22 March 1961

23rd Parliament · 3rd Session

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.

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Senator McMANUS:

– 1 desire to ask a question of the Minister for National Development. Is he aware that Mr. Ebbels, the Victorian Registrar of Co-operative Societies, has challenged in his latest report figures which he states were issued by the Federal Department of National Development, estimating the Australian housing shortage at 50,000 units in 1959, and has stated that his inquiries support the claim of the Victorian Housing Minister, Mr. Petty, that the Victorian shortage alone is from 35,000 to 40,000 homes? Does the Department of National Development compile its estimates independently or in cooperation with the State housing authorities? Does the Minister believe that in view of the statements by Mr. Petty and Mr. Ebbels, the figures of the Department of National Development need to be re-examined? Can he suggest a reason for the discrepancy between the two estimates?

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

– I have not seen Mr.. Ebbels’s report, nor had I heard of it previously. That being the case, I speak with some hesitation, having a very high opinion indeed of Mr. Ebbels and the work he is doing. There must, however, be some misunderstanding. The Department of National Development has not made any estimate of the housing shortage since 1956, but it did commence to bring its estimates up to date in, I think, 1959 or 1960. The department does not do this work on its own. The work is done in conjunction with experts in the Australian National University, and with other demographers and statisticians. The department reported to me that there was a conflict of opinion about the basis upon which estimates should be made subsequent to 1956 and that, as a result, it had been agreed that it was impracticable to make an estimate with any proper foundation until the next census had been taken. The department has not made an estimate of the national housing position for some time. We do no more than say that there has been a marked improvement in the housing situation and that the num ber of houses being built in all States of the Commonwealth has been substantially in excess of the normal annual demand, even though we are not prepared to put a figure upon that normal annual demand. Generally speaking, we go no further than to say that the housing shortage has been very appreciably reduced. It exists at its worst or highest - whichever word you choose to use - in New South Wales and Victoria. It is greater in those States than in the other States of the Commonwealth. It is very much open to question whether in some States of the Commonwealth a housing shortage exists at all. We have deferred establishing the position statistically until the next census. I do not know to what Mr. Ebbels is referring.

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– My question is directed to the Minister representing the Minister for the Army. Is it not a fact that as from 1st January, 1960, the Army establishment in Tasmania - much to the disappointment of the Tasmanian people - was altered from the status of a command, to that of regimental head-quarters? Has the status now been raised again to a command? If not, why are recruiting advertisements currently appearing in Tasmanian newspapers asking, would-be recruits to inquire at head-quarters, Tasmania Command?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I understand that the position is as stated by the honorable senator, and that the Tasmania Command has been designated’ by the Army by a different name. The advertisement to which he refers, and which he has shown to me, invites women to enlist in the Royal Australian Army Nursing Service, Tasmania Command. Quite possibly the use of the word “ command “ instead of “ regimental head-quarters “ is a natural slip on the part of a male officer advertising for female officers under whose command he may eventually come. I shall direct the attention of the Minister for the Army to the question that has been asked.

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Senator BROWN:

– I should like to ask the Minister representing the Minister for Health some interesting questions. Has he any knowledge of a governmental inquiry in Great Britain into the food’ values of certain denatured foods now on the market in the form of breakfast foods? If so, will he make the results of such inquiry available to the Senate? Is it a fact that certain advertisers of similar foods in Australia make extravagant claims on television regarding their vitamin content and food value? Does the department take any action to curb false advertising on television or radio?

Senator GORTON:

– The answers to the honorable senator’s four questions are - (1) No; (2) see answer to No. 1; (3) I do not know, and (4) I will bring the matter to the attention of the Minister for Health and ask him for a reply.

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Senator LAUGHT:

– I preface a question to the Minister for Air by pointing out that the part played by Neptune aircraft of the Royal Australian Air Force in the search in the recent sea mishap about 400 miles east of Brisbane has been properly acclaimed in the Senate and elsewhere. I understand that these aircraft are based near Sydney. Was there any reason why Neptune aircraft were not used by the R.A.A.F. in the search for the “Lincoln Star “ off the South Australian coast?

Senator WADE:
Minister for Air · VICTORIA · LP

– I appreciate the tribute paid by the honorable senator to the Royal Australian Air Force in its search and rescue work off the Queensland coast. In view of the successful use of the Neptune aircraft in that instance he asks why they were not used in the operation off the South Australian coast. The essence of success in all of these operations stems from the speed at which the operation can be commenced. That is particularly so when lives are endangered at sea. If the question carries the implication that had Neptune bombers been available the result of the search in South Australian waters might have been different, I assure the honorable senator, whose concern in this matter I appreciate, that the aircraft used in the search were just as adequately equipped for a search of this kind as are the Neptunes. It may be appropriate to add that persons who need to be rescued from the sea are at the mercy of the waves, and in a very short space of time they can completely vanish from the surface.

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Senator HANNAN:

– Has the attention of the Minister for Air been directed to an article in the Melbourne “ Sun “ last Thursday which quotes the Minister as saying that the decision to make the Mirage fighter aircraft in Australia will directly affect the jobs of 2,000 Australian workers? The same report indicates that it is almost certain that the aircraft made in this country will be fitted with Rolls Royce engines, which also are likely to be manufactured here. Are those statements correct?

Senator WADE:

– It is estimated that about 2,000 Australian workers will be directly employed in the assembling and construction of the new Mirage fighter. It is also true that a large number of additional workers will be indirectly employed on work associated with the new fighter, but it is impossible at this juncture to assess what that number may be. The manufacture of the new fighter will give great impetus to the aircraft industry and to industry generally. But it is not correct to say that it seems certain that the Rolls Royce engine will be fitted to these aircraft. I emphasize that a definite statement about the engines to be used cannot be made at this point of time for the very good reason that tests are now being undertaken in France by a selected team of Australian experts, who will report to the Government on the make of engine considered most efficient and best suited to our needs. No decision will be taken to fit either the Rolls Royce engine or a French engine until we have full and comprehensive reports and recommendations from the people who have been sent to France to conduct tests.

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Senator ARNOLD:

– My question is directed to the Minister for National Development. From time to time, I have asked the Minister questions about the coal industry and the possibility of setting up an industry to manufacture chemical byproducts from coal. I know that the Minister has received reports from experts who have investigated this matter. Having regard to the number of pits that have closed down on the northern coal-fields, is the Minister yet in a position to inform the Senate whether there is any possibility of establishing a coal by-products industry on the northern coalfields within a reasonable time?

Senator SPOONER:

– With the approval of the Government I have had a committee of inquiry appointed to look into this matter and report to the Government. I do nol remember all of the terms of reference, but. the committee was asked first to look at the amount that is now being spent on research into coal. I think the figure is about £350,000 or £400,000 a year. That is an appreciable amount now being spent by the Commonwealth Government on coal research. Secondly, the committee has been asked whether it can advance any proposals which, in the short term, would increase the use of coal. The committee has made a preliminary report and has reviewed, in part, the research programmes. It has pointed out the additional work that it believes it should do before it submits a final report.

So far the committee has done no more than to express a tentative view that the indications are that the best line of research would be to consider the practicability of producing from coal a gas to be used for industrial purposes. That does not mean that that development is just around the corner. Such development would involve a good deal of research work, followed by a pilot plant experimentation. That is why I have always accepted some little amount of unpopularity for not supporting enthusiastically proposals which suggest that something can be done overnight to discover additional uses for coal. I believe we have a long way to go before we can get scientific and industrial opinion to support such proposals.

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Senator SCOTT:

– I preface my question, which is addressed to the Minister representing the Treasurer, by stating that there appeared in the “ Farmers’ Weekly “ of recent date a statement to the effect that finance was being withheld by the banks from farmers for necessary carry-on purposes. I ask the Minister: Is the Government’s credit policy designed to have the banks restrict finance to farmers for carryon purposes? Can he inform me whether the banks have requested the recognized stock firms to reduce their overdrafts with the banks, thus forcing those firms to reduce advances to farmers for carry-on purposes?

Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– Both the policy statement on the operation of credit restrictions, which was made by the Treasurer in November last, and the directive issued by the Governor of the central bank to the trading banks made it quite clear that it is not intended that the credit restrictions shall operate so as to hamper in any way production for export, particularly primary production. I am sure that the Treasurer, in his policy speech, made a particular point of that matter, stating that it would be contrary to the purpose of the directive if credit restrictions in any way hampered production for export. Therefore, the statement to the effect that finance is being withheld by the banks, which the honorable senator says appeared in the Western Australian “ Farmers’ Weekly “, comes as a surprise to me, particularly in the light of the recent statement by the banks to the Governor of the Reserve Bank, and in turn by the Governor of the Reserve Bank to the Treasurer, that the banks themselves would be quite prepared to examine at head office level the complaint of any primary producer who thought he was aggrieved in this connexion. If there are any individual cases of this nature, I suggest that the best method by which to solve the problem would be for the aggrieved person to ask the bank in question to institute, the kind of inquiry that it has agreed to make.

In reply to the other part of the question - whether the central bank has required the call-up of advances made to stock firms - let me say that it seems to me to be quite possible that that is the case. But again, if that call-up operated in such a way as to hamper primary production, I think it would be a case for examination by the method to which I referred earlier. It is certainly not the intention of the directive that carry-on finance should be denied to primary producers, and I can only refer in most emphatic terms to the directive itself and the statement made by the Treasurer.

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Senator SHEEHAN:

– My question, which is addressed to the Minister representing the Minister for Primary Industry, is prompted by the prevalent discussion of methods by which we may improve Australia’s balance-of-payments position. Is it a fact that the Australian tobacco crop foI this season, 1960-61, is estimated at about 31,000,000 lb., which is an increase of 10,000,000 lb. on the crop in the previous season, 1959-60? If that is so, what saving in Australia’s payments overseas, in terms of American dollars, will be brought about by that increase? What has been the trend of consumption of tobacco per head in Australia during the past five years? Is there any factual indication that the increased proportion of Australian-grown tobacco incorporated in Australianmanufactured cigarettes has affected the trend of consumption per head of the population?

Senator WADE:

Senator Sheehan has asked a most interesting question. I understand that the figure he has quoted - an increase of 10,000,000 lb. in the 1960-61 crop over the 1959-60 crop - is correct. If my arithmetic is right, that would involve a saving of about 5,000,000 dollars in overseas funds. I hasten to assure the honorable senator that not all of our imported leaf comes from America. The smoking trend is upwards, although very slightly. One aspect of the trend is of interest. Pre-war, of all the cigarettes smoked in Australia. 30 per cent, were .tailor-made and 70 per cent, were “ roll-your-own “; to-day the position is the reverse of that - 70 per cent, are tailor-made and 30 per cent, are “ roll-your-own “. There are no factual indications that the increased proportion of Australian tobacco has affected in any way the sales of cigarettes or tobacco.

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Senator PEARSON:

– Can the Minister representing the Postmaster-General inform me whether the experiment carried out by the Postmaster-General’s Department in regard to the use of light-weight anodized aluminium telephone booths in South Australia during the recent hot summer months has been successful? If it has been successful, does the department intend to erect more of such telephone booths before next summer?

Senator WADE:

– I should like the honorable senator to place that question on the notice-paper. The department is doing some research into this matter and a comprehensive answer to the question is warranted in view of the interest in the experiment.

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Senator McMANUS:

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

  1. Is the ‘Government aware that there is a great and increasing shortage of qualified dentists in Australia?
  2. Is it a fact that many Australian children are receiving inadequate dental attention because of this shortage and because of the inability of their parents to bear the considerable expense of dental treatment?
  3. Is it a fact .that a considerable number of Australian graduates in dentistry have been attracted to England by the more remunerative opportunities there under the national health scheme, and that business firms in Britain interested in dental supplies are offering most attractive terms to induce Australian dental graduates to go to the United Kingdom?
  4. Did some 170 qualified Australian dentists leave for Britain last year and are some hundreds now domiciled there?
  5. Has the Government any plans to arrest the serious position by (a) a national dental health scheme; and (jb) consultation with bodies representing Australian dentists?
Senator GORTON:

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

  1. I understand that the number of qualified dentists in -practice is less than could be desired in some areas of Australia, but is adequate in other areas.

    1. Any inadequacy in the extent to which Australian children receive dental treatment cannot merely be attributed to the two factors suggested.
    2. No doubt a number of graduates faced with purchasing or establishing a dental practice find that there are favorable opportunities for experience in a country which has a much, larger population and the laws of which enable them to practise there. I understand that some Australian dental graduates are attracted to England for these reasons.
    3. The information available to me indicates that the net. migration of qualified dentists to Britain in 1960 would be considerably less than 170. I am not aware of the number of Australian dentists domiciled in Britain.
    4. I have had consultations with the Australian Dental Association from time to time to discuss problems associated with the introduction of a national dental health scheme.

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Senator LILLICO:

asked the Minister representing the Postmaster-General, upon notice -

  1. ls the Postmaster-General’s Department considering an alteration to what many regard as a most unsatisfactory system of transferring telephones from one subscriber to another, and under which the person to whom the phone is transferred is responsible for all indebtedness contracted by Che previous subscriber?
  2. Would it not be fairer to both parties concerned if a subscriber were made responsible for all indebtedness right up to the exact date on which he relinquished his telephone?
Senator WADE:

– The PostmasterGeneral has furnished the following reply: -

A complete review of the procedures for transferring telephone services is being undertaken. The system to which the honorable senator refers is one whereby a subscriber leaving the premises concerned could transfer his existing telephone service to a new occupant, the new subscriber accepting liability for all outstanding charges. In these circumstances, the department made it quite clear to the two parties concerned that it looked to them to make a satisfactory mutual adjustment of the charges involved.

The procedure has been widely used, particularly where a new occupant has commenced using an existing service before notifying the department that a transfer is required. In such cases the department cannot definitely determine the charges which are appropriate to the outgoing subscriber and the procedure enables public funds to be safeguarded. However, it was realized that the system had some unsatisfactory features and the department has already introduced alternative arrangements. Any new occupant of premises -where there is a telephone service installed can now take over the service at a future date, providing he gives the department advance notice, and he incurs charges only from that time.

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asked the Minister acting for the Minister for Customs and Excise, upon notice -

  1. Is it the Minister’s intention to hold a conference with State Ministers with a view to bringing about uniformity in censorship laws in Australia?
  2. If so, will the Minister examine the system of censorship now operating in West Germany, with a view to its adoption in Australia?
Senator GORTON:

-I am now able to inform the honorable senator that a conference will be held with State Ministers- on 27th March. The purpose of this meeting will be to discuss the possibility of achieving a uniform approach to censorship in this country. The Government has no knowledge of the details of current censorship methods employed in West Germany but steps are being taken to obtain full information on this matter.

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Senator GORTON:
Minister for the Navy · Victoria · LP

– by leave - On 24th February, 1961, the Ministry of Foreign Affairs of the Union of Soviet Socialist Republics delivered to the Australian Embassy in Moscow a note requesting the surrender to the Soviet authorities of Ervin Richard Adolf Petrovich Viks because of certain alleged war crimes.

The note contained an assertion that Mr. Viks had personally participated; in the mass shooting of Soviet citizens near Tartu in July, 1941. It also asserted that while he was in that year chief of the political police of the Tallin-Harin prefecture certain shootings of Soviet citizens and certain arrests of people and their incarceration in concentration camps took place under his official guidance, and that in the following year, whilst chief of a certain department of the Estonian security police, he, in that capacity, guided punitive activities, personally passed death sentences and participated in executions.

No evidence of any kind accompanied the note although it claimed that Soviet investigation agencies had archival documents together with Mr. Viks’s signature which the note claimed to testify to Mr. Viks’s complicity in annihilating hundreds of people. It also claimed that witnesses were available to confirm the contents of the documents.

The Soviet note, in requesting the surrender of Mr. Viks, called the attention of the Australian Government to what it termed the appropriate international agreements which called for war criminals to be handed over for trial and punishment to the countries in whose territories the war crimes had been committed.

The four international instruments were as follows: -

  1. The Moscow Declaration of 30th October, 1943, made by the United Kingdom, the United States and the Soviet Union.
  2. The agreement of 8th August, 1945, establishing the International Military Tribunal for the trial of major war criminals - in conformity with which the Nuremberg trials took place.
  3. The resolution of the General Assembly of the United Nations of 13th February, 1946, recommending that member nations take forthwith all necessary measures to cause the arrest of war criminals.
  4. The resolution of the General Assembly of 31st October, 1947, re-affirming the last-mentioned resolution and recommending that member nations which desired the surrender of war criminals should make their request as soon as possible and should support the request with sufficient evidence to establish a reasonable prima facie case of identity and guilt.

The full texts of these instruments are available in the Parliamentary Library.

No claim was made by the Soviet authorities that any extradition treaty existed which imposed any relevant obligation upon the Australian Government.

Mr. President, this note reached the hands of the Acting Minister for External Affairs, in translation, on 13th March, whereupon he took it immediately into consideration, having the assistance of officers both of the Department of External Affairs and of the Department of the Attorney-General. After investigation, he concluded that the request must be refused.

On 15th March, the Australian Embassy delivered to the Ministry of Foreign Affairs of the Union of Soviet Socialist Republics in Moscow the Australian Government’s reply to the Soviet request. That reply was in the following terms: -

The Australian Embassy presents its compliments to the Ministry of Foreign Affairs and has the honour to refer to the Ministry’s Note of 24th February requesting the surrender of Mr. E. R. A. P. Viks for alleged war crimes in Estonia 19 years ago.

The Australian Government notes that the Ministry, in the absence of any extradition treaty between Australia and the Soviet Union, bases its request on certain international declarations and recommendations, made between the years 1943-1947, concerning the surrender and prosecution of war criminals.

Australia fully shared in the common desire of the United Nations to bring to justice the Nazi, Fascist and Japanese war criminals and, so far as its own immediate theatre of war was concerned, established or participated in tribunals which conducted the trials of a great number of war criminals.

