23rd Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
Assent to the following bills reported: -
Northern Territory (Administration) Bill 1959. Customs Tariff Bill 1959. Customs Tariff Bill (No. 2) 1959. Customs Tariff (Canadian Preference) Bill 1959. Customs Tariff (New Zealand Preference) Bill 1959.
Customs Tariff (Papua and New Guinea Preference) Bill 1959. Excise Tariff Bill 1959. Northern Territory Representation Bill 1959.
– 1 address a question to the Minister for Shipping and Transport. It would appear that recently the Minister had important and farreaching discussions with the Premier of South Australia on the question of broadening the gauges of certain South Australian railways. Will he make a statement to the Senate on the purport of such discussions and the conclusions reached?
– At this juncture I am unable to make the type of statement which I gather that the honorable senator wants - that is, a statement specifying with some exactitude the precise lines considered for conversion, the results of surveys, estimates of cost and the like. I cannot do that as yet. It is true, however, that yesterday I had a long discussion with the Premier of South Australia. As a result of that discussion, I feel confident that there will be some expedition in bringing to a conclusion the exploratory work which must be done before the undertaking can be considered as a definite project - before priorities can be determined, the lines to be converted can be decided, and other questions of that nature can be resolved. The Premier of South Australia and I have decided that we will keep closely in touch for the purpose of checking on the progress of the work being done, and I am hopeful that our discussion yesterday will lead to some expedition in the exploratory work. I also hope that it will not be too long before I shall be able to make the kind of statement which will satisfy the honorable senator completely.
– Will the Minister for Shipping and Transport inform me whether it is a fact that two of the old lighthouse vessels are due for replacement shortly? If it is a fact, can he say whether the vessel which will maintain the Tasmanian and southern Australian lights will be so constructed as to enable her to service our Antarctic bases in addition to performing her ordinary duties? Is it also a fact that payments for the charter of Danish vessels to perform this service have amounted to almost half a million pounds to date?
– It is a fact that three of our lighthouse vessels are reaching retirement age, although in each case there is some two or three years to go before that occurs. Their replacement is being considered now. I do not think that it would be possible to build the type of ship that could perform the duties of a lighthouse vessel, which are many and varied and which occupy the vessel, as the honorable senator no doubt knows, very much during the course of twelve months, and at the same time fit it out for work in the Antarctic.
The figure which Senator Kendall quotes for the charter of Danish vessels to service our Antarctic bases is approximately correct. As I have indicated before, this work is undertaken by the Department of External Affairs and, once again, that department is having a look at the possibility of having built in Australia a vessel which might be used for Antarctic research.
– I preface a question to the Minister representing the the Minister for Primary Industry by saying that in New South Wales there appears to be a very grave shortage of storage for wheat during the coming season. Two years ago the shortage of storage was made good by the wheatgrowers themselves in providing finance for the erection of storage facilities. Will the Minister inform the Senate whether it is a fact that the Australian Wheat Board has conferred with the Department of Primary Industry on the question of the expected shortage of storage space for this season’s wheat crop, with a view to obtaining some financial help from the Commonwealth? If this is a fact, will the Minister give sympathetic consideration to the request?
– I understand that some such statement and some such approach have been made, but in order that the honorable senator may get a detailed reply from the responsible Minister, particularly as to his own approach to it, I ask that the question be put on the noticepaper.
– My question is addressed to the Minister for Customs and Excise. Has the Minister’s attention been directed to a warning issued by the American Atomic Energy Commission to three United States watch and clock manufacturers not to distribute luminous dials containing strontium 90, one of the most feared elements of radio-active fallout, which could damage the eyes or the face of an unsuspecting wearer of these watches? Will the Minister take every care to see that clocks and watches containing this dangerous element are not imported into Australia?
– I have read the article in the press to which the honorable senator has referred, and I have also received some inquiries from representatives of the press on this subject. Inquiries made by officers of my department indicate that, as far as can be ascertained, no such watches have entered Australia, nor have we any record of any Swiss watches containing strontium 90 having entered Australia. I have also contacted the officer in charge of the X-ray and radium health laboratory of the Department of Health who has informed me that he has no knowledge of any of the watches mentioned having entered Australia. He offered the opinion that the amount of strontium 90 in a watch would be so small as not to constitute any danger to the person wearing the watch. Nevertheless, I am having further inquiries made, and have alerted officers of my department to keep a lookout for any such watches being imported from Switzerland.
– I direct my question to the Minister representing the Minister for Health. Is it a fact that vaccines are available in Australia which can be used to immunize people against virus influenza? Are any arrangements being made to institute a programme of immunization against virus influenza?
– Yes, to the best of my knowledge we have vaccines in Australia which can be used for immunization against virus influenza. I should think that the question of arranging for mass immunization is one for the respective State governments. However, if the honorable senator places his question on the notice-paper I shall ascertain from the Minister for Health the actual position in the territories which come under the direction of the Commonwealth.
– I address my question to the Minister for Civil Aviation. ls it a fact that Tullamarine has been chosen as the site of a new airport to replace Essendon airport? Is it a fact that Tullamarine is only 11 miles from Melbourne? Is it a fact also that surveys conducted in the United States of America have revealed illuminating information about the sites of aerodromes to accommodate the larger and higher powered planes now coming into more general use? Has the Minister seen the statement to the effect that American cities have faced up to the problem of the size of future airports, their proximity to cities and the noise that is associated with the more modern aircraft, and have decided that airports must be located well away from cities and housing settlements? Will the Minister review the whole question of airfields in Australia which will be called on to accommodate these modern highpowered planes?
– The honorable senator’s question opens up a very wide field, lt is true that Tullamarine, which is approximately 11 miles from Melbourne, has been selected as the site for an airport which will cater for Melbourne’s growing air traffic. Essendon, because of its size and condition, is rapidly reaching the stage at which it will not be able to satisfy all the legitimate demands of Melbourne’s air traffic beyond the next few years.
The problems of noise, to which the honorable senator has referred, do exist; but I can assure the honorable senator that the decision on the selection of a site for Melbourne’s airport was not taken without the most intense study and examination of the problems. A panel of some 30 people was selected many months ago to inquire into every aspect of the proposed new airport for Melbourne. That panel included not only representatives of civil aviation bodies and those interested in civil aviation, but also representatives of the Victorian Premier’s Department, town planning authorities, road authorities, and similar organizations which would be interested in the selection of a site for an airport. After a most exhaustive examination, that panel unanimously recommended the site chosen. The question of housing, and that of noise, received special consideration, and I can tell the Senate with certainty that the size and layout of the area selected will be such as to reduce the noise nuisance to a minimum. Large buffer areas are to be provided. These buffer areas will be larger than those of most other airports in the world, and certainly larger than the most recently selected sites. Further, the runways will be so angled that aircraft using them will cause a minimum of nuisance to whatever housing happens to be in the area. 1 repeat that the site has been chosen only after a most intensive examination by a broadly representative panel interested in the development of Melbourne and the co-ordination of all the activities of Melbourne as a growing city.
– On behalf of my colleague, Senator Anderson, I address a question to the Minister for Customs and Excise. I preface the question by saying that the Minister, in a recent statement, gave an itemized account of the items subject to excise, and the amount this excise returned in revenue. In this list was a sum of £589,721 for excise on coal. What is the amount of excise per ton on coal, and for what purpose is the revenue raised?
– The excise is 8d. a ton on all coal mined in Australia with the exception of coal won from State mines, such as the State coal mine at Wonthaggi, the open cut brown coal mine at Yallourn, and Leigh Creek. As stated in the question, the amount of revenue is approximately £590,000. The excise is levied for the purpose of financing longservice leave provisions. The money is paid into a trust account which is specially set up to protect this award. State coal mines are exempt because, under separate legislation, they are required to pay a sum equal to 8d. a ton into a long-service leave account. The State coal mine at Wonthaggi already has its own scheme in operation. Other open-cut brown coal mines in Victoria, and Leigh Creek, do not operate under this provision. They make no payments into the fund, and they receive no benefits from the fund.
– Mr. President, 1 wish to ask you a question, and I preface it by saying that the visitors who come into this chamber to see how Parliament works at least are showing an interest in the government of this country. This should be encouraged. The main questions asked by visitors are, “ Who are the various senators? What are the duties of the various officers? What are the duties of the staff and attendants? “ Will you, Mr. President, consider providing a plan of the Senate showing the seating arrangements in the chamber, the names of senators and the States they represent, and the positions of the various officers and members of the staff, this plan to be issued to visitors to the galleries?
– A plan is in course of preparation. I shall look at the further items the honorable senator has mentioned with a view to seeing whether they can be incorporated in the new plan of the layout which will be available shortly.
– I ask the Minister representing the Postmaster-General whether he will ascertain for me precisely why the recent statement by the Postmaster-General on country television services excludes completely the possibility of any country district in South Australia having its own television station in the next phase of television development. Is it a fact that the Goulburn Valley, the Latrobe Valley, Ballarat and Bendigo - areas all closely situated to each other - will each be entitled to separate television stations in the next phase of television development?
– I understand that the statement made by the Postmaster-General about country television services merely outlined the third phase of the development of television services in Australia. It is not yet certain that each of the areas in Victoria to which the honorable senator referred will have a television station. The position will be examined by the Australian Broadcasting Control Board. Public inquiries will be held and persons in the places visited by the board will be invited to express their views as to what is necessary in their districts. After the report of the board has been received, the Government will decide where the new stations shall be placed. If the honorable senator will put his question on the notice-paper, I shall obtain a reply for him, giving the information about South Australia which he seeks.
– My question to the Minister for Customs and Excise is supplementary to that asked by Senator McKellar on behalf of Senator Anderson, dealing with the excise duty on coal. What authority administers the lone-service leave payments to which the Minister referred? Are the conditions of the long-service leave prescribed by an award? I should like information, if the Minister has it at hand, as to the power under which excise revenues are distributed to defray the cost of long-service leave payments.
– I am sorry that I have not the information at hand. I can say only that the Department of Customs and Excise raises the money by way of an excise duty and pays it into a trust account. I do not know at the moment who administers the trust account or distributes the money. If the honorable senator will place his question on the notice-paper, I shall obtain the information for him.
– My question is directed to the Minister for Civil Aviation. In view of the numerous arguments put before members of the Parliament by residents of the area in which the new Tullamarine airport is to be situated, will the Minister make available to the Senate a copy of the report made by the panel appointed to investigate the numerous matters connected with the proposal? Will the Minister, further, say whether the proposal for the construction of this major airport will be referred in due course to the Public Works Committee:?
– I will consider the possibility of complying with the request of the honorable senator to make available a copy of the report of the panel. If copies are not readily available, I shall certainly try to get copies made for distribution to such honorable senators as are directly interested in the proposal. The Government realizes that this is a project of great magnitude, and it proposes to refer the matter to an inter-departmental committee for examination as to when, how, and in what stages the airport should be built. That interdepartmental committee will commence its sittings shortly, and I am hopeful that its report will be available within two or three months. The reference of the project eventually, as a work to be undertaken, to the Public Works Committee would be, I understand, the prerogative of the Minister for Works. I do not quite know what happens at that stage. However, I can assure the honorable senator that this is a work which will be most closely superintended as to purpose, design and construction.
– My question is supplementary to that just asked by Senator O’Byrne. Can the Minister for Civil Aviation give the Senate any figure as to the possible expenditure on this project? Will he indicate which officers will constitute the inter-departmental committee? Will he give earnest consideration to collaborating with the Minister for Works to ensure that such important projects do undergo scrutiny by a parliamentary committee, as distinct from a departmental committee?
– The initial estimate of the amount involved runs to a figure of £8,000,000, spread over some five years. The inter-departmental committee will comprise the senior officers of my own Department of Civil Aviation, the Prime Minister’s Department, the Treasury, the Department of Works and the Department of Air. As to the further suggestion that this matter might be referred to a parliamentary committee, I will discuss that at the appropriate time with the Minister for Works.
asked the Minister representing the Minister for Immigration, upon notice -
– The Minister for Immigration has supplied the following answers: -
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The answers to the honorable senator’s questions are as follows: -
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The following information has been supplied by the Minister for Labour and National Service, the assumption being that the question was directed to sections 29, 29a of the 1947 act, and sections 109 and 111 of the 1956 act. There are, of course, many provisions of the legislation directed at employers, employees and organizations that might equally be described as “ penal “, but it would be imprac ticable to supply information in answerto the honorable senator’s question if it extended to these other provisions -
asked the Minister for Repatriation, upon notice -
– The answers to the honorable senator’s questions are as follows: - 1, 2 and 3. The Repatriation Department does not keep separate statistics of war pension applications made by members of its staff. Obtaining the information desired would be a lengthy and very expensive task, and, in the circumstances, I am not prepared to direct that such a task be undertaken.
asked the Minister representing the Postmaster-General, upon notice -
– The Postmaster-General has now furnished the following answers: - 1. (a) Receivers of a single frequency, but not crystal-controlled type, have been designed by Post Office personnel for local monitoring of transmissions from unattended transmitters of the national broadcasting service. Some experimental work has been undertaken at regional stations to adapt this type of receiver for purposes other than those for which it was originally designed, including the provision of low pass filters to restrict the wide pass band.
It is not considered that refinements of the type mentioned would be necessary to permit adequate reception of broadcasting programmes by the great majority of listeners.
asked the Minister representing the Minister for the Interior, upon notice -
Relative to an answer given by the Minister on 21st April, in which he stated that the Commonwealth had granted rent concessions to the firm of A. E. Goodwin Limited of St. Mary’s, will the Minister advise - (a) How many buildings, the property of the Commonwealth, are rented to private interests; (b) to whom they are so rented; (c) the actual rent paid for each building so rented; and (d) the basis on which the rent is fixed on such buildings?
-The Minister for the Interior has now furnished the following reply: - (a), (b) and (c)-
Message received from the House of Representatives requesting the concurrence of the Senate in the appointment of a joint committee to review certain aspects of the working of the Commonwealth Constitution, in the following terms: -
That, subject to the concurrence of the Senate in the terms of this resolution, the joint Committee known as the Joint Committee on Constitutional Review that was constituted by resolution of the House of Representatives passed on the twenty-seventh day of February, 1958, and a resolution of the Senate passed on the twelfth day of March, 1958, be re-constituted under the name of the Joint Committee on Constitutional Review with the same membership as the firstmentioned committee had immediately before the dissolution of the House of Representatives on the fourteenth day of October, 1958, namely. -
House of Representatives. - The Prime Minister and the Leader of the Opposition, as ex officio members, and Mr. Calwell, Mr. Downer, Mr. Drummond, Mr. Hamilton, Mr. Joske, Mr. Pollard, Mr. Ward and Mr. Whitlam.
Senate. - Senator O’Sullivan (Chairman), and Senators Kennelly, McKenna and Wright.
That the function of the committee be to prepare a report or reports to each House of the Parliament setting forth, so far as the committee thinks it desirable to do so -
further explanation of the recommendations and other matters contained in the report of the Joint Committee on Constitutional Review laid before each House of the Parliament on the first day of October, 1958; and
further information with respect to the considerations and reasons on which those recommendations were based.
That the chairman of the committee may, from time to time, appoint another member of the committee to be the deputy chairman of the committee, and that the member so appointed act as chairman of the committee at any time when the chairman is not present at a meeting of the committee.
That, in the absence of both the chairman and the deputy chairman from a meeting of the committee, the members present may appoint one of their number to act as chairman.
That the committee have power to send for persons, papers and. records, to adjourn from place to place and to sit during any adjournment or sittings of either House of the Parliament.
That the committee have power to consider and. make use of the records of the Joint Committees on Constitutional Review appointed during the Twenty-second Parliament.
That the committee have leave to report from time to time, and that any member of the committee have power to add a protest or dissent to any report:
That six members of the committee constitute a quorum of the committee.
That, in matters of procedure, the chairman, or person acting as chairman, of the committee, have a deliberative vote and, in the event of an equality of voting, have a casting vote, and that, in other matters, the chairman, or person acting as chairman of the committee have a deliberative vote only.
That the foregoing provisions of this resolution, so far as they are inconsistent with the Standing Orders, have effect notwithstanding anything contained in the Standing Orders.
Motion (by Senator Spooner) agreed to -
That consideration of the message be an order of the day for the next day of sitting.
Debate resumed from 30th April (vide page 1169), on motion by Senator Paltridge -
That the bill be now read a second time.
– Prior to the adjournment of the Senate last week, I was addressing myself to the question of increasing the funds of the International Monetary Fund by 50 per cent., and of the International Bank for Recontruction and Development by 100 per cent. I had reviewed the purposes of the fund and was proceeding to discuss some of the activities both of the fund and of the bank. I should like, for a brief period, to resume that consideration.
