Senate
21 August 1958

22nd Parliament · 3rd Session

  1. Senate
  2. 22nd Parliament
  3. 1958

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 11 a.m., and read1 prayers.

page 147

QUESTION

UNEMPLOYMENT IN QUEENSLAND

Senator BENN:
QUEENSLAND

– Is the Minister representing the Minister for Labour and National Service aware that a meat company whose works are at Rockhampton, Queensland, has commenced: greatly to reduce the number of seasonal workers in its employment? Will the Minister confer with the Treasurer to see whether funds can be provided for some form of public works in the Rockhampton district for the purpose of absorbing, all unemployed workers in the area?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– I presume that the honorable senator’s question relates to seasonal variations in employment. If that is so, I point out that the Department of Labour and National Service has officers who; I am sure, will make inquiries and do their best to assist those who are displaced from employment. So that no opportunity will be missed, I assure the honorable senator that I will bring the question to the notice of the Minister so that he may put his department to the task as soon as is practicable.

page 147

QUESTION

SHIPBUILDING

Senator BROWN:
QUEENSLAND

– My question is addressed to the Leader of the Government in the Senate. I understand that last week he met a. deputation of shipyard workers from Maryborough and Brisbane. The members of the deputation were concerned with obtaining orders for the shipyards of Maryborough and Brisbane, and I understand that the Leader of the Government met them on behalf of the Minister for Shipping and Transport. I now ask the Leader of the Government whether it is a fact that the shipyards at Maryborough and Brisbane are facing a grave crisis owing to lack of orders. Will he inform me whether any promises were made to the deputation concerning future orders for ships? Will he also inform the Senate, and the nation, what steps are being taken by the Government to improve the serious position of those shipyards?

Senator O’SULLIVAN:
Attorney-General · QUEENSLAND · LP

– As the honorable senator says, on behalf of my colleague, Senator Paltridge, I did receive a deputation consisting of union representatives, workers, and some executives of the Maryborough and Brisbane shipbuilding yards. Those yards are in a rather parlous condition. The Government is well aware of that fact and is. most sympathetic towards these people. The honorable senator may know that at the present time the Government subsidizes Australian shipbuilding, by way of a bounty, to the extent of about 33i per cent. I took a complete record of the representations made to me, and I shall place them before my colleague on his return.

page 147

QUESTION

ELECTORAL

Casual Vacancies in the Senate.

Senator MARRIOTT:
TASMANIA · LP

– By way of preface to my question, which is directed to the Attorney-General, I should like to say that, recently, I have given some thought and study, from a constitutional point of view, to the filling of casual vacancies in the Senate by joint meetings of the State Houses of Parliament. My study of the matter, and the discussions which I have had with other people,, reveal that there is one matter upon which it is difficult to obtain a clear statement. I believe that the Senate should be aware of this difficulty and should, if possible, be informed officially of the true position. Accordingly, I ask the Attorney-General: Is a member of a State Parliament eligible for nomination to fill a casual vacancy in the Senate?

Senator O’SULLIVAN:
LP

– I am aware of the honorable senator’s interest in this matter. I am indebted to him for the discussions that have taken place, and for the information which he has given me on the subject. The giving of legal opinions is not, under the Standing Orders, one of the responsibilities of Ministers at question time, but the Senate would be indebted to the honorable senator if he made available to it such information as he possesses concerning what electoral officers and other people consider to be the true position. I am having the matter examined, and when I can give the honorable member further information I will certainly do so.

page 148

QUESTION

CIVIL DEFENCE

Senator WADE:
VICTORIA

– I ask the Minister representing the Minister for Defence whether his attention has been drawn to a statement made yesterday by Professor Marcus Oliphant, in opening a science conference, to the effect that even a baby bomb among to-day’s nuclear weapons could annihilate Adelaide in an instant. Is the Minister in a position to say what progress is being made to implement a national policy for civil defence? If he is not in a position to make a statement to the Senate to-day, will he inform it on this most important subject at the first opportunity?

Senator O’SULLIVAN:
LP

– Although this matter is the responsibility of the Government it is, perhaps, more intimately one for the Minister for the Interior. I assure the honorable senator that it has received most earnest consideration by both the Minister and Cabinet. If and when I am in a position to make a statement in elaboration, I will be happy to make it.

page 148

QUESTION

WOOL

Senator WARDLAW:
TASMANIA

– I ask the

Minister representing the Minister for Primary Industry whether he has seen the statement in a leading newspaper that the reduction in the United Kingdom bank rate last week has led to forecasts of greater market stability in the coming Australian wool season. If so, will he inform the House whether, in his opinion, the wool market would benefit from the reduction; whether Bradford would operate more flexibly than it did during last season’s selling, when the stringent United Kingdom financial measures were blamed for some of the general price reductions; whether, in his opinion, world output of wool will be lower than last year; and what effect this would have on the Australian wool market?

Senator O’SULLIVAN:
LP

– The questions raised by the honorable senator could be better answered by an economic expert than by a conjectural statement on the part of a parliamentarian. I shall be happy to refer them to the Government’s economic advisers and give him an answer in due course.

page 148

QUESTION

GOVERNMENT LOANS AND FINANCE

Senator HANNAN:
VICTORIA

– Will the Minister representing the Treasurer inform me whether there is any accountancy or procedural objection to the loan funds fixed by the Australian Loan Council and made available by the Commonwealth to the States each year being lent directly from the Commonwealth Bank at 1 per cent, interest instead of as at present? Is it a fact that this course would effect a saving of interest charges payable by the States of 4 per cent., amounting in the present year, in the case of Victoria, to a saving of more than £1,000,000? As the interest charge has the effect of directly reducing the value to a State of its loan funds, would not the method suggested enable the States to carry out the same volume of public works as at present with only 96 per cent, of their present allocations, thus enabling a substantial reduction in direct taxation?

Senator SPOONER:
LP

– The honorable senator’s question certainly has far-reaching consequences. It proceeds on the assumption that all loan moneys are apparently provided by the Commonwealth Bank which is, of course, not correct. A substantial proportion of loan funds is obtained by the Commonwealth Government by means of borrowings on the loan market. Therefore, the effect of the suggestion contained in the question would be to ask the Commonwealth Bank to make advances at an interest rate of 1 per cent. I put the alternative view to the honorable senator, that if money was available for works programmes at that rate of interest, it would be even more difficult than it now is to curb the enthusiasm of the State governments when they are planning their expenditure each year.

page 148

QUESTION

EXPORT PAYMENTS INSURANCE CORPORATION

Senator MATTNER:
SOUTH AUSTRALIA

– I direct a question to the Minister representing the Minister for Trade. As the Export Payments Insurance Corporation that was established by this Government has been able to forecast with accuracy and efficiency the probable risks which an Australian exporter runs when he exports goods to any of the known 150 international markets, will the Minister inform me of the extent to which the exporters have availed themselves of the insurance cover offered by the corporation to expand Australia’s exports?

Senator SPOONER:
LP

– Offhand, it is not easy to answer the honorable senator’s question. I have recently been informed that the insurance written by the corporation during the last year or so exceeds the sum of £16,000,000. This is evidence of the fact that the corporation is filling a need. I have also noticed that the corporation, whose head office is located in Sydney, has found it necessary to open a branch in Melbourne. This is further evidence that the corporation seems to be proceeding satisfactorily.

page 149

QUESTION

DARWIN POWER STATION

Senator SCOTT:
WESTERN AUSTRALIA

– Will the Minister for National Development inform me whether it is a fact that a new power station is to be constructed at Darwin at a cost of £1,850,000, and that it will use oil as fuel and generate 15,000 kilowatts of electricity? Can the Minister inform me of the estimated cost per unit of electricity, and whether consideration was given by the Government to the erection of a power station that would use another kind of fuel?

Senator SPOONER:
LP

– I am sure that an answer to the honorable senator’s question is to be found in the report of the Public Works Committee. I have a very clear recollection that quite recently the Public Works Committee reported on the proposal to build a new power station at Darwin, and that its report has been adopted by the Government. I cannot say offhand what the estimated cost is, although it was stated in the report. The committee also canvassed in its report alternative means of generating power, including the possibility of establishing a nuclear power station at Darwin, but it recommended that a power station using oil fuel be constructed.

page 149

QUESTION

HOME NURSING

Senator ANDERSON:
NEW SOUTH WALES

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

  1. Has the Minister seen a letter appearing in the “ Sydney Morning Herald “ signed by the chairman of the board of the Sydney District Nursing Association in which reference is made to domiciliary nursing services and which states in part that the Commonwealth Home Nursing Subsidy Act has enabled that organization to employ four extra nurses in the last six months?
  2. To enable honorable senators to appreciate better the working of this act, will the Minister supply information of subsidy given under this act by States during the last twelve months?

SenatorO’SULLIVAN.- My colleague, Senator Cooper, has furnished the following answers: -

  1. Yes.
  2. Subsidies paid under the Home Nursing Subsidy Act during 1957-58 were -

page 149

CUSTOMS TARIFF BILL (No. 3) 1958

Second Reading

Debate resumed from 19th August (vide page 57), on motion by Senator Henty -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The measure now before the Senate seeks to amend tariffs based upon six separate reports by the Tariff Board, all of which are comprehensive and detailed. The Opposition raises no objection to the proposed amendments, but I take the opportunity of referring to several of the topics covered by the alterations, particularly matters affecting Tasmania, such as the timber and copper industries and other sundry items. I shall address my remarks first to the timber and copper industries.

The report on the timber industry was made on 22nd April last, as a result of a reference to the Tariff Board on 19th March, 1957. The tariff proposals were tabled on 15th May. The delay between the date of reference and the date of the report caused very great concern to the timber industry, but one can understand that delay when one has regard to the comprehensive nature of the inquiries that were made, and the complexity of matters to which the board had to direct its attention. The report was a vast disappointment to the timber interests of Australia, particularly in Tasmania, which had experienced a very depressed period in the trade, with mills closing down, men working part-time, production falling and general serious disabilities being suffered.

In its survey the Tariff Board indicated that local industry supplies about 80 per cent. of the total demand in Australia, the remaining 20 per cent, being imported. The board had regard to the need for timber conservation, and recognized quite fully the importance of the industry to Australia from many aspects, including the employment aspect. The board regards the industry as vital, and one that should be assisted, but its recommendations related to increasing the duty on imported veneers only, and made some minor alterations in the tariff of other items that call for no particular comment and which have no decided effect on the industry.

I should like to draw the Minister’s attention to the recommendations that were made by the Tariff Board in relation to sea freights on timber from Western Australia and Tasmania. The Tariff Board generally recognized the depressed condition of the industry in Tasmania, but indicated that the matter of sea freights was hardly one’ for it. and concluded by making a recommendation that the Government should consider subsidizing sea freights from Tasmania, Western Australia and maybe from northern Queensland ports.

I propose to take just a few minutes to lead up to the recommendations of the board by quoting the arguments it advanced in its conclusions. On page 26 of its report the board said -

So far as Tasmania is concerned, government and forestry representation was of the opinion at the public inquiry that the present production of timber can be sustained in that State indefinitely, the State is, however, certainly handicapped in the sale of its timber by problems of shipping and marketing.

On the following page, the board continued -

A reduction in freight or a freight subsidy would undoubtedly improve the competitive position of timber from Western Australia and Tasmania as there seems to be little doubt that for geographic reasons the producers in those States have more to fear from competition in major Australian metropolitan market areas between imported and domestic timbers than do producers in other States, with the possible exception of northern Queensland.

The board indicates then that there is a marked preference, particularly in the big market in New South Wales, for imported timber, even though there is a price differential very much in favour of the local product. Then it proceeds with the theme to which I am addressing myself and states -

The geographic disadvantage of producers in Tasmania and Western Australia manifests itself in a freight problem which producers in other States do not have to the same degree. This freight problem has several facets. Firstly, sea freights from Tasmania, Western Australia and northern Queensland to the main areas of consumption appear to be considerably higher than road and rail transport costs in the using States. While this is a matter for regret so far as one section of producers is concerned, it would not seem to be the proper function of the Board to make recommendations which would impinge on the normal competitive position of producers within Australia as a whole.

We cannot quarrel with that commentary and conclusion, but I am reading these extracts to indicate how, again and again in submitting its conclusions, the Tariff Board adverts to the particular difficulties of Tasmania and Western Australia by reason of their geographic positions. It next draws attention to the very interesting position that imported timbers are being brought in, not only at fallen rates, but at greatly reduced freight rates. It is rather a surprising development, but honorable senators will understand the position if I read what the board has to say on that point. The board says -

Secondly, producers in these supplying States have to face competition in South Australia and New South Wales from overseas exporters of

Oregon and other building timbers whose freight rates not only vary from time to time in a way which upsets the competitive position of the domestic producers but also in a way which, because of the magnitude of the freight fluctuations in relation to the Australian selling prices of comparable timbers, could have serious effects on the stability of the Australian industry, particularly in Tasmania and Western Australia.

The board gives some very interesting instances of that. It says -

For instance, freight rates from the west coast of America to South-eastern Australian ports have ranged from 20 dollars (U.S.) in the middle of 1955 to 25 dollars in 1956 and to a maximum of something like 30 dollars per ton deadweight early in 1957.

Following 1957, rates fell, and at the time of last advice to the Board were as low as 10 dollars per ton.

That is an extraordinary drop for a short period.

Senator McCallum:

– Are they subsidized from abroad?

Senator McKENNA:

– I cannot answer that question. If the honorable senator listens to further extracts that I propose to read, I think he will find that a lot depends upon the dead freight that is lying around and which is capable of being used for this purpose, and this purpose alone. The board does advert to the reasons, but I would sooner state in its own words what it has to say.

Senator Mattner:

– Would the honorable senator understand the south-eastern ports to be Melbourne and Adelaide?

Senator McKENNA:

– That would be my interpretation. The report continues -

Thus, freights in this short period of time have varied as much as 37s. (approximately) per 100 super, feet.

That is really a terrific variation. The report then reads -

When this figure is related to the ex mill cost of Australian hardwoods, it is not hard to imagine the effects which such a variation can have on both the competitive position of the Tasmanian and Western Australian producer competing with imported timbers in South Australia and New South Wales and also upon the stability of this industry and its employment.

Whilst overseas freight rates on timber shipped to Australia have been fluctuating to a greater or lesser degree, but at present tending to fall in an important sector of the import trade, coastwise freight rates within the Commonwealth are rising. Thus, the following table shows a comparison of freight rates from Launceston, Tasmania, to the mainland at the time of the Board’s previous inquiry into timber (early 1954) and at that of the current inquiry.

The table shows that the rate from Launceston to Melbourne per 100 super, feet was 19s. Id. in 1954, and 25s. 2d. in 1957. It also shows that the rate to Port Adelaide was 24s. 4d. in 1954, and 32s. 2d. in 1957. The report further states -

The comparable rate from Launceston to Sydney in 1954 was stated to be 24s. 9d. per 100 super, feet whereas the average sea freight rate from Tasmanian ports to Sydney given at this inquiry was 35s. 5d. . . .

Even after taking into account any actions of merchants in the direction of adjusting their profit margins in an attempt to “ iron out “ to some extent sharp and sudden variations in overseas freight rates, the sea freight rates quoted above suggest that, because of their remoteness from the metropolitan areas of South Australia and New South Wales, the timber industries in Western Australia and Tasmania derive little or no advantage from the otherwise natural protection of ocean freight rates. Furthermore-

This is the point in which Senator McCallum is interested - as many cargo vessels are lying idle in overseas countries at present, any possible further fall in freight rates for vessels on charter may place sawmillers catering for this interstate trade at a further disadvantage.

The existence of hulks- that are so readily available to transport timber is one of the major factors in the low cost. The report proceeds -

Because of the importance which the Board attaches to stability in the timber industry and the importance which freight disadvantages can have upon the return to timber producers in States, which have to rely upon sea transport within the Australian market, the Board feels that the Government’s attention should be directed to finding some solution to the problem of freight disadvantage between domestic and imported timbers.

Senator Vincent:

– Does the honorable senator know whether this is a new departure in the Tariff Board’s policy?

Senator McKENNA:

– The board makes a recommendation. It may be a departure, but I suggest it is rather that, following its investigations into the state of the industry, it has had to say that the plight in Western Australia and Tasmania is due to sea freights. Surely it would be a natural and a proper thing for the board to say, “We recommend to the Government that it have a look at this question if it wants to ensure stability in the industry in those two States “. That seems to me to be quite an appropriate recommendation.

The terms of reference on this occasion were exceedingly wide and did not restrict the board to determining the duties required. My recollection is that the board was asked to determine the degree of assistance that was required for the industry. The Minister for Trade (Mr. McEwen) made the terms of reference so wide, I suggest, that this recommendation is right within them.

Senator Henty:

– I would agree with that.

Senator McKENNA:

– Yes. The Minister for Trade deliberately made them very wide, and although one does not usually see a recommendation of this kind in a Tariff Board report, this recommendation is completely proper having regard to the terms of reference.

Senator Vincent:

– But does not the honorable senator think that the Tariff Board has departed from normal policy in segregating freight charges from those considerations on which, normally, a recommendation would be made?

Senator McKENNA:

– It is not usual for the board to make a recommendation of this kind. I concede that. But if the honorable senator is suggesting that the board ought not to have made such a recommendation, I say to him that the recommendation was completely within the specific terms of reference decided by the Minister.

Senator Vincent:

-I agree entirely with the honorable senator’s statement.

Senator McKENNA:

– Then, I take it that Senator Vincent is not contesting the desirablility of the Tariff Board making such a recommendation in the circumstances.

Senator Vincent:

– No.

Senator McKENNA:

– The Minister for Customs and Excise (Senator Henty), Senator Vincent and I all seem to be agreed on that point.

Senator HENTY:
TASMANIA · LP

– I think that Senator Vincent was trying to say that the board possibly should have recommended a higher protective duty.

Senator McKENNA:

– I follow. In the face of a disability, the board should have recommended a higher protective duty.

Senator Vincent:

– The freight element is one of the considerations for an increase in tariff.

Senator McKENNA:

– Regard must be had to the facts of each particular situation. The board, no doubt the honorable senator will acknowledge, does address its mind with great particularity to the problems of an industry when it undertakes an inquiry of this kind. Faced with a depressed condition in the industry in Western Australia and Tasmania, and being able to pinpoint one of the major difficulties, it would be inappropriate to adjust two local disturbances by means of a tariff, which has to be universally applied. I suggest not only would it be inappropriate, but also a bit silly to approach the problem in that way. In those circumstances, the board has said, “We are not disposed to recommend further tariff protection, but we invite the Government to face the problem. There is the trouble.” That is a very sensible and practical approach to a problem that is rather local in character in Western Australia and Tasmania.

