoving and excavating equipment “. The fact is that we cannot dispose of the surplus earthmoving equipment at opencut mines in Australia today. Admittedly, some very valuable equipment has been disposed of to certain English firms, which have been treated most generously by the present Government. For example, some equipment valued at £750,000 has been sold to them for £500,000.
– Who said that?
– I say that quite deliberately.
– The honorable senator knows that his statement is untrue.
– I know that my statement is true, and I challenge the Minister to prove that it is wrong. However, the point about which I am concerned is the proposal to expend a substantial part of the loan money on the purchase of additional earth-moving machinery for our coal-mines. Although I asked the Minister at an earlier stage of the debate to inform me whether the Government intends, notwithstanding that we have large quantities of surplus equipment lying idle on the coal-fields, to proceed with the importation of all the equipment mentioned in the schedule, the Minister did not condescend to answer my inquiry.
The fact is that production is so slack at some open-cut mines that plant is lying idle and men are being dismissed. Private enterprise does not seem keen to purchase the equipment which is lying idle on our coal-fields. In fact, the only equipment the Joint Coal Board has been able to -ell to date is a couple of draglines, which were disposed of to English contractors on terms very favorable to them. When Labour initiated this programme it intended that when the earth-moving equipment was no longer needed at the open-cut mines it would be employed on other works, such as the construction of roads, water conservation schemes and so on. However, that is apparently not the intention of the present Government.
The Minister for National Development said that the two draglines to which I referred a few moments were not worth £350,000. The fact is that they have been hired to private contractors, who thought that they were so valuable that they were prepared to pay £90,000 for their hire for only eight months. Nevertheless, they have now been sold for £500,000, which is considerably less than their real value.
Senator REID (New South Wales) [11.6 1 . - I agree with the criticism of members of the Opposition uttered by the Minister for National Development (Senator Spooner) in the course of his remarks. We have been treated to-night to a most hypocritical exhibition by honorable senators opposite, who attacked this bill at the committee stage, notwithstanding that they had already voted for it at the conclusion of the second-reading debate.
– We had to do so in order to validate the agreement because the loan transaction was completed on the Sth July.
– Senator Ryan, Senator Grant, Senator Cameron and other honorable senators opposite had the audacity to say that there was no need for Australia to borrow the money provided for in the bill.
– Would the honorable senator repudiate the agreement made by Australia to borrow the money?
– It was not a matter of repudiating an agreement. If members of the Opposition were sincere, they could have rejected the agreement by voting against the motion for the second reading of the bill. One is driven to the conclusion that either members of the Opposition are hopelessly insincere, or the State Premiers, who sponsored the various works on which the dollars are to be expended, were even more hypocritical. I have no doubt that the Premier of New South Wales would be greatly edified by the assertions made by Labour senators who represent New South Wales, that he does not need additional loan money to carry out his works programme. Quite recently he approached the Commonwealth for the allocation of an additional allocation of 12,000,000 dollars from loan money to purchase plant in order to increase the generation of electricity in his State. Does any honorable senator opposite suggest that the Premier of New South Wales was not sincere in his request?
– There is a complete misunderstanding by honorable senators opposite of the purpose and effect of the bill. Not one State Premier will receive a single additional dollar as the result of this loan.
SenatorCormack. - The Premiers will receive the dollar equivalents.
– But the Premiers must provide the funds for their works projects. Although I am in favour of borrowing money when the money can be usefully employed, I do not believe that the dollars that we shall obtain under this loan agreement can be usefully employed at the present time. Because of the serious deterioration in the economy of this country that has occurred during the last eighteen months, it is absolutely essential that the most exacting scrutiny should be applied to all proposals to borrow money or to import goods and equipment from overseas.