I have already referred to the technical services that the International Bank for Reconstruction and Development provides for its members. Those services are set out with some particularity on pages six and seven of the report of the bank for 1957-58; its 13th annual report. Perhaps I may advert to three matters to illustrate the type of activity in which the bank engages. Being an international body, and having on its staff individuals who are really stateless, the bank is peculiarly qualified to intervene in disputes between member nations and in matters in which it considers that such intervention might be of use to particular members. Three instances of such intervention are recounted in the thirteenth report. The first relates to the Suez difficulties, when the United Arab
Republic took possession of assets belonging to foreign companies and resumed the Suez Canal. The bank intervened, provided the technical services of its officers, and reached an arrangement for the payment of compensation by the United Arab Republic to those whose property had been expropriated. That involved a series of negotiations extending over six months, and an agreement ultimately was reached in the matter.
That, unquestionably, was a very real service, although one normally outside the function of the bank. Such a service is possible only in the case of an institution of the type that 1 have referred to. The second thing is that it has intervened and made its good offices available in the discussion between India and Pakistan regarding the sharing of the waters of the Indus Basin. Those talks have not reached finality, but they have been proceeding since 1952 and the parties have been kept at arm’s length in the interim. That is another excellent instance of the type of service the International Bank can render by reason of its status and its statelessness. Finally, without being invited to do so, the bank embarked on a study of the power resources in Italy where it was thought that nuclear power might be readily adapted for the purpose of generating power as long as it could be done on an economic basis. The bank made certain proposals to the Italian Government and suggested a study of the problem in relation to that country. The offer was accepted, and the very interesting course of events is set out at page 7 of the bank’s report.
I should like now to pass to page 11 of the report and to refer to the borrowings by the International Bank. It is well understood that the bank has relatively little capital resources, having called up only one-fifth of the capital to which the 68 nations are committed. The bank gets most of its funds from borrowing in the markets of the world. At page 11 there is a table headed “ Bank Borrowing “ and it shows in very interesting graph fashion the fact that the borrowing in nearly all cases is dollars; in fact, the total borrowing of United States dollars far exceeds the borrowing of currencies of other countries.
– The bank is in the United States, that is the reason.
– It is a bit more than the fact that the money is there.
– And the lending institutions are, too.
– There is an additional reason, and it is referred to at page 23 of the report of the executive directors in December, 1958. I refer the honorable senator to that page, where it is pointed out that one of the reasons that so much of the money borrowed has been raised in the United States and elsewhere is that whoever lends looks primarily to the United States backing of nearly 3,000,000,000 dollarsthe uncalled capital of American dollars. I think it will be appropriate if 1 read a brief passage from page 23 making that point. It states -
The next paragraph says this - lt is understandable that investors in the Bank’s obligation should attach particular importance to the unpaid portion of the subscription of the member in whose currency those obligations are issued, for the member can discharge its liability in respect of those obligations in its own currency and without encountering any transfer problem. With all due allowance for considerations of this kind, the Executive Directors consider it unfortunate that such a degree of reliance should appear to be placed upon the guarantee of one member of the Bank to the apparent exclusion of the guarantees of other members. But the fact remains that, to-day, this attitude does exist and great weight must be attached to it.
It is a very significant factor and the United States of America is the biggest contributor of capital to the bank as well as the greatest lender to the bank. The directors hope that the position will be reversed as other currencies strengthen, and they put the need for American dollars and the backing, above all, of America for new loans that the bank thinks it will need to float in the next decade, as one of the reasons for the increase of capital that is now mooted under the bill and under the proposal. As the honorable senator knows, no money will be subscribed in respect of this increase of 100 per cent., and it merely gives the benefit of uncalled capital, particularly American capital, so as to give confidence to those from whom the funds of the hank are drawn and will enable them to lend freely. In short, the uncalled capital of the United States of America is the main asset upon which, in fact, the bank does borrow. We have to concede that that is not a good thing; we have to agree with the executive directors to that extent. As the bank says, if we are to proceed with a degree of assurance down the next decade, we must have the backing of further uncalled capital from the United States. The honorable senator’s query at the moment was right on the point that I was making.
While 1 am on that matter, 1 shall refer again to pages 52 and 53 of the bank’s report, which sets out the borrowings that have been made by the institution, lt is interesting to note that the enormous number of 1,458,410,000 dollars were borrowed; only 35.000,000 Canadian dollars were borrowed; 21,000,000 Netherlands guilders worth of dollars were borrowed; £26.000,000 sterling, expressed in dollars, were borrowed; and 1 1 6,000,000 Swiss francs, expressed in dollars, were borrowed. So one sees the dominating influence of the American lenders and the tremendous call there is on dollars. That is reflected, too, in a statement that appears in the executive directors’ report at pages 12 and 13, showing quotas and fund holdings of currencies and gold. I am speaking of the Monetary Fund and not the bank. What is true of the bank is true also of the fund. If one looks at the statement on pages 12 and 13 he finds that the funds are depleted.
For instance, of Australia’s total quota the bank has in hand 96 per cent, of our contributions. In other words, the world draws very lightly upon Australian currency.
– Is that what that means?
– That is the way I interpret it, Senator, without doubt.
– I thought that was the amount of the quota that had been subscribed by the country contributing.
– The last column of the statement is headed “ Fund Holdings of Currencies”. That means, what the fund is actually holding. If the honorable senator will look at the figure shown against the United States, he will see that the fund holds only 29 per cent, of the total quota That is indicative of the drain upon the dollar resources of the fund. That is my interpretation of it.
– What about France?
– The percentage of quota shown against France is 150, which indicates that the fund has been drawn upon by France to a very considerable extent. The bank is holding not only her quota but also an additional amount. I should imagine that France has reached the position of placing its own currency into the fund and drawing upon the fund to an unusual extent. That is my explanation of the position. Obviously, the fund is holding a great deal of French currency and France, seeking dollars, is making shortterm drawings upon the fund. That does not reflect favorably upon France. Quite a number of countries have drawn from the fund far more than 100 per cent, of the quota subscription. The fact that the fund is holding the currency of those countries in excess of the quota is to me an indication that those countries have drawn heavily upon other currencies, and have replaced such drawings with their own currencies. A study of the table confirms the accuracy of my suggestion that dollars are the be-all and end-all of the International Bank. Perhaps I am stating the position a little too strongly, but my statement represents at least an approximation of the position.
– I presume the honorable senator is referring to the table covering the transactions of the International Monetary Fund.
– The importance of dollars in respect of the International Monetary Fund for exchange settlement purposes is well expressed, but it has nothing to do with the International Bank.
– I agree that it has nothing to do with the International Bank. I thought that I had made that point clear when I was speaking about the tremendous demand for dollars. I said that the same tendency was reflected when one turned to the transactions of the fund and, therefore, that my proposition applied to the fund and the bank. I am not confusing the two organizations; I am merely showing that the same trend is apparent in both.
The balance-sheet which appears on pages 46 and 47 of the report shows the enormous scope of the fund. Its total assets amount to 4,597,000,000 dollars, included in which are outstanding loans that have not been repaid amounting to 2,828,000,000 dollars. The fund’s borrowings total 1,658,000,000 dollars and its resources to meet losses total 350,000,000 dollars, which amount has been built up during the twelve years of its “Operation. That amount is in two categories, first, the fund’s profits which are transferred, and secondly, the service charge of 1 per cent, which, under the charter, must go to resources. Capital stock is shown as 1,881,000,000 dollars. Although those figures seem to be astronomical, they pale into insignificance when compared with the transactions of some of the member countries. When one considers the annual budget of the United States of America, one feels that this institution does not operate on such a mammoth scale after all. Although, in relation to many of the world’s banking institutions, its transactions seem to be extraordinary, as I have said they are relatively small in comparison with the budgets of the United States of America and Great Britain.
The report of the executive directors contains some very interesting comments. The following appears on page 21: -
During this period-
That is, the twelve years’ operation of the bank - there has not been a single failure to pay principal, interest or other charges on Bank loans.
That is an outstanding record having regard to the fact that the bank has loaned some 4.1 billion dollars.
The Executive Directors, though gratified by the Bank’s successful record both in borrowing and lending, are concerned that the Bank should continue to play its full part in promoting economic growth and better living standards by raising productivity especially in the less-developed areas of the world. As recognized by developed and underdeveloped countries alike, this is the most important and challenging economic task confronting the world community to-day.
The problem is one of staggering dimensions. To bring about even modest rates of growth in the underdeveloped areas generally will require the investment of capital in large amounts. In fact, the magnitude of the problem mav he said to have increased since the Bank was organized; for in terms of money, the capital requirements have grown as currency values have declined; and in real terms the ability of the underdeveloped countries to absorb capital has improved as the development process has gathered momentum.
That statement gives point to the comment that I made on Thursday last - that the Labour Government of 1947 felt that the bank was concerned primarily with the reconstruction of countries which had been devastated by war, and secondly, with the development of the underdeveloped countries which, in our view, meant to develop facilities in those countries where the stanwards of living were exceedingly low. It was on that basis that Mr. Chifley, when introducing the relevant legislation, said that it was unlikely that Australia would ever borrow from the International Bank. The fact is that Australia has borrowed to an appreciable extent - some 317,000,000 dollars. I was surprised and somewhat shocked to learn that Australia had borrowed from the bank. I was also surprised and somewhat shocked to learn that the bank had been prepared to lend money to Australia when we enjoy probably the highest standards of living to be found anywhere in the world.
– Australia is still an underdeveloped country.
– That is perfectly true in that Australia is capable of greater development, but when one considers the great number of the essentials that we produce in ample quantities to meet our own needs, it is hard to envisage Australia as an underdeveloped country in terms of the living standards of the people. When we were in office in 1947 we wanted to ensure the provision of capital moneys to the Asian countries for hospital and health purposes, education facilities, the development of power, water conservation, afforestation schemes and the like. But in our mind was the main objective of raising the standards of living of the Asian people. When I speak of an underdeveloped country in this context, I have in mind the standards of living of the people and not so much the development of the country’s physical resources. The bank, perhaps, has not realized the expectations that we of the Labour government had for it at that time.
I shall now deal briefly with the International Monetary Fund, the objectives of which are set out at length in the charter and are summarized on page 1 of the report which 1 shall not read again. Page 2 of the report contains a survey of the fund’s activities. There, the directors said -
About two-thirds of the total of 4.1 billion dollars has been arranged in the last two years. The needs for assistance in this recent period have arisen from a wide variety of causes which have revealed the many-sided nature of the Fund’s financial activities.
The largest single transaction in this period arose out of the Suez events which caused sterling to come under pressure. In December, 1956, the United Kingdom drew 561,000,000 dollars from the Fund and entered into a stand-by arrangement for 739,000,000 dollars - a total of 1,300,000,000 dollars. The assistance was granted on the basis of a declaration by the British Government that strict financial and credit policies would be pursued, that quantitative import restrictions would not be reimposed, and that the value of sterling would be maintained. This was an emergency situation in which the massive use of the Fund’s resources was required to prevent a major crisis in the international exchange structure.
On page 3, we find this very useful summary -
The Fund’s transactions have been fully described in its Annual Reports, but enough has been said here to indicate that the assistance obtained from the Fund has been requested under a great variety of circumstances: in an emergency at the time of the Suez events, in conditions of boom and expanding world trade, and in periods of recession, as well as in a wider context when stabilization efforts have been undertaken. The only conclusion can be that the Fund must remain prepared for diverse contingencies, many of which cannot be clearly defined in advance.
The directors are leading all the time to the argument that the fund needs increased subscriptions, and, in the latter part of the next paragraph, they say -
Considering that the use of the Fund’s resources in the form of drawings and stand-by arrangements come to over 2.7 billion dollars in the two years from October, 1956, to September, 1958, the resources of about 1.5 billion dollars presently available cannot be considered adequate in the light of past experience to meet such calls on the Fund as may suddenly be made. This is even more evident if it is borne in mind that the Fund must always maintain enough liquid resources to give its members confidence that they have a second line of reserves in the Fund.
On pages 4, 5 and 6, they deal in a most interesting way with the drawing rights of members, and they point out that, under what they term a gold tranche - that is, a quota of the subscription that consists of gold - a member has an almost inalienable right, an unquestionable right to withdraw currency up to that value at any time. Then, based on what they term to be the first credit tranche - the first 25 per cent, of the quota above the gold tranche - they lay down the terms and conditions on which all later ones are available. I refer anybody who is interested to pages 4, 5 and 6 in that connexion.
The new proposal takes special account, in relation to both the fund and the bank, of the increased status of three countries - Canada, Germany and Japan - and enables them to go ahead of the 50 per cent, increase. Special quotas are made for them by reason of their major influence and increased status in internation 1 trade.
I have only two other comments to make. I should like to refer the Minister, for the benefit of the Minister for Trade (Mr. McEwen), to the letter that was written by the secretary of the United States Treasury to President Eisenhower on 18th August last, when, in addition to suggesting increases in the capita! of the fund and the bank that we are now considering, he indicated that the Senate had adopted a resolution calling upon the National Advisory Council to undertake a study of the feasibility of an international development association as an affiliate of the International Bank. He writes this interesting comment -
The Association would finance developmenprojects on the basis of long term loans at reasonably low interest rates repayable in whole or in part in local currencies. In the course of its study, the Council will also explore the possibility that such an affiliate of the Bank might prove to be a means, supplemental to our own national programs, for assuring productive investment of some part of the various local currencies becoming available to the United States through the sale of agricultural surpluses or other programs.
In reply, the President said he favoured an investigation. So far as I know, nothing has come of that and I shall be interested to learn from the Minister, in due course, whether there have been any negotiations or developments in relation to an international development association. But. having regard to our own difficulties in the world markets to-day, it is quite interesting to note that the United States secretary has pointed out that the United States will be selling in many countries for local currencies at a long term, and this proposal is intended to create an investment for those local currencies in the hands of the United States.
Normally, the United States sell only for dollars. Its new policy of helping under-developed countries and these poorer countries by letting them have surpluses at long terms, and at low rates, taking for its remuneration the local currencies is a very worthy thing from the viewpoint of the hungry peoples of the world, but it reacts disastrously upon Australia in its traditional markets, as the Minister for Trade announced recently. But we can assess what is in the mind of the secretary to the Treasury. The United States says. “ Having made this generous gesture, having got ourselves a lot of local currencies that we do not want, we have still to find an outlet for them and put them to productive work “. That is obviously only in the country from which the currency originated. Such a policy, in due course, is good but, of course, it is strengthening all the time the financial position of the United States in the world. I am not saying that is a bad thing; I am merely drawing attention to the keen thought that underlies the promotion of this particular association, and I am interested to know whether the Minister can tell us how far that suggestion has progressed.
The Deputy PRESIDENT (Senator the Hon. A. D. Reid). - Order! The honorable senator’s time has expired.
.- I regret that the speech of the Leader of the Opposition (Senator McKenna) was curtailed because I think the Senate is indebted to him for having devoted attention to this most important subject. I rise to speak, with real trepidation and an acknowledgment of complete inability to offer anything new to the subject, solely because I cannot resist the temptation to intensify my efforts on a subject so inspiring. I personally regret that so few senators are present for the debate on this subject and, having regard to recent references to the liaison between Parliament and the press, I wish to be forgiven for saying that I think the press detracts from Parliament’s efficacy when only one representative of it is in the gallery to report this debate. I am quite sure that indicates that newspapers have no interest whatever in the subject-matter under discussion.
– The Adelaide “ Advertiser “ is represented.
– That might lead me to revise my last remark. However, this Jack of interest by the press in our discussion of institutions which impose great international obligations on Australia but also are of great potency for the development of Australia in the foreseeable future, indicates to me a dwindling view by the press of the matters in which it is thought the public are interested.
The legislation deals with a proposed adjustment of the quotas of members of the International Monetary Fund and a proposed increase of the capital stock of the International Bank for Reconstruction and Development. As 1 understand the matter, the proposals to which this country has been committed, and of which this Parliament is now asked to approve, are to increase the quotas of members of the fund by 50 per cent, and to increase the commitment for stock in the bank by 100 per cent. There will be certain very special advantages in that respect to three countries - namely, Canada, Japan and Germany. I mention that aspect in order to emphasize the extent to which these proposals recognize the economic expansion in the post-war world of Germany and Japan, and, indeed, of our sister dominion, Canada. I interpret the unusually large quotas which those nations are accorded, and the unusually large subscriptions by them to the capital stock of the bank that are accepted, as a recognition of the growing economies of those three countries and the need for an extension of support for their economies from this fund and this bank.