To continue the quotation that I was making from the report, the board stated -

Indeed, the Board believes that one of the major problems of the timber industry in Tasmania and Western Australia is, in fact, not a problem directly related to this industry so much as to the interstate shipping industry.

That pinpoints the board’s thinking. It refers again and again to the question in relation to those areas, and to emphasize its thinking, in the very last paragraph of its report, on page 33, it returns to that subject and states -

The Board invites attention to the remarks contained in its conclusions concerning the disability of the timber industries in Western Australia and Tasmania due to fluctuations in sea freights from overseas to Australia and high freight rates in Australian waters.

I think that the board has rendered a very distinct service in focusing thought on that matter.

The Minister met representatives of the timber interests in Sydney on 20th June, and I understand that on that occasion they pressed the Government, through him, to do something to implement that particular recommendation of the Tariff Board. I am advised this morning that, to date, although a promise of consideration was made, no reply even has been received to the representations. I point out to the Minister, who has a particular knowledge of the Tasmanian position, that the situation has worsened very much even since the Tariff Board’s report was submitted in April last. I am informed that the figures of production show that in the financial year ended 30th June, 1958, production fell to 129,000,000 super feet. For the previous year, production was 134,000,000 super feet, and in the year before that it was 1 5 1 , 000,000 super feet. There has been a progressive decline, and one needs little imagination to realize what drops of that character will do to the timber industry of Tasmania. That decline means that mills are working part-time, that mills are still closing, and that as a result employment is affected.

As the Tariff Board has pinpointed, this position arises primarily from these freight difficulties. I put it very strongly to the Minister that the Government could address its mind to that recommendation of the board at once, apart from the question of tariff; and I should like an assurance from the Minister that that particular recommendation of the board is being considered and that an early announcement will be made in relation to the matter.

I recognize that a period of two months has elapsed since the Minister met the timber interests in conference in Sydney. I realize that he has many other things to do, and that he is now on his way abroad to seek further trade outlets, but I think that at least some information as to what is being done might have been conveyed to the timber industry in the interim.

That reminds me of another factor. The Minister is going to Kuala Lumpur. No doubt his purpose is to extend trade. There is a real fear in the timber industry that importations of Malayan timber may be encouraged in order to stimulate sales of commodities from Australia. Figures that have been given to me as recently as this morning show that during the twelve months ended 30th June, 1958, imports of timber from Malaya were the highest ever experienced. There may have been some falling oft in the importation of timber from North America by reason of dollar limitations, but the importation of timber from Malaya has grown very appreciably and very considerably.

Senator Hannaford:

– It is good stuff, too.

Senator McKENNA:

– Nobody queries that. Different timbers are required for different purposes, and nobody can argue about the advantages of Oregon over hardwood, perhaps, in some types of house construction.

Senator Hannaford:

– You do not get

Oregon from Malaya.

Senator McKENNA:

– I know that. That is another matter. I am moving on from that to Oregon now. The importations of oregon have grown enormously, too. I understand that in the twelve months ended 30th June, 1958, the importation of Oregon made an all-time record. It ran at some 70,000,000 super, feet up to December, 1957, and was over 100,000,000 super, feet in the six months ended 30th June, 1958. That is the highest importation for any six months period since 1955. In two respects at least the position has worsened against the timber industry in this country since the report was made by the Tariff Board. There have been further heavy importations from Malaya, and much higher importations of Oregon.

Senator Anderson:

– But Oregon importation now is very much restricted.

Senator McKENNA:

– According to my information, it was very much higher in the six months ended 30th June, 1958.

Senator Anderson:

– But at this point df time its importation is very much restricted.

Senator Henty:

– The drop in price would account for that suggestion.

Senator McKENNA:

– I think the Minister has given the answer to the difficulty. Senator Anderson is probably looking at the value of the oregon imported. The price of oregon has fallen appreciably, as have freight costs. The honorable senator would not get a true picture from merely looking at the value of the oregon imported. The problem is the quantity that is coming in, and the mere fact that prices have fallen makes the local demand so much heavier and operates against local industry.

I am not suggesting that the importation of oregon be discontinued. It is essential for certain purposes. I merely indicate that the position of the timber industry has worsened in those two particulars - the importation of oregon and the importation of timber from Malaya. I do invite the Minister, in his reply, to say what is being done on the very urgent recommendation of the Tariff Board, which devoted many paragraphs of its report to directing attention to that phase of the industry.

The only other matter to which I wish to refer relates to the changes in the tariff in relation to copper, which is now exported from Australia. A tariff duty was recommended by the Tariff Board. It is the only recommendation amongst the six we are considering that the Government has not adopted in the precise form suggested by the board.

The board recommended a tariff duty in favour of copper, based upon the average weekly price, London quotations. The Government, for a reason that it has not explained, has broken the matter up into tariff duty and bounty. There is to be a bounty of £45 a ton, operating, of course, in favour of local consumers and users. For the rest, the duty imposed is based upon the average weekly price of £275 a ton, on London, and the duty operates at the rate of £1 for each £1 by which the price falls below the level of £275. That is what the present tariff change seeks to effectuate. The Minister did not advert to the reasons for not following particularly the recommendations of the Tariff Board; be merely indicated that there would be that departure from the board’s recommendation. I should like him to indicate, first, just what was in the mind of the Government, actually, in not following the recommendation of the Tariff Board in its entirety; secondly, whether the bill with respect to the bounty will be introduced before the Parliament rises; and, thirdly, whether the proposed bounty will be operative from 15th May, the same date as that from which the duty operates. Will the bounty be retrospective to that extent? Again, if the Minister is in a position to foreshadow what conditions are likely to be included in the legislation when it comes up, I shall be interested in them.

With those comments, I indicate that we do not propose to oppose the changes to the tariff proposed by the bill.

Senator VINCENT:
Western Australia

– I rise merely to make one or two observations following the excellent remarks made by the Leader of the Opposition (Senator McKenna) in relation to this measure. This bill is most important to Western Australia because it contains recommendations relating to two products in which that State is particularly interested. They are timber and copper.

I make one or two remarks first about timber. As the Leader of the Opposition has said, and as the Tariff Board’s report points out, there can be no doubt that the timber industry in Western Australia has been suffering a grievous decline for some years because of overseas competition. The real trouble has been caused, not by the fact that the great hardwood industry of Western Australia cannot compete with overseas suppliers, but because of crippling Australian freight rates. It costs about as much to bring oregon right across the Pacific to Adelaide as it does to bring Western Australian hardwood from Fremantle. That is the devastating picture which faces the timber industry in Western Australia. High freights have come very close to ruining its markets in the eastern States. No one will quarrel with the virtues of Oregon, but I venture to suggest that large quantities of it are being used in South Australia in places where much cheaper timber would have been preferable. Oregon has certain specialized uses, but it is often used in places where, but for high Australian freight rates, much cheaper timber could be used.

Senator Hannaford:

– Would the honorable senator give us an example?

Senator VINCENT:

– I have seen it used in construction work in South Australia in a way which amounted to sheer waste of good timber. In many instances, cheaper timber could be used just as effectively. Surely no one will quarrel with the proposition that where Australian timber can be used it should be used. The Tariff Board recognizes that, and suggests a way out of the difficulty. I may be wrong, but I believe that Tariff Board recommendations do take into account the freight aspect. After all, it is an element in the cost of any product in Australia which is protected by a tariff. I appreciate the reason why the Tariff Board has, in this case, recognized the freight element and, while making a recommendation as to the special difficulties of Western Australia, has not taken them into account in assessing the tariff. I cannot see how the problem could have been tackled otherwise. I appreciate that we cannot have differential tariffs for each State because of varying freight charges.

In common with the Leader of the Opposition (Senator McKenna), I am particularly interested in the action which the Government will take following this special recommendation concerning the difficult circumstances which face the timber industry in Western Australia and Tasmania. This is a typical illustration of how slow we have been to appreciate the fact that our real prosperity depends upon the existence of low freight rates. Everywhere one goes - and especially in my own State of Western Australia - one finds that development is retarded because of high costs - frequently traceable to the all-important matter of high sea, rail and road freights. This is an excellent opportunity for the Government to move quickly and ensure that the timber industries of both Western Australia and Tasmania receive protection and do not languish. I believe that they have merited such assistance for quite some time. I should very much like the Minister to inform me when the Government may be expected to announce a decision on that part of the Tariff Board’s report which has not yet been approved.

I turn now to the report on copper. We have here a unique situation. The Tariff Board has investigated the difficulties of the copper mining industry and apparently has made a two-fold recommendation - one with respect to tariffs and the other with respect to a bounty.

Senator HENTY:
TASMANIA · LP

– The board makes recommendations as to tariffs only.

Senator VINCENT:

– I venture to suggest that the Government’s decision regarding a bounty was complementary to the board’s report. No one will argue with the assertion that the action of the Government has virtually saved the industry. I am interested, of course, in the situation in all the base metal industries. The price of copper has fallen and, of course, so has that of the other base metals - zinc, tin, lead, rutile, scheelite and so on. The picture in the copper mining industry is not different from that in these related industries. I have already asked the Minister for National Development (Senator Spooner) why the Tariff Board was selected as the medium for assisting the copper industry, and why consideration was not given to the other base metal industries also. We have throughout Australia the spectacle of small base metal mines closing. That is a very serious matter. One cannot just re-open a mine at will; it takes capital. Many of the mines which are now closing may never reopen, and valuable metals, as yet underground, will belost to the national economy for ever. I do suggest quite seriously to the Government that some consideration must be given to an overall plan with respect to base metals in view of the depressed prices. We have had one of the cycles in regard to base metal prices that have been experienced over the last 50 years. The trends in the rise and fall of prices of base metals have been apparent. Twice in the last 50 years base metal prices have ebbed and flowed, and each time there has been a fall some of the smaller mines have gone out of production. Some of them may never open again.

It is only the richer mines that can withstand the onslaught of low prices. One may say that that is the ordinary economic law of nature, that the strongest survive and the weakest fall. That is all very well, and I agree with it up to a point, but we have to realize that the person who really gets a mine going is the investor - the man who puts £100 or £200 into a project and expects a return on his money. If over a period - and that is my point - that type of investor grows tired of this risk - because in most cases he does not get his capital back - there will be no mining industry in this country. We cannot for ever live on our fat; we cannot for everlive on the rich mines. I refer particularly to the mines at Broken Hill and at MountLyell. We cannot for ever depend on those two great centres for our supply of base metals. They are going to finish - admittedly in the long distant future - and unless we adopt a longterm planning policy to maintain production elsewhere, we will be in a parlous position. The investor will have grown sick and tired of receiving no return on his money, and in view of the inevitable closure of sections of our great base metal industry-

Senator HENTY:
TASMANIA · LP

– With great respect,I do not think that the honorable senator’s remarks have anything to do with the Tariff Board. It is a very wide problem.

Senator VINCENT:

– I submit that my remarks are relevant to the Tariff Board, because we have imposed a tariff on copper to assist the copper industry, which is a vast industry, and I suggest that similar action should be taken with respect to other base metals. I cannot see that the Minister’s remark has any merit at all. I am particularly interested, not only in copper, but in all base metals, and I am sure that he is, too. If it is appropriate for the Tariff Board to take this action, and if it is appropriate for the Government to take complementary action in regard to copper, it is desirable that similar action be taken in respect of other base metals. That is my argument, and I think it has a great deal to do with the Tariff Board. The Minister for National Development (Senator Spooner) has said that it is now a matter of policy for the Government to consider questions with relation to base metals per medium of the Tariff Board. Therefore, 1 urge the Government to give some consideration, not only to isolated base metal industries, but to the whole of the base metal industry, because if we are not careful we shall find one of these days that we shall have no base metal industry in Australia.

I was on the point of reminding the Minister - and he probably knows this better than I do - that the export income from base metals is second only to that from the wool industry. For that reason alone, this matter is worthy of the deepest consideration by the Government.

Senator POKE:
Tasmania

– I do not want to traverse the whole field of freight rates, but I do want to direct attention to the importance of the timber industry in Tasmania and the manner in which freght rates have affected the industry in that State. In Tasmania, there are approximately 7,000,000 acres of timber forests. Certainly, the timber on a number of those acres cannot be used, but nevertheless that is the acreage of our forests and it is quite safe to say that the Tasmanian hardwood forests rank with the best in the world.

I should like to refer also to a project that is under consideration in the Dover district, where it is expected that a pulping mill will be established to use some of the second-class timber in that district. A considerable quantity of sawn timber is sent from Tasmania to the mainland markets, and the impact of freight is having a detrimental effect on that trade. In addition to supplying the mainland markets, we send timber to the United Kingdom. I am led to believe that quite recently a reasonable order for timber was obtained from America, and a firm in northern Tasmania is now exporting a considerable quantity of timber to America.

It is important that the timber industry shall be placed on a sound basis, particularly in order to provide employment and in view of the large quantities of byproducts that are to be obtained from timber. We have very modern paper-making plants in Tasmania, which produce writing paper, parchment papers, and greaseproof papers. Probably those plants consume more timber in Tasmania than all of the other plants combined. In addition to the paper mills at Burnie and New Norfolk, there is a big ply mill at Somerset which employs a large number of people. There is also another small mill at Cambridge, which uses mainly the soft pines that are growing in that area. Another important by-product of timber is hardboard. Considerable quantities of hardboard are produced at Burnie for use in the building of homes and for other purposes. Considerable quantities of sleepers are cut from the Tasmanian forests for use by the Railways Department in bridge construction and other railway works. The Public Works Department also uses a considerable quantity of timber in connexion with the construction of bridges and culverts. Some of our soft timbers are Huon pine, King Billy pine, and Celery-top pine. The lastnamed timber is used mainly for joinery work. The other two soft timbers also are used for joinery work, and Huon pine is one of the best timbers we have in Australia for boat-building. It is particularly light and durable, and is used to construct beautiful boats.

Senator Kendall:

– I understand that there is not much of it left now.

Senator POKE:

– Unfortunately, that is true. There is not a great deal of Huon pine left, although I am led to believe that one area in the Huon Valley has not been tapped. Other areas are located on the west coast. However, they have been tapped considerably and the resources have been greatly depleted.

In 1955-56 about 345 mills were operating in Tasmania, some of which performed very useful work in the cutting of timber for cases in which our fruit - particularly the apple crop - is shipped overseas. A number of the mills operate entirely for this purpose. However, some larger mills have not the facilities necessary to cut timber for that purpose, and it is necessary to have smaller mills established close to areas where the apples are grown, so that the cases can be made on the spot, as it were, for the packing of the fruit.

I am very sorry to say that over the past few years the number of workers employed in the timber industry has decreased considerably. In 1951, when I was secretary, the Tasmanian Branch of the Timberworkers Union, had approximately 3,000 members. Taking into account administrative employees, I should say that the total number of persons directly employed in the industry at that time was approximately 5,000. I am led to believe that at the present time only slightly more than 2,000 persons who are members of the Tasmanian branch of the Timberworkers Union are employed in the industry there. That means that since 1951, the number of persons directly employed in the timber industry in Tasmania has fallen by 750 or 800. If that number of persons who were directly employed in the industry have left it, it is reasonable to assume that many indirect employees also have left the industry.

In my opinion, a great deal of unemployment in the timber industry in Tasmania has been brought about by the high freight rates. I believe that a factor contributing to the high freight rates is the operation by some shipping companies of out-of-date vessels which cannot handle timber quickly. At one time, timber was shipped loose from Tasmania to the mainland, and it was then thought that the introduction of the bundling method would result in reduced freight rates. The millers and the merchants were not favorably disposed towards incurring the extra cost involved in bundling their timber for the mainland market, but they agreed to do so. However, the expected decrease in freights, which had been more or less promised by some of the shipping companies, did not eventuate. On the contrary, the sawmillers and the merchants found that the freight rate increased despite the fact that they bundled the timber in the yards to facilitate its handling both into and out of the ships.

The plant in the sawmills in Tasmania has an estimated value of £2,000,000, while the salaries of employees directly concerned in the timber industry are slightly in excess of that figure. That is quite a large amount of money to be invested in an industry, and to be paid in salaries. A higher freight rate will mean a reduction in wages. The industry will be crippled in Tasmania and the £2,000,000 invested in plant will be lost, with the result that a number of sawmillers will face bankruptcy.

Timber production through Tasmania has risen considerably over the past few years. For instance, in 1938-39 timber production was in the vicinity of 84,000,000 super, feet while, according to the “ Year Book “ for 1957 production for 1954-55, the latest period for which figures are available, increased to 140,384,000 super, feet. The economy of Tasmania will not be able to withstand the effects of a closing down of our sawmills, with a consequent loss in plant and employment.

I sincerely trust that the Minister, when replying, will give us an assurance that freight rates between Tasmanian ports and the mainland will be subsidized in some way to enable the timber industry in Tasmania to remain stable.

Senator WARDLAW:
Tasmania

– We are indebted to Senator McKenna for a very concise and very fair survey of the position of the timber industry in Tasmania. I think the timber industry ranks third or fourth in the State in turnover, and it is important that we should protect’ it in every way possible. From memory, the figure of 150,000,000 super, feet quoted by Senator Poke is correct although I do not have my file with me to check that point, lt is important, in order to assist the industry, that freight rates should be as low as possible. We have been beating the air in that regard for many years and have tried to impress on this chamber the importance of low freight rates. The waterfront trouble that occurred in February, 1956, and lasted for six or seven weeks, is the principal reason why they are so high. We lost some of our trade with Victoria, South Australia and Western Australia, and the very happy business associations of the Tasmanian timber merchants with merchants on the mainland were disrupted. We were holding on to our business only by the skin of our teeth, as it were, because of the excellence of the timbers imported from Malaya. Prompt delivery is part and parcel of the contract - an important part. When the watersiders more or less cut the Gordian knot at that time and disrupted the regular flow of Tasmanian timber to its normal markets, in my opinion they ruined the Tasmanian industry. It has never been the same since then, and I blame the waterfront people for that. I do not think the trouble can be remedied by subsidies or other action taken by the Commonwealth Government alone. The Commonwealth Government, in conjunction with the waterfront union and the seamen, should see what could be done to bring about better and faster handling of timber. It does not matter how up to date the ships may be, or how up to date handling methods and stowing methods may be; the problem will remain if the waterfront people do not co-operate.