Senator Ashley detailed the problem confronting us in respect of the surplus earthmoving equipment now scattered about our coalfields. Senator Wright recited the works projects in New South Wales that the bill is allegedly intended to benefit. Does not the honorable senator realize that because of the deterioration of our economy it will be quite impossible to carry out any of those projects? As an illustration of the situation that confronts the New South Wales Government, the Minister for Conservation in that Administration, Mr. Weir, stated a few days ago that in consequence of the acute deterioration of currency value it would be impossible to complete any of the water conservation projects in that State. He went on to say that if he could receive the same actual work value for the money expended as he received last year every water conservation project in New South Wales would be completed next year.
– Did the honorable senator read what Mr. Treatt, the Leader of the Opposition, said in reply?
– I would prefer to hear what the Minister, himself, has to say in reply to Mr. Weir’s complaint. The Minister for Conservation has stated that, because of the great reduction in the amount of money available for next year’s programme, work will be stopped on many conservation plans, and of those that continue, not one will be completed within twenty years. A similar situation has arisen in connexion with hospitals.
– Order ! The honorable senator’s remarks concerning hospitals are quite irrelevant to the bill.
– The point that I am endeavouring to make is that the State governments are in such a precarious position because of the weak state of the national economy that they will not be able to employ usefully the capital goods that will be purchased with the loan money. Although I have voted for the second reading of the bill, I repeat my earlier warning to the Government that it will require to exercise the closest scrutiny to ensure that it does not expend the loan money on the importation of equipment that will duplicate the equipment already lying idle throughout Australia.
Motion (by Senator Kendall) put -
That the question be now put.
The Senate divided. (The President - Senator the Hon. Edward Mattner.)
Majority . . . . 8
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a third time.
Debate resumed from the 14th October (vide page 2976), on motion by Senator Cooper -
That the bill be now read a second time.
– The bill will amend the Pharmaceutical Benefits Act 1947-1950. On a casual look at the measure, one would be inclined to say that it had only two simple purposes, one, to authorize the Minister for Health to set up various committees for purposes connected with the administration of the act, and the other, to confer upon the GovernorGeneralinCouncil power to make regulations additional to those already included in the act. However, on a closer examination of the bill, some more important considerations emerge. The Minister for Repatriation (Senator Cooper), in the course of his somewhat lengthy secondreading speech, saw fit to criticize the previous Labour Government for its approach to matters medical and pharmaceutical, and dealt with quite a number of irrelevant matters. For instance, he embarked upon a discussion of medical services for pensioners which, strictly, has no relevance to the measure now before the Senate. At once I want to cross swords with the Minister on the first paragraph of his speech, which was as follows: -
The bill is designed to amend the Pharmaceutical Benefits Act, in order to enable the partnership that has been established between the Government and the medical and pharmaceutical professions to work smoothly and efficiently in implementing the free life-saving drug scheme. The previous Government had tried methods of compulsion in relation to those professions.
I challenge that statement at once and I invite the Minister to tell the Senate of one respect in which any attempt at compulsion was made by the previous Government in relation to the chemists of Australia. I point out to him that at all times, in relation to governmental proposals, the chemists of Australia have been most co-operative. I think that the present Government has experienced just as little difficulty with the chemists as did the previous Labour Government. The Minister’s plain statement that an element of compulsion had been applied to them was quite untrue. Although the position wasdifferent in relation to the medical profession, it is well to recall the degree of compulsion that it was sought to impose on the doctors. Under the Labour Government’s scheme there was a very extensive formulary, but never at any time was there any compulsion upon any member of the medical profession to prescribe from that formulary. There was a provision in the latter stages of the negotiations and discussions with the medical profession that if a medical practitioner, in his unfettered discretion, decided to prescribe from that formulary, he should place his prescription upon an official form andnot upon his own private form. That was the one element of compulsion that it was sought to apply to the medical practitioners. They submitted the matter to the High Court of Australia, and in the course of a judgment a majority judgment, which does not command my respect, and which did not at the time command the respect of the justice who is now the Chief Justice of Australia-
– That is not a fair way to put it.
– It is an accurate way.
– That the judgment did not command respect?
– If Senator Wright will take the trouble to read the judgment of then Mr. Justice Owen Dixon, he will find that His Honour was completely scornful of the suggestion that there was any form of civil conscription in relation to this particular requirement. If the honorable senator differs from my opinion, at least I find myself in very good company in making that statement. That was the one element of compulsion that the Government sought to apply in the interests of the sick people of this country, who needed medicaments.