We have been furnished, not only with the annual report of the bank, which is a most stimulating document, but also with a factual statement of the reasons which actuated the directors and governors controlling the fund and the bank to agree to these proposals. Suggestions were put to the executive directors of the fund and the bank last year. Tn their report, they state that they reached the conclusion that a substantial enlargement of the resources of the fund was highly desirable. They go on to explain the reasons why they believe that the fund’s resources should be expanded. Then follows, to my mind, a most encouraging survey of the degree to which the establishment of the International Monetary Fund has contributed to evening out the troughs and heights of booms and recessions affecting sometimes the world and sometimes only one country. They point out that the main tasks of the fund are to promote international monetary cooperation and exchange stability, and to give financial assistance to member countries.
Dealing with the task of promoting exchange stability, they refer to a matter to which Senator McKenna referred. I did not know how great a financial crisis had occurred, or the extent to which the fund contributed to a solution. The directors state that the largest single transaction in this period arose from the Suez events, which caused sterling to come under pressure. They call that a major crisis. They reveal that something like £600,000,000 was loaned by the fund, and - as appears from page 16 of the report - another £738,000,000 was committed by the fund in support of the United Kingdom, on stand-by arrangements, involving a total support programme for United Kingdom currency, arising out of that crisis, of about 1.3 billion American dollars. I ask the Senate: Were we conscious that the Middle East disturbance, apart from its political implications, imposed such a strain on sterling currency? Until I examined this bill and endeavoured to understand this report, I certainly had no comprehension of the magnitude of the extent to which the International Monetary Fund had contributed to the stability of sterling currency. Neither did I have any comprehension of the crisis through which sterling currency passed as a result of the Suez incident.
We recall the reasons that were given for intervention in Suez by the United Kingdom at the time - namely, to secure an uninterrupted flow of oil and to prevent the machines of Britain from grinding to a stand-still. Arguments were advanced at the time that intervention was ill-advised, merely on the ground of economics and quite apart from the dangerous political repercussions that might occur. When I reflect that the Suez crisis caused such a drain on sterling, and that the International Monetary Fund supported sterling to the extent to which T have indicated, I am glad to know that there is such a fund, designed to even out variations in currencies and bring about economic stability. The fund is contributing to the economic good of the countries of the world in a magnificent way.
– lt certainly shows up Suez in another light.
– It does that. The countries that have subscribed to this fund have made a comprehensive gesture in offering to support a member’s economy until it can put into operation the legislative programmes that it thinks necessary to correct a temporary imbalance. It would be more apposite to associate my next observation with comment upon the great performance of the bank itself, but I would just mention that Senator McKenna seemed to say last Thursday, when discussing this subject, that Labour felt that money, a commodity representing - quite indirectly, but in the aggregate - people’s savings, should be made available without cost or payment in the form of interest. I should have thought that the value of access to this fund for the correction of currency instability would warrant the payment of almost any rate of interest. As the directors say, the inflationary conditions that have been a marked feature of the different countries of the world since the war - a circumstance which I find quite natural - all demand control on the part of the Government of the country. If, as happened in 1931, you had no general fund from which to make a contribution to a particular country meeting a crisis, you might have a continuous series of imbalances between receipts and expenditure such as occurred in Austria in 1931 and then travelled through country after country until we had what we now call the world depression.
The report points out that in late 1956, and early 1957. we experienced conditions of recession. I invite those better informed within the Senate to enlighten me. but I have the feeling that the existence of this fund contributed in no small degree to the evening-out of the situation that was created by that recession. As the report points out, not only do you have the correction of recession, but also the levelling off of booms. Therefore, when you find that the resources of the fund have been drawn on to the extent of 4.1 billion dollars, and that the remaining resources under control - unless quotas are adjusted - have been reduced to about 1.5 billion, you see that it is quite natural that the directors should consider the resources available are not reasonably adequate for the calls that may be made on the fund, having regard to past experience. Therefore, it would be a matter of surprise if the requisite number of assents to enable the funds controlled by this organization to meet any demands in the foreseeable future were not forthcoming. 1 have noted the need to refer to a fact which Senator McKenna has already mentioned. To me it is so arresting as to bear repetition, lt appears at page 4 at the directors’ report and is to the effect that all the resources made available by the fund before 1956 have now been repaid, with the exception of 36,500,000 dollars, and that has not been outstanding for a protracted period. Funds are made available not for long-term repayment but rather for a triennial period. It is, in fact, a revolving fund and such as to repeat the usefulness of the scheme every time there is a borrowing. That to me indicates a greatly multiplied efficacy as compared with lending on a long-term basis.
One other fact produced by the directors, in support of the view that the quota should be readjusted, is that in the last decade the volume of world trade has almost doubled. I may be wrong, but I suppose that in dealing with a monetary fund of this sort the relevant aspect is the amount of money required. That being so, it is quite obvious that the directors show wisdom in anticipating that greater resources than have been available during the last fifteen years will be needed to maintain the stability of currency in, and to finance, particular countries during periods of crisis over the next ten years or so. To me, it would be a matter of great inspiration to find a world organization of this sort insisting on a thoroughly business basis of operation and. at the same time, having the wherewithal to ensure to countries the finance necessary to prevent those ruptures which cause disaster in both national currency and the savings of citizens. We witnessed several instances of that after the first World War and during the financial depression.
Having said that about the fund, may I now make one or two remarks about the International Bank for Reconstruction and
Development. Although we are undertaking a subscription of stock and are increasing our present holding, I understand, by 100 per cent., we are doing it on a basis whereby no cash or currency is required. We are simply underwriting the shares, so to speak. Why are we doing that? We are doing it for the very forceful reason that, the bank having established itself as worthy of credit and therefore able to borrow in all the reputable money markets of the world the moneys that it wishes to lend to undeveloped countries for their improvement, those who lend to it may look to the uncalled capital and, seeing a proper array of reliable signatories, may know that in case of a call on the bank for repayment they can have recourse to that uncalled capital which operates as the guarantee for the ultimate repayment of their loan.
As I understand it, our purpose in increasing our stock investment in the bank, just by undertaking to take out and pay for it if called on, is not to give the bank capital which it may lend to undeveloped countries, but is to reinforce its capital so that those who are prepared to lend their moneys to it will have the guarantee that our subscription will be paid if that money is needed for the ultimate repayment to the lender.
I do not pretend to have nearly the experience of the Leader of the Opposition in the borrowing and lending of money, but I have an innate idea that, if I were a lender of money in any capacity, I would require a proper rate of interest for it. Therefore, when I look to the funded debt of the bank and see that it owes 1.4 billion dollars to American investors, 35,000,000 dollars to Canadian investors, 21,000,000 dollars to Netherlands investors, 26,000,000 dollars to sterling investors, and Swiss francs to the equivalent of 116,000,000 dollars, I think the worst outlook one could have would be to advocate a policy whereby we would expect the bank to borrow without paying the lender a proper rate of interest.
I have an old-fashioned faith that if the bank can lend money to an undeveloped country to enable that country to reap rich benefits from marrying international finance to its huge labour resources, we can provide for the fertilization of the resources of that undeveloped country. If I may be allowed a little enthusiasm on such a mundane matter, I emphasize that through what some people would call machinations of the monetary institutions, but what I would call the method of the money-lenders of the world we can build for reconstruction and development. We can build for the very purpose so often advocated by Labour.
Labour often advocates the advancement of money for the purposes of peace. How glibly honorable senators opposite ask, “ Why should not money be advanced for the purposes of peace when it is so readily forthcoming for the purposes of war? “ Here we have such an instance. The International Bank, constituted by the guarantee of each corporating country, is able to build up an international credit. lt is able to borrow to advantage and then re-lend, not for purposes of immediate mercantile profit, but for long-term developmental projects in order to increase the standard of the economy of particular countries. There is - and let every Labour senator recognize it - a commitment by people who have money, through this bank, for the very purpose of promoting development in antithesis to expenditure on war, reconstruction now being complete, I think, as far as the bank is concerned.
The figures supplied to us by the directors show that in the period of the bank’s experience loan commitments totalling 4.25 billion dollars in no fewer than 49 countries have been incurred. In its borrowing over a period of twelve years, the bank has been able to establish credit in what it calls the leading capital markets of the world - from investors in more than 36 countries. As to the rate of increase in the demands made on the bank, the report shows that for the year ended 30th June, 1957, loans totalled 388,000,000 dollars, and that for the year ended 30th June, 1958, they rose to 711,000,000 dollars. So the expansion of the bank’s commitments is obvious. When we realize, as Senator McKenna pointed out, that there has not been a single failure in the history of the bank in the payment of principal, interest or other charges on the bank’s loans, that the borrowers have been undeveloped countries, and that we have passed through a decade in which the international stringency has not by any means been insignificant, I think we ought to be proud of this opportunity to give some consideration to a project that will push for ward, I hope, the idea of the development of countries to the stage where their economies are on a common level.
It is coming to be recognized that America’s prosperity, as evidenced by a surplus of dollars, does not really mean much if India is poverty stricken. Perhaps I may be allowed to take those two countries to illustrate what is in my mind. The recognition is growing that if a two-way trade between those two great masses of population could be established on a basis of equal productivity, both countries would derive benefit. The purpose of this bank in developing the undeveloped countries to a common level of prosperity is, I believe, to multiply the channels of international trade, with the object of greatly improving the economic conditions of all the countries concerned. For that purpose it is proposed to increase the resources of the bank in the manner that I have mentioned.
I have noted, Mr. President, that in their report the directors have emphasized, as the most outstanding feature of this borrowing that has enabled the bank to be so successful, that the investors have relied on the fact that the bank has recourse to the United States guarantee, which backs the bond of the bank to the extent of 2.5 billion dollars. The bank, I think very naturally, regrets that reliance on its credit is so centred on that United States guarantee. Of course, having regard to the troubled times through which we have passed, and when we remember that sterling has been brought to a precarious position of weakness not once but several times in the post-war period, it is natural that the investors so far should have relied on the United States Government guarantee. As subscribers to the bank, I think that we should be tremendously grateful to the United States for making its credit available to the bank so that it would be the mainstay and the prop of the bank’s solvency, thus enabling this exciting work to be continued and expanded. I am sure that the directors of the bank emphasize this fact to make us realize that, as world trade grows and currencies are stabilized, particularly since Japan and Germany are coming back into the trading community with such reliability and solvency, in the next decade the position may be that not only American dollars, but also sterling and other currencies, will lend their aid, and so make a broader base of support for the repayment of loans to the bank.
I wish to add only one other comment, Mr. President. When the directors recommended an increase of 100 per cent, in the subscribed capital of the bank, they pointed out that they had in view not merely the next few years, but what they called a “ substantially longer period “. I emphasize that we are not c°’ng t0 Pav this increased capital, except in case of need; we are going to subscribe it only in order to give added guarantee resources to lenders. It is expected that that addition will be sufficient for what the directors call a substantially longer period. In the case of the bank, as well as the fund, special consideration has been accorded to Canada, Germany and Japan. I do not wish to repeat what I said on that matter in relation to the fund. To my mind, that is probably a factor of great significance, recognizing the degree to which Japan and Germany particularly, our former enemies, have been built up into prosperous trading nations. I hope that they will never abuse the opportunity that has been given to them. I hope, too, that we will recognize the tremendous contribution that has been made by United States dollars to accelerate the reconstruction and development of those countries over the last ten or fifteen years, so that they would not fall prey to Communist ideas.
Turning from the reasons for the business programme of the bank, I wish to say something about the bank’s activities as disclosed in its annual report. 1 do not propose to ask the Senate to bear with me for very long. All that I have to say will be found in the report; nevertheless, the report is so encouraging that I cannot resist the temptation to comment on it. The report points out that the great expansion of funds, which is illustrated by the fact that, while the loans for 1957 were 388.000.000 dollars, they had increased to 711,000,000 dollars in 1958, was not merely an accident. The report points out that the projects to be financed by those loans are the results of long-term planning and negotiation. In this respect, the report refers to a conspicuous example, involving a loan in September, 1957, for the Yanhee multi-purpose project in Thailand, the largest single development scheme of its kind ever to be embarked on in that country and one of the largest in Asia. The proposal was first brought to the bank in 1953, and the loan was made in 1957. If the Minister would be so good in his reply as to relate that project to what was referred to by Mr. Casey in his statement on external affairs as the terrific project being undertaken in the Mekong Valley in Thailand, 1 would be most obliged.
The next part of this report is of significance in relation to another part of Senator McKenna’s references. It will be remembered that Senator McKenna invited the Minister to comment upon the establishment in America of an affiliated organization, the Development Loan Fund, lo finance long term sales of American produce to undeveloped countries. In this report, the bank directs attention to what it calls the beginning of what promises to be a fruitful relationship between the bank’s operations and those of the Development Loan Fund The bank instances the fact that loans were made by the fund tei projects in India and in Honduras during the year. I should like to know the significance that attaches to that organization, which I understand to be a purely American financial organization having purposes parallel to those of the Development Bank.
Senator McKenna also referred to technical services, as the bank called them, in respect of a great number of activities. The report reveals that, with the assistance of the bank, there was a settlement of the terms of compensation to be paid by the United Arab Republic as a consequence of the Suez Canal incident. As I have pointed out before, backing was given to sterling in connexion with that. I suppose one of the most interesting studies in which one can engage is to try to penetrate the degree to which a masterful management of money can have its effect upon a crisis such as Suez. I just throw this idea out provokingly, so to speak, as a challenge - not because I know to the contrary - thai if the financiers have used such crises for financial enrichment - the usual accusation made against financiers - money is a medium which, if thoughtfully applied, has immense possibilities for ironing out difficulties that might otherwise flare up into war.
There have been references to the use of the bank’s good offices in the discussions to try to promote agreement as to the sharing of the waters of the Indus Basin between India and Pakistan, one or’ the things underlying, as I understand it, the Kashmir trouble. Even our own Chief Justice’s superlative ability to negotiate was not equal to bringing the two parties to that dispute to an agreement. Reference has also been made to the project for nuclear power development in Italy, lt seems to me that if nuclear power could be established there for commercial purposes, an enthusiastic support for the programme of this bank would perhaps enable us in our own lifetime to see the fulfilment of a real commercial programme of development, and the increased prosperity of countries to which the benefits of this bank’s lending will be accorded. I should think that the better understanding that that would promote as between the nations of the earth would be a great force for the removal of causes of disputation which in the past have led to war. And so I just express the thought, Mr. President, that we should be not so despondent as some of us have been.
The bank insists on operating on a thoroughly business basis. Throughout their report the directors point out that money is not a commodity that you can shovel out of some dark and dingy corner and say, “ Pennies for the poor “; money is only of value to those who receive it if the value is retained in it. And value can be retained only by the creation of assets which usually come, not from speculation, but from work. The bank insists that money should b? treated in that way, and therefore its activities are on a strict lender-and-borrower basis - not on a pension basis or a bonus basis or a subsidy basis - so that each may receive the benefit. If that is the means whereby these efforts are put forward, do not we see in this organization an actuality that not only will link one nation with another and give them a common bond, but will expand them and uplift their economic prosperity?
.- We have been informed by the Minister for Shipping and Transport (Senator Paltridge), in his second-reading speech, that the purpose of the bill is to obtain the approval of the Parliament for an increase of Australia’s subscription to the International
Monetary Fund and the International Bank for Reconstruction and Development. How did these institutions come into existence? Answering my own question, 1 say that they were established to meet the urgent post-war needs of nations for bank credit. Therefore, primarily, we are responsible for the creation of both institutions, which were considered to be necessary at the time. As has been said and admitted, the institutions are predominantly American in their origin and in their purposes. We have to watch two forms of domination from which the world has always suffered. The first - military domination, which must be resisted, and the second is creditor domination, which also must be resisted. All privately owned institutions, particularly banking institutions - this dates back to the thirteenth century - have as their objective creditor domination, which is an evil to be resisted as military domination should be resisted. The real reason for the increase to which I have referred is the depreciation in the purchasing power of national currencies as a result of inflation which could be controlled by governments if they were so disposed, but to date they have done nothing. On page 3 of their report the directors have stated -
The correction of inflationary conditions requires internal corrective measures, and one of the principal benefits of Fund assistance is that it gives time for these measures to take effect.
Those remarks do not state specifically how inflation can be corrected. The directors have uttered only the pious hope that it can be corrected in some way or other. Reference is made to this subject on page 6 of the report in these terms -
While reserves of gold and foreign exchange of countries outside the United States have increased by about 50 per cent, in that period, Fund quotas have, with minor exceptions, remained at the amounts determined in 1944; and the rise in dollar prices by at least 50 per cent, since that date has correspondingly reduced the real value of the Fund’s resources.