Just recently some difficulty was experienced with “ Euroa “, which trades between Stanley and the mainland. The firm chartering the vessel handles timber only, but on this occasion farmers in the districts surrounding Stanley had 2,000 to 3,000 bags of turnips which they were anxious to get to the Melbourne market. It was decided that 2,000 or 3,000 bags of turnips could be stowed in the eyes of the ship without interfering with the loading of the timber. That suited the company handling the ship and it suited the charterers as well, but it did not suit the waterside workers. They have a rule that timber can be handled with a gang of eleven, but if the cargo is of a composite or mixed nature it must be handled with a gang of seventeen. The waterside workers wanted to apply that rule. The timber people said that they had no objection to the turnips being shipped on this vessel, but that they did object to the cargo being handled by gangs of seventeen men, because that would increase the handling costs. They made representations which prevented that. After considerable negotiation, the turnips are now being lifted for the farmers, which is a very great help to them.

It is quite apparent to the average man who understands business that if turn-over falls costs increase. That is one of the difficulties that the Tasmanian timber industry is facing to-day. Buyers are picking and choosing from the various types of timber available; they are taking what they want and leaving the rest. That makes it difficult for the industry to keep its costs down by getting rid of the timber on an all-round basis. It is impossible to carry on business successfully on the present basis.

The Tariff Board pointed out quite fairly that it could not recommend that the Government should increase the tariff, because the level of the present tariff is not the reason why Tasmanian timber is not selling. I think the board was entitled to point to the reason for what is happening. It is up to this Government to do something to deal with freight rates. With the Government working in conjunction with the waterfront union and the seamen, there is no reason why foreign rates, to the mainland could not be reduced by at least one-third. That would be a tremendous help to the industry.

I do not wish to say much more, except to add that I think the Tariff Board’s report on the timber industry was an excellent one. The board made a very good survey of the position. It recommended that the Government should look at the freight rates, and I think that that should be done at the earliest possible moment.

Senator O’BYRNE:
Tasmania

– The comprehensive report of the Tariff Board provides the Senate with a very good picture of the ramifications and the economic implications of the timber industry. Senator Wardlaw chose to blame the waterside workers for the trouble in the Tasmanian timber industry, but I remind him that the Tariff Board, which heard evidence from timber producers, made no mention of that factor in its report. I think Senator Wardlaw unjustly stressed a factor which has not been mentioned by the Tariff Board.

The Tasmanian timber industry, or, for that matter, the whole Australian timber industry, is not happy at all with this Tariff Board report. In view of circumstances that have continued to exist since the report was published, the industry feels that its future is rather bleak. Present conditions in Tasmania very much resemble the prewar “ catch-as-catch-can “ conditions. Mills commence operations and work for a short period. When they have completed their orders, they dismiss their men. In that way, they lose the advantage of maintaining a team of men. They also lose the advantage of investment in new equipment. Those and other factors make me feel that although the recommendations of the Tariff Board are probably correct, there is a risk that harm will be done to a very important basic industry.

It is held as a fact in European and other countries that the wealth of a country’s timber resources is reflected in the standard of living of the country. I think that is very true. The timber people in Tasmania have no doubt that they are able to pinpoint the reason for the decline in the sales of their products. It is the Government’s policy of reducing financial assistance to the States for the purpose of homebuilding. 1 have repeatedly pointed to the cycle that commences with the timber industry. Timber resources are something that we have been given by nature. We have wonderful forests in Tasmania, and our re-afforestation policy is such that we have continuity of supplies. We use our natural resources and then nature replaces them. When sawmills have ready markets for their products as the result of a demand for housing, a great deal of employment is created. A big demand for houses naturally creates work for plasterers, bricklayers, cabinet-makers, tilers and hosts of other people throughout the country. It is important that the Government should have a policy in regard to the timber industry that will not only create confidence in the minds of the timber people but will also allow even for the expansion of such an important industry.

If ample orders were available and the mills were working at full production, rather than at 20 per cent, below maximum production - the minimum at which they can produce economically - timber could be produced at a cheaper price. Because of fits and starts in orders, extra overhead costs are involved. This is a matter which should be given very careful consideration by the Government, because if the problems of the timber industry can be solved many other problems will be solved at the same time. The lag in home-building is a great social problem. It can be solved only by government action. It is true that some people, because of the goodwill they have been able to establish, are able to obtain credit from the banks; but, in general, the private home-builder is unable to obtain money because of the high interest rate. There has not been that dynamic impetus which the Government should give in an effort to solve many of these problems.

The report now before us deals with a very important and vital spot in our economy. The Tariff Board, in its report, set out, amongst others, the following reason submitted for the affording of tariff protection to the timber industry -

The Australian sawmilling industry is in a state of crisis; in all States demand has fallen, stock has accumulated and the mills have either closed, forcing dismissal of employees, or are not occupied to the extent of their allowances of logs. The fall in demand is attributed to the limited finance available for home building and the availability of imported timber particularly in smaller sizes.

What has already been said1 in this debate has been directed to the main point at issue - that is, that the industry should be given a lot more incentive and greater stability. Workers in Tasmania, particularly those who have been displaced from the industry because of the reduction of orders, the millers themselves, and other people who handle the timber are vitally concerned.

I should have preferred the Tariff Board to take the view that we must protect our Australian industries. Even though some builders prefer imported timber, and even though there may be a difference in price, we should not have to reduce our standards because of methods that are employed in Malaya and Borneo, and for that matter in New Guinea, where cheap labour and cheaper freights make it possible for suppliers to compete with Australian suppliers. A very important principle is involved in this matter and I feel that, as a compromise, the Government should take great notice of the recommendation of the Tariff Board and ensure that the timber industry, which is vital to Tasmania, is sustained and1 given an incentive, to expand.

Senator WORDSWORTH:
Tasmania

– I do not know that I can add anything new to the debate but, being a Tasmanian, I feel that I must support what I have said previously on this subject. The Tasmanian timber industry is at a great disadvantage. I do not know that I agree with Senator O’Byrne’s assertion that the present depressed state of the industry in Tasmania is due entirely to the Government’s housing policy. Many other things have tended to depress the industry, the main one, in my opinion, being shipping rates. We have efficient mills and efficient workmen in Tasmania, and good timber, but it is a matter of common sense that we cannot compete with mainland States. We must export our product. We cannot compete with the man on the spot in the other States if we must pay very high rates to get our timber across Bass Strait. Something must be done about the matter.

A certain amount of blame can be attached to both the waterside workers and the shippers. I do not agree entirely with what Senator Wardlaw said, but I repeat that there are faults on both sides. I say again that something must be done for the industry in Tasmania. People are being thrown out of employment and production is falling. The Tasmanian Government has embarked on a re-afforestation programme with a view to building up our timber trade, but if freights continue to rise we will be in the position of having forests, but of not being able to export our timber. We will have to burn our timber and turn the land over to the raising of fat lambs.

I now wish to speak about the copper bounty. Not very much reference has been made to it to-day, but it affects Tasmania tremendously. It certainly affects the northwest of the State, and very much affects the town of Queenstown, lt affects every one in that part of the world, because copper is the source of their livelihood. The mine at Queenstown is working on a very low margin indeed. If it were not for the copper bounty, I do not think the mine could remain open. It is not a question of the mine being inefficient; in fact, it is one of the most efficient mines in the world. I visited there the other day, and I was told by the management that copper-mining people from all over the world visit Queenstown to ascertain why the mine can produce copper profitably.

Senator Henty:

– It is low-grade ore.

Senator WORDSWORTH:

– As the

Minister says, it is low-grade ore. The operations of the mine affect the livelihood of many thousands of people. I do not know the exact population of Queenstown, but every one there relies upon the copper mine for his living. The Prime Minister was there a little while ago, and was received with great enthusiasm. He saw for himself what was needed, and certain steps have been taken to rectify the situation. I congratulate the Government upon its attitude towards the payment of a copper bounty.

Senator AYLETT:
Tasmania

.- We are naturally concerned about the timber industry in Tasmania. Before I proceed to deal with it any further, let me correct Senator Wordsworth’s assertion that the Tasmanian timber industry cannot complete adequately with that of any other State in Australia. That is not our problem. However, I shall deal further with that as I proceed. We are concerned about the Tasmanian timber industry, because twelve months ago about 30 mills were closed, 48 were on part-time production and 657 workers were affected.

Nature gave us the industry. It has been developed automatically by private enterprise and has been of great benefit to Tasmania. Now we find that the importation of timber from Malaya and Borneo, where labour standards are much below those of Australia, is severely affecting the market in Australia, particularly for Tasmanian timbers. It is not the mainland markets that we are concerned about. Naturally, if the recommendation of the Tariff Board were adopted and consideration were to be given to the question of freights, that would help, but we can compete with mainland timbers and have been doing so. The timber industry in Tasmania was never more thriving than when it was competing on the open market with the industries in the other States, for the same type of timber, before timber began to come from Malaya and Borneo.

I have here a prepared case which has been sent to me by the Tasmanian Timber Association, in the course of which four questions have been asked. The association itself supplies the answers to the questions. The first question is whether the Tasmanian timber industry is genuinely in difficulty. I think that we all admit, on both sides of the House, that the industry in Tasmania definitely is in difficulty.

Senator Henty:

– Better still, the Tariff Board does, too.

Senator AYLETT:

– Yes, the Tariff Board admits that also. We are all agreed on that point. The second question is: If that is so, what has caused the decline in demand for its previously sought-after timber? That is an important question, the answer to which will enlighten Senator Wardlaw. The third question asks whether action has been taken to assist the industry, and the fourth one is: If not, what practical steps can be taken as a matter of urgency? The association has supplied complete answers to those questions and has outlined a case which, in my opinion, is a very deserving one. I think I can do no better than to read the submissions of the association. First, regarding the cause of the decline, the association states -

We are adamant in our views that it is, more than anything else, due to the competition from Malayan and Borneo timber.

I want that to sink into Senator Wardlaw’s head.

For three years now we have made survey after survey of the market and on every occasion we found our markets were being lost to those timbers. We also went to the expense of sending an investigational officer to those countries for two months. Those timbers are used for precisely the same purposes as Tasmanian timbers - for example, furniture, building construction, joinery, mouldings, shop fittings, and so on. The characteristics of the timbers are similar in that they are light in weight and easy to machine.

For two and a half years now this Association has presented submission after submission to the Department of Trade and has made a great number of personal representations to Ministers and senior officers of the Department, always on the grounds that the industry in Tasmania was being crippled by the increasing imports of Malayan and Borneo timbers.

Despite this, Mr. McEwen now says: “ Overall imports have been declining so that any deterioration in the position of the local industry is not due to changes in the general level of imports. Whilst there has been an increase in the quantities of timber imported from Malaya and Borneo, this has been more than offset by the decline in imports from other sources.”

We cannot understand Mr. McEwen’s reasoning for of what help to the Tasmanian industry is the decline in imports of timbers other than those causing the loss of our markets. Mr. McEwen admits the increase from Malaya and Borneo, which is the very timber we have sought protection against for so long. Mr. McEwen points out that, whilst there was a record intake from those countries for the last six months, it may not be so during the current six months.

Although the January to June periods showed lower imports over the last two years, this may not be so this year, any more than it was in 1955.

If honorable senators think back, they will remember what happened in 1955.

Mr. McEwen emphasises that there has been no increase in the value of licences available for the importation of timber since that value was reduced in April last year, but how can a record import take place after licences were reduced? Either there is a serious pipeline of supplies or the reductions thought to be made were on licences in existence far in excess of intake at that time, or normal requirements.

I now wish to raise with you a most important point.

During the July-December period 1955, the imports from Malaya and Borneo were 254-million super feet, or the same as for the six months just ended. So seriously did that volume affect our markets then that, in the middle of the next year (1956), our mills started to close and our first submissions were made to the Department of Trade though Senator Denham Henty. By the end of the year many major mills were closed and hundreds of men were dismissed.

We now have a parallel position in that the same record volume of imports is entering Australia from the same countries and we say emphatically that, unless there is some immediate substantial curtailment of that timber, the sawmills that have re-opened during the last six weeks will be closed again within three months and many others with them.

Mr. McEwen seeks to find solace in the fact that there may be lower imports this current six months, yet he has failed to take action that will ensure that this will be so and he has permitted imports to increase during the last six months at a time when the Tasmanian industry was forced to cut production from 81-million feet to 64- million feet over the same period. I need hardly reiterate that the Tasmanian Timber Association requests the assistance of its Tasmanian representatives in the Federal Parliament.

The Minister for Trade granted a hearing by the Tariff Board last year. The Board commenced taking public evidence in May and concluded in July last. The Minister, in a letter dated 3rd April 1958 to an honorable member, says the Board’s report is expected in the near future and meantime our industry languishes.

I have already pointed out to you in my previous letter that, despite our protestations, the importation of Malayan and Borneo timbers has grown from 13,300,000 feet in the first half of 1954 to 25,500,000 feet in the last six months.

That is super, feet, I take it.

If there have been import restrictions, they have hardly lessened the blow for they have not had the practical effect of precluding a serious shut-down in our industry with a loss of income of almost £2-million to the State and the industry.

We believe that action to curtail imports from Malaya and Borneo must be taken in the same realistic manner as it was to protect the printed cotton textile industry. Mr. McEwen claims that there is no similarity in our industry to the needs of the printed cottons. He claims that printed cottons are a new industry which would have been overwhelmed with imports, but is not an old industry and one far larger and employing thousands more people equally entitled to be removed from an already overwhelmed position?

The Minister says we have been established for many years and already in receipt of tariff protection, but I would point out that we have a tariff of a mere 12s. per hundred super feet on Malayan timber, which is still able to land at a price 32s. per hundred super feet below that of our comparable grades. In other words, it is not protection at all. With a wage level in our industry that exceeds £3 per day per man for a 40-hour week, we cannot be expected to successfully compete against wages of under £1 per day with a 48-hour week.

We regret that we find it necessary to again approach you, but we do so with a sure knowledge that serious unemployment from closed mills is inevitable unless urgent action is taken by the Federal Government. We therefore request that you be kind enough to again approach the Minister for Trade with the facts I have set out in reply to his various communications to you or your colleagues.

Sitting suspended from 12.45 to 2.15 p.m.

Senator AYLETT:

– There is very little that 1 need say in further support of the case 1 have submitted. Honorable senators on both sides have agreed that it is necessary that something be done in the interests of the timber industry in Western Australia and Tasmania. I submit that I have put an unanswerable case for the Tasmanian Timber Association. That case covers the interests of both employer and the employee. As the Minister has admitted that Tasmania has a case, and as I feel confident that he will use his best endeavours in Cabinet to see that something is done to keep the Tasmanian industry on its feet, I leave the matter there.

Senator HENTY:
Minister Customs and Excise · Tasmania · LP

– in reply - If ever the Senate has justified its existence, it has done so to-day in its consideration of these Tariff Board reports. Honorable senators from Tasmania who sit on both sides of the chamber have joined in bringing to the notice of the Senate and the Government the plight of the timber industry which is very important to the State they represent. The discussion was opened this morning by the Leader of the Opposition (Senator McKenna), who made some extremely sound observations. It continued on that note and there can be no doubt that on this occasion the Senate has acted as a Senate should. Because of that, I feel that we have had a most profitable and interesting morning.

Before dealing with the matters raised by the various honorable senators, I should like to make a very brief reference to what I thought was a rather grimy personal attack made by the honorable member for Yarra (Mr. Cairns) in another place when this bill was before that House. I understand that the honorable member is a man of some education, that he is a doctor.

Senator Benn:

– I rise to order. I submit, Mr. President, that the Minister is not in order in referring to a speech made in another place on a matter that is now before the Senate.

The PRESIDENT:

– On which Standing Order do you rely?

Senator Benn:

– I am seeking the relevant Standing Order now, but I do recollect that T myself was ruled out of order on one occasion on a similar point.

Senator Henty:

– I do not intend to make a personal attack; I merely want to give a statement of the facts in complete rebuttal of what the honorable member for Yarra alleged to be the facts. I wish to make a plain, simple statement of fact, and I ask the indulgence of the Senate so that I may put the record straight. This is the only opportunity I shall have for doing so.

Senator Benn:

– I am now about to quote the Standing Order under which I take the objection. It is Standing Order 416, which reads -

No senator shall allude to any debate of the current session in the House of Representatives, or to any measure impending therein.

Senator Henty:

– May I suggest that I be granted leave to make a personal explanation on that one point?

The PRESIDENT:

– I must uphold the point of order taken by Senator Benn. The Minister may make a personal explanation, so long as it does not cover the same matter.

Senator Henty:

– I shall not refer to that at all, but if I make a personal explanation I think it will clear the air. This is the only opportunity I shall have of doing so. With the concurrence of honorable senators, I point out that the Minister for Customs and Excise at no time has the right to say who shall or who shall not have import licences. That is a matter entirely for the Minister for Trade. I was referring solely to the wrong assumption that the Minister for Customs and Excise has jurisdiction in connexion with the granting of import licences. That is entirely within the jurisdiction of the Minister for Trade.

Senator Courtice:

– More is the pity!

Senator Henty:

– Having got that explanation on record, I am quite happy to leave the matter there.

The PRESIDENT:

– Do you now wish to proceed with your reply?

Senator Henty:

– Yes. I want to deal with matters raised during the second reading debate.

Senator Reid:

– I rise to order. A few moments ago Senator Courtice interjected, “ That’s a pity “. I take that as an implication that the Minister for Customs and Excise would use his official position if he had the opportunity of issuing licences. I say that is offensive to the Senate, and I ask for its withdrawal.

Senator Courtice:

– Evidently the honorable senator does not realize what he is talking about. Evidently he does not understand my interjection. My interjection followed the statement that this matter was now entirely in the hands of the Minister for Trade and not in the hands of the Minister for Customs and Excise. I said, “ More is the pity “.

Senator HENTY:
TASMANIA · LP

– You were speaking as a former Minister for Trade and Customs?

Senator Courtice:

– Absolutely!

Senator HENTY:
TASMANIA · LP

-I understand.

The PRESIDENT:

– Does Senator Reid still ask for a withdrawal of that statement?

Senator Reid:

– Yes. I say that such a statement could contain a definite implication that the Minister for Customs and Excise would use his position as Minister if he had the opportunity of issuing licences. Senator Courtice often makes interjections which are offensive, and of which no notice is taken at the time. I think that, in the circumstances, we should ensure that this does not occur again.