I come to the provisions of the bill. Proposed new section 19 reads - (!.) The Minister may, for the purposes of ill is act, establish such other committees as lie thinks tit.
It is necessary to refer to section IS of r lie principal act, which provided for the jotting up of a formulary committee with representation by .persons who were medical practitioners or practising chemists, and a pharmacologist. Although it was mandatory under the act that that body should be established, and although the Government has decided not to have 1 formulary, no step has been taken to repeal that section.
It is rather interesting, too, to comment upon the fact that such pharmaceutical benefit schemes as have been established by the present Government, and which arc in operation to-day, were put into operation under the legislation that was enacted by the previous Labour Government. The Minister dealt i.t some length with the other committees that it is proposed to establish. Their nature and their purpose cannot bc ascertained from the bill. The Minister stated that the various committees were to be advisoryonly ; that they would advise and report to him on sundry matters. Nothing restricting the activities of the proposed committees to an advisory capacity appears in the bill. In the regulationmaking clause, power is taken to prescribe the constitution, powers, functions, duties and procedure of the proposed com:mittees. Proposed new sub-section (2.) of section 23 provides -
The powers that may be prescribed in respect of a committee established by or under this Act include power to require persons to attend as witnesses and to be examined upon oath or affirmation.
It is clear from the proposed new regulationmaking power that very definite executive powers are to be conferred upon the proposed committees. The mere fact that they are to be authorized in whatever case seems to be good for the Government to send for persons, and to administer oaths or affirmations to those persons, is a very clear indication of that point.
I understand that in each State two or three such committees have already been established on a non-statutory basis. [Ill]
The chemists and doctors are cooperating in the various States. The difficulty, of course, is two-fold : First, that the committees were not set up for a very long time. I know that the chemists particularly were pressing for the establishment of committers of this kind for a considerable period before the Government was prepared to establish them. Then, having established them on a nonstatutory basis, the second difficulty was encountered, particularly with the bodies that were to exercise disciplinary functions, that if they made reports reflecting upon members of the medical or pharmaceutical professions, they would probably leave themselves open to actions for slander or libel. The necessary purpose of this bill, then, is to give some statutory authority to those committees in order to save them from attacks of that kind.
The Minister devoted a considerable portion of his second-reading speech to pointing out why it was necessary to Sei up these committees. It is rather interesting to refer to a speech that the Minister for Health (Sir Earle Page) made on the 14th July, 1950 - about two years ago - when the present pharmaceutical benefits scheme, restricted to socalled life-saving and disease-preventing drugs was established. After describing the scheme, he stated -
The new regulations will provide every precaution against any extravagant use of the drugs, many of which are in short supply all over the world.
Now, two years later, the second-reading speech of the Minister for Repatriation referred to what has happened in the meantime. The Minister referred first to the needless and dangerous use of the drugs that are contained in the limited list. He stated -
The antibiotic drugs available in both these services have been only recently discovered and developed. They are very potent. To secure the best results they must be used with discrimination, with skill and care. Their unnecessary use in minor cases may cause a development of germ resistance. This lessens their value and efficacy in serious cases. In fact, patients may he rendered allergic to their use. Consequently these drugs cannot be used when they would have been especially valuable 1n n patient seriously ill with a specific infectious disease. Their use must be safeguarded for effective life-saving purposes in serious specific diseases, which otherwise would prove fatal.
I draw particular attention to the following statement: -
Their use must, be safeguarded for effective life-saving purposes in serious specific diseases which otherwise would prove fatal.
The Minister continued -
It is obvious that this necessitates the closest co-operation and liaison between the medical and pharmaceutical professions and the Government. Firstly, drugs must he chosen whoso value has been proved. Secondly, there must be advice and supervision of the exhibition of these potent drugs to patients.