Why were dollar prices raised? Who was primarily responsible for raising dollar prices with the result that the fund’s resources were reduced to the extent to which the directors have referred? Undoubtedly, dollar prices are controlled by the fund in collaboration with the United States Government. Senator Wright’s pious, wishful thinking does not help us in any way. Although his hopes and statements may be a tribute to his heart, certainly they are not a tribute to his head.
The New York correspondent of the “Australian Fnancial Review” of 16th April has written to the effect that Mr. Per Jacobsson, managing director of the International Monetary Fund, stated that inflation discouraged savings of investment, and that unemployment and prices would be reduced by increased production. Primary and secondary production throughout the world has increased. America has mountains of primary products which cannot be disposed of at a profit. In Australia we are experiencing a slump in wheat. If we were to increase production, as has been suggested, how would we benefit? We would merely have larger surpluses which could not be disposed of. In their report the directors have made no suggestions as to a remedy. The paragraphs read by Senator McKenna indicate that the directors realize that a desperate position is developing. Here we have men credited with being thoroughly qualified for the positions that they occupy who can merely emphasize the obvious. They state the effects, but utter not one word as to the case and the remedy. We must be critical of this report and not accept the statement of the directors that everything will be all right if we leave matters in their hands.
What is the position to-day? America has approximately 5,000,000 unemployed, plus a permanent pauper population of some 20.000.000. Senator Wright has stated that Germany and Japan are prosperous, but there is increasing unemployment in those countries. England has 620,000 unemployed, and the number in France is increasing, largely as a result of the depreciation of the Franch franc. Instead of giving the world a lead, the directors are talking, as they did in 1925. of reverting to the gold standard. If that is done, the position will become worse. The late Montagu Norman, Governor of the Bank of En-land at the time, and his Wall-street advisers, together with Dr. Shacht, then of Germany, put us on the gold standard in 1925, and by 1931 we had chaos in every country in the world. Their hopes that a reversion to the gold standard would improve the position were not realized. Things went from bad to worse. Are we to learn any lesson from our experience in those days? Are we to accept the directors’ statements in connexion with the manipulation of the currencies? They state that internal action must be taken. What internal action has America taken to maintain the stability of the dollar? What internal action has any other country taken to maintain the stability of the currency peculiar to it? What action has been taken in Australia?
The directors have not taken into account that labour time and the subsistence wage are diminishing factors in production. Almost automatically in these so-called prosperous countries there are increased surpluses which cannot be disposed of at a profit, increased unemployment and increased poverty.
Banks are not run for charitable purposes. A banker is essentially a trader in credit for a profit. The International Bank is interested in Australia because money can be invested in this country at a profit. If there is no likelihood of profit, no investment is made by the bank. Some countries make charitable donations in the form of food and machines to the under-developed countries, but that kind of assistance does not help them very much. Under-developed countries must be encouraged to become self-reliant and self-supporting, but the banks do not want that to be so any more than they want their debtors to become selfsupporting. All that concerns the banks is the extent to which they can capitalize the resources of the country by lending money at interest. If there is no interest, the banks are not interested.
The position, as I see it, is this: Provided another world war does not occur, these countries must take much more progressive steps than they have been taking in the past to re-organize their internal economies so that the power to consume will approximate the power to produce. With increasing production in all these countries, there should be an increase in the power of all those who do the actual work to consume. But the reverse is the case. For instance. Qantas Empire Airways proposes to spend £4,250,000, subject to obtaining permission from the Government, on the building of a palatial hotel in Sydney to house people who are already well provided for, but no reference is made to the expenditure of a similar amount to provide houses in New South Wales for those who will be doing the actual work of building this palatial hotel.
– That hotel is being built to attract tourists who will bring money into the country.
– I know exactly why it is being built, but the tourists are either able to provide for themselves or arc already reasonably well provided for. The houseless people of this country should be the Government’s first consideration, and they are not.
As 1 have stated many times, the basic wage is a diminishing factor to the extent that labour time is a diminishing factor, and although I have given the figures before, they are worth repeating. For instance, if the Arbitration Court increased the basic wage from £1 3-odd to £14-odd the new wage, in terms of the food, clothing and shelter that it could buy, would be worth no more than the wage paid in 1907 because the purchasing power of money has depreciated by fully 80 per cent, since that year. The average worker to-day works 40 hours a week for his money wage and approximately 60 hours a week for his real wage whereas, in 1907, a tradesman who earned a money wage of £3 worked for 48 hours a week and 40 hours only for his real wage. The banks, working in the closest collaboration with the Government, have manipulated currencies to such an extent that we have the paradoxical position of increasing wealth and increasing poverty everywhere.
There are those who close one eye so that they see only one side of the picture. Such people see only an accumulation of capital. They close the other eye to the increasing poverty that is to be found everywhere. Senator Wright spoke about the prosperity of this country. I remind him of the slum conditions obtaining in Japan, Germany, England, America, and even Australia. I think he also said something about establishing an equilibrium. The fact is that we have disequilibrium at the moment in all the directions to which I have referred. How are we to establish equilibrium? The report to which I have referred has nothing to say about that. It is a nicely worded report which implies all sorts of things, but no reference is made to the re-establishment of an equilibrium under which our money will have real value, under which the purchasing power of those who produce with their labour will approximate the value of the wealth they produce.
As one who has been through difficult times, I remind the Senate of the widespread poverty in England in 1893 and 1907 as a result of the action taken by the banks. There was poverty everywhere during the 1920’s. Senator Wright has already mentioned the 1930’s when there was a world-wide depression. And the banks are taking exactly the same action as they took in those days! The result, however, is likely to be even worse than was experienced in the past. If the Government is prepared to take the risk of experiencing another period of chaos and poverty it is entitled to do so, but I warn the Government that it will not be so easy in the future to ignore the masses of working people who will be rendered desperate. What is happening in America now is due solely to reaction to impoverishing conditions. People are challenging the existing authority everywhere. The same thing will happen in France. I venture the opinion that things will be even worse than they were in the past. Poverty led to the French Revolution in 1789, and conditions will be even worse in the future because production is far more mechanized than it was in the past. Working people are being disciplined, not by abstract reasoning, but by disillusionment. I am reminded of Professor Antonio Labrioli, of the University of Rome, who in 1896 said that there are times when we have to wait for the hard school of disillusion to educate when our reasonings have failed. Up to date, people have had to learn most tragically in the hard school of disillusion, particularly in resisting both military and creditor domination. It remains to be seen whether, to use a well-known expression, history is to be allowed to repeat itself.
– I rise to support the bill. I think at least somebody should talk about it. I listened intently to Senator Cameron. He gave us a general discourse on economics from his point of view, but he made very little reference to the importance of the bill now before the Senate. I do not know whether he supports the bill. He did not say whether he does or does not. Although the Labour Party may be giving some token support to the measure, its actions in the Senate during the last seven or eight years have been such as to indicate it wishes to deny to this country the fruits of borrowings from the International Bank for Reconstruction and Development. Every time the ratification of a loan from the bank has come before the Senate, the Labour Party to a man has voted against the legislation. 1 pay the Leader of the Opposition (Senator McKenna) the compliment of saying that he was most interesting when he spoke last Thursday and this afternoon, but I wonder whether the members of the Opposition, in their hearts, are behind this legislation.
We should examine the legislation. A request has come to us that the capital of both the International Monetary Fund and the bank should be increased. We should examine the position to see whether the fund and the bank have done a good job in the past. The evidence discloses that a very satisfactory job has been done, and, therefore, I commend the legislation to the Senate.
The practical effect of the proposals is that there will be an extra £11,000,000 worth of gold required by the International Monetary Fund from Australia, if Australia is to increase its quota in the same ratio as other nations are increasing theirs. In addition, £34,000,000 will be required in Australian currency, although that sum, of course, does not have to pass. The practical effect of this addendum to the fund, from Australia’s point of view, is that Australia will be able to borrow more freely from the fund. Australia’s permissible borrowings will rise from £93,000.000 to £149,000,000, which could be of great importance in the event of an emergency. The fund is really a second line to Australia’s international reserves. As Senator Wright pointed out, the fund was of tremendous importance to the United Kingdom as a second line of defence upon which it could fall during the financial crisis that occurred at about the time of the Suez incident.
I wish to say a few words about the International Monetary Fund itself. I have received considerable enlightenment from reading the debate on this measure in another place. I refer particularly to the remarks of a member of the Opposition - Mr. Crean, the member for Melbourne
Ports - and of a member supporting the Government - Mr. Bury, the member for Wentworth. Mr. Bury, as the Australian representative, was a distinguished member of the inner corps of both of these institutions. He speaks with a practical knowledge of the working of the International Monetary Fund. As a result of my reading, I agree entirely with what Mr. Bury said, which was, in effect, that the fund and the bank constitute the leading forum in the world for the discussion of financial, trade and other problems. It is good to think that Australia is represented at the conference table of the International Monetary Fund, and that the Australian Treasurer each year - I believe it is in September - attends the annual meeting of the fund and the bank.
Mr. Bury made an interesting suggestion, which I think the Senate should consider, particularly as there is a precedent for what he suggested. He suggested that when the Treasurer goes to this annual meeting, he should be accompanied by members of the Parliament, including representatives from both the Opposition and Government parties. The Minister for External Affairs (Mr. Casey) created a precedent four or five years ago when he suggested that members of the Parliament should accompany him to the annual meetings of the United Nations. We have had the benefit of the experience gained by Senator Benn and Senator Marriott, who attended the United Nations several years ago. Possibly this year it will be the Senate’s turn to provide Government and Opposition members to accompany the Minister for External Affairs. This Parliament should become more interested in the work of the International Monetary Fund, and it could do so by sending representatives each year to attend these important meetings.
The International Monetary Fund can do great things in the interests of peace in the world. If the hunger of the world can be relieved as a result of development and the raising of standards of living, we will o some way towards achieving peace. I feel that the sensible discussions on financial matters that take place on the occasion of the annual meeting of the International Monetary Fund could help a good deal in that direction. I also feel that it is of great importance for members of this Parliament to attend conferences overseas.
To-morrow, 1 understand, Senator Vincent sets off on a visit to Poland, where lie will attend the annual convention of the Interparliamentary Union. Senator Sandford is about to set out on a similar journey. Later this year the Commonwealth Parliamentary Association will meet in Australia. In this way there is a mixing of members of Parliament, of the people in the community who bear the serious responsibility of government. It is important that members should enlarge their knowledge of financial matters and I believe that they could achieve this it, from time to time, delegates, or even observers, were sent to such conventions.
My reading of the work of the International Bank for Reconstruction and Development, and of the most illuminating annual report of the directors of that body, convinces me that these men, who study the problems of the world, are not hard, tight-fisted bankers but men with humane ideals who desire to see the charter of the bank carried out so that the underdeveloped countries of the world may, within measurable time, cease to be underdeveloped.
The International Monetary Fund also does good work in dealing with alterations in the exchange rate. When 1 was in South America last year one matter that bedevilled the whole of that continent was the constant changing of exchange rates. I believe that the influence of the International Monetary Fund on the control of exchange rates has done a good deal to check the severe changes in those rates which have taken place over the years. I can recall the chaos that occurred in Germany immediately after the first world war as the result of the alteration of exchange rates. Therefore, 1 believe that the International Monetary Fund should have our whole-hearted support and that the Government is right in recommending to the Parliament that its approv should be given to the proposed increase in the fund.
I should like now to speak about th: recommendation for an increase in the funds of the International Bank for Reconstruction and Development. In common with Senator Wright and Senator McKenna. I found the annual report of the bank most interesting. Both honorable senators have dealt with certain items in the report. I thought that I might mention the technical services of the bank. From page 6 of the report we learn that -
The technical services of the Bank continued to be in demand during the year, not only in the form of advice to member countries on development problems, but also in the shape of mediation in economic disputes affecting member countries of the Bank. In this field one of the most important events of the year was the settlement, with Bank assistance, of the terms of compensation to be paid by the United Arab Republic as a consequence of the Suez Canal nationalization.
That is all to the good, but what interests me even more is the fact that -
The government of the United Arab Republic has requested the bank to contribute towards the elaboration of a development scheme for the Suez Canal by appointing a suitable group to assess the probable future traffic demand on the Suez Canal facilities, and to offer technical advise regarding the works which should be undertaken to expand these facilities to meet such traffic.
As honorable senators will see, the international bank has not only been asked to mediate in the settlement of compensation as between the United Arab Republic and the United Kingdom and other countries, but has also been invited to offer technical advice on the development of the Suez Canal from the point of view of traffic demand and the like. That matter alone is of great importance to Australia. One can give other illustrations of the way in which the good offices of the bank have been sought; for instance, in the dispute between India and Pakistan, which is centred mainly on the sharing of the water of the Indus basin.
The bank has demonstrated, by its activity in the nuclear power field, that it is keeping well abreast of world thinking. The report states -
Yet another field of Bank activity was that of nuclear power, whose emerging possibilities are of close interest in view of the bank’s large and growing investment in electric power projects.
We find the bank embarking upon a joint study, with the Italian Government, of the commercial feasibility of using atomic energy for the production of electric power in Italy. T need not give any more illustrations to convince honorable senators that the bank is something more than an institution of tight-fisted men. It is an institution with its eyes on the future development of the world. It is an institution which hopes to prevent nations from making economic mistakes that they will later regret.
I am proud to know that Australia has made use of the facilities of the bank. It is interesting to note that the Prime Minister (Mr. Menzies) has announced that one of his missions abroad is to have discussions in America with the president of the bank, Mr. Black. I was interested to read in the Adelaide “ Advertiser “ the following statement on Mr. Menzies’s projected visit -
Mr. Menzies said there had already been some discussions with the world bank. If the negotiations were successful it would be the first loan Australia had received from the world bank for a specific project. The loans that Australia has received in the past from the world bank have been for general purposes.
I well recall that one of the loans provided, in part, for the introduction of dieselization on the east-west railway line. What a great boon it has been in developing that important railway. Also, funds were made available for the purchase of heavy earthmoving equipment for the construction of roads; for the winning of coal at Leigh Creek in South Australia; and for soldier settlement land development on Kangaroo Island and similar places in South Australia where it was needed. That phase has passed and now a loan is being sought for a specific purpose, the re-organization of transport facilities to Mr Isa in Queensland. I have no doubt that the rules of the bank will be applied and that there will be an economic and engineering examination of these projects. In the past, Australia has been considerably helped by these loans from the world bank and I hope that the Prime Minister’s efforts will be successful.
When I was abroad last year I could see, all over the world, the great work that was being done with the aid of loans from the bank. I was very interested to read in the report the authentic figures relating to the loan being made to Brazil for the winning of electric power from water.
Sitting suspended from 5.45 to 8 p.m.
– Before the sitting was suspended for dinner I was giving some illustrations of the use, as I had observed it, that was being made of loans made available by the International Bank for Reconstruction and Development. I was dealing with Brazil, in South America. I observed with my own eyes and had explained to me the tremendous development that was going on with the use of hydro-electric power in the Sao Paulo area,, about 280 miles from the capital. There a city of more than 3,000,000 people has. grown up in the space of 40 or 50 years, from a small settlement of no more than 50,000. That development has been due to the use of hydro-electric power, theexpansion of coffee production and the fact that Sao Paulo is now the industrial heart of South America. It is pleasing to note that the International Bank has played a big part in that development. The loan for the current year is 13,000,000 dollars, and the cumulative total is 182,000,000 dollars.
I was able to observe also the development that was going on quietly in Chile. In all these places the governments are rather temperamental and are of reasonably short duration. The stabilizing effect of such a bank, with its teams of technical assistants who forward their reports to head-quarters, is very good. It is interesting to note that this year 21,000,000 dollars is being made available to Chile and 1 5,000,000 dollars to Peru. There are vast mineral resources in the Andes, but the railway system has been allowed to get into disrepair. So in this vast continent of South America there is evidence that the International Bank, which the Parliament is being asked to support, is doing great work.
I sum up my conclusions in this way: This Parliament, by guaranteeing, as it were, the solvency of the International Monetary Fund and assisting to guarantee the funds of the International Bank, fs playing a part in assisting one of the great continents of the future. It should be remembered that in South America there are approximately 150,000,000 people who, in the main, are fairly poor. They are interested in rural pursuits. But the continent is full of natural resources. It has vast rivers such as the Amazon and the Parana and tremendous mountain ranges in which are deposited millions of pounds worth of minerals such as copper, zinc, iron ore and silver. The climate of South America varies from almost Antarctic conditions to hot, tropical jungle conditions. I am glad to see the International Bank assisting in a marked way with the development of that continent, with its vast natural potential.