Senator McKenna:

– I wish to speak to the point of order. After the Minister had indicated that it was a matter for the Minister for Trade, not for the Minister for Customs and Excise, to issue import licences, Senator Courtice interjected, as he said, “ More is the pity “. Senator Reid inferred the presence of some sinister significance in that statement. I think Senator Henty gave the fair interpretation of it a moment ago when he said to Senator Courtice, “ You were speaking as a former Minister for Customs? “ Senator Courtice was Minister for Trade and Customs for many years and he regretted that the important work of that department had been cut in two, part being passed over to the Minister for Trade. Senator Coutice has put it to the Senate that his interjection contained nothing more nor less than that.

Senator Courtice:

– Absolutely.

Senator McKenna:

– Senator Courtice has a sound knowledge of the work of the Department of Trade and Customs and its traditions. He had a very honorable record there as a Minister. I do suggest to Senator Reid that he should accept the explanation given by Senator Courtice. Nothing else was in my mind, when the honorable senator made the interjection, than the interpretation which the present Minister put upon it. I should say, in view of that explanation, that Senator Reid is obviously mistaken, and although Senator Courtice does interject from time to time, I must confess that I do not recall ever hearing him interject in any personal way whatever in this Senate. I should say that if ever there was one man who operated objectively in this chamber, it is Senator Courtice. He is one man whom I would regard as a paragon in respect of exemplary behaviour. His interjections may be political, but in my fourteen years’ acquaintance I have never known him to display a trace of personal animosity. I think that this is one of those unfortunate misunderstandings which do occur from time to time. I am surprised that such an interpretation could be placed upon such a simple interjection and, the honorable senator having duly made his explanation, Senator Reid might, I feel, be graciously prepared to accept it.

Senator Reid:

– Having listened to the explanations which have been given by Senator Courtice and the Leader of the Opposition, I am quite prepared to withdraw my objection.

Senator HENTY:

– I should like now to deal with a number of the questions which have been posed by honorable senators. I hope they will direct my attention to any matters that I overlook. It became quite clear to us all in the course of the debate that the Tariff Board made its recommendations on timber because it found that two areas of Australia were more seriously affected than others. The board suggested that the position in those areas should be remedied by means other than the tariff. That view has been accepted by the Government, and the matter of assisting Tasmania and Western Australia by way of a freight subsidy has been referred by the Minister for Trade (Mr. McEwen) to the Interdepartmental Committee on Transport. The committee has already met. It will hold another meeting shortly, and we may expect its recommendations to be put before the Government very soon. In short, the matter is well in hand.

Honorable senators , are, I feel, in agreement that the Tasmanian timber industry is in difficulties. There is no question about it. As I said by way of interjection this morning, even the Tariff Board accepts that view - or it would not have made the recommendation that it did. The matter of overseas freights is very relevant, and the figures given by Senator McKenna are of great interest. It is amazing to note the side effects of some of these changes. I notice with great pleasure that the Tasmanian industry - which is a very live industry - has been greatly helped by the reduction in overseas freights, and is developing a specialized market in the United States of America. Recently about 150,000 feet of Tasmanian hardwood, in special sizes and specially treated, left the port of Launceston for the United States of America. This has been possible largely because of the .assistance given by reduced freight rates. I congratulate the Tasmanian Timber Association on the work that it has done in promoting the use of timber in Australia and in developing markets generally. I assure honorable senators that the substance of their remarks on this subject this morning will be conveyed to the Government when the matter is under discussion.

I think that I should mention one other point in this connexion. It involves something which is a matter of theory but may yet become a matter of fact. The Government is providing for Tasmania a revolutionary type of vessel which should be on the run in twelve or eighteen months. I refer to the new roll-on roll-off type of cargo vessel. I do not, of course, refer to the ferry, which will carry both passengers and cargo to and from the mainland. The development and building of this revolutionary vessel, which will cost about £1,000,000, has been approved by the Government, and the necessary funds have been made available. I believe that the vessel will greatly help Tasmanian industry - and the timber industry in particular. When the vessel is in use it will be possible to put timber on a trailer at the sawmill, drive it on board to be battened down, and drive it straight off at the end of the journey. I believe that the consequent lower handling costs will be of great assistance to Tasmanian industry. I cannot say with any authority that it will in fact be cheaper. That is a matter for experiment, but the expenditure of £4,000,000 on this vessel and on the ferry shows that the Government recognizes the difficulties under which we, in Tasmania, labour. We have no alternative method of transport to and from the mainland, except air transport, and that is a rather costly alternative. I do not suggest that, if it is possible now to give assistance along the lines suggested by the Tariff Board another eighteen months should be allowed to go by before anything is done.

I come now to the subject of copper. Earlier in the debate honorable senators asked why the Government had not accepted, in toto, the Tariff Board’s report and recommendations. Acceptance would have resulted in an Australian price for refined copper of £330. When the Government was considering the board’s report the world price was about £220 a ton. The Government was disturbed at the possible implications for the economy generally of a raw material price differential of that order. In deciding to pay a bounty and use the tariff to establish a domestic price lower than £330 a ton the Government ensured that assistance would be given to the mines which most needed it. In fact, such mines will receive about the same total net return as they would have received if the board’s recommendation had been adopted. Several copper mining companies have already indicated that the return which they will receive under the scheme will be very satisfactory.

Another relevant aspect is that the tariff is a long-term form of assistance, while the bounty is a short-term form. The industry is to be reviewed in two years. Both tariff and bounty will then be further considered. Moreover, mining is a very unpredictable industry. Production may be uncertain to-day, but to-morrow new bodies of ore may be found. The position may change overnight. The provision of a bounty takes that into consideration, for a bounty is based on the price of copper in Australia. In short, I believe that the duty-cum-bounty arrangement is a very sensible one. As Senator Wordsworth so wisely pointed out, it will help the industry at Mount Lyell in Tasmania. Mount Lyell is an isolated community on the west coast, and the failure of the industry would have grave social and economic results for a large number of people there. The Government took that factor into consideration when it decided on the arrangement.

Senator McKenna:

asked me about the proposed copper bounty bill. The exact form of the bill has not yet been determined. However, I understand that it is at present contemplated that the bounty will be payable from 15th May, that is, retrospectively, at the maximum rate of £45 a ton. The exact rate will depend on the overseas price of copper from time to time. I understand that every endeavour is being made to introduce the bill during this session. I think that I have answered all questions that were asked about this matter by honorable senators this morning, but if I have overlooked any, I should like to be reminded of them.

Question resolved in the affirmative.

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

page 165

CUSTOMS TARIFF (CANADIAN PREFERENCE) BILL (No. 2) 1958

Second Reading

Debate resumed from 19th August (vide page 58), on motion by Senator Henty -

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 165

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL (No. 2) 1958

Second Reading

Debate resumed from 19th August (vide page 58), on motion by Senator Henty -

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 165

CUSTOMS TARIFF (PAPUA AND NEW GUINEA PREFERENCE) BILL 1958

Second Reading

Debate resumed from 19th August (vide page 58), on motion by Senator Henty -

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 165

QUESTION

ESTIMATES AND BUDGET PAPERS 1958-59

Debate resumed from 20th August (vide page 146), on motion by Senator Spooner -

That the following papers be printed: -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other Services involving Capital Expenditure, for the year ending 30th June, 1959:

The Budget 1958-59 - Papers presented by the Right Hon. Sir Arthur Fadden in connexion with the Budget of 1958-59; and

National Income and Expenditure 1957-58.

Upon which Senator Kennelly had moved by way of amendment -

At end of motion add the following words, viz. - “ but that the Senate is of opinion that their provisions inflict grave injustices on the States and on many sections of the Australian people - especially the family unit, and that they make no contribution to correcting seriously adverse trends in the Australian economy “.

Senator MARRIOTT:
TASMANIA · LP

– Mr. President, when the Senate adjourned last night, I had been speaking for exactly 60 seconds, in which time I reiterated my belief that the proceedings of this Parliament should not be broadcast if there is any desire that the Parliament should be ruled, not by the microphone, but by Parliament itself, and if there is any belief in this chamber and in another place that our duty is to build up the reputation and the standing of this National Parliament rather than lower it. The proceedings last night were a fair example of the correctness of my case. I had to sit here and listen, first, to Senator Cole, who did not debate the Budget. Actually, he engaged in a dress rehearsal of his policy speech, having heard an announcement of the date of the forthcoming general election. All I can say in reference to that is that I hope Senator Cole’s speech was not recorded and that he cannot hear it played back. However, I suggest to him that he should read the report of the speech, try to make a little commonsense out of it and cut it down considerably. If he wants to win, not lose votes, he should include in his policy speech some reference to where he is going to get the money to pay for all the big hand-outs he mentioned, otherwise he will be accused of trying to follow the not illustrious steps of the present Labour Prime Minister of New Zealand.

Senator Aylett also spoke last night. All I can say is that if he referred at all sensibly to any part of the Budget, he would1 get an answer in my speech to-day. Because I do not think he referred to the Budget, there is no need for me to make further reference to his speech.

As soon as the Treasurer presents his Budget, the spotlight of public opinion is focused upon every facet of parliamentary activities and administration. I know that after the presentation of the Budget of this record-breaking, brave, sincere, and able Treasurer, little groups of people throughout Australia started to discuss it. In the light of the debates that have taken place in this chamber and in the House of Representatives, the press and radio have endeavoured to enlighten the people on certain aspects of this most important document which announces the policy of the Government for the ensuing year, and which has an effect upon every individual living in Australia and in our Territories.

When the Budget is presented, a duty immediately devolves upon this chamber to discuss the principles upon which Aus-, tralia is being governed. The Senate must decide whether the main policy points enunciated in the Budget are in the best interests of Australia. If they are not, we have to decide whether they are fallacious; whether they can be replaced by better principles of policy, or whether they are knowingly and wickedly wrong. The Opposition is trying to instil in the minds of the people the thought that the policy of this Government is knowingly and wickedly wrong - a very grave accusation to make. However, the Opposition is making that accusation at a most fortunate time for the Government and a most unfortunate time for itself. I accuse the Opposition of debating the Budget for purely party or personal political propaganda purposes, and not from the aspect of the welfare of the people of Australia. I realize that this is election year and that any Budget brought down this year must be the opening round of the election campaign, because it is well known that governments rise or fall upon the people’s view of the Budget. I cannot see any purpose in debating the Budget on the basis of whether it is favorable for the election prospects of the Prime Minister (Mr. Menzies) or the Leader of the Opposition (Dr. Evatt). It should be debated solely from the angle as to whether it is good for Australia.

I support this Budget because I believe it caters as fairly as possible for all sections of the community. In this wonderfully blessed island continent of Australia we have varied communities, and I believe that this Budget, which continues the Federal Government’s policy that has been implemented for the past eight or nine years, gives a fair deal to all of them. Members of this Parliament who preach class hatred, who try to divide employer and employee, and who endeavour to make one section of the community oppose another section, are doing a great disservice to Australia, because the statements of people in public life are regarded as having some weight. They do no service to themselves politically or in any other way.

Since this Government assumed office on 10th December, 1949, it has followed a clear-cut policy that has been developed and amended from time to time. As a result of our wise and honest policy, and mainly through our great immigration programme - scorned though it may be by some honorable senators opposite - we have greatly increased our population. The vast numbers of people who have been brought to Australia have assisted in the development of their new country. That cannot be denied.

We can, therefore, honestly claim that we have an economy that is far more resistant to outside pressures than we had previously. It cannot be denied that our economy is now better able to counter inflationary or recessional pressures from other parts of the world than at any other time in our history. I think it was the Prime Minister who said that before the war Australia was like a one-engined aircraft, relying on its wool industry alone, but now, because of the great development that has taken place, particularly during the last eight or nine years, it has become like a multi-engined aircraft prepared to do its job with more strength and security than ever before.

It is undeniable that Australia’s economy is far more stable than it ever was in the past, and that we can view the future with a lot more optimism than can the peoples of other countries with which we are closely associated. I believe this Government’s policy has made Australia a nation of happy and prosperous people.

The Australian Labour party, admittedly in strife, broken-spirited and distrustful of its own future, has nothing to occupy it, so its members spend their time in naming the Budgets that are presented. That has been, and is, the Labour party’s principal budgetary occupation. This Budget has been referred to as the “ barren Budget “, or the “ stay-put Budget “. Previously we had the “ horror Budget “, and before that the “little horror Budget”. The Labour party view is that Australia should not have a Federal Government which has a continuing policy that is slightly amended and altered to meet the changing conditions of modern times. Let me draw an analogy. If a person has a large sum of money invested in a hire-purchase company, an hotel, or a factory - and quite rightly there are many such persons, because this country favours private enterprise - the directors of which were able to produce regular dividends, he would be very happy about his investment. On the other hand, if the directors changed their policy from year to year, the investor would begin worrying and, looking at the share market, would say to himself, “ I think I had better sell my shares. The directors are in an unhappy state, and if I am not careful I shall lose my capital investment “. That is exactly what the people of Australia would say if this Government shilly-shallied and unnecessarily changed its policy from year to year. They would feel that we had lost control of our national economy. For those reasons, I do not think the Labour party brings any credit to itself by referring to this Budget as a stay-put or barren Budget. The Budget provides for the continuation of policies that have proved, as any unbiased person will admit, to be of great benefit to the people of Australia, and which have won public acclaim for the Treasurer.

It would have been very easy for the Treasurer to have brought in a Budget with a veneer of generosity to the people, a Budget which would have been described in the headlines as “ Fadden’s best “. Had he done so, after he had retired, the people would begin to feel regret at the co-called generosity. Because of the Government’s unwavering policy, the Treasurer will be remembered, long after many of us have gone, as a man who did a great deal to develop this country through his wise guidance of its economic affairs after the terrific strain of the second world war. He sought, not popularity, but progress for the people and prosperity for those who will follow him. I do not think that any man who wishes to do the right thing could do better than that.

There are certain reasons why I give my unqualified support to the financial and general policy enunciated in these Budget papers. As I have already said, in this debate I propose to deal only with principles. Unfortunately, in the world in which we live, one of the principal planks of a government’s policy is defence. In this Budget, the Government has allowed again for an expenditure of £190,000,000 on defence. That means that we are paying 3s. in the £1 of revenue for the defence of this country. Any one who knows anything about insurance will agree that that is not a very high premium to pay for our security now and in the years to come. More than 3s. in the £1 is taken out of our own salaries to pay for parliamentary retiring allowances. So why claim that this country cannot afford 3s. in the £1 of revenue to provide for its present and future security? If any honorable senator opposite claims that the defence vote should be reduced, he should be requested to answer these questions: Do you want fewer men in the services? Do you want less equipment, or do you want to keep the equipment of the services abreast of the equipment of those who may be aggressors? If we want more men and modern equipment, we cannot spend less money on defence. Even the Labour party ought to be able to work that out. I suggest that in view of the present state of the world and the complexity of modern defence, this Government can receive only acclaim for continuing with its defence policy.

Senator McManus:

– The Government is not spending the money properly. Your own colleagues say that.

Senator MARRIOTT:
TASMANIA · LP

– Being a member of a little party, apparently you want to discuss matters of pounds, shillings and pence.

Senator McManus:

– What is the Government spending this money on?

Senator MARRIOTT:
TASMANIA · LP

– Do you not know that there are defence services? Do you not know that there are modern ships, modern aircraft and modern equipment to 0 meet the requirements of the defence services?

Senator McManus:

– Our country is not getting those things. What is the money being spent on?

Senator MARRIOTT:
TASMANIA · LP

– The people sitting over there apparently have no vision. They do not travel round this nation. They have not seen the ships. Are the aircraft too fast for their slow-moving eyes to see? Anyhow, I refuse to be any further taken off the path by such childish interception.

Because of the great part that this nation has played in world affairs, we come, after our consideration of the vote for defence, to the vote for war and repatriation services. No one can say that this Government has not given the most sympathetic consideration to this matter. I do not say that it has been terribly generous, but I think it has been very fair in its consideration of the rights and the requirements of the exservicemen and women and their dependants who suffered because of war service. We are providing £130,000,000 a year for this purpose. That means that 2s. in every £1 of revenue of this country is being used to pay for war and repatriation services.

Linked in many ways with war and repatriation services, as far as the central government’s responsibility is concerned, are social services. This is another of the many ways in which the Government is providing financial help from the central purse for those in need. This year £273,000,000 will be spent on social services. That amount includes the extra £4,000,000 that will be paid out to pensioners by way of a rent subsidy. I think the whole of Australia acclaims that decision by the Government. We have to realize, when assessing how much a government can and should do, that owing to improved health services, the advance of medical science and improved standards of living, people are living for much longer than they did in years gone by. We are quietly and gradually becoming a race that has an increased percentage of old people. That is very good, and it should be encouraged, but we have to realize when assessing the Government’s actions that it necessitates a greater outlay on social services. Some may say that there has been no great increase in social service payments, but because of the factors I have just mentioned, the Government this year has been called upon to provide £1 1,000,000 more for social service payments. It has to do that because of the increased number of recipients, who are mostly age pensioners.

Under these three headings, looking at the matter as the Treasurer and his advisors have to do, we spend 9s. of ever £1 of revenue obtained. We all know - there is no need for me to go through them - that the Government has many other responsibilities which involve spending money. After providing for the things I have mentioned, it has left only lis. in every £1 of revenue to spend on being so stupidly generous as Senator Cole last night suggested it should be. Under the uniform taxation system, the Government then has to face the problem of providing money for the States. This year the fairy godmother is making provision to pay £287,000,000 to the States, or £17,000,000 more than it paid last year. That is a pretty generous extra helping when we consider that from year to year this Government has increased the amount of money paid to the States. To those who say that the Government should be giving more for this and that, I ask: From where is it to get the money? Is it to take it from the defence vote, the war and repatriation services vote, the social services vote or the payments it intends to make to the States? Of course it cannot do that. More than onehalf the revenue of the country is being spent on those things, and the Government cannot possibly decrease those votes. I am certain that if the Government were to reduce taxation, it would not be able to provide from loan funds the money necessary for capital works and services which is now taken from revenue. This nation is developing so rapidly that anybody who assesses the situation at all fairly knows that the Government cannot obtain from its loan resources sufficient funds to meet the commitments that it is brave enough to make to the Australian Loan Council. So I suggest that there is a clear-cut case to support the decision that no taxation concessions of any real consequence to the nation could have been given in this Budget unless we cut down on our capital works and services. Becauses of the great development of Australia and the need to keep the working force employed, it is the responsibility of the Government to continue to adopt a progressive policy of capital works and expenditure.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Does the honorable senator think that the rate of progress and development is adequate for this nation?

Senator MARRIOTT:
TASMANIA · LP

– If we approach the matter with an unbiased mind, 1 think we must agree that Australia’s progress has no parallel in history, lt is such that the people who follow us will look back and thank us for having made it, and for having attained economic security so soon after a restraining and hurtful war.

