17 August 1961

23rd Parliament · 3rd Session

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 1 1 a.m., and read prayers.

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Senator SCOTT:

– Has the Minister representing the Minister for Primary Industry noted the fall in lamb prices on the Australian market during the last three or four weeks, in some cases amounting to more than ls. per lb.? As it is my belief that the butchers have not reduced the price of meat sold to the Australian public, can he say whether the reduction in price has in fact been passed on to the Australian housewife?

Senator WADE:
Minister for Air · VICTORIA · LP

– I have noticed that the price of lamb has fallen substantially during the last three or four weeks. Senator Scott has asked whether the reduction has been passed on to the housewife. I have some reservations about even trying to answer that question because I believe it would be very difficult to give a specific answer to it. I know that the butchers argue that they work on an averaging system so far as ‘their retail prices are concerned. They claim that because they must pay high prices for the meat they buy, and that increased costs are not always passed on to the public, they are entitled, when opportunity presents itself, to recoup themselves when the prices for which they buy meat are lower. However, I shall bring the matter to the notice of my colleague, the Minister for Primary Industry, to see whether he has any specific knowledge of the points raised by ‘the honorable senator.



– My question is addressed to the Minister representing the Minister for Trade. Is the Commonwealth Government in favour of, and is it giving full support to, the current “ Buy Australian Made “ campaign? Have instructions gone out to Commonwealth departments, business undertakings, and so on, that they must buy Australian-made goods when it is practicable to do so? Will the Treasurer ensure that, owing to the depressed state of sections of the paper industry, the Government Printer not only buys Australianmade paper, but also places advance orders as soon as possible for the current year’s requirements?

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

– The answer to trie first part of the honorable senator’s question is, “ Yes “. We all know that Australian manufacturing industry has to expand if we are to continue our existing programme which is designed to increase the Australian population. The answer to the second part of the question again is, “ Yes “. Subject to certain conditions, government departments are required to purchase, wherever it is practicable to do so, items of Australian manufacture. In answer to the third question, I can only say to Senator Marriott that I will bring the suggestion to the notice of the Treasurer to see whether it is practicable.

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Senator BRANSON:

– I ask the Minister representing the Minister for Labour and National Service the following questions: - Did he see a statement in the press which reported Mr. Calwell as having accused Mr. McMahon of faking the July figures for unemployment? Will the Minister explain to the Senate how these figures are compiled? Who is responsible for their compilation? Where is the information obtained? Is there a fixed formula for determining the date of release of this vital information?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I did see the statement which was made in a rather peevish manner by Mr. Calwell, the Leader of the Opposition in the House of Representatives, on this subject. I inform the honorable senator that the unemployment figures are collected from some 141 offices and 400 agencies in the States. They are then sent to the regional directors in the States and, finally, they are forwarded to the central office for collation and release. At all stages of this process, they do not come before the Minister but are collected by Commonwealth public servants. For the last three years at least it has been a practice in the department at all times to collect these figures as they refer to the last Friday or to the Friday nearest to the end of a month provided that Friday is not more than two days after the end of that month. They are then - and have been for the last three years - made available for release on a Monday seventeen days later. For instance, the figures for May were taken on Friday, 2nd June, and released on 19th June, which was a Monday seventeen days later. The figures for June were taken on Friday, 30th June, and released on 17th July, which was a Monday seventeen days later. The figures for July were taken on Friday, 28th July, and released on 14th August, which was a Monday seventeen days later. That has been the common practice for the last three years and, as I have said, the figures themselves are collected by Commonwealth public servants. Consequently, there is no basis whatever for the statement made by Mr. Calwell, and I believe that he knows there is no basis for that statement.

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Senator BENN:

– On 9th May last, I directed a question to the Minister representing the Minister for Trade in this Senate. That was approximately fourteen weeks ago, and the question has appeared on the notice-paper ever since. Is it possible, Mr. President, for a reply to be given by the Minister for Trade to a simple question?

Senator SPOONER:

Mr. President, I should say, in defence of my colleague, Mr. McEwen, that the question is not so simple as would appear. Senator Benn asked -

From which countries did Australia import (a) the 2,500,000 square feet of plywood in January this year, (b) the 2,700,000 square feet of plywood in February this year, and (c) the 1,900,000 square feet of plywood between 1st March and 14th April this year?