However, the contents of the Ministry’s note and the terms of the above-mentioned instruments make clear when carefully examined, as they have been by the Australian Government, that these instruments have no application to the present matter, and that Australia is under no obligation to surrender Mr. Viks.

The Embassy is instructed to add that the Australian Government has not conceded that the place where the alleged offences are said to have been committed constitutes juridically part of the territory of the Soviet Union.

Before I explain to the Senate the full reasons for the Australian Government’s reply, may I remind the chamber of some basic considerations. The Australian Government has no power or authority to arrest, detain or surrender any person in Australia, whether or not an Australian citizen, except in accordance with the rule of law. There must exist some law authorizing such arrest, detention or surrender, and the Government must meticulously observe all the requirements of that law. The great writ of habeas corpus is always available to bring the executive government before the courts of the land to justify any detention of a person in Australia. Australia knows1 nothing of, and would not for a moment, I am sure, tolerate, any power in the executive government arbitrarily, that is to say without the support of law, to detain persons. On the other hand, some nations know nothing of the rule of law which protects the liberty of the people.

Under our system of law, the surrender of a person to another country takes place under and in accordance with the statutory law, usually in the form of extradition acts, which depend for their operation upon the existence of an extradition treaty with the country to which the surrender is made. Under such acts, there must first be a legal proceeding, in which the evidence against the person sought to be surrendered is closely examined by an impartial tribunal, and in which that person is given full opportunity to place evidence before and to address the tribunal in his own defence. The extradition may take place only if the tribunal is satisfied that a prima facie case of guilt is made out upon the evidence, and authorizes the surrender.

In the present case, no extradition treaty exists between Australia and the Soviet Union. Consequently, there is no legal authority under which the Australian Government could interfere with the liberty of Mr. Viks at the request of the Soviet Government.

I should point out, however, that in the extradition treaties to which Australia is a party, a discretion is reserved to the Government in any case to refuse to surrender a person of Australian citizenship whether by birth or by naturalization.

It is the practice of Australia to refuse to surrender an Australian citizen, even if an extradiction treaty exists. In the instant case, Mr. Viks is an Australian citizen, having been naturalized in the year 1957. I should also point out that extradition treaties to which Australia is a party contain a further limitation, namely, that no surrender should be made if the crime alleged by the requesting country is a political crime in the international sense in which those words are used. This limitation applies to Australian residents as well as to Australian citizens. Broadly speaking, crimes of a political character, for the purpose of the extradition system, include crimes committed in the course of conflict between contending political groups or organizations. Breaches of the laws of war committed by commanders in the field would scarcely come under this heading. But the position of acts performed in the purported exercise of government authority is doubtful. There are cases in which it has been held that acts so done do not justify extradition under the ordinary treaties and statutes. Partly for this reason special international arrangements and recommendations were made, during and at the conclusion of the World War, with respect to the surrender and trial of war criminals.

The Soviet note accordingly bases its request upon international instruments that stand outside the extradition system. Before I briefly inform the Senate of the Australian Government’s understanding of each of these instruments, may I say that the Soviet note is based upon the premise that

Estonia is now, and was in July, 1941, part of the Soviet Union so as to make the places in Estonia mentioned in the note part of Soviet territory for the purposes of the international instruments to which the Australian Government is referred. Australia, Mr. President, has never recognized, and does not now recognize, the juridical incorporation of Estonia into Soviet territory - a circumstance of some significance in relation to some of the instruments to which I now turn.

The first of them was the Moscow Declaration of 1943. This was directed to the situation that would arise upon an armistice with Germany, then in prospect, and was in terms limited to German officers and men and members of the Nazi party. Quite clearly, even if it bound Australia - a matter into which I need not go - this declaration has no application to the present case.

The second was the agreement of 1945. This concerned the trial of major war criminals by a particular tribunal - the Nuremberg tribunal - which long ago ceased to exist. The agreement was also limited to German officers and men and members of the Nazi party. This instrument is clearly inapplicable to the present matter.

The third and fourth were the two recommendatory resolutions of the General Assembly of the United Nations. Whilst these resolutions create no obligations, the Australian Government would feel itself obliged to examine closely the question of how far steps should be taken to implement them, if the Government thought that the resolutions were now applicable. But an examination of the resolutions shows quite clearly that they referred to the situation immediately following upon the cessation of hostilities in the war of 1939-45, and that they contemplated prompt action so as expeditiously to clear up questions of war guilt. The terms in which the resolutions are couched lead quite quickly and certainly to the conclusion that the two recommendatory resolutions are now spent, and presently call for no action by the Australian Government.

These conclusions, Mr. President, are sufficient to dispose of the present request for the surrender of Mr. Viks. But I think I should make it quite clear, without in any way assuming guilt on the part of Mr. Viks, that the Australian Government does not condone for one moment such crimes against humanity as have been the subject of the Nuremberg or Tokyo trials, or as may be involved in the acts that the Soviet note here asserts. Australia has demonstrated its conviction in this regard and its willingness to take prompt action - it participated, through its representatives, in approximately 1,000 war crimes trials in respect of the Pacific area.

Two deep-seated human interests, however, may well here come into conflict. On the one hand, there is the utter abhorrence felt by Australians for those offences against humanity to which we give the generic name of war crimes. On the other hand, there is the right of this nation, by receiving people into its country, to enable men to turn their backs on past bitternesses and to make a new life for themselves and for their families in a happier community. This has formed a precious part of the heritage of the West, in which Australia has an honorable share. in a given case the choice between these two human interests may present a government with a difficult decision. In the present instance, however, the Government came to the clear conclusion that, all questions of legal obligation apart, if such a choice had been necessary to resolve the matter, its right of asylum must have prevailed. Australia has established a thorough, though of course no infallible, system for sifting and screening the hundreds of thousands of migrants who have enriched our national life since the World War. In default of a binding obligation requiring Australia at this point of time to do otherwise, these, who have been allowed to make their homes here, must be able to live, in security, new lives under the rule of law.

In saying this, I must not for one moment be thought to be critical of any nation which, in this field, makes a different decision in any particular instance. It may be their duty, and it certainly is their right, to do so. Honorable senators will, no doubt, have in their minds the proceedings now immediately pending in Israel against a man who stands charged, in effect, as a major war criminal. For ourselves, however, in the kind of case which the present demand suggests, and which is distinguishable in many respects from the case in Israel, we think the time has come to close the chapter. It is, truly, the year 1961. This, indeed, is in the spirit of the United Nations resolutions themselves; for the General Assembly recognized how important it was that that which should be done, should be done quickly.

Mr. President, I have thought, that this statement was due to the Senate in a matter of such importance. The ground of the Government’s refusal was based upon a full examination of the international instruments cited by the Soviet Government, for I felt that it was necessary first to examine whether there was any international obligation upon this country. If there had been, I should have felt that Australia would wish to honour it. I was convinced there was no international obligation. The reply therefore took this ground. Consequently, there was no need to rely upon other possible, grounds, some of which I have broadly indicated in what I have said. I ought finally to say that, if there had been an international obligation, legislative steps would have been necessary. The existence of such an international obligation would not of itself have entitled the Government to interfere with personal liberty. Conformably with the rule of law by and under which we live, authority would have had to be sought from the. Parliament. I have explained in detail to the Senate why the Government thought that this course was neither necessary nor desirable.

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Motions (by Senator Spooner) - by leave - agreed to -

Standing Orders Committee

That a Standing Orders Committee be appointed, to consist of the President, the leader of the Government in the Senate, the Chairman of Committees, and Senators Cooke,. Kendall, Nicholls, O’Byrne, Vincent and Wright, with power to act during recess, and to confer with a similar committee of the House of Representatives:

House Committee

That a House Committee be appointed, to consist of the President and Senators Amour, Aylett, Drake-Brockman, Hannaford, Sandford and Wardlaw, with power to- act during recess, and’ to confer or sit as a joint committee with a< similar committee of the House of Representatives.

Printing Committee

That a Printing Committee be appointed, toconsist of Senators Benn, Buttfield, Cooke,. Marriott, Robertson, Sandford and Scott, with, power to confer or sit as a joint committee with a similar committee of the House of Representatives.

Library Committee

Motion (by Senator Spooner) - by leave - proposed -

That a Library Committee be appointed, to consist of the President and Senators Arnold, Hendrickson, Kendall, McCallum, Robertson and Tangney, with power to act during recess, and to confer or sit as a joint committee with a similar committee of the House of Representatives.

ThPRESIDENT.- There being no further nominations, a ballot will be taken. Ring the. bells. (The bells having been rung, the Clerk read the names of the candidates and the distribution of the ballot-papers proceeded) -


– The clerks at the table having handed out the ballot-papers, honorable senators will now vote by striking out the name of one nominee as indicated on the ballot-paper.

I invite Senator Spooner to come to the table and act as a scrutineer. (A ballot having been taken) -


– I declare that the following senators have been chosen to serve on the Library Commitee: - Senators Arnold, Kendall, McCallum, McManus, Robertson and Tangney. The voting figures were - Senator Arnold, 53; Senator Hendrickson, 24; Senator McCallum, 52; Senator Robertson, 52; Senator Kendall, 53; Senator McManus, 31; Senator Tangney, 53.

The question is -

That a Library Committee be appointed, to consist of the President and Senators Arnold, Kendall, McCallum, McManus, Robertson and Tangney, with power to act during recess, and to confer or sit as a joint committee with a similar committee of the House of Representatives.

Question resolved in the affirmative.

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– I have to inform the Senate that I have received letters from the Leader of the Government in the

Senate nominating Senators Laught, McKellar, Wood and Wright, and from the Leader of the Opposition in the Senate nominating Senators Arnold, Cooke and Willesee, to be members of the Standing Committee on Regulations and Ordinances.

Motion (by Senator Spooner) - by leave - agreed to -

That a Standing Committee of Regulations and Ordinances be appointed, to consist of Senators Arnold, Cooke, Laught, McKellar, Willesee, Wood and Wright, such senators having been duly nominated in accordance with the provisions of Standing Orders No. 36a.

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Debate resumed from 21st March (vide page 304), on motion by Senator Mattner -

That the following Address-in-Reply to the Speech of His Excellency the Administrator be agreed to: -

May it Please Your Excellency -

We, the Senate of the Commonwealth of Australia in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

Upon which Senator Armstrong had moved, by way of amendment -

That the following words be added to the Address-in-Reply: - “ and the Senate deplores the faulty leadership of the Government in directing the Australian economy resulting in -

continuing inflation;

loss of overseas funds;

unemployment; (d.) failure of the Public Loan Market;

retarded National development;

injustice to wage earners;

inadequate social services and housing;

inequitable taxation;

high interest rates; and

shortage of steel”.

Senator WOOD:

.- During my remarks last night I complimented the Government upon its determination to build up Australia’s overseas credits. I referred to various secondary industries, the mining industry and the primary industries. When the debate was interrupted, I was referring to the tourist industry as being one means of building up our overseas credits. Just before the Senate adjourned I was pointing out what was needed to make our drive for more tourists effective. I said that we must not think of Australia as being a small nation and that we shall need to spend approximately £1,000,000 a year on publicity. There is a tendency to think that because Australia has a small population we should spend only a corresponding sum on advertising. We must recognize the fact that if we want to make an impact on people in other countries in relation to our tourist attractions, we must do it in the same way as do countries with bigger populations. To make an appeal to prospective tourists effective, it will be necessary to spend a substantial amount of money on advertising. We ourselves know that a small advertisement in the press does not appeal as greatly as does a large advertisement. The same applies when we are seeking to attract the tourists from overseas. I believe that the expenditure of £1,000,000 a year on publicity overseas could very well result in a handsome return for Australia. If, having spent that sum, we were able to build up the value of our tourist industry to £10,000,000 a year in very quick time, the result would be a very great improvement of our overseas balances. As we all know, this is a very important matter.

I believe that the tourist industry can yield a speedier return from any effort that is put forward than can other industries. We know that people think about and do take holidays at all times during the year. If we were to start advertising now, the response could be almost immediate. The tourist industry is a very valuable one, but it is one which this country has not exploited to the same degree as have other countries. The opportunity to do so is now with us, and it is good to know that apparently the Government is determined to try to do something worth while. It has been said in the past that we have not had accommodation and have not had this and that; but it can truly be said now that we have good hotels and good accommodation generally. As 1 said last night, Australia has features which are different from those of other countries. We must remember that the incentive to travel is the desire to see something different and to see different people. Australia has some unique features which I believe would have an appeal to visitors from overseas. Australia not only has an appeal of its own, but it should have a very strong appeal as the terminating point of travel for people who cross the Pacific from such places as the United States of America. Therefore, the Government is proceeding on right lines in making a determined drive to attract tourists to Australia.

It may be suggested that the expenditure of money by the Government would be a dead loss. People may ask what direct monetary gain the Government would receive. Some may ask, “ Why should we spend money to build up the business of individuals and firms? “ Let us look at the matter in a broad1 national way. Whatever money flows to various business undertakings increases the profit of those concerns, and in turn the Commonwealth Treasury receives more in the form of taxes. So in that way the Government receives a direct benefit. In addition, taxes are imposed on such commodities as cigarettes, tobacco and liquor. So they, too, mean a direct return to the Government. As I have pointed out previously, income from the tourist industry runs right through the business strata of the community and affects every one in an indirect way. Consequently, it benefits not only the Government but the nation generally.

Senator Hannaford:

– There is also the aspect of personal contact with other peoples.

Senator WOOD:

– That is so. To have people coming here from other countries establishes a bond and enables us to understand one another better. Travel helps to remove enmities and ill-feelings and so makes a friendlier world.

Our drive for overseas funds is a matter of dire necessity. In the past we have relied to a very great extent upon our exports of wool, and also upon exports of other primary products, for our overseas earnings’. We are now relying upon overseas investments, too. But I do not think it is wise to have all our eggs in one or two baskets. I believe that the more widely we spread our sources of overseas income the better it is for Australia. Wool has taken a knock in recent times. We have seen the development of synthetics, which have encroached upon the wool market. That has been reflected in wool prices. The decline of wool prices and of our earnings from wool has had a serious effect upon our overseas credits. It is right for the Government to be up and doing now in order to rectify the situation. As I said earlier, we have relied upon overseas investments. But that aspect of our policy perhaps has an element of danger in it. If overseas investments were to taper off to any degree, probably we would be placed in a serious situation. Such reliance is too dangerous for us. Therefore, for those reasons we should try to achieve as wide a range of products and commodities as possible, in order to bring more money into this country.

With regard to the investment of overseas capital in Australia, consideration should be given to the necessity for overseas firms investing here to have some Australian content in their capital structure. Where firms have only overseas capital there is a possibility that they will not strive for overseas markets because by selling in those markets they would compete with parent or associated firms in other countries. Then, of course, there is the matter of the mounting dividends which flow out of Australia. Looking at this matter from the viewpoint of our overseas commitments and the desire to have a share in our own industries, the Government should give consideration to the point I have raised. If we. had a stake in many of the industries that overseas interests have established here, that would make for a much better reaction among our people generally.

The. greatest problem that we have at the moment is the balance of payments. If the position is not rectified, it could create a very serious difficulty for us. Therefore, every one of us should be determined to help in every possible way. As I indicated last night, from various statements that have been made we have seen that a consciousness of that requirement is developing. It has been pointed out that in the cattle industry the sending of beef overseas is very important. Of course, the Government has in mind road development schemes for the northern parts of Australia, where cattle are driven. They could be very valuable in helping to build up that industry to an even greater extent. As I have pointed out previously, in time of drought good roads could be the means of saving millions of pounds worth of stock. If we were able to transport stock by road, it is possible that it could be saved in time of drought and eventually sent overseas, so earning valuable overseas funds.

We have a similar trend in regard to coal. The Government is sponsoring the provision of better coal-handling facilities to assist the export of coal. Moves are being made in that direction. Mr. Ernest Evans, the Minister for Mines in Queensland, recently paid a visit to Japan, and I believe that he did a very good job in that country. The Minister for National Development (Senator Spooner) had previously paid a visit there. We find now that coal from Queensland will be exported to Japan. That not only will create work and assist the industry in Queensland, but also it will be another valuable contribution to our overseas credits. Last night I spoke about iron ore. The export of that commodity could grow to even greater proportions than we envisage at present. The tourist industry, of which I spoke also last night, could be increased considerably. So honorable senators can see that we have a number of things on the move and that collectively they could be of very great value.

In dealing with various aspects of this matter last night, I spoke about secondary industries. That is the field in which 1 think we will probably find the greatest difficulty in building up our overseas earnings. Tax incentives are being offered by the Government in order to encourage secondary industries to export their products, but a responsibility devolves not only upon the Government but also upon the people in secondary industries. A national call goes forth to secondary industries to do everything possible to assist the Government to ensure that we have sufficient overseas credits available, so that, among other things, materials may be imported which secondary industries require in the manufacture of their goods. It is essential that secondary industries play their part. I believe that it can be done if the captains of industry really get behind this move.

We know that last year about 250 people gathered in Canberra to try to work out how overseas credits could be earned. I hope that this call from the Government will act as a stimulus and an encouragement to people to do their best for Australia. All Australians should want to see this country progress and develop in every possible way. If we are hampered by a shortage of overseas funds, we shall always be at a great disadvantage. The initiative and enterprise which Australians have displayed so frequently in other directions should be applied to the building up of our secondary industries and of our export earnings. That can be done, and I am sure that secondary industries will rally to the call of the Government. The Government has set the course for them and the opportunity is there.

There is a national call to sell more cheaply and even to sell at cost, if necessary. Four companies, of which I spoke last night, intend to sell even below cost, if necessary, because greater sales create greater markets. The greater the output, the more economic is the rate of production. This results in cheaper goods. I believe that if secondary industries answer the call in a truly national way we will achieve: what the Government is trying to achieve.