There are other aspects of the Government’s policy with which I am pleased. I am dealing only with the principal ones. I laud the Government for the encouragement it is giving to the oil industry. Although none of the money involved will be spent in Tasmania, 1 look at the matter rom a national viewpoint. We must find oil in Australia. I believe we can say that those who have the necessary knowledge are convinced that there is oil somewhere in Australia. They have not spent millions of pounds of their own free will just to put on a show. Those people will be very pleased with the encouragement that the Government is giving them in the form of financial assistance. If the central government, acting upon the advice of its experts, thinks it can help private enterprise to find something that is essential to the future of Australia, it has a responsibility to provide financial assistance. I give the Government great credit for that aspect of its policy, which I believe it has adopted only because of the influence in the Cabinet and in this chamber of the Minister for National Development (Senator Spooner).

I believe, too, that the Government can rightly take some credit for greater variety in our industrial developmental undertakings. The development and the variety of our industrial undertakings stem from two factors. First, we are blessed with a lot of raw materials and suitable conditions for industry. Secondly, we have a government which has proved to the investing public at home and abroad that it can keep the economy stable. I say to Senator Courtice, who nearly got himself into trouble earlier because of a stupid interjection and who is yapping away now, that if he had any money to invest a couple of years ago, he would not have invested it in Queensland where the people had no trust in the then State government. People will invest money only in a country that has resources and which is controlled by a government constituted of honest and sincere men - men of goodwill. That is one of the reasons why I support this Government and its Budget.

If this were the first year of office of this Government, I would not be looking back into the past, because comparisons with Labour budgets, as usual, would be odious. But we can look back over the last eight years and see the performance of this Government in its right perspective. In 1957.-58, the Government granted tax concessions. If it had not granted those concessions, which last year cost Commonwealth revenue £57,000,000, in this financial year the Government would have had £70,000,000 more in revenue. The people have the benefit of those concessions without taking the present Budget into consideration. If honorable senators opposite want to be critical of the Government’s taxation proposals, let them recall the abolition of land tax and entertainment tax and the reduction of pay-roll tax. The Arthur Fadden Budgets have provided for a pretty good series of financial helps to the community. I suspect that some honorable senator opposite will rise and refer to the revenue that has been raised from income tax and sales tax and say that it has increased in succeeding years. I ,ask you Labour people, who I think have not a grip of the situation, to remember that this country is developing and that, if the number of people who are working, buying and selling increases, and if they pay the same amount of tax, the total tax receipts at the end of the year must be greater. So do not throw that argument up in criticism of the Government’s policy.

Let me now refer generally to the Murray report on university education. Several things will go down in history as having been outstanding in the legislative life of this Government. I refer first to the provision of financial assistance to establish homes for the aged, which was an enlightened legislative step, and next to the appointment of the Murray committee and the adoption and implementation of its report. The submission of that report and the quick action of the Government in implementing it constitute the greatest contribution that has ever been made to the provision of higher education in this country.

Senator McManus:

– It has not been implemented yet.

Senator MARRIOTT:
TASMANIA · LP

– The whole world knows that we need to proceed to higher education. Judging by the interjections that are being made, I think we need a few more highly educated people in this place.

Senator McManus:

– If the Government were to implement the report, we might get somewhere.

Senator MARRIOTT:
TASMANIA · LP

– Having been somewhat full of praise, but not without justification, for the Government, let me now say that a government that has been in office for so long has, in addition to great responsibilities and duties, great enemies. Two of its greatest enemies are complacency and over-confidence. It must overcome those enemies, and it can do so by being ambitious and mindful of the problems that are on its plate. This Government has on its plate major problems which are of interest and great importance to the electors of this country. No Commonwealth government can afford to waver or become complacent. To ensure that that state of affairs does not exist, it is the duty of the Parliament - of the private senators and members - to review and criticize the Government’s actions and to prod and encourage it towards continued wise activity.

Another enemy that faces the country at this time is the foreboding of gloom and fear. Those who preach gloom and fear are doing a great disservice to their fellowmen and to the future of their country. I was disappointed when I read, I think in yesterday’s Sydney press, a political commentary on the forthcoming federal election. It was couched somewhat in these words -

Labour’s hopes fade as employment increases and world tension decreases.

At first, I thought that was unfair. After further consideration, I believe that it was an honest commentary and that the Australian Labour party wants unemployment and a worsening of the world situation in order to obtain more votes at election time.

That is a shocking commentary to have to make. If it is true, the Labour party is treading a horribly murky road to fame. The Labour party will do this nation a lot of harm if, within the couple of months that will elapse before polling day, it tries to tell the people that there will be increased unemployment and a recession, that we are not defended, and that our enemies are approaching us. I repeat that, if Labour adopts that attitude, it will do nothing but harm to the people and on 22nd November will get its just reward by losing many of its electoral supporters.

One of the duties of the Senate, particularly, in a Budget debate is to try to improve the parliamentary form of government. Our Parliament, as it gradually grows older, must develop. Its procedures, its attitudes and its work must be kept abreast of the times. Whenever opportunity arises, I believe that we all should make suggestions for the more efficient and more effective working of our parliamentary system.

As I say, this is a debate on principles. Soon we will have the Estimates debate, when we will have the responsibility of making a thorough scrutiny of the expenditure of all the departments, business undertakings and other government instrumentalities. That is a particular responsibility of the Senate, but we face, I think, several disadvantages which must be overcome. We have to deal with the departments of 22 Ministers. We have in the Senate only five of those Ministers. Personally, I think that we should have either the lot or none at all, but that is another matter. We have five Ministers here, so that when the Estimates come before the Senate those five Ministers are questioned and called upon to give explanations in reply to the queries that honorable senators raise. In my experience, we have pretty good Estimates debates in this chamber, but nevertheless it is impossible for the Ministers to know all the answers and to give us straight away the information that we request. It would be humanly impossible to do that. This means that we cannot get the information we want, and if the Senate is not informed, the Senate cannot inform the public. It was the great Woodrow Wilson who said of Congress, “ The informing power of the Congress is more important than its legislative activity “. The Senate plays a most important role in informing the Australian public on all aspects of political life.

Because of this weakness in our present parliamentary set-up, I suggest to the Government that it should establish, within the Senate, what I shall call a Senate estimates committee. Directly the Estimates were brought down and laid on the table of the Senate, the committee would examine them, lt would have power to call for heads of departments, and even Ministers, and to question them on any aspect of the Estimates on which it wanted information. The committee would1 consist of five or six senators. If it got to work straight away, it would have five or six weeks in which to prepare before the Estimates debate normally came before the Senate. Then, during the debate, when honorable senators wanted information about particular items, there would be members of the committee who could say, “We went into this matter, and this is the explanation “, or, “ We have fully examined the estimates of such-and-such a department and we say that there is waste here. We want the Senate to send the department’s estimates back to another place for the Government to have a look at them “, If that were done, I believe that the Senate would be better informed and the Estimates more closely examined1. The benefits therefrom would flow back through the Public Service to the people. It would be realized that the house of review was doing its job thoroughly and that it was, from a nonparty political point of view, thoroughly examining expenditure by the departments. In addition, there might be a better approach to the preparation of the Estimates.

Finally, I say to any one who may be inclined to criticize that point of view that I have put forward on a non-party and helpful basis, “ Please do not tell me that we already have the Public Accounts Committee “. I say that the Public Accounts Committee has nothing to do with the kind of job that I believe a Senate estimates committee could do. Whether the Public Accounts Committee is worth while, I am not too sure. I have not been favorably impressed recently, but we may be able to deal more fully with that subject on another occasion.

I express my unhesitating commendation of the Government for its financial policy. It is being brave in an election year, and bravery in Australia always gets its reward. I say to the Government, “ Look out for your problems “. After the election, I hope we shall have the report of the Constitution Review Committee. I cannot discuss that report at this stage, but I believe that it will be of great value to Australia. I hope that the Government will not pigeon-hole it. The other problem which I want the Government to get on with concerns the fallacy of uniform taxation, a system that is no good to Australia and no good to the central government. It is crucifying some of the State governments. I believe that, within the next three years, we must rid ourselves of uniform taxation.

Senator CAMERON:
Minister for Health · Victoria · LP

.- Referring to the Budget, the “Sydney Morning Herald “ of Tuesday last, under the caption “ West’s Economic Policies Lack Drive “, stated -

If nothing else, the latest Budget of the present Government takes a similar, unimaginative approach to economic problems to that of the Conservative Governments in Britain and the United States in recent years. The outstanding failure of these policies has been the curb which they have placed on the expansion of production in those countries.

That is true so far as it goes. The position that has developed cannot be ignored by any responsible representative of the people or the press, because the underlying law of all things is the law of cause and effect. What the press is doing now is to direct attention to effects. A curb has been placed on the expansion of production in those countries, but there is not one word, of course, of the curb that has been placed on the consumption of the people. The curb on production is due fundamentally and entirely to a curb on consumption. I shall develop this point later.

Let me refer again to the “ Sydney Morning Herald “ article, because it is forthright, from its point of view, and is an attack on the Government that the “ Sydney Morning Herald “ helped to place in power. Like most sections of the press, the “ Sydney Morning Herald “ is wise after the event. The article continues -

Since 19S3, U.S. industrial production has shown little or no general change. There was something of a spurt after the 19S3-S4 economic recession, but by the middle of this year industrial production was back to something like the trough levels of the 1934 setback. “ Fortune “, one of the leading publications in America, stated recently that there were 17,000,000 people in the United States living under most primitive conditions. The reason for that was that these people had no access to the enormous amount of wealth that had been produced, hence the fall in production. The article goes on to say -

Similarly, there was a sharp expansion of production in Britain between 19S2 and 19SS. But since 1955 industrial production has remained virtually stationary, until in June of this year production fell to a level about 5% below that of June 1957, and back to a rate approximating that three years ago.

There we see that in the two leading countries - the United States of America and Great Britain - production is declining while at the same time, just as in America, the pauper population of Great Britain is increasing. There we have the fundamental contradiction which honorable senators on the Government side have not attempted to explain. They simply ignore what is really happening. The article continues -

But even discounting the possibility of padding in the Russian statistics, the Western performance, particularly that of the United States and Britain, is simply not in the same class for rate of growth as that of the U.S.S.R.

This is not a Communist publication; it is a violently anti-Communist journal publish, ing this statement. It continues -

Mr. Allen Dulles, the Director of the U.S. Central Intelligence Agency, conceded in April that Russian industrial production rose 11% in 1957. The State Department has credited Russia with an average increase of 7% yearly in gross national product. Between 1951 and 1956, U.N. economists estimate U.S.S.R. industrial production doubled.

Again I should say the Government is under an obligation to explain the position, but it makes no attempt in its Budget to do so. The article continues -

But the undoubted weakness of the current Western economic policies is their lack of attention to this problem of expanding production. The performance of Britain in the last three years would be laughable if its effects were not so tragic.

Facts must not be ignored, but they are being ignored in the countries to which I have referred, and also in Australia. The article continues -

The balance will swing steadily in favour of the Communists if present trends are not radically reversed.

That is perfectly true. To the extent that any country becomes impoverished or to the extent that preventable unemployment is not dealt with, the position of the Communists is strengthened. After all, what we call communism to-day is nothing more than the inevitable reaction to poverty, tyranny and all the expedients which are adopted to reduce the working population to the lowest possible level. The article goes on to say -

But the effect of the U.S. and British economic policies in the last two years has been largely to frustrate the tender beginning of a move by such countries to lift themselves out of their wretchedness.

This is what it says about dumping -

It is difficult to get any precise measure of the losses which these countries sustained after the collapse of world commodity prices - on which they depend heavily for financing their economic development.

Then reference is made to America’s policy in connexion with dumping. In the “ Evening Post “ published in Wellington, New Zealand, on 13th March, 1958, this report appears -

The rapid depletion of New Zealand’s overseas funds due to high level imports last year, and continuing fall in the prices of exports - dairy, meat and wool - is causing anxiety in many quarters.

In the opinion of the Minister of Finance (Mr. Nordmeyer) a recession is indicated. However, Mr. John Gilkson the chairman of directors of the Southland Frozen Meat Company has a different view. In his address to the 76th Annual meeting of the company, he said, “ In spite of what the Minister says, I am afraid it’s a slump and not a recession “. Mr. Gilkson said he had read recently that the U.S. was proposing to dump 6,000 million tons of surplus food on the world markets and if this happened the prices for all New Zealand produce must again fall.

The Melbourne “Age” of 7th August contained this short report relating to the same matter -

President Eisenhower sent a report to Congress yesterday predicting the U.S. would be saddled with its farm surplus for at least another five years.

That was the outlook even though 985 million dollars (about £439,768,000) worth of surplus farm products were disposed of overseas in the first six month’s of this year.

These surpluses were shipped abroad under Public Law 480, which authorizes the Government to sell the surpluses, for foreign currency, barter them for foreign products, or give them away as relief packages.

This law expired on June 30, but Congress is expected to extend it.

I mention these articles in reply mainly to Senator Marriott and others and as my authorities for the statements I have made. The report to which I have referred in the “ Sydney Morning Herald “, after elaborating the points to which I have directed attention, goes on to say -

However, (hat is looking rather far into the future. For the moment, there are no signs, apart from some hesitant indications of a degree of economic recovery in the United States, that Western economic performance is likely markedly to improve in the near future.

Referring then to the position in Japan the article states that even the massive industrial machinery of that country is faltering. In to-day’s “ Financial Review “ under the caption, “ Why exports are lagging “, we find certain pertinent comments regarding the Australian position. They are -

Mr. McEwen will leave for Malaya and Ceylon on Saturday “ to discuss trade matters with the governments of these countries.”

Early next month Mr. McEwen will be off again, this time to the Commonwealth economic talks in Montreal.

That basic failure of policy in key industrialised countries over the last year or so - the failure to ensure vigorous economic growth - lies at the heart of our present trading difficulties.

Without a real revival of expansion overseas, all the outlay in the world on trade commissioners, advertising campaigns and the rest will serve little purpose.

Reference is also made to the surpluses accumulating in Australia, and which cannot be disposed of. The countries to which Mr. McEwen will travel are faced with the same problem. The article which I have quoted is well worth reading. It points out the old problem of dealing with increasing surpluses on the one hand and increasing poverty, or declining consumption, on the other.

I would suggest that ultimately only one remedy can be adopted - and that possibly only after there has been a good deal more suffering. I refer to the re-organizing of the internal economy so as to establish, in the language of the economist, a sort of working economic equilibrium whereby consumption will more or less approximate production. It is perfectly obvious that we cannot rely on export trade to improve the position. The point I make is that all the time we must aim at internal expansion. I remind honorable senators that it is not only Labour which directs attention to this sort of thing but also those who represent landed and capital interests. They do that because a position is developing which is allembracing.

I cannot see any favorable change in the Government’s policy as compared with the thirties. We see the same orthodox approach, the same recourse to pious affirmations and generalities; the tendency to hope, like Uriah Heep, the character in Dickens, that something will happen. That is the serious situation to which I direct attention.

I turn now to another all-important aspect. On page 43 of the review of “ The Australian Economy, 1956 “, issued by the Government in May last, the following statement appears: -

The basic conception of a public budget is thai a given amount of money will be raised and that all public expenditure will be kept within this amount. Inevitably the war (1939-45) did a great deal of weaken this budget principle. . . Then post-war inflation had something of the same effect.”

The Government itself said this in May! What is being done in this Budget to deal with that aspect? The Budget principle referred to was not the outcome of the 1939-45 war, but had its beginnings in 1914. In August of that year the government of England went off the gold standard for the obvious reason that there had been a rush on gold by people who realized that paper money had no intrinsic value. After a good deal of hardship England, in 1925, went back on the gold standard. As the result of a loss of trade it went off the gold standard again in 1931. Vacillation of that kind is characteristic of economic advisors. They experiment all the time, and cannot take a long-range view. Mr. V. C. Vickers, who had been Governor of the Bank of England from 1910 to 1919, resigned because he realized what had been behind the retreat from the gold standard in 1925. He referred to his own colleagues as a lot of financial gangsters. Honorable senators may read that in his book, which is in the Parliamentary Library. He was succeeded by Mr. Montagu Norman, who stated, when England was in the throes of the depression, that the problem was beyond him, that he approached it not only in ignorance but in humility. In the ‘thirties, nine Oxford dons who were prominent economists wrote a series of essays recommending what should be done about the money problem.

The views of those gentlemen were in complete conflict and revealed their utter inability to find a way in which national and international economies could be controlled. That is what the experts said, yet Government supporters imply that, in querying their policies, the Australian Labour party is actuated by mere personal considerations. Nothing could be further from the truth.

I saw this sort of thing happening as long ago as 1893. One could always see what was going to happen. Any recession, depression, climax or crisis - call it what you will - in this age of intensified production and private monopoly ownership must be a great deal worse than it was in the thirties. So an approach was made in 1940 by another well-known economist who was prominently associated with Lord Keynes. I refer to Mr. Geoffrey Crowther, the then editor of “ English Economist “, who, in 1940, in the preface to his book “ An Outline of Money “, expressed himself in the following terms: -

The war and its aftermath will teach us a good deal about money. Many of the emphasis will shift and monetary institutions will change. . . . But there is some reason for thinking that the changes may not be so severe this time as they were in and after the 1914-18 war. Then there was a long established and smoothly working system to destroy.

He was referring to the fact that notes were not convertible. He went on -

Now we have already had monetary chaos for almost a decade: We have been forced to do a great deal of hard and untrammelled thinking. . . We have had to look behind the formal facade of institutions like the gold standard and inquire into basic realities . . .

I fail to see where any inquiry has been made by any of the experts advising the Government concerning basic realities. What are they? Those are simple words. The basic reality is that the economy of this country and other countries is based on the principle that maximum national production and profit for the owners of land and capital should be increased to the limit, with the minimum consumption. This means, in effect, that consumption is being reduced to the lowest level and production is being increased to the maximum. That is the fundamental position, or the basic reality, to which this gentleman referred. In 1946, Lord Keynes made a similar state ment in the publication “The balance of payments to the United States, Economic Journal “, of June, 1946. He said -

No one can be certain of anything in this ‘ age of flux and change. Decaying standards of life at a time when our command over production of material satisfaction is the greatest ever . . . are sufficient to indicate an underlying contradiction in every department of our economy. No plans will work for certain in such an epoch. But, if they palpably fail, then of course we and every one else will try something different.