I wish to emphasize the following words : -
It is rather interesting, even from the point of view of the medical profession itself, to watch the developments that have taken place in the light of the introduction of a very limited list of drugs of this nature which are free to the people of Australia. One of the objections to such a scheme voiced by the Australian Labour party at the time was that the tendency would be for doctors to use these powerful drugs with the kind of effect which the Minister himself has indicated, not in the serious and very special cases, but generally, because they are free. The Minister, in the course of his second-reading speech, has acknowledged that that kind of development has taken place and needs to be curbed. Not only does it lead to a vast amount of unnecessary expenditure, but it is also having a particularly bad effect upon patients. As the Minister has indicated, the continued use of such drugs, particularly unnecessary use, sets up a germ resistance in the patient. If he has these powerful drugs merely to treat a minor disability and then contracts a really serious disease which needs heavy treatment by the drugs, he may find that their efficacy has completely vanished.
I have in my hand a copy of the Medical Journal of Australia dated the 28th June, 1952, in which appears, at page 887, a most interesting article under the title “ Antibiotics Amok “. Because it is a rather startling article, and because supports the opinions expressed by
Labour, which have now been confirmed by medical practitioners, I propose to read to honorable senators the following brief extracts from it : -
It is not surprising if medical practitioners have been avid in making use of tried and proven antibiotic preparations. Indeed, as we know something of human nature and of man’s readiness to avail himself of any help in time of need, we need not be surprised that antibiotics have been and are being used far and wide without just reason. It may truthfully be said in this regard that therapy has run amok. Every civilized country at the present time has what may be called its antibiotics problem. This statement has recently been made by Dr. L. E. Mallen, who has just returned to Australia from a council meeting of the World Medical Association. The point is that, in their desire to cure quickly an infection which threatens the life of a patient, doctors forget that when they use a powerful drug it has an effect not only on the specific organism whose destruction is aimed at, but also on the other organisms and on the cells of the body. Some of the organisms affected are included in the normal flora of the body. While it is not necessary to discuss this point in detail, it may be useful to recall that the use of sulphonamides may interfere with the absorption of vitamins from the intestine. The over use of antibiotics, and indeed of any other specific and quickly acting preparation, has thus a profound action on the body of the patient. It has another, and perhaps more subtle effect, and that is the substitution of, or shall we say the reversion to, a rule of thumb therapy which sets accurate diagnosis on one side and empiricism on a pedestal, undermining the scientific basis of medicine and the practitioner’s ability to use it.
I wish to read to honorable senators the following additional brief sentence from the same article: -
It is common knowledge that the introduction by the Commonwealth Government of the Pharmaceutical Benefits Act, according to the provision of which certain costly drugs, described as life saving, have been supplied to patients on the prescription of a medical attendant free of charge, was followed by an enormous increase in the quantities of antibiotics used.
– Did not that also happen under the honorable senator’s scheme ?
– No. I point out to the honorable senator that there was then a very comprehensive formulary, and that in many instances where antibiotics were used there was a very minor prescription at relatively low cost.
– Cheaper drugs would not have been used had the more expensive ones been available.
– The temptation is, when expensive drugs are free, to use them in minor as well as in major cases. lt is a temptation which is almost impossible to resist. That is the danger of confining the formulary to limited costly drugs. If the medical practitioner is able to prescribe free to his patients a much wider range of drugs, including drugs which are much less strong for use in minor complaints but which are just as efficacious, there is no reason why he should not use the less costly but weaker drugs rather than the costly ones which are likely to promote germ resistance against the time when the patient becomes infected with a really serious disease. I do not say that the Labour Government’s scheme was perfect, nor do I say that the doctors would have administered it perfectly. I claim, however, that the kind of thing of which the medical profession itself now complains, and against which the Government has set its face, would not have occurred under the Labour scheme. I point out that there must be supervision and control in these matters. The danger of which the medical profession now complains .would have been far less likely to occur under the Labour scheme, and would have had the additional benefit of being far less costly.
The average cost of prescriptions under the Labour formulary was approximately 3s. 6d. It is now extraordinarily high. As the Minister has explained in his secondrending speech, the total cost of approximately 6,500,000 prescriptions has been almost £6,700,000, which means that the cost, of each prescription was more than £1.