Let me cite the case of a Queensland company, Appleton Industries Limited of Brisbane. A little while ago I received a letter from Mr. Spalding, the chairman and managing director of that company, in which he said -

That Australia’s real problem is one of a shortage of overseas funds, of course, is correct. As chairman of a Queensland company that, at present, sells its products in over 100 countries and thus does its share in earning overseas currency, I think that we can claim to be doing our part in the export field.

That Brisbane firm is selling its products in more than 100 countries because it has initiative, drive and sales know-how. Surely that is an example that many industries in the bigger capital cities of Australia should follow. Appleton Industries Limited is a Queensland company of which I am truly proud, as I am sure most Queenslanders are. I hope that that example will be copied and re-copied by more and more industries throughout Australia. If that is done, I believe that we will achieve our aim of building up our overseas credits and eliminating the trouble which we have had continually in recent times, so making Australia a sounder and more prosperous country. I believe that the greatest problem we have at the moment is our. overseas credits position. Mr.. Deputy President, I have very much pleasure in supporting the motion for the adoption, of the. AddressinReply.

Senator AYLETT:

– I. desire to associate myself with the remarks) of other speakers in regard to the Address-‘ in-Reply to the Speech made by His Excellency the Administrator. I consider, that the Address-in-Reply should be: adopted, as other honorable senators do; but I also consider that the words contained in the amendment moved by Senator Armstrong should be added. We know that His Excellency delivered his Speech with great courtesy, dignity and clarity, but we also know that the Speech which he delivered was handed to him by his advisers, of whom he feels in duty bound to take cognizance. Although the Speech was delivered very courteously and with all the’ dignity that anybody could expect, in my opinion it was barren or any ideas or meat. That is why I support the amendment moved by the Opposition.

In the limited time at my disposal I will’ be able to deal with only some of the subjects on which I should like to speak. Therefore, I will speak only of those that I consider the most important - namely,, inflation, unemployment, injustice to wageearners, inadequate social services and housing. I will take them in that order.. First, let me refer to inflation. No one will deny that slight inflation was creeping in at the time this Government took office in 1949. But nobody will deny that a very strong rein had been put on that inflation by the Labour Government, particularly through capital issues control and import restrictions. Labour had inflation fairly well controlled. This Government said that it could not bear any controls, and it threw off capital issues controls and import licensing: Inflation’ went haywire; like a racehorse racing round a course. Upon seeing that inflation was going haywire, that the value of the £1 was continuing to diminish despite the Government’s promise to put value- back in the £1, the Government re-introduced import licensing, took it off again, and- brought it back again and retained it for seven years. A similar thing happened in respect of. capital issues controls. The Government imposed those controls, took them off-, reimposed them, and took them off again The Government thought that such actions would curb the inflationary trend. What has happened? The more the Government muddled about, imposing; capital issues controls and. removing, them, the higher inflation mounted. The more it imposed and removed imports control, the more inflation spiralled’. In spite of everything the Government attempted to do, it did not curb inflation at any stage. Inflation continued to increase year by year.

In the latter part of 1.960, the Government introduced the credit squeeze and increased sales tax on passenger motor vehicles as a cure-all for inflation. What was the result? We sat in this chamber and listened to two supporters of the Government opposing the measures. Senator Wright used, all his eloquence to tell the Government what the result of a credit squeeze and the lifting of imports; control would be, but when the matter came to a vote it was. shown that he had’ very little sincerity: Senator Wood spoke with great sincerity about what would happen if the Government took that course. He. backed his opinion by his vote in this chamber; and how right he was. His ideas were supported by every member of. the Opposition who spoke in that debate.

What is the position to-day? In- spite of the credit restrictions and the lifting of imports control, inflation is still1 rising while wages remain at the same level. Not only did all members of the Opposition and some supporters of the Government in the Parliament tell the Government that disaster would befall it, but also some of the Government’s keenest supporters outside the Parliament said the same thing. In the Melbourne “ Herald “ of 20th March, 1961, appeared a statement attributed to Mr: Gordon More, president of the Victorian Chamber of Manufactures. It will be most interesting for the Government and the listening public to hear the results of the survey made by that organization. This is too good a survey and factual statement to ignore. The report, which is headed “ Wide range of industry hit hard “, reads -

The Chamber of Manufactures said to-day a survey it had make showed that “ the detrimental effects of the credit squeeze imposed last November have now extended beyond the build. ing and automotive fields which- were the first to be hit..”

Results of the survey were announced by the president of the chamber, Mr. Gordon More.

Mr. More said production in. the box and case manufacturing industry was down. 14.5 per cent on last year’s level, men’s clothing production had fallen 12.3 per cent, lingerie 1S.4 per cent, knitted fabrics 40 per cent, and furnishing fabrics. 40 per cent.

Those industries had also shown the greatest fa.111 in sales. The- woollen and worsted industry had suffered, a sales, drop of 37.9 per cent in the first six weeks of 1961,. compared with the same period last year. “ Two of the most serious aspects of the current credit squeeze are the increasing stocks in some industries, combined with rapidly falling orders,” Mr. More said.

Industries having most difficulty’ in this way were the box and case makers (stocks up 41 per cent, and forward orders down 16.7 per cent), women’s frocks (stocks up 17.1 per cent, orders down 14.8 per cent), men’s, wear (stocks up 1S.S per cent, orders, down 26.1 per cent), lingerie (stocks up 11 per cent, orders down 39.3 per cent), knitted fabrics (stocks up 54 per cent, orders- down 33.5 per cent), furniture (stocks up 50.8 per cent, orders down- 41.8 per cent), furnishing- fabrics (stocks- up 45 per cent, orders down 57.3 per cent) and woollen weavers and spinners (stocks up 7.5 per cent, orders down 33 per- cent).

Mr. More said: “This, of course, must unfortunately lead to some retrenchments of employees. The- chamber’s survey also indicated considerable reduction of overtime over a. wide spread of industries.”

Returns from knitted fabrics factories gave the most serious view of this side of the credit squeeze, said Mr. More. He said employment there had fallen’ by 21.5 per cent and overtime had been eliminated.

In box and case making, employment was down 12.5 per cent and overtime down 24.3 per cent; in men’s wear factories employment was down 7.6 per cent and overtime had been cut by almost one-third; and in lingerie factories employment was down 7.6 per cent and overtime- down 67.5 per cent.

He said furnishing fabrics factories had reduced employment by 12.5 per cent and cut overtime for the remaining workers by 40 per cent.

Woollen and worsted factories Had put off 5.8 per cent of their employees, and cut overtime by 37.9 per cent.

Mr. More said, all these things were raising rather than reducing, costs. This was the opposite effect, he said, to what the Government’s advisers had envisaged when the credit squeeze began.

Typical examples of increasing unit costs werea six per cent increase for the woollen and’ worsted industry; 8.1 per cent for women’s frocks, and 10 per cent for furnishing fabrics.

Mr. More said: “The immediate, reimposition of selective import, restrictions could allow the. early easing of the recent credit restrictions which, together with excessive- imports; are contributing’ greatly to this unhappy picture.”’

When we point out these things, the Government claims, that we are calamity howlers, trying to ruin the prestige and economy of Australia by putting a scare into the people. The survey to which I have just referred shows the factual position. It was made by very careful men who knew their job and were competent to make it. The survey bears out the warning that the Opposition gave to the Government when the economic measures were introduced. It supports all that Senator Wood and Senator Wright said during the Budget session last year. It shows that the Government’s measures have been an utter failure.

Let me turn to the employment position. I have just read to the Senate a statement which substantiates our claim that inflation is still running wild and that the Government has done nothing to curb it; that unemployment is mounting; and that if something is not done very quickly indeed, unemployment will snowball. Throughout Australia, sawmills are closing day after day. Mills that-had been in continuous production for twenty years have been forced to close, and there are stacks of millions of super, feet of timber for which there are no markets. In addition, factories are closing because of the credit squeeze. At certain factories the employees have agreed to work a four-day week to prevent some of their fellows from being thrown on to the scrap-heap. Yet, when we bring such matters to the notice of the Government, its supporters claim that we are calamity howlers.

I point out that the motor car industry has dismissed between 6,000 and 7,000 employees. Because of the effect of those dismissals on other industries which are connected with the motor industry, it is no doubt true to say that about 10,000 persons have been thrown on to the scrapheap because of the slackening off in the motor industry alone. How can the Government say with truth that the employment position is stable when in fact unemployment is snowballing at the present rate? What is the Government doing to improve the position? Nothing whatever! Its supporters say that the credit squeeze and the removal of import controls are achieving the objectives which the Government planned for them. If it planned to bring about a large pool of unemployed, and to have warehouses full of imported stocks while Australian factories are sacking employees and closing their doors, it certainly has achieved its objectives.

In 1927 and 1928, during the regime of the Bruce-Page Government, an economic situation that was almost exactly similar to the present situation arose. Unemployment began to increase in exactly the same way. The warehouses were full of imported goods that had been bought with borrowed money. The Menzies Government is to-day borrowing money to pay for imports, while Australian factories are closing. In the years that I have mentioned, there was also a credit squeeze. There were high interest rates. Nobody could obtain finance. That disastrous state of affairs continued for about ten years. Some of the supporters of the Government in the Senate may not be old enough to remember those days, but there are many honorable senators who, like me, remember only too well the disastrous effects of that economic policy on Australia. It has taken us three decades to get over it.

When the Government says that unemployment is not snowballing, it is not speaking the truth. We hear Ministers and other honorable senators opposite say that only 1.7 per cent, of the work force is unemployed. Even if that were correct it would be far too high a percentage, but of course, Mr. Deputy President, the percentage is much greater than that. As we know, the Government’s unemployment statistics relate only to people who have registered as unemployed. Those members of the community who work for a couple of days a week cannot register. The supporters of the Government compare the percentage of the Australian work force that is unemployed with that of the United States of America. Apparently, they believe that because 6,000,000 people, or 5.7 per cent, of the work force, are unemployed in the United States, we should follow suit. To be logical, they should also say that we should follow Russia’s example and spend millions of pounds on hotels to boost the tourist industry. That might not be such a bad idea, incidentally, because the construction of hotels would at least provide employment for some of the people who are at present unemployed.

Instead of a government which says that we should follow the example of certain other countries, we need a government that has initiative and vision. Why compare our list of unemployed with that of the United States, Canada or Great Britain? To do so certainly affords no comfort to the 73,000 people whom the Government admits are unemployed, although probably a more correct estimate of the number would be 140,000. To compare the position in Australia with that in other countries’ gives little comfort to the unemployed people who are paying for their homes on terms, or to those who are paying off refrigerators, television sets, washing machines and other appliances. The bailiffs may be coming to take the appliances back to the factories, and the unemployed people may lose all the money that they have already paid. The Government deserves to be censured if only 1.7 per cent, of those who are willing to work are unemployed. Surely there is no greater injustice than to take from a man his self respect by forcing him to go home to his wife and say: “ My dear, you have had1 this refrigerator, or this washing machine, for eighteen months, and there is only £20 to be paid off it. Unfortunately, we cannot keep it because I cannot find the money to pay for it. I have lost my job, and we shall have to depend on the unemployment benefit.” Could there be anything more demoralizing for a hard-working man?

What is the Government doing to correct the position? Like a previous Menzies Government during 1940 and 1941, when we were at war, it is doing practically nothing. What could be more unjust to the workers than for prices to be rising every day while wages are pegged? The Government cannot pretend that the wages of the workers have not been pegged by indirect methods. It is true that some time ago the Commonwealth Arbitration Court awarded a slight increase, but wages have been pegged ever since. During the whole of the time, wages have been chasing prices. The tail has been wagging the dog. The workers also are suffering from an increasing burden of taxation. It cannot be denied that the greatest weight of taxation falls on the man with the largest family, because of the incidence of sales tax. When this Government came to office, receipts from sales tax amounted to about £86,000,000 per annum. Now, they amount to about £120,000,000 per annum. ls it just that the workers with the largest families must bear the heaviest burden in the form of sales tax? On a previous occasion in this chamber, I read from the “ Grocers Journal “ a list of every-day commodities, such as self-raising flour, which were subject to sales tax of from 12i per cent, to 181 per cent. What could be more unjust to the workers than taxation of that kind?

Senator Dame Annabelle Rankin has told the story of the Government’s achievements so often that she is beginning to believe it herself. She emphasized the great work that the Government has done in the field of social services. She did not say that the cost of living had skyrocketed and that if the Government had not increased social service benefits, many people would be starving to-day because they would not be able to keep pace with inflation. The Government parties, prior to their election to office, promised to put value back into the £1. Instead, they have reduced its value. The Government had no alternative. It had to increase social service benefits, so that the pensioners and others would have some money with which to purchase the necessities of life.

When this Government took over the reins of office, social service contributions at the rate of 18d. in the £1 were being paid into the National Welfare Fund, in which there was a substantial credit. This Government took that money and paid it into Consolidated Revenue. The Government then introduced legislation which had the effect of forcing people to join approved societies in order to be eligible to receive hospital and medical benefits. In effect, the workers were compelled to pay an extra tax of £20 a year. The position would not be so bad if they received the full benefits for which they have contributed. Not long ago, one of these societies introduced a new table known as Table J. It reminds me of document J in a celebrated court case some years ago. Under this table, the benefit payable in respect of a major operation is, admittedly, about double the amount that was payable under the existing tables. Appeals are made on television that are designed to hoodwink people into transferring to Table J, involving them in additional contributions of £3 or £4 a year, but the majority of them will receive practically no additional benefit. The amount of benefit payable does not even cover the cost of a minor operation or of an anaesthetic administered by means of a needle. If a subscriber to the fund has to undergo surgery a second time in respect of the same illness, then, although he may have been a member of the fund for five or even ten years, he is classified as having a chronic complaint. I can tell the Senate that I am speaking from practical experience and that what I have said is not based on hearsay.

Senator Dame Annabelle Rankin referred to the free medicine scheme. Let us have a look at this so-called free medicine. In my own case, it is necessary for me to buy drugs every week of the year, but it pays me handsomely not to touch the free drugs scheme because of the restrictions that are imposed and the small quantities of drugs that are made available. Over the year, I save money by paying the full price for the medicine I need and not availing myself of the Government’s scheme. As I have a head for business, it follows that I have a head for finance, and I know that I am financially better off at the end of the year by avoiding the so-called free medicine scheme.

I come now to the statement in the Opposition’s amendment that an injustice is being done to the workers. By inserting severe penal clauses in the industrial legislation the Government hopes to bankrupt many workers’ organizations in this country. Some trade unions have been fined £500 or £1,000 for contempt of court. In addition to paying those fines, the unions have incurred legal expenses of another £500 or more, because when the Government is represented by a Q.C. it .is of -no use for the union to be represented other than by another Q.C. I say that the Government, by means of this1 penal legislation, hopes to smash and bankrupt the unions of Australia, which would1 then be at its mercy. This Government may penalize the industrial workers of Australia and bring them to bankruptcy but it will never break .their spirit. The more the Government tries by this sort of legislation to smash .the workers, the .more determined they become that the Government will not smash them. I believe that the economy of Australia generally would benefit if the

Government adopted a more conciliatory attitude towards the workers.

Let me refer to another aspect of social services of which the Opposition’s amendment makes mention. The Administrator stated in his Speech that the Australian people are being adequately housed. The credit squeeze has reduced the construction of housing by 50 per cent. Even if this reduction had not occurred, it would have taken some time for the building industry to overtake the lag in housing. But, as I have said, the Government has put the brakes on this industry and the construction of housing has been reduced by at least 50 per cent. Unless the economic curbs are removed the building industry will stagnate. If the Ministers have not time themselves to look at what is taking place in the building industry, they should get the back-benchers on the Government side to take a look for them. If they were to. look around they would find that in many instances homes that were almost finished a few months ago are still not finished, because building was brought to a standstill due to lack of finance. The Government is bringing into this country migrants at the rate of 125,000 a year, and they must be housed.

Senator Laught:

– They are being housed.

Senator AYLETT:

– That may be the case at the moment, but what will the position be in the future in view of the 50 per cent, drop in housing construction? In view of the snowballing of unemployment in Australia, what does the future hold for the migrants? Migrants who are coming to this country Will swell the pool of unemployed. In addition to immigration, natural increase is running at the rate of about 125:000 a year, so our population is increasing overall by between 200,000 and 250,000 persons a year. How does the Government hope to house these additional people, remembering that the credit squeeze has reduced the rate of construction of housing by about 50 per cent.? The Government is doing exactly what the BrucePage Government did in 1927 and 1928. It is heading in the -same direction .as that Government went.

I have .no time in which to enlarge on some of the points I have made. I commend Senator Wood for pointing out some time ago the effect that the iniquitous credit restrictions that have been imposed by the Government would have. I believe that the days of this Government are numbered. In 1927 or 1929 nobody thought that Labour would win the election, but it was returned with an overwhelming majority. The people were fed up with credit restrictions, with poverty and with the suicides that were occurring. This Government is following a policy similar to that which was applied by the Government of those days. I am sure that after this sessional period ends and the economic pinch has been felt by the people from one end of Australia to the other, the Government will lift its credit restrictions and in August will bring down a rosy Budget, saying to the people, “We had to do those drastic things in order to right the economy of this country “. The Government parties will try to win the next election by those means because they know they have no chance while the credit squeeze is still in operation. However, I believe that this Government will meet with the fate which the Bruce-Page Government met in 1929. The people who financed the Government parties at the last election will not finance them or vote for them on the next occasion because they do not want their factories to be closed and they do not want to see people going bankrupt all over the country as was the position in the 1930’s, brought about by the application of a policy similar to the policy that is being implemented by this Government to-day.

Senator LAUGHT:
South Australia

– I rise to support the motion for the adoption of the Address-in-Reply, and I oppose the amendment that has been moved by the Opposition. I join with honorable senators of both sides in expressing loyalty to Her Majesty the Queen and in expressing thanks to the Administrator for delivering his Speech in the Senate. I join also with other senators in expressing regret at the passing of the late Governor-General. I am reminded of the words of the Administrator in the first paragraph of his Speech. He described the late Lord Dunrossil as a man who brought to his great office a notable dignity, a personal charm and a quality of mind which won our loyalty, our love and our deep respect.