Because of what the International Bank has done for Australia and what I hope it will do in the provision of loans, particularly for the Mount Isa-Townsville railway line, and also because of what it is doing for the world in general, I heartily support the bill. I trust that, when from time to time the Parliament is called upon to ratify loans for Australia, the Australian Labour Party will see the error of its ways of the past and will support loans that emanate from the International Bank.
.- Mr. Deputy President, evidently Senator Laught has indulged more in the reading of law books than in the reading of “ Hansard “. Otherwise, he would not have spoken with such ignorance about the attitude of the Australian Labour Party towards the International Bank for Reconstruction and Development. If the honorable senator were to refer to “Hansard” of 1947, he would read what Mr. Chifley, the Labour Prime Minister of the day had to say in support of the International Monetary Agreements Bill. The Prime Minister had the numbers and he was not under duress or pressure from the Liberal Party or anybody else. I do not know whether every member of the Labour Party agreed with the purpose of that measure, but the party as a whole did. I repeat that it was a Labour Prime Minister who introduced that bill, which sought approval by the Parliament of Australia becoming a member of the International Monetary Fund and the International Bank.
Why was the International Bank established? It was established for reasons completely different from those we have heard to-day. I propose to quote from the speech of the then Prime Minister to show just how far what he had to say differs from what we have heard in this chamber to-day, particularly from Senator Laught who spoke more from lack of knowledge, 1 would say, than anything else. Mr. Chifley said -
The purpose of the International Bank for Reconstruction and Development is to provide a source of capital funds for the reconstruction of countries devastated by war and for the development of industrially backward countries. The bank has a share capital to which member countries subscribe according to quotas, our quota being £A .62,500,000, the same as for the monetary fund.
And that is what the Australian Parliament considered to be the purpose of the bank at that time - to rehabilitate countries that had been devastated by war and to develop industrially backward countries.
To-day we have heard Government senators, particularly Senator Laught, emphasize the need to support the International Bank, but so that Australia, which is one of the most progressive countries in the world, which has not been devastated by war and is not regarded as being backward in any shape or form, may borrow more and more. I understand that Australia is the second largest borrower from the bank. According to the information we obtained in 1947, the bank was established for an entirely different purpose. What a change has taken place! Have the poor, devastated countries all been rehabilitated? How much have they had from the International Bank for the purpose of rehabilitation? How much have they had for reconstruction? Senator Laught told us what previous loans had done for us. He said that they had been used to buy machinery, such as heavy earth-moving equipment and bulldozers, and that the loans had even developed Kangaroo Island.
– For soldier settlement, yes.
– Has the prestige of this Government sunk so low in Australia, and have our capital resources dwindled to such an extent, that we have to go to the International Bank to borrow money for the purpose of developing the little islands around Australia’s coast?
– That is why your government joined the International Monetary Fund.
– No. If the honorable senator had been listening or paying attention, instead of wandering about the sheep paddocks-
– Senator Aylett himself referred to the development of backword countries.
– I read a paragraph about that. If it is the opinion of honorable senators opposite that this is a wardevastated country, well and good.
– No; it is a backward country.
– If Senator Kendall believes that Australia is a backward country, his interjection has some point. However, I disagree with my friends on the other side of the chamber on this matter. I do not admit that Australia is either a war-devastated or a backward country. 1 have seen too much of countries that are regarded as backward countries to agree that Australia is one. If Senator Kendall cares to regard Australia in that light, of course he may do so, but I do not think that many Australians will support him in that line of thought.
Let me come back to the purposes tor which the International Bank was constituted. I was under the impression that it would play a far greater part in promoting trade than it is playing at the present time. I was also under the impression that it would be of great assistance to the backward countries that were mentioned so much during the debate when this legislation was first introduced in 1947. Let me remind the Senate that all countries of the world did not see eye to eye with the proposal to establish an International Monetary Fund under the Bretton Woods agreement. Australia was one of the first countries to ratify the agreement. Both Australia and Great Britain were in difficulties immediately after the war, but of course the position of Great Britain was very much worse than that of Australia, and also very much worse than that of America. Owing to the shortage of dollars in the sterling bloc Great Britain was obliged - she had no choice - to accept offers from America. America offered Great Britain a 1,000,000,000 dollar loan on condition that she ratified the Bretton Woods Agreement. That was the string that was attached to that loan. Because of her devastated economy due to the war, Britain was forced to sign the Bretton Woods Agreement, but the moment her signature was placed on the agreement, America devalued her currency, with the result that Britain received only 75 per cent, of the value of the 1,000,000,000 dollar loan in purchasing power. That was Britain’s introduction to the International Monetary Fund and the International Bank for Reconstruction and Development. Despite the nature of that introduction, she has stuck to the Bretton Woods Agreement.
Australia ratified the agreement because the members of the British Empire had to stick together. They could not act like a lot of rebels, with some countries ratifying the agreement and others not doing so. Unity is strength. It cannot be denied that at that time the British Empire was suffering severely from the effects of the war. Australia joined these international monetary arrangements more to help Great Britain than to benefit herself. The need to assist Great Britain was the decisive factor in Australia participating. Let me put Senator Laught right by informing him that we of the Australian Labour Party are just as loyal to the Crown and the Commonwealth of Nations as the Liberals are, whether in government or in opposition.
– Who has denied that?
– 1 am merely pointing out that one of the factors that caused Australia to ratify the Bretton Woods Agreement was her desire to be loyal to Great Britain. The reasons that have been put forward by honorable senators opposite during this debate are not correct. Nothing was further from our thoughts than to exploit the resources of the International Bank at the expense of backward or wartorn countries. Yet, that is exactly what is happening to-day.
Senator Laught, following the lead set by the Minister for Shipping and Transport (Senator Paltridge) in his second-reading speech, said that the great importance of this legislation was that it would enable Australia to borrow more money from the International Bank. He then went on to tell us that we had benefited through borrowing from the bank, because it had enabled us to purchase equipment. I suggest that such equipment could have been either purchased from British factories or manufactured in Australian factories. The honorable senator appears to place the Prime Minister (Mr. Menzies) on a pedestal because he proposes to have talks with the International Bank for the purpose of borrowing £28,000,000 to construct a railway line from Mount Isa to Townsville.
– Will the honorable senator vote against that proposal when it comes before the Senate?
– If the honorable senator will only listen for a few moments, he may gain knowledge that he will not find in law books. He may acquire a little practical knowledge. There is no doubt that Australia has been through some crises. History has a habit of repeating itself, and J can see history repeating itself at the moment in a return to the economic conditions of the 1920’s. May I ask Senator Laught, through you, Mr. President, where he thinks Australia would have been if we had had to wait for a loan of £28,000,000 from an International Bank in order to construct the outback roads that were necessary for the defence of Australia during the war. Does he not agree that we would have been under the heel of the Japanese? Have the standards of our technicians, our tradesmen and our workmen not advanced to the same degree as those of other countries? If they have not, naturally we must borrow money from overseas for such a petty development project as the Mount Isa-Townsville railway - petty compared with the great projects that were undertaken during the war.
I know that Senator Laught will not agree when I say that it is degrading for Australia to admit that it cannot go ahead with a project costing only £28,000,000 or even £100,000,000 for that matter, without having to borrow American dollars from the International Bank. Have the finances of Australia dried up to such an extent that we cannot find £28,000,000 for this undertaking? Have our technicians deterioriated so much that they cannot manufacture the things that are needed for that railway, including locomotives? I do not think that that is so, because 1 believe that Australian workmen, technicians and engineers are the equal of any in the world. To go to the International Bank for the purpose of borrowing foreign capital to undertake a small project like that is to belittle Australia. Whose fault is that? The Government must accept the full responsibility for it. Senator Laught has put both the Prime Minister and the Treasurer (Mr. Harold Holt) on a pedestal.
– How would Labour finance the project?
– It would finance the project as it financed many projects both during and after the war, that is, from capital provided in Australia. Whenever Labour was unable to obtain from private investors all the money it needed for the purposes of war and for rehabilitation purposes after the war, it obtained the amount of the shortage from the Commonwealth Bank.
I remind Senator Laught that the Liberal and Country Parties did not form the Government of this country after the war until 1949. If ever there were a time when Australia might have resorted to obtaining finance from overseas, that time was immediately after the war. But did the Labour Government that was then in office go around the world begging for money with which to rehabilitate Australia? Of course, it did not do so! It will be recalled that that Government had more money available for rehabilitation than it could expend; our difficulty was the shortage of man-power. We were not short of money at any time. The present Government would not be short of money either if it had approached the people in the right way. But obviously, in view of the high rates of interest that are being paid for money by hire-purchase concerns, the Government experiences difficulty in borrowing from the people for public works. It is in thai respect that the Government is falling down on its job. Who will invest money in Government loans at 5 per cent, or even 6 per cent, when interest of from 10 per cent, to 12 per cent, can be obtained from hire-purchase firms? Why should we be in the position of having to borrow money from the International Bank? In effect, this Government is hawking Australia, as one might go to a pawnbroker for a loan. Surely there are in the Government ranks men of sufficient intelligence to devise a means of financing the proposed railway without having to borrow money from overseas for the purpose!
I expect Government senators to say that the loan that is being sought is required for the purpose of financing the importation of certain machinery for the project that cannot be manufactured in Australia. We have heard such arguments before. I recall that when the Labour Government proposed to pay a bounty on each motor car engine manufactured in Australia the Opposition parties, which now form the Government, derided the thought of motor car engines being manufactured in this country. What a change has occurred since those days! Not only motor car engines, but also aircraft engines and other engines are now manufactured here. Australia was faced with the prospect of having to go without these things unless it manufactured them; we could not run to the International Bank or the International Monetary Fund, or to any other institution to borrow money with which to finance the importation of such items. In those days, there was not a pool of unemployed from which to draw; all of our people were fully employed. If the Government sincerely wants to relieve the present unemployment situation, why does it not encourage the manufacture in Australia of goods that it now imports for certain projects, and so provide employment for those who are at present unemployed?
Let us now have a look at the other side of the picture, and take our minds back to the purposes for which the International Bank was established. We might well try to compare Australia with India, Pakistan or any of the African countries. When I was in Ceylon several years ago the newspapers carried banner headlines lauding Australia for lending that country 20,000,000 rupees - I think that was the amount; it was only a bagatelle, pin-money. I contend that we should be backing and standing behind those countries if they need financial assistance. They should not have to depend on charity, as they do to-day under the Colombo Plan - you cannot call it anything else. America, Great Britain and other countries should give money to the International Bank for the uplift of the people in the countries I have mentioned.
– India has got only 300,000,000 dollars from the bank.
– That is not a large amount, considering that Australia is spending £200,000,000 a year on defence alone, out of a Budget of over £1,000,000,000. The amount that India has borrowed from the fund is little enough for the development of a country having a population of 300,000,000 or 400,000,000 people.
I remind Senator Laught that “ Hansard “ shows that Labour was not opposed to the establishment of the International Bank for the purposes that were initially announced, and we are still 100 per cent, in favour of assistance being granted for those purposes. But we do not agree with Government senators that Australia should borrow money from the fund for the development of this country. Do honorable senators opposite think that America should borrow either dollars or sterling from the International Bank for developmental purposes in that country? Has America attempted to do so? Of course not! Australia is no more a backward country than is America, from the point of view of our standard of living, our finances, our resources, and our population. By developing our resources, it is possible for us to surpass America in many respects. But we will not get anywhere by running around the world begging for money like a pauper. In effect, we are robbing countries that were devastated during the war, since we are a bigger borrower from the International Bank than they are.
According to the speeches of Government senators, the proposal contained in the bill will be of great benefit to Australia. If we are going to live just for ourselves, then, let us by all means grab all we can out of the International Bank, provided the rate of interest payable is appropriate. Let us prevent any one else from getting even a shilling! When the International Bank was established to provide assistance to backward countries, our attitude was completely different from what it is to-day. As honorable senators know, Australia did not borrow money from overseas with which to prosecute the war. Likewise, after the war and until this Government came to office in 1949, Australia did not borrow overseas for developmental or rehabilitation purposes. I claim that to-day there is no need whatever for Australia to borrow credit overseas - and that is all you are getting - for developmental projects. Although honorable senators opposite may smile, this is part of a plan devised by the bankers - certain financial geniuses - for their own profits.. They try to gull the people of the world into believing that outside capital must beused to carry out certain internal projects.. When a job has to be done, man-power and materials are the factors that countSenator Laught has referred to the eastwest railway. If he studies the history of that project, he will find that the government of the day did not approach the International Bank, nor did it seek to borrow sterling from Great Britain. It obtained the money inside Australia, just as we did during the Second World War and during the post-war era.
– That statement is not quite correct.
– It is correct. The Commonwealth Bank had been crippled by the legislation of 1923, 1924 and 1925 introduced by the party which honorable senators opposite now support, and it was never allowed to operate freely until the Labour Government unshackled it in 1945. The Commonwealth Bank was able to play such an important part during the war years because the then Labour Government operated under the war-time emergency powers. As soon as those powers lapsed, we had to amend the banking legislation to enable us to carry on in the post-war era. Although we used the resources of the Commonwealth Bank, this Government is using them equally as much to-day. In those days people loaned their money quite freely to the Government because the interest rates were an inducement to investors. At that time the interest rates charged by hire-purchase companies were controlled by regulation, much to the benefit of this country. We were able to obtain the money that was unused by the people. To-day, thousands of millions of pounds are floating about in Australia. That money could be obtained if the Government offered sufficient inducement to the people who hold it, but one cannot expect people to take up government loans when they can obtain far greater returns from their investments in hire-purchase companies.
Honorable senators on the Government side are not right in saying that the Labour Government did not obtain sufficient finance within Australia. We did. This Government has all the machinery at its disposal to do it again. But the Government’s policy is in line with the policy of the international bankers who live on the proceeds of banking. They are surrounded by a great circle of friends making a living in the same way. If they are able to bulldoze the governments of various countries into believing that they must borrow from the International Bank in order to finance their undertakings, those countries will be tied to the bank indefinitely.
It is most deplorable to hear honorable senators opposite say that before this legislation was introduced we could borrow only up to £93,000,000 from the International Bank but if this legislation becomes law we shall be able, if necessary, to borrow up to £149,000,000 from the bank.
– Hear, hear!
– If the honorable senator who has interjected so desired, he, and the Government he supports, could obtain sufficient money from our own Commonwealth Bank to carry out any internal projects. Instead, if we borrow the £149,000,000 from the International Bank, we shall have to underwrite that loan by Australia’s gilt-edged securities. If this Government is prepared to secure our loan from the International Bank with our giltedged securities, why not obtain a loan from our own Commonwealth Bank on the same security. The Government already is using the Commonwealth Bank and its resources to balance its Budget, and another £28.000.000 would be insignificant in comparison with the amount drawn from the Commonwealth Bank on the issue of credit.
The Government’s statement might be accepted by those people who do not know anything whatever about our credit system or about our past history. The Government’s statement might be accepted by the rising generation, which might be gulled into believing that if the bank becomes bankrupt the people will starve. If we grow sufficient primary products in this country, we shall never starve. The Government might be able to fool some of the rising generation, but it cannot fool the older people who have experienced good and bad times in Australia and who know what we can do without assistance from the International Bank.
What is this International Bank? It is an organization that is controlled by America. The other member countries are merely pawns in the game who do the bidding of the American financiers. That is why Great Britain was hesitant about becoming a member of the bank when it was established. Had she not been ravaged by war and if she had had any alternative, she would not have joined the organization. But Great Britain had to approach America for dollars. By borrowing money from the International Bank, Australia is depriving war-torn, backward countries of the assistance that they so urgently need. The bank was established to help those countries to progress and develop. When Great Britain needed a loan of 1,000,000.000 dollars, she obtained it only on condition that she signed the Bretton Woods agreement and became a member of the International Bank. As I have said, Great Britain would not ratify that agreement until she was forced to do so because she could not carry on without American dollars. Being placed in such a position, she made the best of a bad job. To her credit, she has stood loyally by the bank ever since. To the credit of the Australian Labour Party, we also have stood loyally by the bank. But we deplore the action of this Government in obtaining from the bank money that should be devoted to the development of those countries that were devastated by the war, -such as India and Pakistan and countries in Europe and in what we call the free bloc in Asia. We enjoy probably the highest standard of living of any country in the world, yet the Government prides itself on being the second biggest borrower from the International Bank.
– We have the highest standard of living in the world.
– I accept the honorable senator’s statement. How degrading, then, it is for this Government to say that it is proud to be the second biggest borrower from the International Bank because we have the gilt-edged securities to offer as security for our borrowings, while those countries that were ravaged by the war are unable to obtain the finance they need to rehabilitate themselves and raise their standard of living because they do not have sufficient security to offer.