– It was 20s. 8d.
– I had not worked out the pence. I contented myself with seeing that it was plainly more than 20s. for each prescription.
– Surely the honorable senator does not consider that that is a fair comparison? One is obviously intended to cater for expensive cases and the other for general cases.
– That is true, but it still does not affect the legitimacy of my point that minor treatments would have just as much efficacy and would cost far less in many instances. That fact is frankly acknowledged in the secondreading speech, where the Minister deplores the over-use of expensive drugs.
– That is not to say that pills and water would have the same efficacy as these drugs.
– I suggest that the honorable senator and I might be more skilled in other spheres than in the sphere of medicine. I would not attempt to dispense or prescribe for any illness. However, the Minister for Health has drawn attention to the over-use of these costly drugs and of the dangers arising from such over-use, both to the patient and to the profession itself. He points very clearly to the need for supervision.
– Is not much of that supervision necessary because of the dishonesty of certain chemists?
– I propose to deal with that subject under another head, if the honorable senator will bear with me. I wish to deal next with the question of cost, and in that connexion to read again from the second-reading speech, because the following statement bears once more on the point raised by Senator Wright: -
Practical experience gained in thu provision of these various services over the last 18 months to two years, has shown that without adequate control and supervision, . some practices can arise which are not entirely in the best interests either of the patients or the medical profession taken as a whole. These practices may cause the total cost of these services to he unduly high. For example, practical experience in the widespread use of some of the new antibiotic drugs has shown that prescribing habits can arise which are both clinicially unjustifiable and can cause the cost for supplying them to rise to excessive levels.
– He was very sensible.
– I agree entirely. I also agree with the approach of the Government to control these matters. I do not contest or oppose that action at all.
The third point that I wish to make concerns the matter referred to by Senator Kendall. In the course of the secondreading speech, when dealing with the advisory committees which it is proposed to set up, the Minister stated -
The investigations and inquiries of these committees will help the Government to control the provisions of these services by closely supervising the activities of all persons participating in them.
So that there is to be close supervision of the persons who participate in the scheme - the medical practitioners, chemists and others. It could also relate to certain private and public hospitals. The Minister continued -
These researches will provide a body of knowledge and experience from which beneficial rules can be established and varied as the situation demands from time to time.
The Government therefore acknowledges plainly the need for close supervision and rules. When all is said and done, that was the very basis of the scheme which Labour suggested. We had had a. perfect opportunity to observe what had happened in other parts of the world. Rather than walk into a sea of troubles of the kind which the present Government is encountering, we preferred to have rules and controls from the beginning - rules which this Government is finding, to its cost, are necessary. The Minister continued -
The committees will investigate, report and make recommendations to the Minister for Health on matters referred to them. As these committees will be operated by and with the full co-operation of the executives of the various branches of the British Medical Association and the Pharmaceutical Guild, the deterrent effects which the committees should have on malpractice under the various schemes should be considerable and should have a salutary effect on fraudulent, extravagant and wasteful provision of services.
He thereby acknowledged the need to do something about fraud, extravagance, and waste. I agree with him that such action is necessary. I invite the Minister to reply, because I believe that these matters really interest the Senate. We are entitled to know just what kind of fraud, extravagance and waste have been practised. Some detailed instances of fraud and extravagance should be available to the Senate. I understand that there have been a number of prosecutions both of chemists and doctors in relation to these matters. Doctors have been prosecuted for writing out prescrip- ti ons for antibiotics for imaginary patients and placing the medicines on their own shelves. I believe that a doctor who was prosecuted in Adelaide was found to have hundreds of pounds, worth of antibiotics on his shelves. No doubt he had them for proper therapeutic purposes, but he could have had them for re-sale or disposal in some way. However, it seemed to be an extraordinary quantity of goods to accumulate. Fraud would be easy by collusion between a doctor and a chemist under any scheme, but a scheme which does not at least make collusion necessary to fraud is defective in a fundamental particular. I congratulate the Government on recognizing that it is necessary to bring these factors under control. I do not suggest that the control should be heavier than the situation requires from time to time.