Senator Hannan:

– Would you call Lord Keynes a Fabian?

Senator CAMERON:

– No, I would not call him any names at all. I make a much more respectable approach to people. I do not believe in character assassination, but I do believe in ideological assassination, so I shall practise on the honorable senator who is interjecting for a while. I am quoting accepted leading authorities in England at the time, not representative of the Labour movement.

Senator Hannan:

– Are you opposed to orthodox fabianism?

Senator CAMERON:

– I am at a loss to answer the question, because I do not know how Senator Hannan defines orthodox fabianism. When he speaks of communism he never says what he means. Likewise, he has not said what he means by fabianism. Therefore, I shall not say “ Yes “ or “ No “ until he says what he means.

Senator Hannaford:

– Do you mean that you are like Lord Keynes. You do not know?

Senator CAMERON:

– I do not accept that Senator Hannan has an understanding of the position. I judge from the contents rather than by the label. I judge men by their deeds rather than by the names they call themselves. I believe that a person of my experience is justified in making that reservation because quite a number of people call themselves this, that, or the other but they are, in practice, quite the opposite from what those terms imply. Christians, for example, are 100 per cent, ethical, but economically they are just as pagan as anybody. That is the position with which we are faced. I want my remarks to go on record because I want to see a constitutional revolution brought about. In other words, I want to see a change in the internal and international economy accomplished by constitutional means, where there is an appeal to reason rather than to prejudice, whether it be racial or political prejudice or any other prejudice.

The position that has developed, to which I have directed attention, operates mainly in the interests of the diminishing number of wealthy and privately owned monopolies that are in charge of the nation’s monetary system and means of production, by the practically unchecked depreciation of the currency, ever since the beginning of World War I., when the Commonwealth Treasury issued, at the instigation of private banking interests or offered to issue, four ?1 notes for a sovereign.

In October of last year I said in this chamber that an answer to a question submitted to the House of Commons indicated the extent to which, the purchasing power of the ?1 sterling had depreciated between 1914 and 1956. The answer gave the figures for all of the intervening years except the war years. In 1956, the depreciation was 78 per cent.; the value of ?1 in 1956 compared with the value in 1914 was 4s. 4d. Since 1956, prices and rents have increased and now the ? 1 sterling in England is worth only 4s. compared with what it was worth in 1914. Our Australian currency is based on sterling. If you reduce 4s. by 25 per cent. - the adverse exchange rate - our ?1 note to-day is worth only 3s. when compared with the ?1 note of 1914.

Senator Wade:

– How long ago was the value of our ?1 note reduced to 3s.?

Senator CAMERON:

– The information appears in “ Hansard “ for the benefit of people who ask unnecessary questions. If the honorable senator will look at “Hansard” of 15th October last, he will find all the relevant figures, and he may make his own calculations. As I wanted to find out what the Treasurer (Sir Arthur Fadden) knows about the matter, I asked a question on it, but I received no satisfaction. In another place, Mr. Ward asked a similar question, in the following terms -

  1. Is it a fact that a ?100 long-term Commonwealth war loan bond about to mature will represent only approximately ?45 in real value in comparison with its value at the time the money was loaned?
  2. If this figure is not accepted by him, will he state to what extent such an investment has deteriorated during the currency of the loan? ….

Sir Arthur Fadden. The answers to the honorable member’s questions are as follows: - 1 and 2. There is no satisfactory basis for making the comparison suggested by the honorable member ….

Senator Wade:

– No satisfactory basis?

Senator CAMERON:

– No satisfactory basis, for the obvious reason that they are either ignorant or are paid to write things that are untrue. If there is no satisfactory basis, why did they have to ask the Chancellor of the Exchequer in England in 1956 what the basis would be? Will they say that the Chancellor of the Exchequer is wrong and does not know what he is talking about?

In my opinion, most people are not supposed to understand the way in which they are fooled, ruled and robbed, from the cradle to the grave, by the manipulation of the monetary system. Finance is one matter about which the business world is either ignorant or else afraid to tell the truth. The question asked whether a ?100 bond, purchased for ?100 in 1949, is now worth only ?45. I have all the evidence here to prove that it is worth approximately that amount.

Senator Wade:

– On that basis, the ?1 is worth more than 3s.

Senator CAMERON:

– The point I am trying to make is that the bond for which ?100 was paid during the war years is not worth ?100 to-day, even if sold at par. The same principle applies to savings in a bank. Take the case of the average working man who has put his savings in a bank. The ?1 that he withdraws as required, does not have the same purchasing power as the ?1 that he deposited. Why does not the Government face the facts? Why does it not investigate the matter more intelligently? Is the Government going to wait until incalculable damage has been done? Is it going to wait until we have a position similar to the position that existed when I first came into this chamber, when there were 500,000 men on the dole and tons of wheat and other foodstuffs were being dumped all round the coast of Australia? Had the war not intervened, the Government would have had to make some adjustment to the monetary system or there would have been rioting everywhere. The war saved the situation. Although during the time of peace the Government said it was impossible to feed all those in need and to clothe and house men, women and children decently, everything was possible during the war years because profit was to be made through investments in war loans and contracts.

As far back as 1951 the “New York Times “ said that the Korean war was a boon for trade, and that if peace were declared it would be disastrous for business. Another well-known writer said that the war was a godsend, “because it enables us to get rid of our surpluses “, but he did not say anything about the thousands of men who were slaughtered. All the business world thinks about is surpluses and profits.

Inflation of the currency is the principal cause of the position with which we are faced to-day. So that honorable senators will not think that that statement is exaggerated, I shall quote from an article that appeared in the Melbourne “ Herald “, of 7th April last, under the heading of “ Bernard Baruch warns - ‘ Inflation Real Menace to U.S.’ “. Perhaps I should mention that Bernard Baruch is an 87-year-old financier known as the “ Adviser to Presidents “. The article states -

  1. . Inflationary policies would bring America to disaster. “ Inflation “, he told the Senate finance committee, “is the most important fact of our time - the greatest single peril to our economic health. . . .” He claimed that further deficit spending would start not merely another cycle of deflation but a cycle of destruction.

Honorable, senators should note that Bernard Baruch used the same phrase as the Prime Minister used - “ deficit spending “. The Government is pursuing a policy of issuing treasury-bills, and must now face what Bernard Baruch referred to as “ not merely another cycle of deflation but a cycle of destruction “.

In the Melbourne “ Sun “, of 5th June last, an article under the heading, “ Inflation is Permanent Threat to Stability “, reads - “ Inflation has ceased to be a passing danger, and had become a permanent threat to stability “, a United Nations report said to-day. Dealing exclusively with the inflation problem, the first part of the annual world economic survey also found that generalised measures for price restraint might succeed only at the expense of slowing down economic activity. It noted that though unemployment reached a postwar peak in the U.S. this year, and had increased in many eastern European countries, the carry-over of earlier fears of inflation remained a major factor in the determination of policy.

As I have said before in this chamber, and I believe the statement to be perfectly true, the only difference between the Government and its banking authorities, and the counterfeiter, is that one acts inside the law and the other acts outside the law. The counterfeiter may succeed in passing practically worthless pieces of paper of the face value of thousands of pounds for which he receives goods and services. If he is caught, charged and found guilty, he is sent to gaol. But the authorities inside the law are doing precisely the same thing. They issue practically worthless pieces of paper of the face value of millions of pounds for which they receive goods and services, but no action is taken against them.

Our economy is becoming more and more unbalanced. Our cities are ‘becoming overcrowded while our rural areas are becoming depopulated. In the cities, millions of pounds are being converted into fixed capital in the form of unnecessary petrol stations, unnecessary banks, palatial offices, such as the I.C.I, building in Melbourne, which is twenty stories high, and Commonwealth buildings twenty stories high, while, in Victoria alone, 16,000 young couples are being denied adequate housing. A government which permits such a policy cannot avoid the resulting permanent shortage of housing for the workers of industry - a shortage which is increasing all the time - and increasing poverty.

Then you are faced with an unbalanced economy caused mainly by inflation, brought about by a lack of control of finance. For all practical purposes, political democracy in this country begins and ends on election days. After that we have a political dictatorship. That has been going on for years. In the “ Sydney Morning Herald “ of 8th April, under the caption* “ Parliament Eclipsed by the Boys of the Back Rooms “, the following appeared -

In this debate, the Government made virtually no attempt to answer Opposition criticism, principally because its advisors in the bureaucracy were not yet fully in a position to tell the Government what it should do. Accordingly, Government speakers either waited or said nothing.

A similar reference was made to bureaucracy in the last issue of “ Muster “.

Bureaucracy is extending everywhere. The “ Sydney Morning Herald1 “ article continued -

This deal looks like one of the biggest cooperative operations we have yet seen in this country between the bureaucrats of industry, the managers and the bureaucrats in the Government.

This is the “ Sydney Morning Herald “.

Senator Hendrickson:

– It is pretty right, too.

Senator CAMERON:

– Of course it is. The article further stated -

Parliament cannot debate these issues because they are too complicated.

The matter is complicated.

Senator Hannaford:

– You said just now that it was too complicated for Lord Keynes.

Senator CAMERON:

– I did not say it was too complicated.

Senator Hannaford:

– You said it was imponderable.

Senator CAMERON:

– You ought to cultivate the very useful habit of thinking first and speaking afterwards.

Senator Hannaford:

– That is what I am doing.

Senator CAMERON:

– I said he drew attention to the complications. The article continued -

Meanwhile, the real government of the country and the real power decisions are controlled by a process of mutual negotiation between industry and official managers.

That means that the Government ignores the people. Senator Marriott spoke about the Government representing the interests of the people. Nothing of the sort; it represents only a section of the people. I am supported in that statement by the “ Sydney Morning Herald “. The same thing has been said for years past by all people who are reasonably well-informed students of economic politics. The article went on further -

However, in neither case do the shareholders or the Parliament (and probably the rank and file in the unions) have any real say in what goes on.

That is perfectly true. You either have to take it or leave it.

Senator Hannaford:

– Are you still reading from the “ Sydney Morning Herald “?

Senator CAMERON:

– I am trying to, but I am afraid I am talking to a person who is not able to follow what I am reading. The final paragraph of the article was as follows-

Accordingly, as we saw in the proceedings of the last few weeks, Parliament rants on while the real work is done (with full benefit of public relations pressure and public indifference as long as things work smoothly) in the back rooms.

In other words, as was said in this article, that will go on for just as long as the people will tolerate it. Government supporters reduce the proceedings of the Parliament to mere displays of theatricalism and exhibitionism. Most of the reports submitted by Ministers are merely appeals to prejudice or emotions. Very few of them are based on facts. On one occasion the Prime Minister (Mr. Menzies) said that we want men with big ideas. He implied that he was a judge of men with big ideas. I should say that he has an exaggerated idea of his own importance, as many elected persons have. However, he is destined to be disillusioned just as many elected persons will be disillusioned after the next election. A prominent professor at the University of Rome, Antonio Labriolo, said in 1896- -

There are times when we have to wait for the hard school of disillusion to educate where our reasoning has failed.

That statement was true then and it has been true ever since. All the strikes, revolutions and wars, such as that in the Middle East at the present time, represent the actions of people who are being disillusioned by practical experience. They have failed to understand what is happening by a process of abstract reasoning. I can quite understand that.

Every day in almost every section of the press attention is directed to effects, but nothing is said as to causes. Why? It is because the press here and overseas is now a monopoly press. There was a time when the Australian press - before it became a monopoly - controlled to the extent that it is to-day - was much more forthright. As a matter of fact, it is to the forthright utterances of the “ Bulletin “, the Melbourne “ Age “ and a number of other newspapers in the days before World War II. that we owe the privilege we have at present of being able to discuss these questions in the Parliament. Had it not been that they paved the way, we would not be here. To-day the press and commercial radio and television stations are controlled by monopolies. The people are destined to be disillusioned in the hard school of practical experience before they understand what is being done. That is inevitable. Let me repeat that although we may ignore effects to the extent we are doing to-day, we will not be able to ignore causes indefinitely, because in the long run causes will make themselves felt. I regret, however, that unnecessary sacrifices will have to be made, particularly by young people, who will be denied schooling and housing because this Government - I repeat - is either too ignorant or lacks moral courage to do the right thing.

Senator PEARSON:
South Australia

– We have just listened to a speech which was typical of those usually delivered by Senator Cameron. We have been told that the Budget is dismal and barren. Perhaps those who indulge in that kind of criticism can be spoken of as “ Barren “ Evatt, “ Barren “ Cameron or “ Barren “ Somebody-else. I do not understand what the honorable senator’s speech was about; it was completely beyond me.

Senator Cameron:

– You will understand in time.

Senator PEARSON:

– I have listened to that kind of speech from Senator Cameron for about seven years. Although the honorable senator leads me to hope that I shall understand in time, I am beginning to despair of that happening. I could not decide whom he was praising or whom he was criticizing; but I did decide that, whatever he was doing, he was making a good job of it. I did not know whether he was criticizing the Government, the “ Sydney Morning Herald “, or the backroom boys, as he referred to them, whom he suggests really run this country. I regret to have to say to the honorable senator that I could not accurately sum up his remarks.

However, Sir, I did gather that he was inclined to suggest that we were in grave danger of witnessing an increase of communism in this country because of the poverty in which people live. But I thought how ridiculous that contention was. No one in Australia will regard it seriously. If that is the reason for the growth of communism, this country ought to be the last to witness it. There is no one in the free countries of the world who will not admit that this is the best country in which to live, that we have the lowest level of unemployment, and that no other country offers better housing conditions and general standards of living. I think that dismisses the honorable senator’s contention, which I am sure he made quite sincerely.

As Senator Cameron has referred to unemployment as being a factor in the growth of communism, perhaps I should state, in passing, that only 1.6 per cent, of the working population of Australia is actually registered as being unemployed.

Senator Cameron:

– Why should there be any unemployment?

Senator PEARSON:

– We regret that as many as 1.6 per cent, of the working population are unemployed. The honorable senator asked why there should be any unemployment. Let me ask him why, when he was a Minister of the Crown in 1949, some 6 per cent, or 7 per cent, of the work force was unemployed. That is a fair question. He has not answered the question, and1 1 anticipate that he never will. At this point in time, I repeat, 1.6 per cent, of the work force is unemployed.

Senator Cameron:

– The number of unemployed is 70,000.

Senator PEARSON:

– It is not. I invite the honorable senator to read the latest statement on this matter by the Minister for Labour and National Service (Mr. Harold Holt). I shall give the figures to the honorable senator before I resume my seat. I again ask the honorable senator why there was any unemployment in 1949. He asked me why we should have any now. I shall endeavour to show him as time passes. I hope he will be here to listen.

The honorable senator again referred to his old pet theories about the monetary system. He said, I think, that if the war had not intervened, there would have been chaos in this country and the people would have demanded a change. He added that, when the war broke out, there was a change, and that we embarked upon a tremendous programme of borrowing from the people. It is true that we did, but I was surprised to hear the honorable senator say that he agreed with large-scale borrowing.

Senator Cameron:

– I did not.

Senator PEARSON:

– He does not disagree. I think that was a fair statement of what the honorable senator said. Unfortunately, there was no one else on the other side of the chamber to hear what he said, so it cannot be said whether I am right or wrong.

One of the causes of the present difficulty is that the government of the day did embark upon a large programme of borrowing from the people. There was no alternative. Thank God, the people did lend money to preserve the security of their country in those war years. But we are reaping the whirlwind to-day. In the current financial year we will be obliged to repay or to ask the people to re-invest no Jess than 337,000,000 of the £l’s of which the honorable senator spoke, and as they were in 1940.

Senator Mattner:

– They are the same £1’s.

Senator PEARSON:

– Yes, they are the same. In addition to that sum of £337,000,000 to be redeemed or converted, there is a sum of £26,000,000 to be redeemed in the United Kingdom. That is one of the reasons why this is a cautious Budget. It is the only kind of Budget that could be, and which was, expected by the people of this country.

My colleague from Tasmania, Senator Marriott, had something to say on this subject. He went to great pains, as perhaps I shall, to explain why this is the honest kind of Budget that this Government has presented in similar circumstances in the past. Before I get into deep water in that regard, I should like to pay tribute to the Treasurer (Sir Arthur Fadden), who is about to relinquish the cares of office and the burdens of the Treasury after having produced, Amongst other things, a record number of Budgets. Whatever opinions people, either inside or outside this place, may hold about the Budgets that Sir Arthur Fadden has presented from time to time, I am led to believe that there is a unanimity of thought, to which expression will be freely given between now and polling day, as to his integrity and honesty of purpose. He will leave the political arena with the utmost good will of every member of the Parliament for the untiring and conscientious efforts that he has made in the best interests, as he has seen them, of the people of Australia. Whether it is the “ Sydney Morning Herald “ or any of the other newspapers which, from time to time, have had hard things to say about the Treasurer, I am sure it will agree with the sentiments that I am now expressing. I hope that the press of Australia will not be timid in endorsing what I have said.

The Government is not only justified in bringing in a Budget of this kind, but also is compelled to do so in the interests of Australia. During the time that Sir Arthur Fadden has been Treasurer he has witnessed, as we all have, considerable extremes in the stresses and strains which have a bearing on the economy. In the early 1950’s we went through a period of extremely high prices for the products which we exported overseas. That was a very good thing for Australia in many ways. It enabled the primary producers who received those high incomes to achieve a degree of security which, I think, they had never before experienced. As I say, that was a good thing for the primary producers, who were on the receiving end, and it was also good for Australia and its economy. But we in this chamber, and I am sure people outside it as well, appreciate that that period of high prices created stresses in factors which govern the economy. The Government at that time took steps, although they were exceedingly unpopular with a section of the electorate, to remedy the condition and to try to save the country from certain consequences which might have followed had action not been taken. Those who criticized the Government at that time and were so outspoken have remained to praise it and now endorse the action which the Government took. That is always a very pleasurable experience. I think that it has given great pleasure and satisfaction to Sir Arthur Fadden who was, perhaps, only the servant of the Government in the steps that were taken.

During the long period that Sir Arthur Fadden has been Treasurer, we have experienced the other economic extreme and have seen what some people have termed a mild recession, or at any rate a slowing down process, as a result of a fall in our export income, which has such a bearing on the economy. It was, perhaps, that turn of the wheel that brought about our present circumstances and led to this type of Budget, which the members of the Opposition have been at their wits’ end to criticize. They have tried to make party political capital out of it and to convince the people that some alternative was open to the Government.