This Government has put Australia in pawn, and the future generations that have to carry the burden will regret the Government’s action, just as the future generations regretted the action of the Bruce-Page Government in the early ‘twenties. This Government’s action is a typical example of history repeating itself.
A Labour government was responsible for Australia becoming a member of the International Bank, and we do not oppose this legislation, but we do object to the methods adopted by this Government in placing Australia in pawn when in reality the need to do so does not exist.
– This debate, which has been most interesting to me, was being conducted on a very high plane until Senator Aylett spoke. If Senator Aylett is completely honest, he should vote against this bill. He has said that the Labour Party will support it, but, after what we have heard from him to-night, I can only say that if he has any integrity at all he will vote solidly against the bill because he does not agree with the recommendation of the executive directors of the International Monetary Fund and the International Bank for Reconstruction and Development. We are carrying out that recommendation in introducing this legislation. The honorable senator has condemned his own Government for it was a Labour government which ratified the agreement under the Bretton Woods plan for the establishment of the International Bank and the International Monetary Fund.
I speak in complete humility on this matter because I cannot claim to have any great knowledge of the functions of either the International Bank or the Monetary Fund. But I did listen with very great interest to the Leader of the Opposition (Senator McKenna), whom I regard as a first-class financial brain. He gave a constructive survey of the functions of both the International Bank and the Monetary Fund. He was followed by Senator Wright who gave what I thought was a most enlightening talk on the subject. After listening to both speakers, 1 am impelled to support the legislation for I have been convinced that it is in the best interests of Australia and the world in general.
I do not propose to depart to any substantial degree from the second-reading speech of the Minister for Shipping and Transport (Senator Paltridge) because, as I said earlier, I do not claim to be a great authority on these important matters. 1 have read most of the report brought down by the executive directors of the International Bank and of the International Monetary Fund and have been greatly interested in what I read. I suggest that it would pay every honorable senator to make a close study of what is contained in that report. We all know that down the years one of our great troubles has been the world’s productivity on the one hand and lack of means for the proper distribution of those goods on the other hand. We see bountiful production on one side, in the Western countries in particular, and a very low level of subsistence on the other side in what we might call the more backward countries. We know that while the world has great productive capacity, at the same time it suffers acutely from lack of proper distribution. That function devolves upon the monetary systems that obtain throughout the world.
I believe that the International Bank is one of the things that will help cure this disease, if we may call it that, and allow the more backward countries to obtain the finance necessary to enable them to produce a large part of the goods they require. It will also enable them to trade with other countries that are producing in plenty at present. Finally, it will have the ultimate effect of raising the level of civilization throughout the whole world.
That is why I support this legislation. I believe that the work of the International Bank has been extremely valuable to the world in general. One has only to read the report of the executive directors of the bank to appreciate what is going on in various countries. Senator Aylett says Australia is not a backward country. We know that without question the standard of living in Australia is very high indeed; but there is infinite room for development throughout this great country, and we know that without financial assistance we cannot develop to the full. We cannot bring thousands, indeed millions of migrants to Australia unless we have the financial capacity to absorb them and develop Australia’s vast resources. That is why we have the International Bank. We are not war-torn in the sense that other countries are, but we do know that if we contribute to the wealth of the world we shall help the so-called backward countries, or the more backward countries, to raise their standard of living appreciably. That is why I say that Australia has every reason to participate in the loans that are available through the International Bank, and I am very pleased to see that she has taken advantage of that opportunity.
We know that Australia has borrowed something in the vicinity of 317,000,000 dollars. Every penny of that money has been spent wisely. It has been brought into this country and has enabled us to increase our productivity substantially. We know that it has made possible the development of our great resources throughout the land. This development has been mentioned by various honorable senators and I do not wish to go into those matters now, but it is obvious that we cannot bring capital into the country and invest it in productive enterprises without producing more goods and more wealth which, in turn, has an effect on international trade. That is why I say it is extremely important for Australia to participate in these loans. 1 admit that the needs of other countries are greater than ours but, at the same time, I cannot see why Australia should not benefit from her membership of the International Bank. I submit that it is most desirable that we adopt the recommendation of the executive directors that we increase the capital that we contribute to the bank, for this will mean that we shall have a greater opportunity to raise more money if we require it. After all, to a country like Australia, 317,000,000 dollars is but a very small amount, but it has been invested wisely, and it will produce more. The investment has had that effect already.
What ls more, the investment of this money has had a material effect on the defence of Australia in that it has made us stronger in every way. Therefore, I have no hesitation in saying that the extra contribution to the International Bank by Australia will be extremely valuable for, although it does not involve the contribution of any money at all, it gives us greater reserves and more opportunity for development. I support the proposal that we double our contribution to the International Bank.
Although the International Monetary Fund is removed to some extent from the functions of the International Bank, it is also of very great importance to all countries of the world. We all know how complicated finance is. Finance is not a simple matter which every man can learn to understand fully in a few moments. Banking is one of the highly skilled matters that take almost a lifetime to understand. It would be presumptuous of me to say that I know all about banking. I do not know all about it, nor do I think any other honorable senators do.
The International Monetary Fund is necessary for the adjustment of exchange between countries. We have been told about what Great Britain did in her extremity in connexion with the Suez crisis. We have had explained to us how the International Monetary Fund enabled her to live through that crisis. In fact, it may be that had Great Britain realized the implications regarding her financial position she might not have taken the action she did in connexion with the Suez crisis, but 1 do not want to go into that matter now, although there are various opinions about it. I do feel, however, that the International Monetary Fund did serve Great Britain well at that particular time. I notice that the report states that Argentina, Bolivia, Brazil, Chile, Cuba, Denmark, France, Japan and the Netherlands have had considerable assistance from the fund. All those countries were beset by peculiar financial difficulties. Certainly, they were not similar, but they were indeed great financial difficulties. They had recourse to the International Monetary Fund, which got them out of difficulties, mainly on a short-term loan basis. That is why I think the International Monetary Fund is something that we should support to the full. The 50 per cent, increase in our commitment to the fund will stand us in good stead.
We have enjoyed very high overseas reserves for many years. Fortunately, we have not been called upon to take steps to arrest a calamitous fall in our overseas reserves, although we have had ups and downs, as we all know. However, if Australia - or any other country, for that matter - reached the extremity of having its international reserves completely depleted, the International Monetary Fund could be called upon to help. It is in existence to adjust a country’s economy in order to help it over a difficult period. That is really the purpose of the fund. As I said earlier, it got Great Britain out of a very sticky financial position after the Suez affair, and it has helped various other countries too. We do not know what the future has in store for us, but it could be necessary at some future date for Australia to use the fund to help it overcome a difficulty that had arisen. The fund stands as a second string to our international reserves. We could draw on the fund to a degree which could tide us over a difficulty. Therefore, I have no hesitation in saying that this further contribution to the fund is fully justified.
I do not wish to take up any more time. As I said before, I felt impelled to speak on this measure, because I believe it is a very good one. The bank and the fund are among the things that provide some hope for the future of the world. They were brought into existence to remove difficulties that arise from time to time on a global basis. I believe that when the bank and the fund are drawn upon to the extent that they can be drawn upon, world trade will be facilitated and under-privileged countries will be developed as they should. I look forward to the time when standards throughout the world will be raised as a result of the activities of the International Bank and the International Monetary Fund.
– in reply - I want, first of all, to express the extreme satisfaction of the Government that the measure which has been presented to the Parliament has met with such support from both sides of the Senate. Twelve years of operation have proved the efficacy of both the International Monetary Fund and the International Bank for Reconstruction and Development. I repeat that I am delighted that the measure has been received in this way.
I do not want to spend a great deal of time in replying to the debate. I should like to pay a tribute to most of the honorable senators who have taken part in it. This is one of the best-informed debates to which I have had the pleasure of listening for some time. Naturally, I took the trouble to read the debate which occurred in another place. Without disrespect to that other place, let me say that, with the notable exception of the contributions made by the member for Wentworth (Mr. Bury), the member for Melbourne Ports (Mr. Crean) and one or two other speakers, the debate there developed into a discussion of the merits and demerits of a single developmental proposition within Australia. However interesting that subject may have been, I suggest that the debate departed completely from the terms of the measure which was being discussed. I have been heartened and informed by the contributions we have had from honorable senators on both sides of this chamber. All speakers have referred to the beneficial results which have flowed from the operation of the International Monetary Fund - highlighted, of course, by Great Britain’s experience immediately after the Suez crisis.
I think that all of us will take note of Senator Wright’s remark that here surely, is a field in which the power of money, of finance, could be applied in an increasing degree in the service of the maintenance of peace and the advancement of living standards. I have in my hand the last report - liberally quoted from during the debate - of the International Bank. It represents a saga of achievement by the bank in this sphere.
As I have said, there is little that I want to say in reply, but I am impelled, if only to put the record right, to make some comments on the contribution made by Senator Aylett, who, unfortunately, has now left the chamber. Senator Aylett, during the length - I repeat the word “ length “ - of his discussion, hammered the point that an unwilling Britain was dragged in by the heels to participate in the International Monetary Fund and the International Bank. Senator Aylett’s memory is short. Who of us here will forget that it was the dominant personality of the British economist, Lord Keynes, which played such a remarkable part in the establishment of the fund and of the bank? As I listened to Senator Aylett and remembered what Lord Keynes had said and done, I could only think that Senator Aylett was regurgitating a debate which may have taken place in the Labour Caucus, when there was a difference of opinion between the late Mr. Chifley and Mr. Ward on whether Australia should participate in these institutions.
Senator Aylett also made the remarkable statement that, the bank and the fund having been set up, we saw the financial phenomenon of America devaluing her dollar. That never happened. America did not devalue her dollar. That has not happened, Sir, during any time that you and I can remember, or for a long time before that. What did happen was that the United Kingdom devalued sterling. Senator Aylett then went on along the road of inaccuracy, alleging that the Labour Government, in agreeing to Australia participating in the fund and the bank, was motivated solely by a desire to help undeveloped countries, and asserting that Australia should not have borrowed from the fund. Yet Australia, under the Chifley Government, was wisely, one of the first borrowers from the International Monetary Fund.
– It borrowed 20,000,000 dollars in 1949.
– Yes. lt borrowed 20,000,000 dollars in October of 1949. The loan was negotiated two months before that. “ This “, Senator Aylett said, “ is an American-dominated agency “, completely forgetting that the inescapable arithmetic of the voting power gives to America, as to the bank about a 30 per cent, vote and, as to the fund, about a 25 per cent. vote. Then, for good measure and just to lard it all over, we had the story of the financing of the Mount lsa railway. “ We have the resources “, he said. “ We have the men. Why don’t we build the line? “ I remind him that there is a third factor. We must have money. I am sorry that Senator Aylett is not here because I would have reduced the matter to its most common factors and pointed out to him, as I have had occasion to do in the past, that Australian workmen just will not accept anything other than money to take home to their wives. You cannot pay them in loads of sleepers. You cannot pay then in 60-ft. lengths of rail. They must have money, and what Australia needs more than anything else is capital. That is one of the reasons why we belong to the bank. That is why we have availed ourselves of the bank’s assistance from time to time. There is little more that I need say because the debate was of an informative kind, rather than one which called forth any criticism which needed answering.
I would just refer briefly to one or two matters mentioned by Senator McKenna. Last Thursday afternoon, under the mistaken impression that the bill was to be rushed through, the honorable senator took exception to the time allowed for debate. He said that the governors had not thought to implement these new arrangements before 15th September. In point of fact, the governors had set 15th September as the latest possible date. They are anxious - and there is a need - that the new arrangement should be put in hand as early as possible. I point out that the United Kingdom legislation has already received royal assent. The United States legislation is at an advanced stage, and letters of consent have already been received from a number of other members.
Senator McKenna struck a note similar to that struck by Senator Aylett when he said that it was Australia’s intention in joining the bank not that this country should itself participate in a loan raising, but that the proceeds of these loans should be directed to undeveloped countries. In point of fact, Australia has received only about 7 per cent. of the total loans made by the bank. It has had from the bank six loans, amounting to 318,000,000 American dollars. If one compares those figures with the loans made to other countries one sees Australia’s participation in proper perspective. If we exclude the loans for reconstruction in Europe, made in 1947, we find that, in all, 214 loans, amounting to 3,750,000,000 American dollars have been made to the end of 1958. Of course, Africa has received 23, totalling 540,000,000 dollars; Asia and the Middle East, 59, totalling 1,230,000,000 dollars; Latin America 79, totalling 940,000,000 dollars, and European countries 47, totalling 730,000,000 dollars. I merely quote those figures to indicate that Australia’s participation, though of immense value to this country, has not been excessive in any way. Moreover, such loans as we have had have been completely legitimate. The developmental needs of Australia will be denied by no one.
I had intended to comment on Senator McKenna’s criticism of the “ high “ interest rates, but my friend and colleague, Senator Wright, dealt so devastatingly with that submission that I do not propose to take the matter further. I should only like now to comment upon particular requests for information during the course of the debate. Senator McKenna asked what progress had been made in the establishment of the International Development Association following the letter to the United States President in August last year. The initial thinking on the establishment of the association is to the effect that all member countries of the bank should be invited to become members of the association. America’s participation will be stimulated by the fact that that country holds, in counterpart balances overseas, currencies in numbers of other countries. The association will be used as a channel for the employment of those balances and the support of the other member nations of the bank will give the project the international flavour which practice has shown to be so desirable in the establishment of confidence and in the creation of a feeling of one-ness - a single desire to help each other in this matter of finance. However, the creation of the International Development Association has not proceeded very far. As the honorable senator will appreciate, it is a most complex piece of financial mechanism and the matter is still under close study in the United States of America.
Senator Wright referred to the activities of the Developmental Loan Fund in some of the Asiatic countries. That fund is a straight-out American government agency the purpose of which is to extend aid to countries which feel a pressing need for assistance outside that which is, or can be, made available from the International Bank at any particular time.
The honorable senator also asked a question about a loan by the International Bank to the Yanhee electricity authority in Thailand and asked me to get him some information about the relationship between that loan and the finance for the Mekong Valley undertaking. The two projects are quite separate and stand in isolation the one to the other. The Yanhee electricity authority is being assisted by finance from the International Bank. The Mekong Valley development project is a United Nations effort under the sponsorship of the Economic Commission for Asia and the Far East. Assistance for that project is being obtained from various countries, including a number of British Commonwealth countries. At the recent Ecafe conference at Broadbeach, in Queensland, Australia made it known that it would support the Mekong Valley project to the extent of £A. 100,000 in the form of technical advice or assistance of that sort.
I do not propose to speak further about the measure. I conclude as I began - by expressing my great satisfaction with and my gratitude, if I may say so, for the support the bill has attracted. I also express my admiration of the standard of the debate on this legislation.
Question resolved in the affirmative.
Bill read a second time.
– There is one matter which I mention most reluctantly because of the sweetness of the tone of the debate up to this stage - that is, the need for parliamentary approval of a measure such as this. It will be remembered that the Minister for Shipping and Transport (Senator Paltridge) averred, at the forefront of his speech, that parliamentary authority for the action proposed was not required. Whether it was done in a spirit of condescension or in recognition of the appropriate course I know not, but it was stated that nevertheless the course of consulting the Parliament was being taken. It is fitting, on an evening such as this, to refer to that matter, because we are concerned with a measure which commits Australia to an increase of 50 per cent, of her quota to the International Monetary Fund and a 100 per cent, increase of her commitment to the International Bank for Reconstruction and Development. I should be most obliged if the Minister will explain to me the basis upon which it is stated that a commitment of that sort does not require parliamentary approval.
It will be recalled that Senator McKenna, in the course of his remarks last Thursday, referred to the original act of 1947 in which there is provision for a continuing appropriation of a limited character. The honorable senator referred, I think, to section 8 of the 1947 legislation where there is an appropriation for - such amounts as Australia is, from time to time, required to pay to the Fund in pursuance of paragraph (c) or (d) of section eight of Article V of the Fund Agreement.
I regret to have to quote the relevant section in those terms; the mystery of it has no more invitation to me than to any other honorable senator. But I refer to it in specific terms in order to bring to the Minister’s mind my view that that appropriation is of a very limited character indeed.
I feel, Mr. Chairman, that a very fundamental principle is at stake here. This country is engaged to contribute money, either in gold or securities, upon undertaking a further commitment to the fund. In regard to the subscription of stock for the bank, it is a continuing obligation to guarantee the resources of the bank for substantial amounts which in a series may be really important from any international aspect. I think this is a matter of fundamental importance - if there remains any interest in the preservation of the Constitution of this country, which guarantees that the appropriation of the people’s money is the prerogative of the Parliament as distinct from that of an authorized representative of the Government.