It is provided in the bill that no committee shall examine the conduct of a doctor or a chemist unless it is composed of doctors or chemists together with a member of the Public Service. I ask the Minister what such a committee can do, assuming that it is given executive functions? What penalty is such a committee in a position to impose? From my perusal of the legislation and regulations there appears to be no provision for any penalty whatsoever to be imposed on a medical practitioner who misbehaves. 1 invite the Senate to distinguish between the case of a medical practitioner who i= authorized to act as a chemist and the case of a medical practitioner functioning only as a doctor. There is a provision for the medical practitioner acting as a chemist to be penalized and for him to appeal to the Supreme Court. But 1 cannot find any provision for a medical practitioner functioning as a doctor, accused of extravagance, clinically bad behaviour or misbehaviour not amounting to complete fraud, to “be penalized. I suggest that the disciplinary committee will have no power to impose a penalty, and if it did have power to decide, in an extreme case, that a medical practitioner should be denied the right to prescribe from the free list, that would be an extreme and drastic penalty because, in effect, it would put him out of the practice of his profession. But since the
Minister will take complete power to prescribe by regulation the constitution, powers, functions, duties and procedures of such a committee, does he propose, pursuant to that power, to confer upon the disciplinary committee power to take disciplinary action against medical practitioners who misbehave within the scheme, short of committing actual fraud ? If this is the intention of the Government, will the Minister give the Senate some indication of the type of sanction or penalty that it seeks to impose?
I notice that the bill provides that the court of a State and also the court of a territory may be invested with federal jurisdiction. From that fact I surmise that it is proposed to set up some kind of appeal procedure from the decisions of these tribunals. If that is the case, the appellant jurisdiction and right of appeal ought to be written into the bill, and not left merely to be conferred by regulations which can be changed, relatively speaking, at a moment’s notice. I should like the Minister to state what penalties the Government intends to impose on medical practitioners who misbehave. A chemist who misbehaves may be suspended from the scheme and this penalty is adequate. Both are liable under ordinary criminal law if they commit a fraud, or practice some form of deceit on the revenue. But are they to have a right of appeal against the extreme penalty of prohibition against prescribing? Why, if there is to be a right of appeal, has that right not been written into the bill? In the absence of some form of sanction upon medical practitioners, the setting up of a disciplinary committee in relation to medical practitioners will be a mere bluff which will be almost instantly exposed. I think it is obvious that the Government will have to have recourse to some form of sanction against specified forms of conduct and obviously it contemplates imposing those sanctions, but I should like the Minister to give the Senate some indication of their nature.
I understand that the united friendly societies have been invited to send two members from each State to sit on these committees. It appears that the registered pharmaceutical staff of these societies change their employment rather frequently, leaving the societies for private companies. The friendly societies would like to have the right to change their nominations from time to time as their nominees leave their employ. Will the friendly societies be able to revoke the representation of a person who has left their employ? They do not desire to be represented by people who have left their employ and who cannot be expected to put their viewpoint.
A scheme which varies from the main one dealing with life-saving and diseasepreventing drugs has been provided for pensioners. My attention has been directed to superannuated persons who derive no age or invalid pension, but whose range of income is well within the pension plus permissible income of persons in receipt of a pension. Surely it is just that superannuated persons who may receive less income than a pensioner should not be excluded from the benefits of the scheme. I have no doubt that the plight of many superannuated persons could be even worse than that of pensioners and they might be in even greater need of pharmaceutical benefits. I think that the Government should consider broadening the pharmaceutical benefits scheme that applies to pensioners to include people whose income does not exceed the maximum of a pension plus permissible income. I should like the Minister to indicate whether any consideration has ‘been given to that matter and whether the Government is prepared to extend the benefits of the scheme to this class of person.