This recent action of the Government, and also the action of a different kind to which I have already referred, shows that the Government is not afraid to face issues and causes over which it has so little control. It has never flinched from the issues or refused to face them, whether in a period of inflation or when there has been some, shall we say, running down of the economy. We are three months away from a general election. One would have imagined that the Government, if it were at all irresponsible, would have introduced a Budget that would have taken a great many risks and pledged the future to an unwarranted extent. That might have been the case, had its main purpose at this time been to win votes. But not even the severest critic of the Government can accuse it of being concerned only, or even at all, with that aspect. It has presented a fair, honest and straightforward Budget. We shall go to the people at the proper time and they will believe us, as they believe us to-day. I think that this Budget is typical of the Government’s courage, a fact that all sections of the community should be prepared to concede. The Opposition will learn, on 22nd November next, that this Government is trusted. I think that the people will be prepared to trust it again, with perhaps an increased majority in both Houses of the Parliament, for the next three years.

Senator Cameron:

– You are an optimist.

Senator PEARSON:

-I am a realist. I have been in this place, Sir, for nearly eight years now, and it has been remarkable that whatever type of Budget the Government has seen fit to introduce, it has always been wrong, according to the Opposition.

Senator Nicholls:

– Strange, but true!

Senator PEARSON:

– It is certainly strange. Surely the Government must be right sometimes. Of course, the people of Australia think it is right all the time. I stand to be corrected, Mr. Acting Deputy President, but I think I am right in saying that in respect of every Budget that this Government has introduced, the Leader of the

Opposition in another place has moved to censure the Government. If we bring in a Budget to stop inflationary tendencies we are wrong, and if, in a time of running down, such as now, we bring in a Budget that befits the occasion, we are still wrong, according to the Opposition. That is a remarkable thing which can spell out only one meaning: Not that the Government is always wrong, but, unfortunately, that Her Majesty’s Opposition in this Parliament is concerned to jump on any bandwagon that happens to present itself. Is that true or untrue? 1 say that the Government cannot always be wrong; yet, on every occasion since 1 have been here, the Opposition has tried to censure the Government for its Budget.

Senator Brown:

– It is the right of the Opposition to criticize.

Senator PEARSON:

– I have not had experience of being in Opposition.

Senator Wade:

– And the honorable senator will not have it, either.

Senator PEARSON:

– I do not think I will. I have been in politics for nearly eighteen years and I have never had the experience of being in Opposition. Senator Brown has said that it is the right of the Opposition to criticize. That is perfectly true. Of course that is its right. I hope the day will never come when that is not the case. But there are two types of criticism. There is responsible criticism and there is irresponsible criticism; there is constructive criticism and there is destructive criticism. My experience of the Opposition in this Parliament, rather different from my experience of the Opposition in a State Parliament, has been that the only criticism of the Government has been either destructive or irresponsible, of a type calculated first and foremost to win support at an election. I regret that that is so. Every thinking member of the Opposition surely must regret it also and realize that the Opposition in this Parliament is not performing its proper function while that is its chief concern.

In the course of this debate, much has been said regarding unemployment. I have already referred to this subject, but I want now to say something further about it because it is of great concern to the Government at the present time. As I have already said, the total number of people registered for employment is only 1.6 per cent. of the work force of this country. In Canada and the United States, the proportion is something like 6 per cent. I may say that I checked those figures immediately before I came into the chamber. I am happy to think that my own State of South Australia, and Victoria, have the lowest proportion of unemployed to the work force. In Victoria and South Australia, the unemployed is only 1.4 per cent, of the working population.

Senator Wade:

– They are progressive States.

Senator PEARSON:

– They are! I could say, of course, that they have Liberal governments, but I would not say that. But these are interesting facts. It is a matter of satisfaction to me, as a South Australian, to realise that South Australia has always been one of the States to have the lowest proportion of unemployed to the working population. We do rejoice in the fact that the figures are falling now. Whilst the total number of people registered as unemployed on 27th June was 67,144, the figure has fallen, in a period of five weeks, to 65,913. Putting it another way, and taking a slightly longer period, I point out that since the end of January, 1958,- in a period of six months, the figure has fallen by 8,852. That is in contradistinction to the position for the corresponding period last year when the unemployment figure rose by 479. So, whatever honorable senators opposite choose to say about this position, which concerns us all, it must be admitted that despite all the other circumstances which obtain in this country, the trend in the first half of this financial year, has been for the better. I hope that the Opposition does not go to the country at the forthcoming election painting a picture that is not correct.

Senator Brown:

– Of course that is what we will do!

Senator PEARSON:

– Senator Brown says, “ Of course that is what we will do “. I have not the slightest doubt that he will do that.

Senator Brown:

– We will do our very best to defeat you.

Senator PEARSON:

– No doubt the honorable senator will, but I hope he does not paint an exaggerated or false picture in connexion with this rather serious problem.

I listened very carefully to the Leader of the Opposition in another place speak in the Budget debate. I am waiting now to hear from the Leader of the Opposition in this place. I hope that pleasure will be forthcoming at the earliest possible moment. The Leader of the Opposition in another place, if I might be allowed to say so, made a great song and dance about the plight of the farmers, about the plight of the primary producers generally, about the plight of the pensioners and about the plight of the most deserving sections of this community. He referred to all those people, and to many others. And he threw the whole lot at the Government’s door, saying, 1 It is your pigeon, not ours, and I have not got a constructive suggestion to make.” I have read the report of his speech, and I heard him make it. I think that what I have just said is a fair criticism of that speech.

The only suggestion which Dr. Evatt might be accused of, or criticized for, making was that he would have recourse to the people’s bank. Of course, he meant the Commonwealth Bank. He made the statement about as briefly as I have. He did not enlarge on the suggestion at all. One is therefore forced to think that his only panacea for all the ills which he recited in his speech is to do as he said he would do - borrow more money from the Commonwealth Bank and print notes ad infinitum.

Senator Courtice:

– The Government is to get £110,000,000 from the bank.

Senator PEARSON:

– But that does not satisfy the Leader of the Opposition in another place, because he wants to put money into the farmers’ hands. He says the farmers are short of money.

Senator Hannaford:

– That is what Senator Kennelly said.

Senator PEARSON:

– Senator Kennelly also said that. I am a farmer, and I know that farmers are short of money, but I do not intend to trust the Leader of the Opposition to issue additional bank credits - that is. print additional bank notes - and put the money into my hands.

Senator Courtice:

– The Government is printing them.

Senator PEARSON:

– No. The Government has gone to the maximum in this business of printing notes. The amount of £110,000,000 or £115,000,000 for the coming year is the maximum the nation can stand. I am surprised that the Government has gone as far as that, but it has seen fit to do so, and that is the maximum we can stand without a violent upsurge of inflation. Surely Dr. Evatt realizes that we would have this violent upsurge of inflation! Or does he?

I have referred to the fact - and so have many others in this place - that the farmers’ incomes have receded by about £180,000,000. About one-third of the income they had last year is not available to them for this financial year. That is serious to the farmer, and it is serious to the country. It is serious for our economy, and it creates difficulty for the Government when it sets about preparing its Budget.

Senator Hannaford:

– It is deflationary.

Senator PEARSON:

– It is certainly deflationary, but it is brought about, not by causes over which this Government has any control. Any person who listened to the broadcast of Dr. Evatt’s speech could gain only one impression - that Dr. Evatt was anxious to create in the minds of his audience the belief that all this is the Government’s fault, whereas, as my friends know, it is due entirely to the fall in export prices of primary products, wool, barley, eggs and dairy products. And it is due partly to the dry season that two, if not three, States experienced last year.

Those are the causes of this recession in the farmers’ income, a recession which directly affects the Budget we are now considering. It affects also our balance of payments position, which has its repercussions in this Budget. I am rather surprised that the Treasurer has seen fit to announce that he will allow imports to continue at the same level as last year - £800,000,000. I am glad he has done so because, for the life of me, I cannot see that industry can continue to absorb workers on the increasing scale which we all desire, having in mind a large influx of migrants, and exist on an import level at anything below £800,000,000. Indeed, having regard to our build-up of population, I think we must endeavour to discover, within the next few years, ways and means by which our import limits may be raised far beyond £800,000,000. Somebody said the other day that in the next fifteen years we will have to provide a volume of exports to permit of a volume of imports at a minimum level of £1,600,000,000.

Senator Hannaford:

– Sir John Allison.

Senator PEARSON:

– It might have been Sir John Allison. What he said may be true, and it does point to the fact that in this year of grace in particular, whilst we have a healthy balance of payments position - thanks to higher prices enjoyed earlier - it would be unwise and unjustified tolimit imports to any figure below £800,000,000 Those things, together with heavy overseas borrowings, and the borrowings in Australia during the war, which must be converted, created difficulties for the Treasurer when he came to draw up his Budget.

And there is no escape from them! Lower prices simply happen, and nobody in this or any other country can be blamed for them. We cannot escape ourwar obligations. I hope we shall never try to do so. We cannot escape the fact that we are limited, perhaps beyond our desire, in respect of the level of imports which we can permit. We cannot escape anyof these things. The Leader of the Australian Labour party in another place says that the Government is to blame for these things How in the name of creation any responsible leader of the Labour party can believe that, or how he can rectify the position,I do not know! God only knows how any responsible Leader of the Opposition can sincerely charge the Government with being to blame for these things or sincerely claim that he will rectify them if elected to govern! It is as plain as a pikestaff that the Opposition will tell the people that kind of thing when it goes to the country. I should like to issue a warning to electors to beware of people who, like the Greeks, come bearing gifts. One might go further and say, “ Beware of Dr. Evatt when he makes you promises “. I hope that I am proved wrong but I. expect to hear a series of wild promises which, if Labour is elected, will result in a frantic attempt to honour them, or in their being completely dishonoured. One must not forget what has happened so recently in our fellow dominion of New Zealand. The present Prime Minister of that country made this statement as part of his policy speech before the election -

You will have received your income tax demand. Please take a look at it. If the tax commitment on assessable income … is £1, £5, £10, £50. or any sum up to and including £100, provided you return a Labour government, you will not have o pay income tax in February next. If it is more than £100, you will have to pay only that amount which is in excess of £100.

Honorable senators should listen to this passage especially. -

Return a Labour government on November 30th ind most of you can tear up your income tax demand and use the money you have set aside (or income tax payment as a Christmas benefit or the family.

Unfortunately, the people of New Zealand believed Mr. Nash.

Senator McCallum:

– Not all of them.

Senator PEARSON:

– Enough to enable Labour to win by a very narrow majority. I understand that the present Treasurer and leader of the New Zealand Government has always been regarded as a sound financial leader and adviser - not given to making this sort of statement without foundation. I chink the fact that he did make it rather amazed people in New Zealand. However, lis background was such that they were inclined to believe him. I do not blame them <t all for that mistake.

As soon as Mr. Nash was elected he urged the people of New Zealand to save the remitted tax rather than spend it. He said that good citizens should pay the tax originally demanded and await a refund. That was entirely different from what he had said earlier. If they had torn up their income tax demand they would not even have known how much they owed. The electors of this country should beware of promises by some one who has never been regarded as an orthodox financier, and who, down the years, has been quite irresponsible in his criticisms of government budgets. The public should beware of a man who comes to them, as Dr. Evatt did in 1954, and makes promises which will either wreck the economy or result in higher taxes if kept.

The Budget shows that the Government is not prepared to take unwarranted risks for political purposes. Instead, it is determined to encourage and maintain the high level of spending which is necessary for continued prosperity. It is determined to encourage and promote the expansion of industry. It is determined to maintain and encourage the highest possible level of employment. It is determined to maintain the present level of imports and to protect industry, both primary and secondary, from the full effects of the kind of recession which has occurred overseas, lt is remarkable that, though there has been a substantial recession in major countries such as the United States and Canada, Australia has experienced what can only be described as a mere ripple on the surface. That is especially true of our primary industries. It is attributable, I think, to action for which this Government can claim full credit.

I try, with more or less success, to grow wheat, and I believe that the Government has done great things for that industry. As a result, it is not experiencing the sort of thing that is happening overseas. What has this Government done, and what did Labour do when it was in office, to help the wheat industry? The Australian Labour party, it is true, introduced the wheat stabilization scheme. This Government has continued the scheme and has improved it. I have always believed in stabilization and I am very glad to think that the scheme is about to be continued for another five years under this Government - with even more generous conditions than the industry has enjoyed previously. The scheme provides a guaranteed price for wheat produced and consumed locally, and also for 100,000,000 bushels of export wheat. That would cover practically the whole of a normal crop. The scheme provides a degree of security which the importance of this great industry fully warrants. I am glad to see that the scheme is to be continued during this year of grace, and for four years thereafter. The wheat industry has not experienced a tremendous fall in prices. Though prices have fallen it has not had to face the consequences of such ,a fall, and is not likely to have to do that in the next five years.

It is quite true that the Government has not had to contribute anything to meet its obligations under the wheat stabilization scheme. The boot has rather been on the other foot. The industry has contributed something like £200,000,000 to the benefit of the country as a whole. However, though I do not want to be a pessimist I hope that I am realist enough to believe that wheat prices may still continue to fall. In saying that, I am influenced by the huge surpluses in other major wheat-producing countries. The Government, with its eyes wide open, but with a genuine desire to be straight with the wheat industry, has guaranteed exports on the basis of cost of production for the next five years. That undertaking might easily involve the Government or the taxpayers in the payment of some £60,000,000 or £70,000,000 during that period.

Senator Hannaford:

– The fund will have to be supplemented.

Senator PEARSON:

– The fund will be carried into the new period. It is the wheat-growers’ own money in the fund. I say that that amount will not be anything like sufficient if prices go down further, and it may mean that the Government will have to come to the aid of the farmer to the extent of £50,000,000, £60,000,000 or £70,000,000.

Sir, I have said more than I intended to say in regard to this aspect of the Budget, but while I am on the subject of protection for primary producers, I want to remind honorable senators that a similar type of agreement has been in operation for the dairying industry for some period of years, to the enormous benefit of that industry. We have to remember that in addition to helping the wheat industry, the Government has been for a period of years, in effect, subsidizing the dairying industry to the extent of £13,000,000, £13,500,000 and £14,000,000 or £14,500,000 annually. I think that the dairying industry would be in very serious strife to-day - probably in a hopeless position - if that type of help had not been given to it. Yet the Leader of the Opposition in another place said that the farmers are running out of money, and he asked what the Government is doing about the matter. I am saying what the Government is doing about it. The farmers have experienced by only a mere ripple the effects of the down-turn in world prices.

The Government offered the dried-fruits industry a stabilized scheme, but, in my opinion, the dried fruit growers themselves were given very bad advice and they rejected it. I think that to-day there are many people in that industry who would have liked to see it in operation. Certainly a majority of the growers on the River Murray area in South Australia and Victoria voted overwhelmingly in favour of it, but because it was not supported by a sufficient majority, the whole scheme lapsed.

We have benefited also by the Government’s action in trying to find markets for our products. It is very important in these days to find fresh and enlarged markets. We have engaged in all sorts of research for the wool industry and other industries with government money and money obtained from other sources. These are things that I am sure the primary producers will not forget in the next few months, nor will they ever forget the way they have been treated at the hands of this Government.

I have not referred to the concessions which are in the Budget and which honorable senators opposite do not see fit to acknowledge. They are considerable, and they are to be enjoyed by the most deserving sections of this community. I shall leave it to my colleague, Senator Dame Annabelle Rankin, who will probably follow me from this side, to enlarge on this aspect of the Budget which, I am sure, will bring great satisfaction to people at the receiving end.

I want to mention now a purely local matter, a parochial matter perhaps. My colleague, Senator Hannaford, recently asked a question in regard to the anxiety of certain people in this country for the railway line from Port Pirie to Broken Hill to be standardized. I hoped that he would take part in this debate before me, so that he could enlarge his case, but as he has not done so I feel that I should say that I fully support the remarks that I know he proposes to make, because I know what prompted the honorable senator to ask the question.

In South Australia, there is disappointment because this Government has not seen fit to make available an amount of £50,000 - I think that i? the figure - which would have enabled a survey for the new line to be proceeded with. However, I realize, Mr. President, that the Government has its hands full in coping with the many matters that I have mentioned this afternoon. I know that the railway line between Wodonga and Melbourne is being standardized. I accept the decision that this line should have preference in the matter of standardization. We in South Australia are not asking for the work of standardizing the Port Pirie to Broken Hill line to be started, but we should like the necessary survey to be undertaken at the earliest possible moment so that after work on the Wodonga to Melbourne line has been completed, conversion of the line I have mentioned can take place. It may be that the Government does not see any urgency in the matter at the moment, and for that reason has declined to make the money available in this financial year. I urge the Government to look at this matter again.

I regard this Budget as an honest Budget and the type that the people of Australia expected, and therefore they will not be disappointed. I should like again to congratulate the Treasurer on the work he has done in the years that he has occupied his high office. I am sure that after he retires from this Parliament on 22nd November he will be accorded great respect for as long as he lives.

Senator NICHOLLS:
South Australia

– I am opposed to this Budget and I support the amendment that has been submitted by the Deputy Leader of the Opposition (Senator Kennelly). I am opposed to this Budget because it is negative in its approach to the problem of inflation and does nothing at all to return our economy to a stable basis. Continually rising prices are intensifying the inflationary spiral.

Secondly, I am opposed to the Budget because the proposals of the Government embraced in it in regard to taxation will retard production at a time when increased production is essential. Thirdly, I am opposed to the Budget because the burden which rightly belongs to people in the higher income group is still being borne by those people on the lower rung of the ladder - workers in industry, people on fixed incomes, age and invalid pensioners and other people who are least able to carry this burden. Because the basic wage is pegged and quarterly cost of living adjustments have been suspended, workers in industry are doubly penalized. Yet this was the Government which in 1949 promised to arrest inflation, to keep prices down, and to put value back into the fi. Well, we know how those promises have been kept! They remain unfulfilled and1 they are likely to be that way just as long as this Government remains in office.

I desire, Mr. President, to deal briefly with the question of exports. I notice from the copy of the Budget speech that was distributed in the Senate that our exports have fallen during the last twelve months by £164,000,000, from £978,000,000 to £814,000.000. That is a tremendous blow to our economy, and demands the immediate and urgent attention of this Government. We must step up our exports. We have apparently been priced out of overseas markets because of the inflation caused in this country by the policy of the present Government. However, we might prospect some of those new markets in so-called iron curtain countries and follow the lead of the United Kingdom in this respect. I say, Sir, in submitting my view concerning these markets, that an under-populated count! y like Australia is wide open and vulnerable to the vast Asian land masses in the near north and we can no longer afford to subscribe to a policy embracing the nonrecognition of mainland China. I believe that we should trade with all countries that are prepared to trade with us on an equitable basis. The recent agreement signed between Australia and Japan, which of course did not contain adequate safeguards for our secondary industries, could quite easily point the road which must be travelled to achieve economic prosperity. But the Japanese Trade Agreement, even if it did contain safeguards for our secondary industries, represents only one obstacle that has been overcome. Many others remain to be surmounted.