– In order to clear the decks a little, I agree with the view of Senator Wright in regard to section 8 of the principal act. It has a very limited application; it does not touch upon the matter to which he has directed attention. Actually this operation, if it may be so described, falls into two parts. First, there is the all-important matter of the consent to the increase in Australia’s subscription. The 1947 act already contained authority for this consent. I think that is what was specifically referred to in the second-reading speech. Indeed, I said that the 1947 act already contained sufficient authority for Australia to consent to an increase in its fund and bank subscriptions. Beyond that point, however, there is the question of the actual arrangements for payment. Section 6 of the 1947 act does give authority for the payment of further calls where loan money is employed. On this occasion, loan money is not being employed. The amount is being paid out of Consolidated Revenue, as, 1 am informed, were the original subscriptions.
I think that the misunderstanding arises - and I apologize for it, so far as I am culpable - because the second-reading speech does not make sufficiently clear that there are two aspects of the negotiations: First, the consent, and secondly, the arrangement for the actual payment of the further funds. I trust that Senator Wright and the Senate generally will take the deed in this case for the word. If the Government has erred, then at least its culpability has been explained by the fact that its intention was always made completely clear by bringing he measure before the Parliament and putting the whole case to the Parliament before going on with the proposal.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Debate resumed from 16th April (vide page 816), on motion by Senator Henty -
That the bill be now read a second time.
– The purpose of the bill before the Senate is to amend the Aliens Act by altering a machinery provision, lt is some time since I looked at the bill and the second-reading speech of the Minister for Customs and Excise (Senator Henty). My recollection is that the effect of the bill is to repeal all provisions relating to the issue of certificates of registration to aliens in this country. It is claimed that such certificates are no longer necessary and, secondly, that their discontinuance will result in a very distinct saving in administrative costs. No indication of the extent of that saving has been given in the secondreading speech. I should be grateful if the Minister would convey to the Senate an intimation of the order of the saving and where it will be made, and how far it will affect staff, facilities and the rest. I presume the statement that substantial savings will be made was uttered after due consideration of the facts.
The subject of this bill is one matter in which the Commonwealth rests easily so far as constitutional power is concerned, because we have under the Constitution, in the general repository of power, section 51 (xix.) which gives power to this Parliament over naturalization and aliens. The Aliens Act has had quite a history. For any one who is particularly interested, I refer to the speech made by the honorable member for Melbourne (Mr. Calwell), appearing in “ Hansard “ of 19th March, 1947, at page 849, when the act that we are now amending was introduced in its present form. Mr. Calwell, on that occasion, reviewed the whole history of the Aliens Act in Australia. He pointed out that, up to 1916, there was no particular provision but that, of course, arrangements had had to be made during the first world war to locate aliens and compel them to register as a matter of the protection of this country against actual or potential enemies. He recounted what Senator Pearce, who was Minister for Defence during World War I, had said when he pointed out that no country in the world allowed aliens to run free without some form of registration. I do not want toreview that aspect now.
In 1920, certain legislation was enacted but was never enforced and never became operative. It was repealed in 1934. It was. not until World War II when, by means of national security regulations, following an abortive act passed in 1939, just before the outbreak of war, that we really began to regulate the position of aliens. That position is regulated for very good reasons. From the point of view of security, we need to be able to determine how many aliens we have, of what nationalities they arc, and above all, in what areas and industriesthey are concentrated. We need to know those things for the protection of our country in a world where alliances change with a good deal of rapidity. We saw changing alliances during the last world war. It is very important to know what people there are in this country who owe allegiance to a foreign country and not toours. We allow aliens to come in very freely. In fact, we encourage them to doso. We have no objection to their being here, so. long as they are law-abiding, citizens. At the same time, in the event of trouble we need to be able to know just where they are. We have to be able to put our hands on them. It is rather unthinkable that we should have in our midst large numbers of people who are determined to make their lives in Australia - and I am speaking of them only - who, for reasons that seem good to them, nevertheless retain their allegiance to their country of origin. It is not altogether a happy position that of the 400,000 aliens that we have in Australia approximately half of them are eligible for naturalization but have not bothered- to become naturalized Australians. I think that the Government is taking steps to encourage them to do that.
The bill imposes upon all aliens in this country the obligation to register and to supply the fullest particulars of themselves. They are forbidden to change their surname, or to change their residence without notification. They must notify the fact of their marriage. Complete information isto be provided for the purposes of the Department of Immigration, which, now administers matters affecting, aliens, and according to the Government, there will be no need for the issue of certificates of registration which aliens would be obliged to keep and to produce on demand.
The Opposition does not query the presentation of that argument. We think that it may well be right. We have no desire to preserve the issuing of certificates of registration, and from that viewpoint we support the bill. I think, Mr. President, in the circumstances I need say no more than that. The purposes of the bill are apparent, and we are not opposing it. If the Minister is able to give the information that I have already sought regarding the nature and quantum of the savings te be effected, I shall be obliged.
– in reply - This is a short administrative bill. I cannot supply Senator McKenna adequately with the information he seeks at the moment, but I can give him some indication of where a saving will be effected. The general assessment - I think this is the best way in which to deal with his inquiry - is that there will be a reduction of about 40 per cent, of the present volume of work associated with alien activity. It is estimated that there will be a saving of between £40,000 and £60,000.
– Per annum?
– Yes. It is an arbitrary figure; £40,000 is regarded as a conservative estimate, and £60,000 the extent of the possible saving. Of course, the saving can be assessed accurately only after certain administrative functions have been deleted and the scheme has been in operation for some time.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 22nd April (vide page 954), on motion by Senator Sir Walter Cooper -
That the bill be now read a second time.
– Mr. President, in 1948 the Government of the day put through the Parliament a bill to give repre?sentation to the Australian Capital Terri-* tory voters in the Parliament. There was a prohibition against the member for the Australian Capital Territory voting on any question arising in the House of Representatives except that he was free to vote on any motion for the disallowance of any ordinance of the Territory or on any amendment of any such motion. It was representation that was not effective legal representation in that, although the voice of the member for the Australian Capital Territory could be heard, he was entitled to vote in respect of only one particular matter.
There has been constant pressure for that position to be altered. The Government has yielded to an extent in the bill now before us which provides that, in addition to exercising a right to vote in the manner I have already indicated under the 1948 measure, the member for the Australian Capital Territory shall now have a vote on a proposed law which relates solely to the Territory, and in addition to being entitled to vote on a motion for the disallowance of an ordinance or any amendment of an ordinance he will be entitled to vote on a motion for the disallowance of a regulation made under an ordinance and, finally, on any motion for the disallowance of a modification or variation of the plan of lay-out of the city of Canberra.
The honorable member for the Australian Capital Territory (Mr. J. R. Fraser) has indicated in another place that if this bill had been in operation from 1948 right up to the present time he would have had no more than two votes in the intervening ten years. So, on the experience of the past ten years, this bill adds practically nothing to his voting, rights. It is a very minor concession to a very strong feeling in the Australian Capital Territory that the member whom the people in the Territory are allowed to elect should have a more effective legal voice in the Parliament. Their member is not counted in relation to a quorum; he cannot be Speaker, or Chairman of Committees; and he is not counted in determining an absolute majority of the House of Representatives. So, apart from the personal qualities he can bring to bear on the situation and apart from his own personal impact in the party room, in the Parliament, and in his approaches to Ministers concerned with Canberra, he is a person with very little power indeed in the Parliament.
I think it is a tribute to the present member for the Australian Capital Territory that he does play a potent part in the affairs of the National Parliament. This is not due to any right that he enjoys. It is due solely to the force of his personality and his own competence in attending to the duties that have been entrusted to him by the citizens of the Australian Capital Territory.
At the time Canberra was given a representative in the Parliament there were some 11,800 voters in the Territory. We of the Labour Government who conceded the right to representation denied the member the right to vote, because to give the representative of only 11,800 people a full vote on all matters in the National Parliament would be to give to one member a vote many times the quality of a vote of any other member in the Parliament. I think it was quite proper at that stage. But the development of Canberra has been so very expeditious that at the last election there were some 20,563 voters. The number had very nearly doubled in ten years. T understand that at the moment it is between 21,000 and 22.000 electors. I am not speaking now of population. The population is in the neighbourhood of 43,000 people.
The reason given by the Minister for Repatriation (Senator Sir Walter Cooper) for rejecting the claim that the member for the Australian Capital Territory should be given full voting rights is based entirely upon the assertion that the number of electors is not adequate. He does admit that the smallest electorate in Australia - I am speaking now of number of electors and not geographical area - is Kalgoorlie in Western Australia. With an area of hundreds of thousands of square miles, most of it desert, this electorate has only 31,000 voters. Tn some other electorates the position is vastly different. One member of the House with full voting rights represents an electorate of 31.000 voters, and another member with the same full voting rights represents an electorate of 65.000.
– It is not a permanent maladjustment.
– It is not permanent, but it is a long-term one, and I suggest to the honorable senator that there is not likely to be a very violent change in the number of voters in Kalgoorlie, whatever may take place elsewhere. The honorable senator reminds me that there is an obligation to have a redistribution.
– That is what I had in mind.
– Under the Electoral Act, in certain circumstances after every census - and the taking of the tenyearly census has been interrupted by war in recent years - whenever the population in a certain number of divisions gets beyond 20 per cent, up or down on the quota - there has to be a redistribution. As the honorable senator knows, that takes a great deal of time, and even when a redistribution is effected one does not get instantly a fresh election based upon the redistribution. So we find that years are usually taken up in that particular process, and vast variations occur between one electorate and another. We must acknowledge that that will be the order of events for a considerable period to come, because in recent years Australia has undergone tremendous industrial development and the tendency has been for industry to take over the great centres of population in the hearts of the cities and to drive the people into the periphery - the marginal areas far removed from the centre of the cities. New housing settlements have been established in areas that were previously vacant. In fact, they spring up almost overnight. During the last decade or two we have witnessed the most enormous movement of population that Australia has ever experienced. With the tendency of industry to take over the hearts of the cities, and with the continued flow of immigrants to this country, the indications are that the order of events to which I have referred will continue for many years.
– How does the population of the Australian Capital Territory compare with the population in a State electorate?
– The ordinary population quota is in the vicinity of 80,000, and at present the population of the Australian Capital Territory is about 43,000.
– How does that square with the honorable senator’s view as to one vote, one value?
– Without a doubt, one must acknowledge that as a principle. In developing his argument, the Minister has concentrated far too much on section 20 of the Constitution which, as the honorable senator knows, determines the quota for a division in a State based upon the population of Australia, including not only the Australian Capital Territory, but also the Northern Territory. Aborigines are the only people excluded. I emphasize the fact that once the quota is established, the Constitution selects that devisor for determining the size of a division in a State. Under the Constitution, that factor is related specifically to a State and has no relation to a Territory. In fact, the Constitution digresses from that determination of the sizes of an electorate in a State in which the principle enunciated by Senator Wright is correct - as between States there should be one vote, one value - and by section 122 confers on this Parliament absolute power to determine representation of any Territory - the Australian Capital Territory is a Territory - on such terms and conditions as the Parliament may determine. The Australian Capital Territory is in a different position from the States in respect of the determination of the size of an electorate.
When one looks at the history of representation in the Commonwealth Parliament, one finds that from the beginning of federation Tasmania had five divisions each having a population of only about 16,000 electors. Therefore, it is no novelty to find the principle of one vote, one value breached in this Parliament. It was breached by the Constitution itself in according to the minor States - the States with small population - at least five members of the House of Representatives.
– But that guarantee would become quite illusory, would it not, if this Parliament accorded to any Territory an excessive representation or voting value?
– I agree with the honorable senator, but in comparison with Kalgoorlie, which has 31,000 electors, Canberra - which I shall regard as an electorate of 22,000 people with a rapidly growing population that will be increased substantially by the time the next election is due in the normal course - should be given representation without the slightest hesitation. Is it fair to say to the 22,000 electors of the Australian Capital Territory, “ You shall have no effective representation until you grow up “? Although the Constitution provides that an electorate must have a population of 31,000, it is not unreasonable to say to the people of the Australian Capital Territory, “ You now number 22,000 and your numbers are growing apace with the transfer of Commonwealth departments to the Territory at a good rate. You are entitled, not only to representation but also to a truly effective voice in the Parliament “. At present, the Territory representation is negligible. The elected representative does not have a vote, except on certain matters affecting the Territory itself. Rather than deny effective representation to the people of the Australian Capital Territory, they should be given representation on what may be regarded as slightly stronger terms than other electorates. Without hesitation, I affirm the principle that they are entitled to a vote. If the electoral population of the Territory is only 22,000, why not give it effective representation? If the Government were to do so, having in mind the rapid rate of growth of the population of the Australian Capital Territory, the Opposition would be quite happy.
During his second-reading speech the Minister argued that the people in Washington, the centre of government in the United States, do not have a vote. That is true. No provision has been made in the United States Constitution for the people of Washington to have a vote. They are not denied a vote as the result of something that has been done by the United States Congress. The founders of our federation, patterning our Constitution upon the American Constitution, saw that defect and cured it by writing into section 122 the power to give representation to Territories on terms and conditions determined by the Parliament. No argument can be based on the position in America by which all the people in the Washington area are disfranchised. The founders of our federation deliberately chose another course.
– Surely if the matter of a vote for the people of Washington was of such magnitude, steps would be taken in America to amend the Constitution.
– Very great difficulty has been experienced in America in changing the Constitution, and I think that a much more important matter than a vote for the people of Washington - important as it is - would have to arise before the Congress would seek to amend the Constitution. The fact remains that under the American Constitution the people of Washington do not have a vote. They are governed by a commission appointed by the Congress.
– What is the population of Washington?
– I do not know, but I should say that it is far greater than the population of Canberra.
– It is considerably greater.
– I agree with the honorable senator.
– The population of Washington is about 600,000.
– That figure would be correct. I am grateful to the honorable senator. In fact, the public service population of Washington has spilled over into the adjacent areas. It does not surprise me to be informed that the total population is 600,000, but they have never had any representation, and they have become accustomed to the position, apparently, knowing that a constitutional change is required in order to alter it. Here in Australia, no constitutional change is required. All that the Opposition asks is that the Parliament exercise the power it has in this matter. Already the Government has conceded in the Parliament the right of the Australian Capital Territory to representation. It has conceded to the member for the Territory the right to vote in an exceedingly limited class of matters.
The one difference between the Opposition and the Government is the quantum of matters on which the member for the Australian Capital Territory may vote. It is a very small area of .disagreement. There is no argument but that he has a vote, that he is here, and that the local people have representation, and I .think we ought to be adult enough and broadminded enough not to be quibbling about numbers. The number of voters in the Australian Capital Territory is not much below the number in the smallest electorate otherwise - 31,000 in Kalgoorlie - and the number here could very well get quite close to that in Kalgoorlie by the time the next election is held.
We of the Opposition ask the Government to have a little foresight. We realize that the vote of the member for the Australian Capital Territory will have no effect in the House of Representatives, as it is now constituted, on the Government, or any of the party measures that come before the House. The Government has nothing to fear from conferring the vote on the member in the next period of three years so far as can be foreseen. On behalf of the Opposition, I move -
Leave out all words after “That”, insert “ the bill be withdrawn and re-drafted to remove all restrictions on the voting rights of the member for the Australian Capital Territory “.
The Minister developed an argument - I doubt that he presented it as a firm view - to the effect that it was open to question whether a population consisting very largely of public servants acting under the Government in the most intimate way in a territory should be given a vote at all. That is a proposition that the Opposition repudiates completely.
– When in a state of doubt, resolve the question in the negative!
– That is not a good principle. As a matter of fact, I had a contrary experience in my early youth that I have never forgotten. I was undecided whether I had to write an essay on A or B, and did neither because of the doubt. I paid the penalty on the following Monday. I assure the honorable senator that is at the back of my mind when I repudiate the principle that he puts to me. You do not decide in the negative.
I find no principle involved in the matter. From a democratic viewpoint, one looks for enlightenment amongst electors. I have argued in this place before that the strength of a democracy depends upon the degree of enlightenment of the electors.
– No - its representation!
– I do not agree with that interjection. The degree of enlightenment of the electors will have a great effect upon the representation, and will determine the representation. I should say that of the people who live very close to politics in this Territory only a very few - those right at the top - might have a say in fashioning the advice that is tendered to governments. They would be very few, and they would be only men at top levels. They would not be the rank-and-file public servants who are not policy makers but who are in relatively routine jobs. The number of public servants who influence top policy of the Government can, I venture to say, be counted on the fingers of two hands. The rest are in the position of ordinary citizens, except that they are very close not only to politics but also to politicians. They are able to assess men and policies from a better platform than electors in any other electorate, and I put that as an additional argument why those in the Territory, comprising very largely responsible public servants, should have a leaning to them in favour of their voting rather than a leaning against them.