On his return from the United States of America some time ago, the Minister for Health (Sir Earle Page) stated that an analytical laboratory should be set up in Australia in order to test drugs that could be prescribed under the Government’s scheme. Many manufacturers are making drugs of the same class, but they do not all reach the same standard. Facilities are not readily available in Australia for testing them. I should like to know whether the Government has acted upon the suggestion of the Minister for Health and if it has not, whether it is likely that action will be taken for the establishment of this laboratory. I would strongly support a move in that direction. If the Government does pursue the suggestion of the Minister for Health I trust that the activities of the laboratory will extend to a field far wider than the drugs included in the benefits scheme. I do not claim that the Government has constitutional power to prohibit the use throughout Australia of drugs that may be found to be deficient, of low standard or deleterious to health. But such a laboratory should be set up. If the Government gives effect to the suggestion of the Minister for Health it will have the most cordial support and approval of the Opposition.
With reference to sub-section (2.) of proposed new section 19, it might save time in committee if the Minister for Repatriation (Senator Cooper) could tell me what type of public servant will be appointed to the membership of the disciplinary committees. I strongly recommend that he should be a legal practitioner. I think that these bodies of chemists and doctors, who will embark on what may virtually be trials of their fellows, would find that legal guidance might enable them to avoid many pitfalls. Is it proposed that only one public servant shall serve ou these committees, or will there be more? On that point, the provisions of the bill leave me in some doubt. The Opposition believes that it is a move in the right direction. Now that the Government has recognized the need to bring this scheme under control, we can only deplore the fact that it was allowed to run free in the first instance. We deplore also the fact that the Government did not take action before a good deal of harm had been done and the matter had become one of some public notoriety and scandal. Nevertheless, we congratulate the Government upon having moved, however belatedly, into the field. The Opposition will watch with real interest the steps that the Government takes and the reactions of the medical profession to the various controls and rules to which it is to be subjected. To the Opposition it is rather intriguing to find that, under the new scheme, the medical practitioners of Australia are very largely using official prescription forms, using two carbon papers, accepting a limitation on prescribing, and now agreeing to the setting up of voluntary disciplinary authorities and other professional bodies to control, guide, and regulate their activities. The Opposition will watch with the greatest of interest the developments that lie ahead.
Thursday, 28 October ; 1952.
– in reply - I have listened with considerable interest to the remarks of the Leader of the Opposition (Senator McKenna). I realize that he is most interested in health matters, and particularly in a measure of this kind, because he was at one time responsible, as Minister for Health, for the introduction of certain health schemes. This Government’s pharmaceutical benefits scheme has worked quite smoothly. The Leader of the Opposition will appreciate the difficulties that had to be overcome because, for a period of 27 months he himself endeavoured to introduce a scheme of this kind. The fact that the scheme has worked smoothly is evidenced by the number of prescriptions that have been written. Altogether 6,500,000 precriptions were written during the year ended the 30th June, 1952. The average cost of those prescriptions was, as the Leader of the Opposition has pointed out, slightly more than £1, and the total cost was £6,699,000. Surely that cannot be regarded as an excessive figure in view of the fact that the prescriptions were for life-saving drugs. Not only have many lives been saved by the use of antibiotics, but also there has been a substantial saving of hospital beds because of the rapid cures that have been effected. It is true that last year, although the estimated cost of this scheme was £5,000,000, the actual expenditure amounted to approximately £7,000,000. I am informed by the Minister for Health (Sir Earle Page) that one of the chief reasons for that increase was that, from October, 1951, until January of this year, Australia experienced one of the most serious virus epidemics that it has ever known. During that period, the new drugs saved the lives of many people. In the last three or four months, with the assistance of various committees, the cost of the scheme has been reduced by no less than £100,000 a month. The Leader of the Opposition expressed the fear that there might be a tendency to use the wonder drugs unwisely, merely because they are free and patients would have to pay for other medicines. I point out that a regulation was promulgated on the 21si September, 1951, to prevent the use of expensive antibiotics for the treatment of minor complaints. As the result, the use of