We Australians as members of the British Commonwealth of Nations view with great anxiety happenings in other parts of the Commonwealth. The present is a time when members of the Commonwealth should exercise great tolerance one towards the other. The. parliamentary institution within the Commonwealth is one of our great bulwarks and hopes for the future. Within this Parliament and 70 parliaments of other Commonwealth countries we have a Commonwealth Parliamentary Association. I believe that the common bond between those associations may be a light in the darkness for some parts of the Commonwealth. I hope that in South Africa freedom will be preserved in the traditional British way and that the Habeas Corpus Act, which is the foundation of one of our freedoms, will continue on the statute-book of that country as it has continued in the United Kingdom for nearly 300 years. I hope that liberty will remain and that tolerance will be shown to political opponents. Unfortunately, in some Commonwealth countries such liberty and tolerance do not exist.

I wish to direct attention to the amendment moved by Senator Armstrong. Senator Aylett, who lias just resumed his seat, gave us quite a tirade about it. I could not believe that he was speaking in the National Parliament of a country which in the space of a little more than 100 years has forged ahead to become the tenth trading nation in the world and the nation with possibly the least number of unemployed of all the Western nations. I could not imagine that he was speaking in a country where last year £80,000,000 was made available to the War Service Homes Division and to various institutions for the provision of houses. It was quite impossible for me to follow all that he said, and I do not think that he himself believed everything that he said.

I should like to examine the amendment moved by Senator Armstrong. It was to the effect that the Senate deplores the faulty leadership of the Government in directing the Australian economy. In this debate on the motion for the adoption of the Address-in-Reply members of the Opposition have granted themselves great liberties. Last night I listened to Senator Cant, and I made a note of some of the phrases be used. Speaking of unemployment he said that the Government had designed a policy to produce unemployment. That statement is ridiculous. He said also that the Government had deliberately set out to create unemployment. How can a man in possession of his senses get up in the National Parliament and say that a government, proud of its record and hoping to continue in office, would do such a thing? I give that as one illustration of the type of speeches that have come from the Opposition.

I agree with honorable senators on both sides of the chamber that one of the problems at the moment is the running down of our overseas balances. The Government has called into consultation on this matter some of the great thinkers in the community. I refer to Dr. Coombs, the Governor of the great Commonwealth banking institution, and Sir Roland Wilson, the Secretary to the Treasury. However, I suggest to Senator Paltridge that despite the excellence of the men who have been called into consultation the Government should consider whether there has been sufficient consultation with people actually engaged in trade and commerce and in business and agriculture. I am not suggesting that the two men who have been consulted are not men of great experience in government finance, but it occurs to me that men actively engaged in business at the present time might have been called into conference with greater alacrity. T am aware that the Export Development Committee has been called into conference, because within the last month statements have emanated from that body. I am reminded that in 1951, the Prime Minister (Mr. Menzies) called into conference a number of talented people, including heads of the Churches in Australia. I am also conscious of the fact that during the darkening days of the war men such as Mr. W. S. Robertson and Mr. Essington Lewis were called into conference on matters of important economic concern. That is the kind of approach that has been exercising my mind.

It is interesting that the Opposition should attack the Government for losing overseas funds. One of the most important aspects of the operations of this Government has been its credit-worthiness. The most important bill passed in this Senate in 1951 or 1952 was that which ratified the first loan granted by the International Bank for Reconstruction and Development. That loan enabled dollar borrowings to be made to purchase important equipment sorely needed in this country. I quote as an illustration the equipment for the dieselization of the transcontinental railway. Believe it or not, every member of the Labour Party voted against the ratification of that loan. Members of the Labour Party should stand up and account for their attitude in that respect. If the Labour Party had its way much less money would be coming into this country at the present time. A little later, the Senate ratified a loan to purchase earthmoving and coal-winning equipment for use at Leigh Creek in South Australia. The acquisition of this earth-moving equipment that was used all over Australia for roadmaking would have been in jeopardy had the Opposition won the day.

I recall the campaign waged by the Opposition several years ago against the negotiation of a trade agreement with Japan. Where would Australia be to-day if the Opposition had been successful, and if we had not entered into a trade agreement with Japan? To-day Japan is our greatest customer for wool. She has been an important customer for flour, wheat and other things. Every so often the Opposition refers with derision to the Government’s efforts to negotiate loans overseas. I remember that a few years ago the Opposition derided the Government for attempting to negotiate a loan in Switzerland. Less than a week ago this Government announced it had1 successfully negotiated a loan of 60,000,000 Swiss francs at the very low coupon rate of 4i per cent. The Government was1 able to negotiate that loan because of its excellent credit standing. The Opposition’s contention that the Government has been responsible for Australia’s loss of overseas funds is completely without foundation. If anybody is responsible for our loss of overseas funds it is the Opposition because of its continued knocking of this country. The Government is responsible for Australia’s excellent credit standing overseas, which has enabled it to borrow large sums of money whenever it was needed for basic development.

The Opposition chides the Government on the failure of the public loan market. Why, only last week a loan of £35,000,000 was fully subscribed - the best result since

January, 1960. Only this week a loan sought by the Electricity Trust of South Australia was fully subscribed1. That loan was supported by the Australian Loan Council. Daily we read in the press that public loans are being sought, and are being fully subscribed. I submit that the Government has acted wisely. It has imbued the loan market with confidence.

The Opposition chides the Government with retarding national development. Look at the Snowy Mountains scheme. The contracts that were let by this Government have been finished ahead of time. That is not retarding national development. Think of the support given to the aluminium industry, involving Weipa in north Queensland1 and Bell Bay in Tasmania. The scheme involving Bell Bay was fully debated in this chamber last year and was supported by the Parliament. It was interesting to note at that time that one day Senator O’Byrne said that he would oppose the scheme, but overnight he received his riding instructions and on the next day he, with other members of the Labour Party, supported the scheme. This Government is going full steam ahead with national development. It is not opposing national development one day and supporting it the next.

This Government has given outstanding support in the academic field. Approximately £3,000,000 is being spent on the Australian National University each year for buildings, equipment, salaries and scholarships. Universities throughout the country will receive this year an extra £11,000,000, and the number of Commonwealth scholarships is being increased. I have given but a few examples to show that the Government is fully conscious of the need for national development, both in the physical sense and the cultural sense.

The Government is chided w;th permitting inequitable taxation. At the present time, the Ligertwood committee is considering all aspects of income tax except matters related to depreciation, which were considered some years ago by the Hulme committee. Surely the Government has acted with foresight in regard to income tax. What about land tax? A number of years ago the Government abolished land tax, thereby giving an additional incentive to primary producers in particular. Since the Opposition has chided the Government on its taxation policy, 1 remind the Senate that members of the Labour Party voted against the abolition of federal land tax and a little earlier every one of them voted against raising the exemption from £5,000 to £8,750. It is obvious that the Opposition, if it had been able, would have applied the land tax to all those farmers with land valued between £5,000 and £8,750. This Government has been most imaginative in its handling of federal estate duty. It has raised the exemption from £2,500 to £5,000.

The recently announced incentives designed to boost our export earnings are very interesting but, I am wondering whether they are, perhaps, a little too timid. I am inclined to the view that the exemption with regard to pay-roll tax and the concessions in respect of expenses incurred by a company’s officers travelling overseas will take some time to have any real effect on our export earnings. After reading a report in the “ Taxpayers’ Bulletin “ I am inclined to the view that the standards set by the United Kingdom some years ago with a view to boosting its export income could well have been studied by the Government. I am aware that the Ligertwood committee may make some valuable suggestions designed to boost our export earnings. The Government should earnestly consider any scheme designed to boost our export earnings. It should look carefully at schemes operating in Japan, Germany, Austria, Italy. France and Belgium. All those countries are attempting to increase their export earnings. Before the next budget is brought down I hope that the Government will seriously study this matter. The proposals that have been announced, but which have yet to be placed before the Parliament, are, in my view, too timid.

I want to say a few words about steel production, because this subject was dealt with at some length yesterday by my friend, Senator Drury. He was at a disadvantage when he quoted from a very old report - the Dickinson report of 1950. That report was published about eleven years ago, and very likely the inquiries that led to the report were made a few years before the report was presented to the South Australian Government. The Opposition has levelled a great deal of criticism at the Broken Hill Proprietary Company Limited as if it were a monopoly - a great octopus. I remind the Senate that at the end of last year there were 69,061 separate shareholders in B.H.P., the number having risen from 60,976 in one year - a rise of over 8,000.

The great problem with B.H.P., as 1 see it, is that of coping with the demand for steel. Coal is one of the great components in steel making. When I was in the Newcastle area looking at some coal mines in June last, I was staggered to learn that there was afoot a great move, supported1 by the Labour governments of New South Wales and Tasmania, for a 35-hour working week on the coalfields. That would have meant a considerable reduction ot the output of coal. How can the Opposition twit the Government about its inability and lack of interest in steel production when in New South Wales and Tasmania the Labour Party is supporting an application virtually to take away 20 per cent, of the potential to win coal. I should say that a 35-hour working week on the coalfields which feed the Newcastle and Port Kembla works would completely disorganize the Australian coal and steel industries.

In contradiction of some of the statements that were made by Senator Drury, I propose to refer to a very recent report of the Broken Hill Proprietary Company Limited which came into my hands within the last week. The report points out quite clearly that the industry’s expansion programme has continued virtually without interruption and at a constantly accelerating pace for more than ten years, that it had brought ingot-making capacity ahead of the overall demand for most classes of steel in 1957-58, and that that remained the position until the sudden acceleration of demand in late 1959 and during 1960. It is all very well for Labour senators to read reports for the year 1950. This report which I have quoted, and which was presented by none other than the chairman of directors of the company to the 69,000 shareholders, shows what a wonderful increase there has) been in steel production.

It should be remembered that the steel production of the Broken Hill Proprietary Company Limited is geared to a rate of expansion based on long-term expectations rather than to sudden fluctuations which may occur from year to year. My friend, Senator Dame Annabelle Rankin, has already cited very accurately the figures contained in this report and I shall not repeat them. What interests me about B.H.P. is that it is1 an organization with the widest ramifications which are of the greatest importance to Australia. In the Whyalla, Iron Knob and Iron Baron area alone, possibly £40,000,000 will be spent on mines, equipment and buildings within the next ten years. Exploration is being carried on continuously and the training of apprentices, almost as though they were at a college, is being carried on under the aegis1 of this company. At all times a search is being made for both low-grade and high-grade iron ore. Work has been going on at Rapid Bay in South Australia, and a most amazing situation exists at Port Kembla where a vast inner harbour is being established which I understand eventually will provide accommod’ation for 50 ships bringing in raw materials and taking away finished products. It will be seen that these 69,000 persons who own B.H.P. have something to be very proud of. It seems to me to be both wrong and unkind of the Opposition to attack the manufacture of steel in Australia and the great company that has been responsible for it. It is particularly unfortunate that honorable senators opposite should make such an attack without bringing to the notice of the Senate some of the proud facts, as I describe them, of Australian steel production.

The Tariff Board, at page 29 of its annual report for the year 1959-60, lists the comparative prices of certain iron and steel products in Australia and other parts of the world in terms of Australian currency. These -are the latest figures available to me. They show that at 31st March, 1960, the price of foundry pig iron in Australia was £21 2s. 6d. per long ton; in the United Kingdom, £26 4s. lid.; in the United States of America, £29 15s. 4d.; and in Japan, £35 14s. Id. The price of steel merchant bars in Australia was £42 8s. 3d. per ton; in the United Kingdom, £49 0s. 2d.; in the United States of America, £56 15s.; and in Japan, £53 lis. 2d. The price of structural steel in Australia was £42 8s. 3d.; in the United Kingdom, £47 10s. 8d.; in the United States of America, £55; and in Japan, £56 2s. 2d. So you can see, Mr.

Acting Deputy President, that the Opposition has failed to tell you about the comparatively cheap price of steel and other products that are being produced in Australia at the instance of a company which is owned by 69,000 different shareholders. It is interesting to note that the price of coal in Australia is £2 15s. 4d. per long ton; in the United Kingdom, £5 4s. 2d.; and in the United States of America, £2 8s. lOd. So the price at which coal is produced in Australia is more than competitive with the price of coal won overseas. As a matter of fact, it is approximately half of the price in the United Kingdom. That is a record of which Australia may be proud. It is a record of which the Government is proud inasmuch as it has provided a climate of government and an economy in which such things may happen.

In the short time that is at my disposal I want to mention one other matter that is of prime importance to South Australia - the export of flour. Some of the finest wheat in Australia is grown in South Australia. Over the last 100 years there has been developed a vast number of mills, especially in country areas. In those mills an excellent relationship exists between the owners and the employees. I should like to pay a tribute at this stage to the Honorable Frank Condon, who is the Leader of the Opposition in the Legislative Council of South Australia and who has been connected with unions associated with flour-milling for more than 50 years. I understand that there has not been an industrial dispute in the flour milling industry in South Australia that has not been solved very quickly.

When I questioned the Minister for Trade (Mr. McEwen) on whether the fullest effort was being made to sell flour abroad, I was informed that since January 40.000 tons of flour has been sold to mainland China, that our Trade Commissioner in Indonesia spends at least half his time on matters connected with the Australian flour trade, and that the same is true of our Trade Commissioners in Malaya and Ceylon. The Ceylon figures are quite interesting. In 1956 and 1957 our trade with Ceylon in flour had fallen to almost nothing, but in 1958 a trade agreement was negotiated with the Ceylon Government and that country agreed to take 100,000 tons of flour a year from Australia. In 1960 sales of flour to Ceylon were 120,000 tons. So in a matter of four years the Government, by means of skilful negotiation by its trade commissioners, has built up this important flour trade. An agreement in similar terms has been made for a further two years.

The figure for Malaya is 80,000 tons a year. The Indonesian trade is fascinatingly interesting. During 1960 Indonesia placed orders abroad for 79,000 tons of flour, of which 58,000 tons was allocated to Australia. So you will see, Sir, that the Australian Trade Commissioner Service is very much alive on this important aspect of trade. If I had time, I could deal with the flour position in other parts of the world and the problems that arise from time to time with the United States of America. Suffice it to say that this Government is not guilty of the charges levelled against it by the Opposition in its amendment. On the contrary, it has done an enormous amount positively to increase the trade and potential of Australia. I support the motion and oppose the amendment.

Senator COLE:
Leader of the Australian Democratic Labour Party · Tasmania

– During the Address-in-Reply debate it is customary to extend felicitations to the Queen and to express our loyalty to the Crown. The present time is a most dangerous one as far as loyalty, not exactly to the Crown, but to the bonds of the Commonwealth of Nations is concerned. I believe that at this time we should express our desire that the bonds of the Commonwealth of Nations be strengthened as much as possible. At present those bonds have been strained to the utmost. That has come about, of course, as a result of the unfortunate happenings at the meeting of the Commonwealth Prime Ministers and the departure of South Africa from the Commonwealth.

The Australian Democratic Labour Party does not agree with the theory or the practice of apartheid in South Africa, but we deplore the fact that South Africa has been forced out of this united Commonwealth of Nations. We do that because of what will happen in South Africa. I believe that the strife in that country will mount very rapidly. There will no longer be the kindly guiding hands of at least some of the Prime Ministers to curb the very stringent measures that may and probably will be taken in enforcing apartheid. So I regret very much that South Africa has been forced out of the Commonwealth of Nations. I believe that the actions of the Prime Ministers of the other Commonwealth countries, who were, responsible for South Africa’s leaving the Commonwealth of Nations, were wrong because South Africa as a whole is now out of that body - those in South Africa who desire a better understanding and those who are against that.

I even go so far as to say that the happenings at the Commonwealth Prime Ministers Conference could very well herald the complete destruction of the Commonwealth of Nations. I say that because of the very serious problems faced by all the nations whose Prime Ministers meet in conference. They do not meet to make decisions, although I believe that in this case the decision was practically forced. They meet to discuss how they can help the welfare of their various countries. Although what has taken place may receive applause from certain sections of the community, I believe that it is wrong and could very well herald the destruction of the Commonwealth of Nations.

We have to remember that South Africa has very grave problems to face. We say that there is a certain colour problem in America, but America’s problem is infinitesimal in comparison with the colour problem in South Africa. America has about 18,000,000 coloured people in a population of about 170,000,000. South Africa has several million whites in a population of anything from 10,000,000 to 15,000,000 coloured people. So South Africa has a problem that we really do not understand. South Africa’s mistake has been that she has insisted too much on white supremacy instead of multi-racial co-operation.

The action taken by our Prime Minister at the conference of Prime Ministers seemed to be in accord with justice and common sense, but I am sure that several of the other countries which are members of the Commonwealth should have been among the last to throw stones at one of its members. A domestic policy has1 come before the Commonwealth Prime Ministers and a decision has been virtually forced. What could happen in the not distant future? Can Australia, for example, remain a member of that body if certain actions are taken by the nations that have acted against South Africa? What will happen if they question our white Australia policy? What answer will we have? What will happen if they question the treatment of our aborigines and force an issue on that subject? In Papua we have citizens of Australia who are not allowed to enter Australia to live. Such questions could’ be brought forward at another meeting of Commonwealth Prime Ministers. I understand that Mr. Menzies has already stated that if such domestic subjects were raised he would tell the persons raising them to jump in the lake.

Let us look at some of the nations which are very vocal against South Africa’s treatment of its coloured people. Prime Minister Nkrumah of Ghana was very outspoken. I understand that he said that Ghana would leave the British Commonwealth of Nations if South Africa continued her apartheid policy. Yet, what is the position in Ghana? There is a dictatorship. Nkrumah’s own party does not stand for any opposition within the country’s borders; and let us not forget the treatment given to the northern tribes of Ghana. That treatment is worse than the treatment received by the coloured people of South Africa.