I do not propose to traverse the matter further at this stage. I commend to the Senate the amendment which I have moved on behalf of the Opposition.
– 1 listened to the Leader of the Opposition (Senator McKenna) with the attention that I always give to his remarks, and with a good deal of sympathy, and I might say that I could give him the reply King Agrippa gave to Paul - “ Almost thou persuadest me “. But I am supporting the bill and opposing the amendment, and for these reasons: This bill does give the member for the Australian Capital Territory increased power. He will be able to vote on bills relating solely to the Territory. He will be able to vote on a motion for the disallowance of an ordinance relating to the Territory, or on a motion for the disallowance of a regulation under an ordinance relating to the Territory. Finally - and this is most important in this period of transition - he will be able to vote on the disallowance of a modification or variation of the plan of the layout of Canberra.
– Does that amount to much?
– It does. If the honorable senator will listen, I shall show him that it amounts to a great deal. I think that in this period of transition that is as much as we are entitled to give, and I am of the opinion that if the Leader of the Opposition were sitting on this side of the chamber he would adopt the same attitude as the Government is taking.
I do not accept the American parallel. I think the Americans probably did not know quite what they were doing. When they drew up the constitution, the federal territory and what it developed into was something that did not enter their thoughts. I have always thought that it was a great defect in American government that the people in the city of Washington did not govern themselves.
The fathers of our Constitution did the right thing when they placed in it something which gave the possibility of the people in the Australian Capital Territory governing themselves as fully as all other citizens. For instance, a provision was placed in the Constitution which enabled Parliament to give a representative to the Australian Capital Territory in either House. That is something that is usually not known. The best legal opinion I have been able to get is that the expression “in either House “ means in both Houses. That is something for honorable senators to consider. It may be possible to> have representative in the Senate. I am quite sure that if there were a representative in the Senate, the people of the States, especially of the States with the smaller populations, which need the Senate more than my great State, would insist that the representative should vote only on matters relating to Canberra. For that reason, I can see nothing wrong with the limitation on the member as proposed by this bill.
Canberra and the Australian Capital Territory are by no means fully populated. This city is not yet built. We are still in the half-way stage. When this city becomes such a capital as Washington is to-day. the average member will not arrive at the latest moment and leave at the earliest; he will live here for at least part of the year. We will have houses or flats. We will not stay in a lodging house, an hotel or wherever we stay. Until that time arrives, this city will not really be the capital. Some public servants are still arriving, and provision is being made for them. Outside the Public Service the building trade is probably the most important sources of employment, but many of the people engaged in the building trade are not permanent residents; they are only birds of passage. I think, it would be wrong that they should have an undue influence on the government of this country.
The Minister stated that his objection to giving full voting rights to the representative of the Australian Capital Territory was based solely on the ground of population. I think that all other grounds of objection that have been raised are irrelevant. I certainly agree with Senator McKenna that there is no objection to a constituency in which the majority of people are public servants. It was said in Victoria, and also in New South Wales, some years ago, that because public servants were influencing governments too much by their deciding vote in many electorates, all public servants should be taken out of their existing electorates and put together in one or two electorates. I would not agree to that. 1 think that a public servant is also a citizen. I can see no objection to giving full voting rights to the member for the Australian Capital Territory simply because the majority of the people here are public servants. However, I hope that when this city develops fully we will have here the sort of mixed society that you get throughout Australia.
We already are developing educational institutions. The retail trade is developing to an enormous extent. As was stated in the report of the select committee - and as 1 have said more than once in this chamber - we hope that certain industries will come here, not by the deliberate action of the government, but simply because it is the natural place for them to come. I instance the printing and publishing industry, which I think may ultimately find Canberra to be the most important centre in Australia. I accept this bill, therefore as a step forward towards giving Canberra something like full self-governing rights.
What is most important for Canberra is that the people should control their own local affairs. As you know, in the select Committee’s report on Canberra we recommended a legislative council. That was laughed at in the metropolitan newspapers, as were many other things we recommended, because the critics did not take the trouble to read the report and see what our motives were. They thought that a legislative council was something grandiose, something on a big scale, and that we had recommended a body that would be enormously expensive. We recommended a legislative council rather than a system of municipal government because we found, on the evidence presented to the committee - and let us remember that our findings were unanimous, with no party dissension; it was not a chairman’s report, as some one writing in one of the newspapers said, but the report of the committee - that the municipal functions were being adequately performed by the authorities in Canberra, but that the legislative functions were not. We felt that there were certain spheres in which the people of Canberra should have the same rights as citizens in a State, and therefore we recommended a legislative council, which need not be more costly than a local council, but which would carry out the functions that a State government carries out. That is what Canberra needs.
We recommended that a system of municipal government should come later, as time and the occasion demanded. The appropriate system of municipal government for Canberra is a very difficult thing to determine. As Senator Vincent and other members of the committee will recollect, the committee went into this matter very fully, and all kinds of suggestions were thrown out One suggestion that I myself threw out was that the Federal Government should administer the Government triangle - the part of the city in which this building and all the other great public buildings are situated - and allow the people, in their suburbs, to govern their own affairs. For various reasons, that proposal was not accepted. What kind of municipal government Canberra will get ultimately, I do not know. That is a difficult problem, yet to be worked out, but the point I want to make is that the voting power of the representative in the other place is not the most important thing for the citizens of Canberra.
The member for the Australian Capital Territory is given a vote on anything that concerns the Territory exclusively, but is not given a vote on something which could upset a government, or be a determining factor in the policy of the Commonwealth. I think that that is the right position. The representative of the Territory in the other place has a great deal of influence. I remind the Leader of the Opposition. through you, Mr. Acting President, that he occupies one position which I hope will be a position of influence. He is vicechairman of the Joint Committee on Canberra. He holds that position because of the determining voice of one person - myself. The constitution of the committee states that the chairman has the right to nominate the vice-chairman, and I nominated Mr. Fraser, not only because he represents this city, but also because 1 have great faith in his personal judgment on all matters affecting Canberra.
So, Sir, I think that this matter should not be considered from a party viewpoint or from a debating society viewpoint. 1 think that everybody, looking at the matter fairly, will admit that the time has not yet come to give full voting rights to the member for the Australian Capital Territory. Canberra must grow further; it must have a larger population; it must have a more varied population; and it must have also the organs of self-government which will enable the citizens of Canberra to govern themselves and develop their spirit of citizenship. It may be taken as a criticism of some of the people of Canberra when I say that the rather artificial growth of the city from the time that the commission, under Sir John Butters, determined to bring people here willy-nilly has not yet developed a community in the ordinary sense in which we understand the term in Australia. I think that Canberra has a larger proportion of highly intelligent people than have most places in the Commonwealth.
– We will not have that. They vote Labour.
– I am rather sorry that Senator Scott sounded that partisan note. Whether the citizens of Canberra vote Labour or do not vote Labour is not the point. I would not think of determining the issue on that, and I do not think the Government has determined it on that. The time may come when the people of Canberra will not vote Labour. The Leader of the Opposition, quite rightly, praised the personality, character and ability of the present member for the Australian Capital Territory. I am quite sure that many citizens of Canberra do not vote Labour, but vote for the admirable representative they have in another place. Before the present member, they had an independent member. I think it is quite possible that some day they will have a Liberal member. Let me say that if ever the electors of New South Wales are ungrateful enough to say to me “You no longer have a place in this Parliament as our representative “, I will give the people of Canberra the chance to vote for a Liberal representative.
This is a transitional measure. Canberra is in a state of transition. The time ought to come when the citizens of Canberra have every right that the citizens of the States possess, but that time has not yet come. Therefore, I support this transitional measure.
.- I rise to support the amendment. In view of what has taken place in Australia in the past 1 must disagree entirely with Senator McCallum that the time has not yet come to give the representative of the Australian Capital Territory full voting rights in this Parliament. I take the honorable senator’s mind back to the days when Australia had half its present population. That is not so many years ago. I remember it well and the honorable senator must remember it also. I shall not go back to the days when the population of Australia was only 5,000,000. I shall only go back to the time when I entered this Parliament. That is not so very long ago. At that time Tasmanian members in the House of Representatives were elected on no more votes than is the member for the Australian Capital Territory to-day. The average number of voters in those Tasmanian electorates was about 24,000. In the Australian Capital Territory there are to-day about 23,000 voters. If honorable senators will think back for twenty years they will agree that the average electorate in Tasmania then comprised no more than 10,000 or 15,000 voters - far less than are to be found in the Australian Capital Territory to-day. No one - not even Senator Henty, who comes from Tasmania - would claim that, a Tasmanian member should have less than full voting rights in the Commonwealth Parliament. Moreover, there were at that time six senators. To-day there are ten, so that Tasmania has a total of fifteen representatives in the Parliament. If the Tasmanian voting strength is divided among those fifteen it produces a figure of about 12,000, or almost half the number in the Australian Capital Territory.
– That is not quite fair.
– Senator Mattner says that it is not fair, but if he wants to change it he must change the Constitution. It is not necessary, however, to go that far to give full voting rights to the member for the Australian Capital Territory who, I repeat, is representing here far more voters than was the Tasmanian representative of only a few years ago. Let me emphasize that each Tasmanian representative here speaks for about 11,000 voters.
– You cannot include the senators in your calculation.
– I have merely done so for the purpose of illustration. To approach the matter from another direction, I would ask whether any honorable senator would deny to the people of the Australian Capital Territory the representation in this Parliament that was given Tasmanian citizens of twenty years ago?
– I expected such an interjection. The same honorable senator would claim that it was right and just for Tasmanian members to have full representation. He is not prepared to give a similar privilege to Australian citizens in another part of the Commonwealth. If it is fair for citizens in one part of Australia is it not just as right, just as fair, just as democratic, for citizens in another part of the Commonwealth also? What sort of an Australian would he be who would say that that should not be so? Let me analyse the situation further. No Government supporter can get round the fact that the citizens of the Australian Capital Territory should have the same representation as citizens in other parts of the Commonwealth have enjoyed in the past - and still enjoy. How can the present situation be supported in a country which prides itself on its system of democracy, and prides itself on giving equal opportunity to all its citizens? If Government supporters can give me a valid reason for not according to the citizens of the Australian Capital Territory representation comparable with that enjoyed elsewhere, I will sit down immediately.
– Is that a promise?
– Yes, if Government supporters can give me one reason for adopting the undemocratic attitude. To-day our nation is growing up. We are represented on every organization of consequence in the world. We pride ourselves upon being a country that gives a lead to other countries in government, in democracy, in freedom, in standards of living and in almost everything else. Can honorable senators name another country in the world that singles out one portion of the population and says, “We deny you the rights enjoyed by other citizens.”?
– It happens in Washington.
– Does Senator Wade claim that that is in the interests of democracy?
– I have answered the honorable senator’s question.
– I accepted the answer, and I now ask the honorable senator a further question. Is it in accordance with the principles of democracy that some of the citizens of a country, living under similar standards, and following the same line of work as their fellows elsewhere, should be denied opportunities offered to other citizens? I remind honorable senators that all residents of the Australian Capital Territory are not public servants. The number of public servants is relatively few, compared with the total population. Why should the people of this Territory be denied a right that is enjoyed by every other citizen of Australia? Why should their representative have shackles on his hands and legs so far as voting rights are concerned? Why should he be prevented from taking full part in the decisions of the Parliament of this country? Honorable senators can vote, without exception, on matters affecting any part of Australia. They can vote on matters affecting the Northern Territory, the Australian Capital Territory, their own State or any other State, but the member for the Australian Capital Territory is hamstringed. Government supporters think that they are being very generous in allowing him to vote on matters that concern the Territory only.
– That is all he is concerned with.
– I wonder what Senator Maher would say if the Government told him that it would allow Queensland representatives to vote on matters concerning Queensland only. He would be the first to disagree with the Government over that, lt would be necessary to change the Constitution to do that, but it is not necessary to change the Constitution to give the representative of the Australian Capital Territory the same rights as are enjoyed by other members of the Parliament.
– What if the population in the Territory does not warrant it?
– If the population of the Territory does not warrant it, then it was not warranted during the early days of federation. There were no squeals then in the Parliament or anywhere else to the effect that any member of the Parliament did not represent sufficient electors to enable him to retain his seat. As I have indicated, those of us who come from Tasmania represent an average of 12,000 electors each; but the member for the Australian Capital Territory in the House of Representatives represents 23,000 electors. So how can it be suggested that he is being treated equitably?
Section 122 of the Constitution gives the Government full power to make laws for the Territories and to give the representatives of those Territories full voting power in the Parliament. Until such time as those representatives are given full voting rights within the Parliament, they will not be properly representing their constituents. The citizens of the Australian Capital Territory, through their elected representative, are entitled to have as much say in the framing of legislation as has any honorable senator opposite or any honorable senator on this side of the chamber. But the member for the Australian Capital Territory is barred from having full voting rights. The residents of the Territory have been singled out to be disfranchised. There are between 40,000 and 50,000 people in the Territory. Whoever dreamt for one moment that in a free democratic country one section of the community, consisting of 40,000 or 50,000 people, would be singled out and barred from the right to have a say in the affairs of government?
– Has this happened only in the last few years? I can recall your having the opportunity to do these things when you were here before.
– 1 entirely agree with the honorable senator. After having a good look at the situation and analysing it. after putting my back to the job as I was elected to do, 1 found the anomalies that existed. Having discovered those anomalies. I can see that the honorable senator agree? with me; but he will not rise and fight for these people who are not in a position to fight for themselves. If the Parliament had remained in Melbourne, every citizen of what is now the Australian Capital Territory would be represented.
– But there were only about five or ten people here originally.
– Never mind whether there were ten or 10,000! We happen to be talking about 40,000 or 50,000 people who to-day are disfranchised. You cannot get away from the fact that, if the Parliament had not been moved from Melbourne, every one who lived in this lump of territory here would have been fully represented’; but because the Parliament has been moved to Canberra, the people have been disfranchised and the gentleman who has been elected by them is also disfranchised and barred from being able to represent them in the same way that other members are able to represent their constituents in the various States.
– Are you in favour of the amendment?
– Of course, I am in favour of the amendment.
– I thought so.
– If the amendment is carried it will give these people the franchise to which they are justly entitled; but Senator Henty will admit - he will correct me if I am wrong in assuming this - that if it is not agreed to, these people will not get the franchise to which they are entitled.
– Let us test it.
– You cannot argue against numbers.
– The honorable senator from Queensland who interjected-
– He does not come from Queensland.
– Senator Kendall interjected. I have often heard him speak in this chamber about free democracy. He is one of the champions of free democracy. I do not think he will object to that title.
– Do you mean me?
– Yes. I do not think the honorable senator would run away from that title for one moment. In fact, I do not think any honorable senator opposite would run away from that title. That being so, I suggest that the time has arrived when Government senators should not only preach free democracy but should practice it when they have the opportunity to do so. Why should honorable senators tinker with the principal act unless they intend to do the right thing and say that the person who has been elected to represent the residents of the Australian Capital Territory has the same right to vote on the question as to whether we should go outside Australia to obtain £28,000,000 for the railway from Mount Isa to Townsville as the rest of us have. If the member for the Australian Capital Territory is not given that voting right, 23,000 electors are being disfranchised. If honorable senators opposite pose as the champions of free democracy, here is an opportunity for them to practice free democracy. Every Australian is entitled to the same rights as his fellows enjoy. Why should not the people who live in the Australian Capital Territory have the same rights as other electors, and why should not their representative enjoy the same rights as are enjoyed by honorable senators opposite? No one can say why they should be debarred from having those rights.
– Would you reduce the voting strength of all federal electorates to that of the Australian Capital Territory?
– I would not let such a stupid and idiotic thought enter my mind any more than would other members of the Parliament entertain the stupid and idiotic thought that the present basis of representation for Tasmania - an average of 12,000 electors - should be altered because some other members of this Parliament represent 30,000 or 40,000 electors.
– Are you speaking against Tasmania?
– No, I am not speaking against Tasmania. Tasmania has every right under the Constitution to have fifteen representatives here. No one can rob Tasmania of the right to have fifteen representatives in the National Parliament. That is Tasmania’s right. Every Australian has that right under the Constitution.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 10.30 p.m.
Cite as: Australia, Senate, Debates, 5 May 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19590505_senate_23_s14/>.