drugs such as aureomycin, Chloromycetin and streptomycin is now restricted to specific diseases. They are prescribed under regulation 40. It is clear/ therefore, that quite early in. the scheme, the danger to which the Leader of tho Opposition has referred was foreseen, and steps were taken to restrict the use of those drugs. In my secondreading speech I drew attention to the fact that some of the drugs- might produce undesirable effects in patients who were allergic to them. We hope that in future they will be used sparingly and only in necessitous cases. The advisory committee to which reference is made in the measure is constantly supervising the use of antibiotic drugs as well as’ recommending the inclusion of new preparations in tho free lists. With regard to the actual cost, I am informed that the great increase in the cost for each prescription has undoubtedly been brought about by the introduction of the new antibiotic drugs which are responsible for 60 per cent, of the present expenditure. The drugs were not available when the original estimates were made. No scheme to provide public relief with regard to the cost of drugs would be of any account if it did not provide for the supply of these most important life-saving drugs. Therefore, any extension of the present scheme to include mixtures and ointments could not possibly lessen the expenditure. If they were used, they would increase it. The disciplinary committee would discipline the medical practitioners. It is true that it would have more control over the pharmacists than it would have over tho medical practitioners, but the Minister for Health (Sir Earle Page) has dealt with that subject. He said -
The committees will actually be engaged on matters that, in the final analysis, will conserve professional conduct. A committee will examine the circumstances of each case. Cross examine the man concerned, allow him to lay all the information at his disposal before it and will then report to mc concerning the conduct of the medical practitioner or chemist concerned’ in relation to the provision of pharmaceutical benefits and the medical service for pensioners, and recommend whether he should be reprimanded or whether there should be more publicity given to the fact that he has been found guilty of some unprofessional act. The committee might suggest that his conduct has been such that he should cease to be eligible to carry out further services in connection with the scheme. Provision hae already been made in the act and also in the bill that a man who is charged with such acts and has been up for examination has the right of appeal to a Supreme Court before any action is taken.
Under section 32 of the act, that would apply only to the pharmacists and not to the medical practitioners. It does not give full and complete control over to chemists, but the publicity might bring great discredit upon such an individual. With regard to friendly societies that are> to bo represented upon the disciplinary committees. I understand that a panel of names is to be submitted by the societies and that they can be changed at any time if they so desire. Reference has been made to persons in receipt of superannuation benefits I can only say that I shall bring, that matter to the notice of the Minister. I cannot express an opinion upon it either way. With regard to inspections of the quality of drugs, it is proposed later to set up a laboratory of the type that has been mentioned. The question is being investigated. At the University of Melbourne and the University of Sydney, testing of various types of new drugs and also of drugs that are in use is carried out. I am informed that while there is no legislative power to prevent any person from setting up a factory to manufacture or process drugs, the Australian Government has not overlooked its responsibility to ensure that the drugs supplied as benefits are pure, and of a standard which conforms to official requirements. All drugs that are being supplied as benefits are being systematically tested. Already certain pro? ducts have been removed from the list because they did not comply with the standards that were laid down. As a result of recent tests others will be removed, so there is a considerable amount of inspection and care taken with drugs that are being used and manufactured. “
– I should like it to move from the field of benefits to the broad field, and I think that it could be done.
– I shall bring that matter before the Minister. As to the personnel of the committee, I am informed that the matter to which the honorable senator referred has not been decided upon. 1 appreciate the manner in which the Senate has accepted the provisions of this measure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Motion (by Senator O’sullivan) agreed to -
That the Senate, at its rising, adjourn to to-day, at 2.30 p.m.
The following papers were presented : -
Air Navigation Act - Regulations - Statutory Rules 1952, No. 87.
Income Tax and Social Services Contribution Assessment Act - Regulations- Statutory Rules 1952, No. 89.
Lands Acquisition Act - Land acquired for Postal purposes - Ballan, Victoria.
Senate adjourned at 12.20 a.m. (Thursday).
Cite as: Australia, Senate, Debates, 22 October 1952, viewed 22 October 2017, <http://historichansard.net/senate/1952/19521022_senate_20_220/>.