In relation to India and Pakistan, why should not the Kashmir question be brought before the Commonwealth Prime Ministers and a decision reached? A great deal of trouble, hardship and death has been caused by the Kashmir dispute, yet discussion of it has not been allowed in that august body. Ceylon was1 also very vocal against South Africa. We should remember the Tamils of Ceylon, who are virtually receiving treatment as bad as that which the coloured races of South Africa receive. In Malaya the Chinese minorities are not receiving justice from the legislatures. I believe that they never will receive it. Malaya has a very difficult problem and desires to keep the country under the control of the Malayan people. The Chinese who have migrated to Malaya and settled there are prosperous and energetic. Within a few years they could quite easily outnumber the Malays, but they are not given citizenship and they have no right to go to the polls.

Representatives of these countries were the most vocal in criticism of South Africa, whose withdrawal from the British Commonwealth of Nations is a great tragedy. While South Africa was a member of the Commonwealth we had some hope of influencing it to take a better stand in respect of its coloured people. That chance has now gone. All the other matters to which I have referred can now be raised at the next meeting of Commonwealth Prime Ministers. If an issue was forced on any of these subjects, there could be a further break in that body, which 1 believe is doomed. I have mentioned these matters in reference to loyalty to the Queen. These bonds of loyalty must be greatly strengthened if we are to survive as a nation. 1 should like to deal now with that part of the Administrator’s Speech which refers to our economic position, lt shows that no effort is being made by the Government to improve the position that has developed in the last few months. There is a pronounced downhill trend at present. As I go along, I hope to develop the reason for this. The Government took certain measures which it thought were the best to be taken. I believe that it has found that these measures should not have been taken but it is still persisting in them to a certain extent. I should like to deal first with the increased sales tax on motor vehicles. When this was introduced, we opposed it very strongly because we foresaw certain repercussions. The Government set out with the idea of forcing a certain amount of unemployment in the motor vehicle industry and transferring necessary men and materials to other industries. It succeeded to a great extent. Now the increased sales tax has been removed. I do not believe that it was removed, as the Minister representing the Treasurer said in reply to a question by me, because it had achieved its purpose.

Sitting suspended from 5.45 to 8 p.m.

Senator COLE:

– Before the suspension of the sitting, Mr. President, I had been referring to the additional sales tax on motor cars. I contended that the increased tax should not have been imposed by the Government, a fact which the Government apparently realizes, because the Prime Minister, before going overseas, admitted that certain unforeseen circumstances had arisen and that he thought it better for the rate of tax on motor cars to be restored to the previous level. I am of the opinion that the Government is morally responsible to return to the unfortunate people who bought motor cars during the period that the increased tax applied, the amount of additional tax they paid. 1 admit, Mr. President, that the moto companies of Australia did not co-operate with the Government during that period. Unemployment became rife in the motor industry. I believe that that unemployment was more company-made than anything else. It seems a little ridiculous that a company such as General Motors-Holden’s Limited, which makes tremendous profits each year, should have found it necessary to sack employees during that transitional period. Such a firm could quite well afford to keep it employees at their jobs until they found other employment. A government that proposes to introduce measures that will bring about unemployment in certain industries should look ahead and plan developmental works to absorb employees who lose their jobs in industry. An able-bodied person who is without employment is a great liability in any country. As a nation, we lose a great deal if we allow unemployment to occur.

The second matter with which I propose to deal is the removal of import restrictions, a step that I think was taken hurriedly and on wrong advice. We believe that import restrictions are necessary in the case of nonessential goods. The value of such imports may not be a large proportion of the value of all the goods we import, but nevertheless, expenditure on them reduces our overseas balances. It seems somewhat anomalous that Australia, which has a blue pea industry of its own, should be importing blue peas from Holland. I thought that the Government believed in the theory of supply and demand. If it does so, surely it is reasonable that farmers who have been growing blue peas for many years should have the opportunity to sell their product at a reasonable price. Because importers can buy Dutch blue peas for about 2s. a bushel cheaper than the Australian product, our blue peas are not being sold. The example I have given may not be a very important one, but it illustrates the way in which our overseas balances are being reduced. The Government should consider the position of the Australian blue pea industry and the interests of the farmers.

The reduction of our overseas balances is one of the main sources of worry to the Government, and of course, the position has to be corrected, if that is possible. We say that it can be rectified by means of increased production which, of course, will take time. We must look for other ways to prevent the decline of our overseas funds. As I have said, I think it was wrong of the Government to remove restrictions on the importation of non-essential commodities. There are several ways in which we could help to increase our overseas reserves, and I propose to name some of them. First, we could cut shipping costs by having our own shipping line.

Senator Kendall:

– That would not cut any costs.

Senator COLE:

– I appreciate that the cost of having our own shipping line would be tremendous. The line would have to be subsidized because the conditions under which Australian ships operate are much better than those that apply to the vessels of other countries. But even if we had to subsidize the line, would it not be better to have our own ships than to have the present position?

If we had our own shipping line, at least the money paid to it would remain in Australia, and we should not have to reduce our overseas balances to meet transport costs. That is a suggestion that could well be considered by the Government as a long-range plan. As honorable senators know, there are Australian insurance firms which operate in other countries. Could we not insure our shipments with those firms and thus avoid or reduce many of the unseen expenses, such as insurance costs, which help to reduce our overseas balances?

The Government hopes to increase export income by allowing taxation incentives. That is a good idea. It will help to increase our funds overseas, as would the establishment of a Commonwealth-owned shipping line. Since the Government proposes to increase export income in that way, why does it not encourage, by means of the same taxation reductions or incentives, Australian factories that are making goods for export, and particularly factories which make goods that we now import? That would stop the importation of quite a number of goods that are costing the people of Australia a considerable amount of money at the present time.

In dealing with the subject of increased productivity, reference has been made to the steel industry. I believe that the Government will have to do something in that field. I am not throwing brick-bats at the Broken Hill company, which is doing a great job, but I believe that the time has arrived when the Government should help to build up another steel organization in Australia with either Government money or private money, or a combination of both. We are importing steel, thus lowering our overseas balances1, although we have within Australia all the essential materials for the production of steel. When Senator Laught was addressing the Senate this afternoon, he dealt with the cost of steel in Australia and compared it with costs in other countries. We can produce steel much more cheaply than any other country in the world. If our steel industry were expanded - and I believe that the Government should assist its expansion - steel could become for Australia an earner of tremendous export income. As the awakening countries to the north of Australia become industrialized over the next few years, their standard of living will rise and there will be a tremendous market for steel in those countries. Steel would then become one of the greatest earners of export income for Australia. But steel must be produced before it can be exported. We have in this country everything that is needed to produce steel and the Government must recognize the importance of expanding the steel industry. From now on, the theme for the steel industry in Australia should be expansion, expansion and more expansion.

We still follow the concept that money is the most important factor in expansion. That is the old concept, but there is a new concept now. It is that the human capital - ‘that is, knowledge, skills and inventions - contribute more to economic growth than does the tangible capital - the factories and the machinery. Let us plan our economic future on the basis of this new concept. 1 believe that it is being applied in relation to the Snowy Mountains project. Think of the expansion that will follow the completion of that work. I think that the Government should now be planning other great projects to assist expansion.

Senator Vincent:

– It is.

Senator COLE:

– It should do that so that there will not be any unemployment in Australia. There is no necessity for unemployment in this young country. Senator Scott has given notice that he will move a motion concerning the development of northern Australia. This is another matter that is based on the new concept I have mentioned. If the Government pushes ahead with the planning of projects for expansion, this country will attract the migrants and the credits that it needs, because investment in the projects arising from this planning will assuredly follow. It will no longer be necessary for the Government to adopt hit or miss methods in controlling the economy of this country.

Housing, of course, is essential to development. We know that young married people want homes of their own. There is fear of communism in the world, and I believe that home ownership is a great bar to the acceptance of the Communist ideology.

Turning to the credit squeeze, I believe that the private banks have let the Government down by forcing the permanent building societies, for example, to reduce their overdrafts. Furthermore, a leading assurance company has now reduced the number of its housing loans in northern Tasmania, an area having a population of about 180,000 people, to two a month. At the same time, this company has paid a call of £200,000 in a hire-purchase concern, making its total investment £600,000. This supports my assertion that the insurance companies and the private banks have not played the game in relation to the Government’s economic policy.

The renewal of the Commonwealth and State Housing Agreement, which will shortly expire, is being considered by the Commonwealth Government and the State governments. The money that has been made available under this agreement has greatly helped the co-operative building societies, and T pay a tribute to the Minister for

National Development (Senator Spooner) for all that he has done to foster the co-operative housing movement throughout Australia. Several States have objected to the Commonwealth and State Housing Agreement being renewed on the terms proposed by the Commonwealth. I should like to deal with Tasmania’s objection in particular. Mr. Reece, the Premier of Tasmania, has objected to the proposed new agreement for two reasons. The first reason is that the rate of interest on money to be provided by the Commonwealth to the States under the agreement will be raised by $ per cent. The other reason is that the Agricultural Bank of Tasmania has a waiting list of 850 persons for housing loans. Therefore, Mr. Reece wants the money that should go to the housing co-operatives to be made available to the Agricultural Bank.

As to Mr. Reece’s first objection, I believe that the Tasmanian Government is putting a confidence trick over the homeseekers in that State. Under the present agreement, the Commonwealth Government lends money to the Tasmanian Government at 4 per cent, interest. The Tasmanian Government in turn lends the money to the Agricultural Bank at 4i per cent, interest - i per cent. more. No administrative costs are involved because the Commonwealth pays the money to the Tasmanian Treasurer and he pays it to the Agricultural Bank. The Agricultural Bank then makes available to the cooperative building societies their share of the money, adding i per cent, to the rate of interest. The increase of the interest rate by i per cent, is perhaps justified, because of the cost of administration incurred by the Agricultural Bank. But the Tasmanian Government, which, as I have said, does nothing but pass the money on, is making a profit of i per cent. - and that amounts to a considerable sum - on the money provided by the Commonwealth Government for housing. The Agricultural Bank is charging individual borrowers 5i per cent, on housing loans. On a loan of £3,000 - which is the maximum that can be obtained - a borrower is paying H per cent, more than the Commonwealth Government is charging for this money. That means that each borrower has to pay £3 15s. a month extra for a loan of £3,000. The usual period of a co-operative society loan is 31 years but because of various profits that accrue the loan is generally paid off within 26 years.

Senator Aylett:

– Who guarantees the money to the Commonwealth?

Senator COLE:

– The ordinary people who pay their taxes. It works out that a person who borrows £3,000 has to pay an extra £1,475 in simple interest. At compound interest the amount would be considerably more.

Senator Gorton:

– Why does the Tasmanian Government do that?

Senator COLE:

– That is what 1 am trying to find out; but that is what happens.

The money loaned to the co-operative societies is repaid to the Agricultural Bank in 31 years at the outside and generally within 26 years. The loan from the Commonwealth Government is paid back over a period of 53 years at 4 per cent, interest. By the end of 31 years the State Government has paid back to the Commonwealth only about £34,000 out of every £100,000 that is loaned. This leaves the State Government an amount of £66,000 which it can re-lend at 5i per cent. State governments are making money out of this arrangement, or at least that is the case with the Tasmanian Government, which is following this procedure. In plain terms it is a case of robbery by the State governments from the very people they are supposed to represent. How much could a young married couple do with that extra £3 15s. which is taken from them every month?

In the face of this procedure Premier Reece is complaining about the extra I per cent, that is to be charged by the Commonwealth. He could easily absorb that I per cent, and still show a profit of roughly 1 per cent. The Commonwealth and State Housing Agreement has proved its worth and I hope the Government will continue the agreement. If the States are not willing to continue it, the Commonwealth Government should lend the money directly through its own instrumentality, the Commonwealth Bank. The money could be made available directly to the co-operative societies. If that were done individual borrowers would save about H per cent, in interest. The Australian Democratic Labour Party is in agreement with the Government’s policy to have a housing agreement with the States and it hopes that the Government will continue its policy to give help to co-operative societies either directly or indirectly.

Finally I should like to refer to what is happening in our near north. A great deal has been said about the export of wheat to red China, and everybody seems happy with the idea. If the export of this wheat means that hungry people are to be fed no moral objection can be raised, but I urge the Government to be careful. It should make sure that it has firm contracts with the Chinese Government. Otherwise it may be left lamenting. The Government should be careful, too, that it does not receive shoddy cloth and tung-oil in exchange for the wheat that it is exporting. It is possible, too, that politics may be involved in this trade. I am under the impression that a great deal of the wheat going to red China will not be used to feed the Chinese people but will be used for political purposes. It seems rather peculiar that while China is buying 1,000,000 tons of wheat from Australia it is shipping 200,000 tons of rice - the staple diet of the Chinese - to other countries, and to Cuba in particular. I believe also that a large amount of this wheat being bought by China is being passed on to Russia to pay for arms that that country is supplying to China. We need to be very careful in our trade with China.

The farmers of Australia should not think that it is necessarily a great thing to trade with red China, because quite a lot of political considerations may be involved. I do not suppose this tremendous amount of wheat will make a great deal of difference to China in view of the enormous amount of grain that is needed in that country to-day. I understand that the last census showed that China was growing in the neighbourhood of 160,000,000 tons of grain for food. It is hoped ultimately to increase production to about 200,000,000 tons a year, but this year, because of drought, production has fallen to about 140,000,000 tons. So Australia’s export of little more than 1,000,000 tons will not make a very big splash.

I believe that we are losing the fight in South-East Asia. I only hope that a little confidence is restored in this area when the

South-East Asia Treaty Organization meets next week. Many of the countries that have common borders with Laos are losing confidence because they can see one of their neighbours being over-run by Communists or people who support the Communists.

The fight against communism in Australia is being lost, and in this regard the Government is to some extent at fault. Our people are rather uninformed as to the true position. The Government does not engage in very much propaganda in order to educate the people of Australia against the dangers that we face. The Government should at every opportunity tell the people of the dangers that surround us. Whenever supporters of the Australian Democratic Labour Party attempt to do so they are branded. Well, let the Government be branded occasionally. It is not much good asking the Labour Party to help in this matter because at present, willingly or unwillingly, it is actively supporting Communist policies, both in the political field and the industrial field. At present the largest union affiliated with the Australian Labour Party - the Amalgamated Engineering Union - is controlled by Communists. An election of the union executive was held recently and Southwell, a Communist, was elected to that important body. It may be said1 that the election was a matter for the members of the union and that if they wanted Southwell, why should they not have him, but the terrible thing is that he won with the support of members of the Labour Party. Butler, who is a member of the Victorian executive of the Labour Party, was organizing Southwell’s campaign. For a long time Butler has been a member of the A.E.U. rights committee, and whenever possible he has supported the Communists. He even caused notices to be sent to the various branches of the union asking them to forward money to help Southwell’s campaign. On 4th February the union received from branches several offers of money to help in the campaign. That, of course, was illegal. As far as the union was concerned it was a misappropriation of money.

In the political field we find that the Labour Party is urging recognition of red China. It may be contended that it is a good idea to recognize red China, but as soon as we do we can say good-bye to South-East Asia. China will become the predominant power in Asia. We shall then have trouble at our front door. So, from a political point of view, the Labour Party must knuckle down if it ever wants to become the government of this country. It must do something about the matters I have raised.

I wish to refer now to the amendment moved by Senator Armstrong. The amendment refers to quite a number of matters and looking at the amendment I feel that I am in agreement with it. It refers to continuing inflation. I cannot help but agree that inflation is continuing. The amendment refers to loss of overseas funds. We have lost some of our overseas fund’s. Reference is made to unemployment. Who can deny that we have unemployment today? The failure of the loan market is mentioned. That failure is not too severe, because the last loan was undersubscribed, if only by about £100,000. Retarded national development is referred to in the amendment. I have urged the Government to expand national development. It must not endeavour to pay for all projects as they are undertaken. National projects will pay for themselves 100-fold in the not far distant future. The amendment refers to injustice to wage-earners. The Democratic Labour Party has1 been pointing to this matter for a long time. The amendment mentions inadequate social services and housing. I think everybody is aware of our attitude to social services. The amendment also mentions inequitable taxation, high interest rates and shortage of steel. It would appear, therefore, that the Australian Democratic Labour Party must support the amendment.

Senator GORTON:
Minister for the Navy · Victoria · LP

– At the outset I wish to refer to a matter that was raised by Senator Cole. He charged that the Government has, among other things, retarded national development during the last decade.

Senator Cole:

– I did not say that the Government ‘had retarded national development. I said that more development was needed.

Senator GORTON:

– Whether or not Senator Cole said that the Government had retarded national development, Senator Armstrong’s amendment certainly implies that that is the case. I submit that on any unbiased view of the development that has taken place in this country in the last decade, that charge cannot be substantiated for a moment. National development is not something undertaken solely by the Commonwealth. National development means development in any part of Australia; and national development has proceeded not only in those parts of Australia coming solely under the jurisdiction of the Commonwealth, but also in those parts of Australia that are the responsibility of the State governments. But the development that has taken place at the hands of the State governments has been made possible largely because of the actions of this Commonwealth Government. In the last decade the Commonwealth has provided more than £11,000,000, and, because that money was raised by taxation, the Commonwealth has had to bear a great deal of public odium. That money was provided to enable the Commonwealth and the State governments to carry out the development which any one who has lived in Australia over the last decade can see on every side. Not only have we brought ‘here during that time 1,000,000 or more, migrants and not only have we coped with the natural increase, making a total increase of 25 per cent, in the population, but the Commonwealth and the States, with the States dependent on the Commonwealth, have made possible for that increase of population the provision of services in the form of roads, electricity, water, ‘housing, schools and all those, other amenities that have been provided to the industries which have been established in this country to employ those persons.