Other countries much more progressive than Australia are a long way out in front, making every post a winning post in the race to gain trade. The United Kingdom, Canada, New Zealand, France, West Germany, Belgium and many other countries are going all out to-day to establish sound trade agreements with mainland China. However, on the other side of the Pacific, the United States of America, through her Secretary for State, Mr. John Foster Dulles, has continually reiterated that she stands four-square behind her policy of nonrecognition of mainland China at any level. For some reason known only to itself, this Government has blindly followed America’s lead. Torn between economic prosperity and apparent deference to the United States, this Government has procrastinated, and is still procrastinating, in making a decision on the question of trade with China. On the other hand, the United Kingdom expects, or envisages, an annual increase of trade with China to the extent of £62,000,000 sterling, to be achieved by a reduction in the number Df strategic preferential items on a par with the embargo on trade with Soviet Russia. Only last week the number of items on the strategic preferential list was reduced from 181 to 118.

By way of contrast, this Government exports a meagre £9,750,000 worth of goods to China, mainly in the form of wool tops. That amount could be increased to £30,000,000 by entrepot exports. Apparently a great difference of opinion exists between the United Kingdom and Australia concerning trade with China. The most interested spectators of this contest are the resurgent Chinese who, with characteristic urbanity, are sitting on the sidelines following closely the clash between the Western Powers in the trade arena, and no doubt are assessing which country will be the most friendly disposed to China when she attains full maturity.

Since the present regime commenced in 1949, China has made extraordinary progress, so much so that infrequent Western visitors to China come away amazed at the progress that is apparent, particularly in the building of new railways, bridges, dams, power stations and many other worthwhile projects. In 1949, China spent approximately £300,000,000 on development. That amount was stepped up in 1954 to £900,000,000, and increased again last year to £2,270,000,000. A concrete example of the progress that has been made may be seen in the north of China, which is a natural wheat-producing area, formerly cultivated by nearly 100,000,000 peasant farmers who were barely able to exist. It is expected that within the next two years tractors and other mechanized aids will do most of the work on the farms.

China has three major products, iron, coal and petroleum, all of which have played their part in the progress that has been made. Products emerging for the first time from new factories include heavy steel rails, generating plants, hydro-electric power equipment, silicone steel and aluminium ingots. It is expected that motor cars and aircraft will swell the production output by 1960. A tractor factory now being built is expected to produce 15,000 units a year when completed.

In the closing phase of the first five-year plan, China made extraordinary industrial progress, so much so that she now has a trading power of no small force which can be greatly expanded and extended. In 1949 China’s overseas trade amounted to £150,000,000. That trade was stepped up in 1954 to £800,000,000 and increased again last year to more than £2,000,000,000. To finance her trade with the Western world, China requires an adequate supply of sterling funds. These have been secured through entrepot activities with the British island of Hong Kong, where entrepot exports last year amounted to more than 76 per cent, of the total export trade because Hong Kong is accepted as the traditional trading centre for agricultural and industrial products. Mainly as a result of our embargo against trade with mainland China, Australia has lost a large part of her valuable export income.

Australian leather, among the finest in the world, supplied the great bulk of Hong Kong’s requirements for years, and a large amount of this leather was re-exported to China. In 1956, our leather exports to Hong Kong fell by nearly 26 per cent., due. in the main, to China obtaining her requirements from other countries which were prepared to trade with her on a more equitable basis than Australia was prepared to do.

An interesting situation has developed in regard to China’s export trade. In this field China appears certain to be in a position to compete with Japan in her traditional game of price cutting. Working through Japan and Hong Kong, China has infiltrated the markets and established contacts with other countries, and to-day is openly competing with Japan in goods ranging from fountain pens to bicycles and sewing machines. To-day, Japan is the largest producer of sewing machines in the world. In recent years her machines have been of a very high quality and have proved highly competitive with the products of other nations. Japanese machines sell at anything up to £40 less than an Americanproduced unit. China has made a largescale entry into this field by under-cutting Japan to the extent of £5 a machine. The Asian market has already absorbed a huge quantity of Chinese sewing machines. This is indicative of the march of time. It shows that a country with very little experience in production, can not only compete with, but also challenge the lead of other countries which for years and years have concentrated on the production of precision units.

The best indicator of our prospects in this market is the United Kingdom’s estimate that it will increase its trade with China by £62,000,000 sterling a year. At the moment China is not interested in consumer goods. In order to increase her standard of living to within reasonable reach of world parity within the next fifteen years, she must concentrate on agricultural and industrial pursuits. That is the position in regard to these markets. At the moment 80 per cent, of China’s trade is within the Communist bloc, mainly with the U.S.S.R., which sends to China, among other items, Australian wool.

The United Kingdom expects to export a huge volume of goods to China, including complete factory units, as well as machine tools and plant for the maintenance of those units. Australia could offer all those things, and more. We could offer heavy machinery, machine tools, motor vehicles and also technical assistance from the viewpoint of increasing China’s productivity. A potential customer with nearly 600,000,000 people would be of great value to our economy, and particularly to our wool producers. However, the opportunity to prospect this vast potential market is being denied to Australia to-day.

The United Kingdom, which purchases most of our wool, is sitting pretty, occupying the middleman’s role of re-exporting our wool to China. The United Kingdom is the largest exporter of wool tops in the world, exporting annually about 81,600,000 lb. valued at nearly £37,000,000 stg. Last year the United Kingdom exported a tremendous amount of wool to China,- most of which came originally from Australia. In 1956 Australia exported 14,000,000 lb. of wool tops worth nearly £6,000,000, and most of that found its way to China. I believe that we could capture most of the trade in wool tops with China. All that is required is additional scouring and combing facilities, which could easily be established in Australia. We all remember how Japan has dominated our wool auctions in recent years, and we must realize just how much greater a force China could become in this field once trade agreements between us were implemented and extended.

I believe that we have more or less priced ourselves out of overseas markets because of the inflation caused by the present Government, but I still believe that in these new markets, which apparently are good for other nations associated with the British Commonwealth of Nations, we could sell heavy machinery, machine tools, motor vehicles and things of that description.

A recent token shipment of Holden cars to Asia was very well received and augurs well for increased trade of that description in the area mentioned. Altogether more than 5,500 Holden motor vehicles have been exported, earning for Australia nearly £3,000,000 in overseas exchange. Those vehicles were exported during the period from November, 1954 to May, 1957. In 1954, 1,341 Holden motor vehicles were exported. In 1956 the number was stepped up to 2,191. It was greatly increased last year and will be tremendously increased during the current year. Distributors for Holden motor vehicles have been appointed in the Cook Islands, Tahiti, the Society Islands, American and Western Gamboa, South Africa, Southern Rhodesia, Aden and many other places. I believe that the export of Holden motor vehicles will play a big part in our economy in years to come. However, the export of motor vehicles is only one aspect of our export trade. There are many other aspects and all of them should be thoroughly investigated from the point of view of their expansion.

Unfortunately, with the present export policy of this Government, it is very difficult for Australian manufacturers even to contemplate trade with China. As I understand the position, export licences must be approved, not only by the Department of Trade, but also by the Department of External Affairs. Applications are viewed, no doubt, in the light of the very questionable policy of this Government, acting in complete acquiescence with the wishes of the United States of America. A self-supporting country like America has no need to worry to any great extent about exports, but Australia, tied hand and foot to exports, with the whole of her economy geared to exports and the establishment and expansion of overseas markets, is in an entirely different position. We must do everything possible to step up our export trade.

In conclusion, let me say - this is very important - that the acceptance orrejection of another man’s politics does not come into this matter. It should play no part in what is purely an economical consideration. Lifting the bamboo curtain to allow trade with China would greatly accelerate our industrial expansion, bringing within reach the economies of large-scale production. That would assist not only to maintain full employment in Australia, but would also aid our immigration programme, and bring much nearer the period of economic prosperity that we all desire to witness. With that end in view, surely our immediate aim must be to concentrate on establishing and extending trade agreements with China, a country which appears certain to become a world power within the foreseeable future.

I leave the position there. I say again that I am opposed to the Budget and that I support the amendment which has been submitted by Senator Kennelly.

Senator Dame ANNABELLE RANKIN (Queensland) [5.25]. - Mr. Deputy President, I rise to support the Budget. Before I refer to some of its provisions, I shouldlike to say how much we all regret that it will be the last Budget to be presented by the Treasurer (Sir Arthur Fadden), who has contributed so much over the years to the wonderful development of this Australia of ours. He has always done the right and courageous thing, whether or not it has been popular. For that, Sir, I believe generations to come will pay tribute to his work as Federal Treasurer. Again on this occasion he has thought it only right to present an honest, sound Budget and not, in this pre-election period, as so easily may have happened, a vote-catching Budget. For that reason, we support it and express our admiration of the Treasurer. Sir Arthur Fadden has always displayed a high sense of responsibility and has not just sought political favour. He will always be remembered as one who has done much to ensure a stable economy and a better Australia for us all and for those who will come after us.

Yesterday and to-day we have listened to a number of dreary and depressing speeches on the Budget from honorable senators opposite. Having listened to them, one would think that this was not a young country which had a great future.

At such a time as this it is well for us all to recall the achievements of this Government since it assumed office and to remember that we are facing a very great period of development and success and that, since 1949, Australia has played a part in world affairs of which we can indeed be proud. One grows rather tired of hearing these dreary and depressing statements from honorable senators opposite. Surely we as Australians can be proud of what has been achieved and what I believe will be achieved as a result of the sound, sincere and honest approach to future problems that has been revealed in the Budget.

I shall now refer to one or two points in particular. I congratulate the Government upon the fact that it has appreciated the problems and needs of people upon whose behalf many of us in this chamber have made representations. It gave me very great pleasure to note that the Minister for Repatriation (Senator Cooper), who is always very sympathetic to ex-service personnel, has been able to make provision for assistance to nurses who served in World War T. I have felt for a very long time that they were a section of the community that we as Australians ought to assist. We recall the deeds of some of those very splendid women who served in the hospital ships off Anzac Cove, and in France. Many men are alive to-day because of the splendid work of nursing sisters during World War I. and World War II. It has always seemed to me to be a very grave injustice that they have not received in the past the assistance that is now contemplated. Provision is to be made for an extension of eligibility for medical treatment under the repatriation regulations to the nurses who served in World War I. That benefit will be of great assistance to those women, who now are no longer young. I congratulate the Minister upon having taken this step. I am pleased that the domestic allowance payable to war widows is to be increased by 7s. 6d. to £2 7s. 6d. per week.

Next we come to the question of social service benefits. For a very long time members of the Parliament have brought before the Minister for Social Services the very real need of single pensioners who live alone and have to pay rent. It gives us very great pleasure to note that supplementary assistance is to be given to single pensioners and to married persons where only one is in receipt of a pension and the other is not in receipt of an allowance, and who are deemed to be entirely dependent on their pensions, to enable them to pay rent. That is a proper step to take towards helping these people, who at times have been in great distress.

I am also very glad to note that it is proposed to liberalize the means test in a number of ways. Let me remind you, Mr. Deputy President and other honorable senators, that this Government has liberalized the means test time and time again since it assumed office. Having listened to speeches from the other side of the chamber, one would think the Government had not considered this very important matter. The fact is that the Government has so liberalized the means test that more and more people have been able to receive pension benefits and more and more have been able to receive greater benefits. I should like to know whether we can assume in this further liberalization of the property limit from £1,750 to £2,250 that a person will be allowed to have more than £200 in the bank before his pension begins to decrease. Is the allowable amount to be increased in the same proportion as is the upper property limit? I hope we will be given a further explanation of that aspect of the matter. We have all noted the real problem with which people are faced in regard to the amount of money they are allowed to retain in their bank accounts before their pension is reduced.

I should like to congratulate the Government upon having introduced an extra benefit for widows through the rehabilitation scheme. We all are very appreciative of the great work that is done at the rehabilitation centres. It has always been a matter of grave concern to me that women have not been able to receive a pension between the time at which their youngest child reaches the age of sixteen years and the age at which they themselves again qualify for a pension. Because women in that category have had to stay at home and care for their children, as is right and proper, they have experienced great difficulty in obtaining employment and have not been able to benefit from occupation at a time when they needed occupation and were not in receipt of a pension.

I have always felt that if some rehabilitation assistance could be given to such women at those times it would be of great benefit to them. I am particularly pleased to see that in the Budget on this occasion changes have been made in regard to the Commonwealth rehabilitation service, and that the requirement that a person must be incapacitated for at least 13 weeks before he may be accepted for treatment or training is to be abolished. In future, persons who claim a special benefit, or a widow’s pension, will be included in the classes eligible for rehabilitation. That, I believe, is a tremendously worthwhile step forward in appreciation of the problems of widows and the assistance that is needed to overcome those problems.

WhileI am referring to the work of the rehabilitation centres, I want to direct the attention of the Senate to what has been done by these centres during the last ten years. They have a wonderful record of achievement. Honorable senators may be interested to know that in those ten years we have trained 10,600 people. We have restored them to independence and have given them confidence again. We have given them a feeling of well-being and happiness. On the financial side, it is estimated that those 10,600 people have contributed at least £35,000,000 by way of increased productivity, wages, and pensions saved. On the other side of the ledger, it is interesting to learn that rehabilitation in those ten years has cost only £3,500,000. Under this scheme, a national network of fine rehabilitation centres has been built up. I suggest that if there is an honorable senator who has not seen one of these centres he should certainly do so. At the centres, men and women are giving their energies and are using their knowledge, experience and training to help other men and women to overcome disabilities that they have sustained as the result of injury or ill health. Not only are these people helped to become independent, but they aregiven hope, happiness, and a feeling of wellbeing which are so important for all of us. It is a wonderful thing to be able to helpone’s fellow man to become a useful and happy part of the world to which he belongs. Therefore, I congratulate the Government on this field of its activity. It is gratifying to see that these services are being extended in the ways that I have indicated.

I wish also to say something about housing, because I believe that homes are of the greatest importance in the community. We on this side of the chamber have always believed in the desirability of home ownership. We think that people who wish to own homes should be given every opportunity to do so. During the current debate, we have heard from the other side of the chamber a most dreary and depressing story about the housing position in this country. Therefore, I think it is fitting that accurate figures should be given in order to show what is being done and what has been achieved in the past. It may be of interest to the Senate to know that more than 85 per cent. of the houses being built in Australia to-day are for home owners. That is a magnificent figure. We hear a lot about the achievements of our friends in America. Again, it may be of interest to the Senate to know that research discloses that the Americans are proud that home owners occupy 60 per cent. of all houses in America, Yet, the proportion in Australia is nearly 70 per cent., and it is still rising. Surely this is a great achievement and one that answers the criticism that has come from the other side of the chamber.

There are many facets, so to speak, of home building and home ownership. Onethird of the total sum that was expended on housing last year was provided by the Commonwealth Government, through the Commonwealth and State Housing Agreement, the War Service Homes Division, and other agencies. We want to see more and more private investment coming back into the very important field of housing. Under the Commonwealth and State Housing Agreement of 1956, 30 per cent. of the funds provided this year by the Commonwealth for housing is allocated to building societies. The amount provided for that purpose this year is £10,750,000, while last year it was £6,500,000. Those are significant figures. They completely contradict the remarks of Opposition supporters on this subject.

The figures in respect of the number of houses and flats completed also are interesting. The latest preliminary statistics on housing issued by the Commonwealth Statistician confirm the recovery in home building which has been taking place during the last 12 months. These figures exceed expectations. In 1957-58, 74,333 houses and flats were completed, representing an 8.6 per cent. increase on completions for the previous year. That total exceeded the estimate of 73,000 made by the department. That estimate was thought, in some quarters, to be too optimistic, yet the result has been even better. There were 72,905 dwellings - houses and flats - commenced in Australia in the last financial year. That figure was almost 5 per cent. above the 1956-57 total and was the highest since 1954-55.

Those figures show that we have a very good housing record, one of which we may indeed be proud. I point out, Mr. President that a quarter of the houses in Australia have been built in the last ten years. Surely that is something of which this Government can be proud, and so too can the people of Australia who have played a part in this achievement, including those engaged in private industry, the building societies, and those who have done so much towards building homes for themselves. Let me point to something which I think makes the story even better. In those ten years, our population has increased by 2,000,000. Yet we have reduced the overall housing shortage from 250,200, as it was in 1947. to 80,000 at 30th June, 1958. Those are figures that I believe should be blazoned abroad, because Australians may be truly proud of them.

Senator O’Flaherty:

– Where did the honorable senator get them?

Senator Dame ANNABELLE RANKIN:
QUEENSLAND · LP

– I shall give them to the honorable senator if he wants them. They are all here.

I think that we can be proud, too, of the war service homes that are being built, and of the achievements in that connexion. It is worth remembering that this Government, in only nine years, has provided more than £242,000,000 for war service homes, or about 82 per cent. of the total finance for that purpose that has been provided since the inception of the scheme about 40 years ago. In those nine years, we have provided 111,639 homes for ex-servicemen, compared with only 54,541 provided by all other federal governments in the 31 years between 1918 and 1949. It is right and proper that that should be so, because ox-servicemen comprise a very important section of the community. Our whole standard of living demands that we should have good and adequate housing and that we should continue to catch up with the housing lag. Perhaps above all things we need good homes. It must be made easy for those who want to own homes to do so. I say that the record of this Government in the field of housing is indeed a fine one and that it has contributed greatly to the happiness and security of the families of Australia.

I turn now to the great importance of the future development of this country. We all look forward to an even greater Australia than we have to-day. Considerable development has been taking place in recent years in the lonely, distant parts of the continent. For instance, in my own State of Queensland, we have seen the development of mineral deposits in the far north at places such as Weipa and Mary Kathleen. At those places, history is in the making. Development of that kind has been possible largely because we have had stable and sound government in the federal sphere. Mr. President, I ask for leave to continue my remarks at a later date.

Leave granted; debate adjourned.

Senate adjourned at 5.46 p.m.

Cite as: Australia, Senate, Debates, 21 August 1958, viewed 22 October 2017, <http://historichansard.net/senate/1958/19580821_senate_22_s13/>.

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