It would take too long to enumerate all that has been done in the last decade; but, on behalf of the Commonwealth Government, I can point to the continuation of the Snowy Mountains scheme, the standardization of the rail gauge, between Melbourne, Sydney and Brisbane, the provision of £20,000,000 for the Mount Isa to Townsville railway line through a loan which could not have been negotiated but for the help of the Commonwealth Government, and to all those State developments that have been made possible only because Commonwealth revenue has supplied what loan raisings would not fill.

Senator Cameron:

– Including unemployment.

Senator GORTON:

– I am sorry, I could not hear that interjection! We have been charged here and in another place with having run a stop-and-go economy during this decade of unparalleled development. We have done nothing of the sort. But we have run an economy which has required at times an accelerator and at other times a brake, but which has never ceased to progress towards the goal of greater national development. The reason why we or any other government that may have been in our place must, in circumstances such as exist at present, run an economy which requires at times an accelerator and at other times a brake is that the exports of our primary industries, which earn 86 per cent, of our export income, are being sold at prices over which we have no control.

If we are determined, as indeed we are - our record shows that we have been determined, too - to maintain full employment with a fluctuating overseas income, we must from time to time adopt fluctuating measures to stabilize the economy. The degree of success that has been achieved by the fluctuating measures we have adopted is displayed in the fact that during the last decade not only has the material progress that I have mentioned taken place, not only has there been the cultural progress mentioned by Senator Laught with £11,000,000 being allocated to our universities, an opera house being established in Sydney and a cultural centre in Melbourne, but also that the people have never known a decade with such a high level of employment. Our income from what we produce will continue to fluctuate and this Government, while it remains in office, will take whatever measures are necessary from time to time to attain the twin goals of full employment - but not over-full employment - and stability of prices to the extent that that can be achieved while full employment sometimes runs into over-full employment and while demand for capital in this dynamic country sometimes raises the price of capital above what it ought to be.. They are the basic reasons why the economy has been run in the way in which it has been run over the past ten years.

Let me go back to the state of affairs that existed two years ago. A number of newspapers which think - I believe rightly so - that there is not a proper Opposition in this

Parliament have constituted themselves into an opposition and have made a concerted attempt to advance biased arguments that one would expect from a parliamentary opposition. I wish to go back two years, because I believe the newspapers to which I have referred have sought to indicate that there have been rapid changes on the part of this Government, that it has been zigzagging from month to month. I believe that history shows that that has not been the case. It is worth noting that in February, 1959 - a little more than two years ago - 8,000 more persons were registered as unemployed than are registered to-day, even though there was then a much smaller work force than there is to-day.

Senator Sheehan:

– Do you say that unemployment was greater two years ago?

Senator GORTON:

– The number of persons registered as unemployed some two years ago was 8,000 greater than it is to-day, with a smaller work force then than there is to-day. Because one of the cardinal beliefs of this Government is that unemployment is an evil, the Government injected credit into the economy at that time to attack the problem. But over a period of time the state of unemployment gradually changed to one of over-employment and in February, 1960 - a year ago - it was necessary to take measures in the opposite direction. It was necessary to adopt those measures because young people who wanted to build houses had to wait months for bricks and steel and found themselves short of labour because there were thousands more vacancies for building workers than there were building workers to fill them. Moreover, as we heard from the Opposition benches at the time, people were charging interest rates which were too high for young home-builders.

So in February, 1960, more than a year ago, a gradual tightening by this Government began. It was first manifested by the removal of a number of import restrictions, of which I will say more later. It was accompanied by an undertaking from the Government to avoid deficit finance and to budget for a surplus. It was accompanied by statements supporting the Reserve Bank policy to reduce the excess liquidity of the trading banks - a policy which the trading banks did not carry out at the time. It was accompanied also by the unpopular step, which 1 believe was ultimately for the good of the Australian worker, of intervening before the Commonwealth Conciliation and Arbitration Commission against granting an increase in wages, because we believed that an increase would be paid not by the big men but by the small men wanting homes or buying goods on hire purchase. This gradual tightening and this gradual attack on inflation began more than a year ago, and it has been going on ever since.

Senator Cooke:

– The Government attacks everything but the big interests.

Senator GORTON:

– I will come to the big interests a little later. One of the things which now, but not then, the Government has been severely criticized for doing was the removal of some import restrictions. I say “ some “ because those who control publicity have a tendency to try to persuade the Australian people that overnight all imports, which previously were coming into Australia under a system of restrictions, were suddenly freed from those restrictions and that the evils which they claim to see have followed from that step. They claim to see them a year later; they did not claim to see them then. I want to make it quite clear that the facts are that a year ago 50 per cent, of the imports coming into this country either were already free from import restrictions or, in effect, were running free, although subject to import restrictions. So the step taken then referred, not to that 50 per cent, of our imports and not to the 10 per cent, which are still subject to restrictions, but merely to that 40 per cent, which were already coming into Australia, although subject to restrictions under import licensing. As a result of this decision, they were able to come in freely.

I suggest that the reasons for that step, in the circumstances prevailing at the time, are fairly evident and were valid. First, I believe that it is philosophically wrong to decide by a bureaucratic control who may and who may not import X, Y or Z articles, if it is at all possible to avoid that form of control. But, more importantly, when you have, as we had, an immense demand for goods - for instance, the demand1 for steel could not be satisfied, although the steel industry had increased its production by 300 per cent, in the last decade - which cannot be met with goods manufactured in Australia although the production of those goods has increased, then, in such an inflationary situation, you must help to meet the demand which Australian production cannot meet by bringing into the country more imports. In that way, you help to meet a demand which otherwise would not be met and which, if it were not met, would mean merely more competition for the goods available. That would mean higher interest rates, higher charges and, higher prices for the small people about whom Senator Cooke said he was so disturbed.

There were other valid reasons for taking off the import restrictions at that time. Of course, one was that under international obligations we were obliged to remove such restrictions once our reserves reached a stage at which we could remove the restrictions with a modicum of safety. But, more importantly and more practically than that, we have heard from the Government of an export drive for secondary industry products. We have heard commendation of that step. The Government is providing incentives to manufacturers in an endeavour to ease the burden which falls on the primary producers of selling their goods abroad in order to earn export income. Does anybody seriously think that we could continue indefinitely prohibiting the entry of goods from other countries by decree and still have the markets in those other countries open to Australian exports? The very idea is ridiculous. In addition, far too many of the present-day critics of the Government in high places; in big companies are, I believe, basing their criticism, not on an analytical approach, not on an unbiased approach, but on the fact that tor too long they have been able to operate behind import restrictions as though they were operating behind a tariff wall, and so have been able to evade the necessity to lower their prices or to increase their efficiency. For those reasons, I believe that the removal of import restrictions from that section of imports to which they previously applied was) a wise, proper and payable step for Australia.

The second line of attack which is being developed against this Government is that the other steps which were taken at that time, or later in the chronological sequence which I have previously set out to the Senate, were wrong either in principle or in practice. I have said what we did in February, 1960, at the cost, as we expected, of some political popularity and the loss of some overseas balances, which loss has been great and will be greater before it stops. On that point, let me digress to say what our overseas balances are for. They are not simply accumulated so that the country can look at a number of figures in a ledger and say, “ How wonderful! Our overseas balances are rising”, and frame them and put them on a wall. They are there to meet certain difficulties with which the country may be confronted from time to time. One of these, of course, is bad seasons which cut the export earnings of our primary industries. Another is an inflationary situation against which other measures are being taken, so that while those other measures are becoming effective goods will be available to meet the money in circulation in the country. That is what balances are for, and that is why balances were used in this way.

Following from what we did in February, I960, let me come to the continuing pressure applied by the Government for the same purpose. There was a steady pressure beginning in February, followed by an increase in individual income tax and company tax in the 1960 Budget. We budgeted, as we said we would budget, for a tax surplus and not for a tax deficit. We sought, through the Reserve Bank, to tighten the credit flowing into the community because of the climate created by the confidence felt in this Government here and overseas. This credit was flowing into the community to meet demands from people who were prepared to pay 10, 12, 14 and 16 per cent, for money and pass on the cost to the young man buying goods on hire purchase or buying a home. There was a steady progression, a steady pressure.

But it was not until November, 1960, that we had to take still more drastic steps, for which we are now most under fire. We increased the bank interest rate, but we hear little of that now. What we hear most about and what 1 wish most to speak about was the decision to induce or compel - at that time compel, at the present time induce - life insurance companies and superannuation funds to contribute to public loans of one kind or another 30 per cent, of the moneys that they accumulated. We have been told from our side of politics, not the other side, that this is contrary to Liberal principles, lt is an action which the other side of politics must, of course, support and beyond which it would go very far. This Government, in order to encourage thrift, has made it possible for the assets of these large companies to grow greatly, by increasing from £100 to £400 the tax deductions enabled to be made for life assurance or superannuation contributions. I am informed that some £150,000,000 a year is flowing into these sources that previously and traditionally had supported public loans, which amount, but for the Government’s actions in making tax concessions to the individual and to the superannuation funds themselves, would not have flowed into these sources. Yet, in spite of the community savings flowing into these sources as a result of beneficial action by this Government, we found that these organizations had so little sense of responsibility that their contributions to public loans fell and fell and fell, until they became entirely negligible.

The result has been that most of the great development carried out in this country in the past decade has been from revenue, which I do not regard as being against principle but which I do regard as having reached a degree which should not be continued. Sixty per cent, or more of this development, both Commonwealth and State, has been carried out from revenue, and if that development is to continue at the same rate some source of money other than revenue must be found or else it will continue at the same rate from taxation revenue. I should have thought that any one who at present is disturbed at the falling income of the primary producer and the difficulties that face the professional man, the self-employed man and the higher-paid worker, would be glad of anything that made it possible for the amount of money raised from them for public development to be raised instead through instrumentalities such as life insurance companies and superannuation funds which, but for the actions of this Government, would not be in the position in which they are to-day. I have no hesitation in supporting wholeheartedly and com pletely the proposition that we have a right to look to great companies, in which are aggregated the savings of individuals and to which are given rights, for a fulfilment of their responsibilities.

The other point on which we have come under fire most is that of deductibility of interest. I have spoken of the high rates which people were prepared to pay in the money market - 15 and 16 per cent., or whatever was asked - because they felt they could pass the price on. They knew that whatever they paid in the way of interest, and however great their interest bill might be, they could deduct it as a business expense. We have decided that there is a reasonable and proper deduction which can and should be made in respect of interest charged on loans. People who are prepared to force up interest rates and to divert money from works which are in the national interest by offering interest above a certain rate, will not be able to deduct that interest as a business expense.

Senator Courtice:

– Your policy is a bit belated1, is it not?

Senator GORTON:

– The question is whether it is right. I have sought to show, Mr. President, that the Government’s policy has been marked not by a series of stopandgo actions over the last year or eighteen months, but by a series of actions aimed at attaining the two objectives of stability and full employment. At the same time, it has been necessary to reduce the amount of credit available in the country.

The Opposition has sought to prove that those measures have already led to widespread unemployment. They have not. Unemployment now is less than it was two years ago, as I have said; but the Government is fully aware that unemployment could grow quickly, and it is not prepared, even to attain complete stability of prices, to allow massive unemployment in this country. The Government does not believe that it will be faced with a choice between the two alternatives. Tt believes that the policies which it is following, and which have been flexible, will enable it to overcome the inflationary boom that undoubtedly was robbing the pockets of every person on a fixed income, every primary producer and every small man in Australia. The Government believes that its policies will prevent that from continuing to happen. lt is confident that, at the same time, its policies will maintain employment and that they are in fact having that effect now. The Government will watch to see that people whom it, at any rate, does not regard as ciphers, are employed, and that the greatness of the Australian nation is enhanced.

Senator SHEEHAN:

.- Before I address myself to the remarks of the Minister for the Navy (Senator Gorton), I wish briefly to associate myself with the loyal sentiments expressed in the AddressinReply and with the expressions of condolence .concerning the death of our late Governor-General, Lord Dunrossil.

Senator Gorton, in an attempt to justify the actions .of the Government, commenced his remarks by denying the contention of the Opposition that the Government had stood in the way of national development for the last ten years. He recited a list of activities for which he .claimed credit for the Government. While he was speaking, my thoughts went back to the great developmental projects that were commenced by Labour governments and which the present Government has carried on. One of the greatest of those projects, to which the honorable senator made only brief reference, is the Snowy Mountains scheme. I suggest that had that scheme not been initiated by the Labour Government led by the late Mr. Chifley, it would not be in progress to-day, because the party of which Senator Gorton is a member most violently opposed in this Parliament the commencement of the project. The supporters of that party showed their chagrin by staying away from the official opening. We have said that before and we shall say it again, because all too frequently this Government claims credit for the work of previous Labour governments.

Senator Gorton attempted to derive credit for the Government from the fact that the Australian population had increased through immigration. The immigration scheme that this Government is carrying on was initiated and brought along the road to success by the previous Labour Government. The Government has not had the courage to throw overboard that part of Labour’s programme. While we give full marks to the Government for carrying on the immigration scheme, it should not claim all the credit in that respect. The honorable senator also referred to the standardization of railway gauges between Sydney and Melbourne, and the proposed standardization of the line to Perth. In this respect, also, the Government has merely carried on the work of the previous Labour Government, which unhesitatingly duplicated certain sections of the main line between Sydney and Melbourne when it was found necessary to do so. The standardization of railway gauges is no new idea evolved by this Government. The matter has been well canvassed in the past byresponsible bodies. Because it is essential to standardize the gauges, I have no doubt that a start would have been made on that work if the present Government had not attained office.

Senator Gorton objected to criticism of the Government on the ground that it had a stop-and-go economic policy. I suggest that that phrase truly describes the Government’s policy. We remember that last February the Government announced that it proposed to do certain things. It said that it would attempt to check inflation. The measures contemplated at that stage were credit restrictions; the further calling up of reserve deposits; surplus, instead of deficit, financing; the removal of import restrictions; Government intervention against the claim by the industrial unions for an increased wage; and legislation to curb the operations of monopolies and price-fixing combines. That was the policy that was outlined by the Government in February of last year. We well remember the manner in which the Treasurer (Mr. Harold Holt) intimated that that would be the Government’s objective. The Government further stated that it would pursue certain measures during the course of the year in order to restore the stability of the economy of this nation. When we look at the list of measures that the Government proposed to implement as from February of last year, we find that the only one in which it was successful was that which deprived the workers of a reasonable improvement in their standard of living. Senator Gorton had the effrontery to say that it was a good thing for the worker to be deprived of his share of the prosperity of this country.

Let us turn to the very important question of the control of monopolies and pricefixing combines. The Government announced its firm intention to apply stern measures in order to restore stability to the economy. What action has it taken in regard to this important matter. None! The reason why the workers are continually approaching the arbitration courts seeking wage increases because of the depreciated value of their wages is that no action has been taken by the Government by price fixation to prevent prices from soaring. Despite the fact that that assertion was made in February of last year - twelve months ago - the Government wonders whether it has power to deal with monopolies, and the Attorney-General (Sir Garfield Barwick) has announced that he is conferring with the State Attorneys-General on the matter. In a report that was furnished by an all-party committee of the Parliament - a report that has been lying on the table for a long time - a recommendation was made that the people be asked at a referendum to agree to an alteration of the Constitution to enable the Commonwealth Government to deal with the problem to which it referred in February of last year. Nothing has been done in this direction.

In referring to the lifting of import restrictions the Minister made a glaring error when he said that Labour had offered no objection to the lifting of import restrictions in February of last year. On 9th March of last year in this chamber Senator Kennelly moved an amendment to the motion for the adoption of the AddressinReply. That amendment was practically a motion of censure of the Government, because it sought to add to the AddressinReply the words - but desire to inform your Excellency that the Government no longer possesses the confidence of the Parliament and of the nation because of -

  1. Its failure to halt inflation with its adverse effects on wage and salary earners, on pensioners, on persons on fixed incomes, on primary producers and on home builders, particularly those with young families;
  2. Its action in lifting import restrictions with its accompanying threat to the employment of thousands of Australians and the security of Australian enterprises; and
  3. Its decision to ask the Arbitration Commission to reject the current application of the trade union movement for an increase in the basic wage.

That is the action that the Opposition took twelve months ago. Our attitude to import restrictions is the same to-day as it was then. Now, twelve months later, the icy winds of inflation are blowing and our overseas balances have fallen. The Government has done nothing tangible towards solving the problem. What happened a few months after the Government announced in February last year that stern measures would be taken? There was a protest from certain interests in Australia, and very shortly afterwards an announcement was made that stability had been restored to the economy.

In the Budget that the Government brought down in August last, to which Senator Gorton has referred, it was announced that taxation would be increased. We then had to wait for months before the Government proceeded any further. Lo and behold, in November we found that the motor industry had been singled out as the villain of the piece by causing inflation to soar. Was it the motor industry that was using the steel that was in short supply? If it was that industry, why was not the Government honest in the matter? Why did it not say that that was the reason why there Would be a dampening down, to use the words of Government supporters, of that industry? Honorable senators on the other side did not say that; it was something that they thought about later. Only a few weeks ago the Treasurer (Mr. Harold Holt) announced in another place that the increased sales tax that was imposed on motor cars in November last would be removed because it has served its purpose. It was a 90-day wonder! The Government solved the problem in 90 days by increasing the sales tax on motor cars!

The Government also threatened - it is very good at threatening - to compel life insurance companies, superannuation funds and so on to invest a certain proportion of their assets in loans to the Governmentor to semi-governmental bodies. This was to be one of the great cures for inflation. But the Government has seen the light and that proposal has gone by the board. Another proposal by the Government in November last was to make interest paid by companies on borrowed money non-deductible as expenses for income tax purposes. We have heard nothing more about the proposal and I wonder whether it, also, has gone by the board.

To-day the Government is repeating the sentiments that it expressed about this time last year. Senator Gorton has attempted to justify the lifting of import licensing on the ground that there is a shortage of steel in this country. Of course, we know that steel plays an important part in connexion with the development of the nation. The Minister was silent in regard to the importation of other goods that are not in short supply in Australia. Look at the position that our textile industry is in to-day. Some of our textile mills, which are probably the finest that could be found anywhere in the world, are to-day working short time. Men and women have been thrown out of employment in these mills. As the result of the loss of purchasing power of those workers further economies will undoubtedly follow.

My mind goes back to the beginning of the depression years when some people suggested - just as this Government is suggesting - that wages were too high, that industry could not afford to pay them, and that they should be reduced. I well remember a businessman in the town where I reside speaking in that strain. Wages were reduced ‘by 10 per cent, and we had the Premiers Plan introduced. What happened? Slowly but surely purchasing power decreased and more people went out of business. It was not that there were no goods to purchase, or people to purchase them, but that the purchasing power was not in the hands of the consumers. The same thing is happening to-day as the result of this Government’s policy. Senator Gorton attempted to justify a policy that brought ruination to many of our people in days gone by and which will bring ruination again unless it is discontinued.

The greatest difficulty being experienced to-day is the “start, stop and go” policy of the Government. Something which happened overseas late last year and in the following months, helped our economy to keep going. I refer to the unfortunate incidents in South Africa and the Congo. Many who invested in the Congo and South Africa sensed danger and discontinued investing in those countries with the result that additional foreign capital flowed into Australia. That had a buoyant effect on our economy. Whether that condition “will continue, we do not know.

I want to refer now to unemployment. Only the other day the Minister for National Development (Senator Spooner) dealt with this subject. Professor Copland, who was one of the people who suggested the 10 per cent, wage reduction and the adoption of the Premiers Plan during the depression, anticipates that unless action is taken by this Government, 200,000 people will be out of employment before we again experience anything like prosperity. His estimate may be high, but nevertheless it is the estimate of a thinking man and is not a figure suggested by a Labour politician. Even on a conservative estimate, unemployment will increase further by at least 20,000 because there was a far greater increase in unemployment during the last four months of last year than during the corresponding period of the preceding four years. It is idle to suggest that unemployment is not increasing.

As I have said, this unemployment will result in a reduction of the purchasing power of the community which in turn will affect another important section - the primary producers. During the last depression there was no scarcity of foodstuffs, but there was insufficient purchasing power to purchase the produce grown by our farmers. The effect of unemployment percolates right through our economic system. In to-day’s “ Daily Telegraph “ is a repory of the presidential report to members of “Men of the Land “ by Sir William McKell, a former Premier of New South Wales and a former Governor-General of Australia. Among other things, he said -

The time is lon? overdue for rural industries to given proper incentive to produce more of their exportable commodities.

T quote that sentence because it has been suggested that the Government is undertaking a drive to increase our export trade. The bulk of our exports are, of course, primary products. The Minister for Trade (Mr. McEwen) has said that the Government intends to grant sales tax and other concessions to exporters. The proposals seem to me to be most complex and will take a good deal of working out, and I am very doubtful whether they will meet the requirements suggested by Sir William McKell. Sir William went on to say that - Australia would not be in the bad economic position it is in now if the country were receiving another £200,000.000 from overseas income.

That would be good indeed if we could obtain it. The report continues -

He said: “ A complete investigation of the cost structure in the rural industries should be made. “ This would allow the farmer to sell his products on the overseas market and, at the same time, provide savings for future development”

Sir William quoted these figures from the quarterly bulletin of the Commonwealth Bureau of Agricultural Economics.

I ask honorable senators to note these figures because they are important. They show the trend that is taking place in our primary industries to-day. I am reminded of a story that has to do with an occasion when I was supporting a Labour candidate in a parliamentary election a few years ago. He was a wheat farmer and there had been a fall in the price of wheat. During the depression years farmers had plenty of wheat, but nobody could afford to buy it. Country Party senators refused to give the Labour Government of the day the opportunity to raise sufficient finance to pay the wheat farmers a reasonable price for their wheat. To get back to my story, our election meetings at that time were a great success in rural areas. That candidate told me that when he was a lad he worked for his father and his father worked for the banks, but neither of them got paid. Senator Wade, who is interjecting, knows about whom I am speaking, and he knows that what I am saying is true. He knows that the young man worked for his father, that his father worked for the banks and that neither of them got paid. They were very lucky to save their property. It would be interesting to tell how they did that.

Senator Wade:

– That man is a millionaire to-day.

Senator SHEEHAN:

– Whether he is or not does not matter; he is a very good Labour man. I ask honorable senators to pay very close attention to what Sir William McKell said because the way things are going under this Government may mean for primary producers a return to the conditions of which I have spoken. Sir William said -

Farmers have been faced with a 10.1 per cent, increase in their farm costs in the past five years.

Their net farm income has averaged nearly £100 million less than the average for the previous years.

Farmers’ total indebtedness to lending institutions rose from £13 million to £124 million, an increase of £111 million over deposits.

That is an indication that the former bad conditions are returning. If the Government wants to save the economy it must act. It is idle for the Government to contend that the newspapers that are criticizing the Government have adopted the role of the parliamentary Opposition. If the Government’s actions were in the interests of the nation the newspapers, which traditionally oppose Labour, would not now be criticizing the Government. Their criticism is an indication that the Government is not doing the job demanded of it.

The Government has said that the Labour Party, when criticizing Government policy, should suggest an alternative policy. In view of past history 1 think that the leaders of the Labour Party have been well advised not to intimate to the Government at this stage the actions that they would take if Labour became the government. If one goes back over the years one finds that on many occasions this Government has simply pilfered Labour’s policy. The Government is so bereft of ideas, notwithstanding all the advice of its officers - possibly that advice is inaccurate - that if Labour were to offer a solution to the problem that now confronts the Government, the chances are that it would sneak that solution from Labour and put it forward as the Government’s own policy. Labour will not make its policy known until such time as the revelation will be beneficial to it. That time will be when the Government must answer to its masters - the people - who will decide who is right and who is wrong. It is then that Labour will announce its policy. I have not the slightest doubt that that policy will be accepted by the people, so that at last the country will be rid of a Government that has been proceeding in fits and starts ever since it assumed office, and that has brought the economy of the country to the position it is in to-day.

Western Australia

, - In rising to support the motion for the adoption of the Address-in-Reply, so ably moved by Senator Mattner and seconded by Senator McKellar, I desire to associate myself with the expressions of loyalty to Her Majesty the Queen, who is entering on the tenth year of her reign.

I also join with my colleagues in expressing deep sorrow at the passing of Viscount Dunrossil. He had been with us such a short time, but in that time he endeared himself to all of us. The women’s associations of Australia will deeply regret that to-day Lady Dunrossil left our shores. She had already taken a very great interest in a number of our associations, and had given us the great advantage of her trained mind. To the Administrator and Lady Brooks I offer a welcome to Canberra. I hope that their stay here will be a pleasant one.

The Administrator’s Speech covered a great many subjects of tremendous importance to Australia. One of those subjects was the conference in London of Commonwealth Prime Ministers. Judging from the daily reports of that conference it was evident that such a meeting was necessary and very important. We on the Government side regret that Senator Armstrong did not think that Mr. Menzies should have attended the conference. It is true that we have problems in this country, but it would be of very little use to solve our own problems if the countries of the world were to be cast into a catastrophic war. The pooled wisdom of the Prime Ministers meeting in London was surely of paramount importance to the world. We have no reason to bemoan the fact that our own Prime Minister is away from us for a little while attending that very important conference. The Prime Ministers Conference should have been treated as very much above party politics. It is a very great pity that the Labour Party shows so little interest in foreign affairs, as is evidenced in the things that are said in this Senate by the Opposition and in the lack of interest taken by it in any of the committees that deal with foreign affairs.

Before discussing the very interesting and important things dealt with in the Administrator’s Speech I wish to reply, if possible, to some of the statements that have been made by honorable senators opposite. Senator Benn, during the course of his speech, made some astonishing allegations against the Government. Senator Benn discussed the Government’s proposition to invite life assurance companies and superannuation funds to invest in Commonwealth bonds and said -

I do not know whether the Government believes in outright compulsion, but when that announce ment was made it confirmed an idea that I had had in my mind for a number of years regarding the Liberal Party and the Australian Country Party. It confirmed that there is a Communistic cell in the Liberal Party and Country Party in this Parliament.

Senator Hannan:

– He was joking.


– He did not seem to be joking. He had it in his mind. He continued -

There are two Country Party members in that cell and three Liberal Party members. They are in this Communist Party cell and they advocate without a blush that the Commonwealth Government should compel the life assurance companies to contribute to the loans of the Commonwealth. Of course, that is Communistic. It is nothing else than outright compulsion. 1 thought that Senator Benn belonged to a party which believed in compulsion, lt seems that I was very much mistaken.

Senator Wedgwood:

– No, you were not.


– I should like to remind Senator Benn that in 1957 Dr. Evatt, the then leader of the Labour Party, declared that Labour was a left-wing party. A lot of evidence is coming forward day after day to prove that that statement was absolutely correct. For example, this year we have heard of the very famous Mr. Stout being elected to the office of federal president of the Labour Party. He will help to dictate the party’s policy for the future. The new federal secretary, Mr. Chamberlain, is also very well known in political circles. The fact that both of those men have been appointed to the offices that I have mentioned confirms Dr. Evatt’s statement that the Labour Party is a left-wing party. We are left in no doubt whatever about the direction in which the party is travelling. These were the men who took such a great interest in the Hobart conference in 1955 and again in the Brisbane conference of 1957 when the policy of the party was dictated.

Only last week a statement was made by one of the leaders of the Labour Party in the House of Representatives which I presume the Leader of the Opposition (Mr. Calwell) will adopt as the party’s policy until something else turns up. This leader in the House of Representatives said -

The Labour Party must never have any apologies for its objective of socialism. It is the light on the hill.

He added that he hoped no one in the party would ever decry the socialistic aim of the

A.L.P. The correspondent who discusses that statement in the report I have in my hand says -

Now that the light shines, brilliantly on the Labor hill-top, may it be a signal for Mr. Calwell and the rest of his troops to take up Mr. Pollard’s cry and proclaim the virtues of “ democratic socialism “ far and wide.

Let him tell the world exactly what kind of policy Labor really has and of the means it would employ to regiment the inhabitants of this land of ours.

He would at least have shrieks of delight from the Communist Party, for in addition to cementing the already close alliance, socialism is regarded by the Reds as the first step toward their ultimate plan of world domination.

I as well as other honorable senators know that there are many very estimable people in the Labour Party who want to have no truck with communism. Not for a moment do I imagine that Senator Benn, Senator O’Byrne, who is sitting it out in the chamber, Senator Cooke, Senator Courtice or Senator Brown would give up their very comfortable and pleasant way of life and ownership of property to join a commune. The idea is just too ridiculous. I am sure that even Senator Cant, who openly declared that he would, rather vote for a Communist than for a member of the Liberal Party or the Australian Country Party, would not exchange his pleasant way of life to become a peg in a commune. I am sorry he is not in the chamber to hear what I am saying. The real puzzle to the electors of Australia is why these worthy gentlemen stay in a party that is directed by left-wing leaders.

That a system of infiltration into the party has been taking place is now becoming painfully clear. I have in my hand a little booklet which any one may purchase and which contains a lot of very valuable information about Communist cells. I have searched it from cover to cover, but I cannot find in it any reference to the cells in the Liberal Party and the Australian Country Party about which Senator Benn had an idea in his mind. This booklet is not the product of the Government parties; it is compiled and vouched for by Mr. J. P. Maynes, who is the federal president of the Federated Clerks Union of Australia, who must know what is going on in trade union circles, and who is very disturbed about what is going on.

If I indicate to honorable senators some of the unions that have been infiltrated they will see to what degree this left-wing partyhas progressed with the Labour Party. One of the objectives of the Communists is to get into the trade unions and to try to establish a united front of the workers. This passage appears in the booklet -

In this part of their programme the Communists are still making headway at the State and national levels.

The result is that at the present time the Communist Party has retained practically all of its power in the key trade unions. Thus, it controls or dominates:


Maritime: -

The Waterside Workers’ Federation

The Seamen’s Union

The Ships’ Painters and Dockers (except the N.S.W. Branch)

Land: -

The Australian Railways Union (excluding the N.S.W. branch)


The Amalgamated Engineering Union

The Boilermakers’ Society (x)

The Sheetmetal Workers’ Union (x)

The Blacksmiths’ Union (x)

In these unions certain branches are controlled by non-Communists but the Federal control is Communist, and the decisions are binding on all branches.


The Building Workers’ Industrial Union

The Painters’ Union (x)

The Builders’ Labourers’ Union (x)

The Plumbers’ Union (x)

The same position applies to these unions as those in the heavy industry section.

Senator Hannan referred to the assistance that was rendered by the Labour Party so that Mr. Southwell could be elected to the Commonwealth council of the Amalgamated Engineering Union, thus forming another Communist link. The booklet contains this further list or organizations said to be under the control or domination of the Communist Party -


The Coalminers’ Federation

The Federated Engine Drivers’ and Firemen’s Association (particularly covering the Sydney, Newcastle and Port Kembla areas).

So we can see that this system of infiltration is going on very thoroughly. At last we are beginning to see just what the Labour Party is doing.

Senator Cooke referred to a demarcation strike, as he called it, in Fremantle. My colleague, Senator Drake-Brockman, cited some very interesting figures about this situation, which I shall not repeat. That strike lasted for fifteen days and laid up fifteen ships. Nothing was loaded or unloaded for that period. Cargo which was needed in Western Australia was not removed from the vessels. According to Senator Cooke, that little strike was a demarcation strike. I do not care what he calls it. AH I know is that it was very detrimental to Western Australia. Therefore, I should have thought that Senator Cooke would have deplored it. When he described it as a demarcation strike, I said to myself, “ I must look through my little book again and see whether I can see anything that will lead me to understand this”. He was rather afraid that I did not understand very much about industrial matters, but I think he has forgotten that I was a member of the teachers’ union for a great number of years. I was also a member of its executive for a great number of years, and I dealt with many union troubles. I was also a deputy representative on the teachers’ appeal board, sitting with a judge for a good while. So I am not quite as ignorant of industrial matters as Senator Cooke tried to make out.

When I look at my little book I find what the Communist tries to do in Australia expressed in these words -

Australia, in the immediate past, has experienced - and is still experiencing - a series of stoppages, bans and limitations of work. If one seeks a common purpose in all of them, it can be found only in the twofold objective of (a) undermining confidence in arbitration- which I think is a terribly serious thing -

and (b) promoting the class war mentality through strikes, particularly through those which have a political character.

So, whether you call that strike a demarcation strike, a hold-up or anything else, it was very detrimental to Australia, and to Western Australia in particular. It caused a great immediate loss, and perhaps even a future loss of much of our trade.

Senator Cant contradicted a statement that was made by Senator Scott. Senator Scott spoke of the strike in the coal-mines in Western Australia and he attributed some of the activity there to a Mr. Latta. Senator Cant said -

Senator Scott directed attention also to a strike at Collie and mentioned Mr. Latta. I want to tell the Senate that Mr. Latta - a confessed Communist - had nothing to do with the strike at Collie, which was conducted by the disputes committee of the Australian Labour Party and the Combined Unions’ Council at Collie.

When I turn up my little book again I find these words -

Combined Unions Committees.

Around the Commonwealth, numerous instances may be seen of the use of the “Combined Unions Committee “ by the Communists as a means of exercising control over a whole industry. Two good examples of this have occurred in West Australia where Communist “Paddy” Troy established the Maritime Unions Council at Fremantle, and Communist Bill Latta created a Communist sphere of influence through the Collie Combined Mining Unions Council.

So, I think Senator Cant will have to bring up to date some of his information about Communist cells that are appearing here, there and everywhere in connexion with the Australian Labour Party. 1 shall now go back to the Administrator’s Speech. Australia has reason to be proud of the continuing success of the Colombo Plan, which has proved so successful for so many students, and which is now being extended in a great number of ways. We should also be proud of the fact that the Government has given a great deal of technical assistance - I think the amount mentioned was £200,000 a year - which is also to be given to some of the Commonwealth countries of Africa. It is good to know that Australia plays such a leading part in helping South-East Asian countries and that it has promised to help the Commonwealth countries in Africa, as well as playing its part in the South-East Asia Treaty Organization, and the South Pacific Commission, both of which are helping the economic and social development of the countries around the Pacific.

While I am speaking on the subject of international understanding, I should like to report to the Senate that the first international women’s conference to be held in Canberra was held here in January. It was the Ninth Triennial Conference of the Pan-Pacific and South-East Asia Women’s Association. There were about 200 delegates from South-East Asia and all the other countries bordering the Pacific. The theme of the conference was education of and for women in a changing world. I happen to be the national president of that organization at the moment. I have held that position for nine years, as a matter of fact. The thanks of my organization have been extended to the Commonwealth Government, to the Department of External Affairs, and especially my colleague, Senator Gorton, who assists the Minister for External Affairs, and to the embassies and the people of Canberra for helping to make that first international women’s conference a great success. The press and the Australian Broadcasting Commission gave the proceedings a very generous coverage. Among the many complimentary press notices was one which stated that this conference was perhaps the most wonderful gesture that Australia had made to the Pacific. There is an old saying that the quickest ways to spread news are by telephone, telegram and tellawoman. If that saying is true, nearly all those 200 women left Australia’s shores expressing the one thought, namely, “ We had no idea that Australia was so friendly towards us “. So, 1 believe that we in Canberra to-day can feel very proud of ourselves because we have at least 200 women who, wherever they go, will spread the gospel that Australia is friendly towards all these countries and is desirous of being a great help to them.

I urge the Government to encourage more groups of people of that kind to come to Australia and also to encourage groups of Australians to go and visit those countries, because there is nothing like the personal touch for the development of international understanding. We have been having mainly exchanges of trade delegations both ways, but I can think of many other ways of developing international understanding. Housewives and ordinary businessmen should be included in that interchange. I think of what a wonderful effect it would have on many of these countries if the Government encouraged groups of people to visit them.

In the press this week I found the following paragraph: -

In August this year a small party of about 20 teenagers, in the age group 16-18. wil! be going to America for twelve months as, in effect, junior ambassadors for Australia.

I do not know that people need so much encouragement to go to America, but the idea contained in this paragraph is something that this Government should encour age in respect of other countries. The paragraph continues -

These young people, hand-picked and screened, will be travelling under the sponsorship of the Australian-American Association on American field service scholarships. They will attend high schools in the United States, live with American families and take part in community activities.

I think that is very good, and this Government might well take some note of it.

The international women’s conference was remarkable in two respects. There were twenty flags of Pacific countries flying in Canberra during that conference. That was one notable feature of the conference, and according to the people who provided the flags, that was the first time that such a thing had ever happened in Canberra. Another feature was that 33 years ago the then Prime Minister of Australia sent a message to the opening conference, when the Pan-Pacific Association was formed in Honolulu. The lady who took the message was Mrs. B. Rischbieth. a Western Australian citizen. She is still alive and she came to the conference in Canberra this year. She had taken a flag from the Prime Minister of Australia and presented it to the opening conference. That flag came back to us and was flown during the Canberra conference. Altogether the conference was very successful. At its close the 22 countries represented elected an Australian woman, Miss Jessie Robertson, of Western Australia, as international president for the next five years, and a Canberra woman, Miss Burbidage, as international secretary. What a great honour it is for Australia to have the confidence of all those countries, and what a tremendous responsibility.

This Government’s action in imposing additional sales tax on motor vehicles was very objectionable to me. I did not go so far as some of my colleagues and vote against it, but I was greatly tempted to do so. However, when I saw the figures showing the boom in motor car sales and the effect of it, I decided that perhaps I was wrong in thinking that that action should not have been taken. I think it did have a salutary effect in the way the Government desired. In November, 1960, motor vehicle registrations were at an all-time high of 31,865. In December, 1960, registrations dropped to 22,368, and in January, 1961, they dropped further to 16.254. It is clear from those figures that there was a salutary effect, and the Government has kept its promise to remove the tax at the first possible moment. However, along with many of my colleagues, I shall not be satisfied until the iniquitous sales tax and pay-roll tax are things of the past. Both of them were war-time measures. It must surely be time to get rid of all war-time measures. The Commonwealth Statistician recently stated that an amount of £138 a head is paid by Australians in taxes. Of course, that is not the whole picture, because that figure is the average per head in respect of direct tax only. We also pay about another 40 per cent, in sales tax and payroll tax. The exact amount in this respect is very hard to estimate.

The provision of financial assistance for homes for the aged is still one of the proudest things that this Government has done. I have visited many of these homes throughout the Commonwealth. Last week I was again in Tasmania and was present at a film showing two additional homes that have been opened. What this Government has done in this way to relieve the tragedy of old age has been very good indeed. I am not satisfied with social service benefits provided for civilian widows. The means test has been liberalized, but it does not affect many civilian widows with children. The Government should have another look at this matter and ensure that there is no longer any restriction on the amount that civilian widows are allowed to earn. I do not suggest that their pensions should be raised to the level of war widows’ pensions, but I do ask that they be allowed to use the talents they have to earn as much as they can to help them to keep their children and achieve a happier way of life.

A colleague indicates to me that I have only one minute left. I am very glad to know that Mr. McDonald of banking fame has recommended that a committee be formed to deal with the development of the northern part of Australia. The idea is a very good one. I hope that if the Government entertains the suggestion, it will remember that two committees have done a tremendous amount of good in ascertaining what is needed in northern Australia. The men who formed those committees live in the area and know what is wanted. I hope that if the Government proceeds with the appointment of another committee those people will be represented..

Education is the only other subject to which I shall refer. The Government has. done a very fine thing in its aid to universities and the provision of scholarships. However, I agree with President Kennedy’s statement, when announcing most liberal assistance for primary and secondary education, that a child has the right to be fully equipped to meet the problems of this changing world. If that is the right of an American child, it is the right of an Australian child. There are two or three other subjects I should like to deal with, but my time has expired. I commend the Government for the wonderful successes it has had during the past year. I support the motion and oppose the amendment.

Senator WARDLAW:

– I should like to associate myself with the expressions of loyalty to Her Most Gracious Majesty Queen Elizabeth that are contained in the motion before the Senate. I also express my sincere regret at the passing of Lord Dunrossil, and voice my very deep sympathy with his widow and family. Lord Dunrossil, before his appointment as Governor-General of Australia, had a most distinguished and impressive career. When this was detailed by the Leader of the Government in the Senate (Senator Spooner), in proposing a motion of sympathy, we were rather surprised at the extent and comprehensive nature of Lord Dunrossil’s public and parliamentary career in Great Britain. He served there for a period of 30 years and occupied very many posts under various governments. He probably was one of the most experienced and successful parliamentarians in Great Britain. He served in France in the Royal Field Artillery from 1914 to 1918 and attained the rank of captain. He was awarded the Military Cross and was mentioned three times in despatches. He had altogether a splendid record of service. He was a man of very wide and varied experience and his death is a very great loss to the Commonwealth.

I compliment the mover of the motion for the adoption of the Address-in-Reply: Senator Mattner, and the seconder, Senator McKellar, upon their excellent speeches and their comprehensive surveys of the matters contained in the Administrator’s Speech. Needless to say, I strongly support the motion and just as strongly oppose the amendment moved by the Opposition. I do not think that it is necessary for me to reply to any of the statements made by the Opposition, as these have been very effectively dealt with in Senator Robertson’s speech, which added so much to this debate. Every senator should give unqualified support to the Government’s proposals outlined in the Speech. I say that because I know that the measures have been designed to improve and consolidate the Australian economy at a time when it is imperative that measures of a positive nature should be adopted in the best interests of the country.

His Excellency the Administrator, in the course of his Speech, made the following statement, which I heartily endorse: -

In the economic sphere, it remains the firm aim of the Government to maintain soundly based national expansion, immigration and. full employment. Honorable senators and members will recall that last year the Government adopted a series of measures designed to restore a better balance between supply and demand in the economy and to give greater stability to costs and prices. My advisers believe that those measures are having their intended effect. There is evidence that the pressures of excessive demand are beginning to abate and my advisers are confident that the action they have taken will be successful in setting the economy on a course of steady growth and progress. My advisers have the state of the economy continuously under review and will take prompt steps to correct any untoward tendencies that might became manifest.

Senator Gorton has already referred to that passage. The Speech continued -

As has already been announced, the Government examined the impact of its economic measures on the motor and allied industries and decided that the sales tax on motor vehicles should be reduced to the rates payable on 15th November, 1960. Parliament will be asked to approve amending legislation with effect from 22nd February, 1961.

The Menzies Government has stated clearly on many occasions that it would adopt positive policies and adhere to them. Of course, it is necessary from time to time to deal promptly and expeditiously with special problems that arise, because if they were allowed to remain unsolved they would undoubtedly prove harmful to the overall economy. The Government has not hesitated to adopt remedial measures when that has been necessary, whether the measures have been popular or unpopular. I believe that thinking members of the community who take the trouble to find out the facts will be firmly convinced that the economic measures adopted by the Government are in the main in the best interests of the community generally.

The following paragraph from the Speech of His Excellency refers to proposals that have been criticized by many persons: -

In pursuance of the policy objectives announced last year, my advisers will introduce legislation to incorporate in the income tax law continuing provisions relating to the deductibility of interest as a business expense. This legislation will replace the interim measure enacted last year which applies only to the present year of income. My advisers will also inform the Parliament of the action they propose in relation to investments by life insurance companies and superannuation and provident funds in public authority securities.

The intentions of the Government in respect of life insurance companies and superannuation and provident funds have already been defined. I should say that the proposals have been approved, in the main, by the organizations concerned. The relevant legislation will be introduced later in the session and full particulars of the measures that are contemplated will then be given. Many people hold the view that the interest rate on government bonds should be increased to enable bonds to compete more effectively with investments offered by certain companies, but it must be remembered that the Commonwealth is not the only body to be consulted in this regard. The States and the Australian Loan Council have a big say in the rates that are fixed. It must be admitted that a stable interest level and a stable price level are of prime importance to the community.

There appears to be a growing demand for a new method of financing local government. Honorable senators will be aware of the tremendous increase of municipal rates that has occurred throughout Australia. In many instances, rates have increased by as much as 100 and 200 per cent, over a period. That increase points to the necessity for a new method of finance to be adopted. I believe that the adoption of such a method is an urgent matter.

I am of the opinion - and it is widely shared in many quarters - that there are strong organizations and individuals of wide experience who are opposed to the measures proposed by the Government to stabilize the economy. They are determined to prevent the measures outlined in the Administrator’s Speech from being implemented, despite the fact that their adoption is imperative from a national point of view. I regret very much the temporary lack of employment in some industries, particularly in Tasmania. I refer to the timber industry, the motor industry and the home-building industry. I doubt, though, whether the credit squeeze can fairly be blamed for the position that has arisen. The Government considers that restriction of credit is necessary to bring about more stable economic conditions. It appears to me that the unemployment that has occurred is the inevitable aftermath of boom conditions, over-production and, in some spheres, wartime wastage of assets. In the United States of America, there are 7,000,000 persons out of work, or about 9 per cent, of the work force. In Canada, 750,000 workers, or about 11 per cent, of the work force, are unemployed. That is a serious position for those countries. I suggest that, in relation to employment, probably no country in the world is in as good a position as is Australia at the present time. As we know, in this country 1.7 per cent, of the work force is unemployed. The Government is determined that the situation shall be taken in hand in the early stages and not allowed to deteriorate or to degenerate as it inevitably would if the economic conditions were not dealt with immediately and drastically.

The following paragraph from His Excellency’s Speech sets out our national objective very clearly: -

The attainment of our national objective of expansion must go hand in hand with an expansion of our export trade. Positive steps are being taken to improve Australia’s external trading position.

Imports and exports are the very life-blood of Australia. The position of our export industries has been discussed in the Senate many times, but I think it will bear repetition whenever possible so that honorable senators, particularly on the other side of the chamber, may appreciate the factors that are involved in it. The primary producers, Mr. President, earn 80 per cent, of our export income. In 1959, it was reliably stated that they earned 86 per cent, of our export income. It must be admitted that that is a magnificent effort by a comparatively small section of the community. This very satisfactory effort enables secondary industry to command up to 75 per cent, of the imports of capital goods and of goods for re-manufacture. The unpalatable truth, of course, is that secondary industry is not bearing its full share of the effort to increase export earnings. Drastic measures are necessary if the manufacturing interests are to be made fully aware of the need for greater efforts. They simply must accelerate their efforts, get down to tintacks and bear their full share of the export drive. In my opinion, secondary industry has had ample protection over, say, the last twenty years. If the manufacturers are to play their part fully in the economic life of this country, they must increase efficiency and concentrate on lowering the cost of their products on both the Australian and overseas markets. I believe that manufactured goods should constitute at least 25 per cent, of out exports.

The Administrator went on to detail more specific measures for increasing our export income, including the encouragement and support of the tourist industry. As many honorable senators have already said during this debate, the tourist industry is capable of a great improvement and continued expansion over the whole of the Commonwealth.

His Excellency also stressed the importance of developing our mineral resources and mentioned their value as an earner of foreign exchange. Their development would act as a stimulus to the development of our isolated areas. The search for oil is being pressed strongly and every effort is being made over a wide area to find oil in payable commercial quantities. That was referred to by the Minister for National Development (Senator Spooner) in his speech in this chamber recently. He emphasized that Australia was vigorously pursuing the search for oil.

A record wheat crop of 236,000,000 bushels has been delivered. Sales of wheat overseas are particularly satisfactory at the moment, and I noticed that quite recently we were able to make a further wheat contract with Communist China, which will considerably help our overseas trade. As has been stated by many speakers during this debate, there is a very attractive market overseas for our meat, particularly beef. Every effort is being made to stimulate the production of meat and to expand our present markets. His Excellency stated -

In the Northern Territory my Government will introduce a scheme to assist pastoralists and agriculturalists in the development and improvement of water supplies on their properties. Also within the Northern Territory research into cattle disease and the most suitable fodders is continuing.

The last year has probably been one of the driest years in the history of the Commonwealth. In my opinion, it was only the fact that our water supplies had been developed to such a degree that enabled us to keep our stock in good condition. In many instances, particularly in Tasmania, they improved out of sight. This is very satisfactory, considering the adverse conditions that have been experienced in most of the States of the Commonwealth.

Senator Robertson referred to the revised means test for age, invalid and widow pensioners which is now in operation. This scheme has been very well received in all States, and the manner in which it is being carried out by the Department of Social Services has been very favorably commented on. There is a further part of His Excellency’s Speech to which I should like to refer. He stated -

The projects under particular and sympathetic consideration are road development in the north; improved port and loading facilities to assist the coal export trade; standardization of important railways in South Australia and Western Australia; and proposals to stimulate the search for oil and minerals generally.

The proposals referred to in the Administrator’s Speech cover a very wide field of endeavour. I am sure that they will result in the further strengthening of the economy - and in much greater stability in the long run.

Tasmania will play its part in attracting tourists from the mainland and from overseas. The facilities for travel on the island are excellent. We are on the way to having, within a year or two, probably the finest shipping service in the Commonwealth. We are particularly beholden to the Commonwealth Government in this matter and we are grateful for what it has done to supply us with adequate shipping. The “Princess of Tasmania “ has been a pronounced success. The “ Bass Trader “, which has been recently launched, and will be in operation in April, is probably the most modern cargo vessel in the world. Our air service is second to none; it is fast, convenient, safe and comfortable. We have much to offer the tourist in our small island in the matter of scenery, mountain climbing, fishing, shooting and sport generally. In addition, we have an ideal climate.

Before I resume my seat, Mr. President, I would like to give the Senate some idea of the conditions of the farming industry in Tasmania during the past year, which has been one of the most difficult that we have experienced in our history. During the five months from November to the present time we have had practically no rain in Tasmania. That does not apply to all parts of the island, but I would say that we have not had adequate rains. We will feel the effects of this later. Nevertheless, we have come through fairly well, considering the adverse conditions that have been experienced. The early part of the season, due to very good rains in the early springs and favorable climatic conditions, held out the promise of a very good dairying year. However, the long, hot, dry summer, extending from late November through to March, has altered the position considerably. The production of butter fat probably will be down by 25 per cent, or 30 per cent, over the whole of the island.

Our wool production was particularly good, considering the seasonal conditions. The average yield was only i lb. less than in the preceding year. We produced 48,000 bales of wool on the island and, as usual, we received the top price for superfine wool in the Commonwealth. My South Australian friends are looking at me and I suppose they are thinking that I am drawing the long bow. We received 406d. per lb. for our superfine wool.

Senator Hannaford:

– Was that the average price?

Senator WARDLAW:

– That was the price paid for selected bales. It was certainly not the average price. It placed Tasmania, as usual, at the top in relation to prices received throughout the Commonwealth. But despite the high price that was received for some of our wool, I think our wool cheque will be about £1,000,000 less than it was last year. I suppose that all the States of the Commonwealth will receive lower wool cheques because the price of wool this year was down by approximately lOd. per lb., compared with last year.

Taken all round, the stock generally came through the summer particularly well. Our fat cattle prices were good, and that helped in some respects to cushion the loss on our wool. The production of fat lambs has been particularly good and the general quality, taken all round, has been excellent. Local prices on the whole have been reasonably good, but theprice of frozen lambs on the British market fell by 5d. or 6d. per lb., which meant a slight loss for the producers. Generally speaking, the prospect of price increases in London is good and it appears that we shall see a further rise in fat lamb prices in the near future.

Our cereal crops were not a great success. Crops of wheat, oats and barley have been fairly good, and yields appear to have been above average in many cases. Considerable interest is being shown in Tasmania in increasing wheat acreage in the coming year and it would appear that returns will be substantially higher than in any previous year. Our yield of canning peas was 50 per cent. less than in the previous year. That was due, of course, to lack of rain at a critical time. The grey and blue pea crop was a hopeless failure for the same reason.

The potato crop is one of the most important on the island, but this year the acreage planted is the lowest since 1888. Senator Wright will correct me if I am wrong, but I think that is so. The average yield last year of 6.31 tons per acre was particularly good and it helped us through the present dry year. We are extending planting to areas which can be irrigated and it is hoped that there will be a considerable increase in yield over the whole State. It is hard to estimate the later crop, but adequate rains will make all the difference. By and large, although cash crops have failed, which no doubt will be reflected in financial hardship for many farmers, the position in Tasmania is reasonably good. The Tasmanian growers, as usual are determined to play their full part in increasing the volume of primary products, as all primary producers are being urged to do in the interests of Australia.

I conclude, Mr. President, by reiterating my very strong support for the motion for the adoption of the Address-in-Reply proposed by Senator Mattner and seconded by

Senator McKellar, and I oppose just as strongly the amendment moved by Senator Armstrong.

Question put -

That the words proposed to be added (Senator Armstrong’s amendment) be added.

The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)

AYES: 23

NOES: 30

Majority 7



Question so resolved m the negative.

Original question resolved in the affirmative.

Presentation of Address-in-Reply.

Motion (by Senator Spooner) agreed to -

That the Address-in-Reply be presented to His Excellency the Administrator by the President and such honorable senators as may desire to accompany him.


– I have ascertained that His Excellency the Administrator will be pleased to receive the Address-in-Reply at Government House at 4 p.m. to-morrow. 23rd March. I invite honorable senators to accompany me on the occasion.

Senate adjourned at 10.50 p.m.

Cite as: Australia, Senate, Debates, 22 March 1961, viewed 22 October 2017, <>.