I suggest to Senator Benn that there is quite a lot of work involved in going through various data in order to get the information he has sought. I should not think that the Department of Customs and Excise or the Department of Trade keeps this information in such a ready form as to be able to answer such questions offhand, but in deference to Senator Benn I shall speak to Mr. McEwen about the matter and see whether a reply can be expedited.

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Senator LILLICO:

– I ask the Minister representing the Minister for Trade: How many industrial concerns have applied for tariff protection under the emergency legislation that was passed by the Parliament last year? How many industries have been granted protection because of that legislation? Would not the industries so advantaged have been in a less favorable position to-day had the legislation not been passed?

Senator SPOONER:

– This question arises from some discussions that I have had with Senator Lillico over the last few days. He has taken a great interest in this matter, with particular reference to the circumstances that exist in Tasmania. I have talked with officers of the Department of Trade and I have been able to get some information which is of great interest to manufacturing industries. Let me start by reminding the Senate of the purposes of the legislation. The scheme was evolved by Mr. McEwen in order to provide quick relief or protection when an industry - not a particular business - was facing undue competition from imports. Within the Department of Trade there are industry advisory panels, with Which the department consults. The department then makes a recommendation to the Minister. If the Minister thinks there is a prima facie case for protection, he makes a reference to a member of the Tariff Board, who is required to make a report within 30 days. Therefore, it is a very quick process. If the Minister approves a recommendation for the application of a temporary duty, that temporary duty, is applied and in broad terms, continues until such time as the Tariff Board has made a normal inquiry into the industry concerned. I find that 24 such references have been made to a deputy chairman ot the Tariff Board. Fifteen requests for a temporary duty have been granted, or some arrangement analogous to a temporary duty has been made in order to provide protection against imports. Six applications have been refused and three applications are still pending, a deputy chairman of the Tariff Board not having made a report on them. I think that those facts show that an expeditious method of seeking protection is available to a manufacturing industry which considers that it is being unduly prejudiced by imports and that it has a case for the granting of temporary assistance or the imposing of a temporary duty untilthe Tariff Board has made a normal, full inquiry into the industry.

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SenatorO’FLAHERTY. - I direct a question to the Minister representing the Minister for Labour and National Service. In reply to a question, afew minutes ago he said that information was gathered from all over Australia for the purpose of compiling the unemployment figures that are published by the Commonwealth Statistician, through the Minister, and that these figures were accurate. We are not suggesting that the figures are not accurate, but I ask the Minister: Is it not a fact that there are nearly 500,000 workers who are not recognized as being unemployed and who cannot get employment through any Government agency, because the Government says that they are waiting to go back to the jobs from which they were temporarily stood down? If this is so, can the Minister tell me why particulars of those men are left out of the Statistician’s report?

Senator GORTON:

– The original question addressed to me by Senator Branson had to do with the untrue allegation by Mr. Calwell that the dates of release of unemployment figures were somehow improperly interfered with. I gather that my statement in reply does not lead Senator O’Flaherty to question the accuracy of what I said. Instead, the honorable senator moved on to another question and asked whether it was a fact that 500,000 workers in Australia were unemployed and that they would not be recognized as being unemployed. The answer I give to that question is, “ No, it is not a fact “. If a person is out of employment, given the requisite amount of time he is eligible to receive unemployment benefit. That is the answer to Senator O’Flaherty’s question.

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Senator HANNAN:

– I address to the Minister representing the Minister for External Affairs some questions with reference to the recent closure by the Communists of the border ‘between East Berlin and West Berlin. Has the Minister’s atten tion been directed to the statement in this morning’s press, which has been attributed to Soviet sources, to the effect that the agreement under which the West is in Berlin is invalid? Is there any substance in this Soviet claim? Is it other than propaganda? Is Australia involved in any commitments in respect of Berlin?

Senator GORTON:

– I have noticed from time to time, but not specifically this morning, statements which have appeared in the press in relation to the actions of the Soviet Government and the East German Government in Berlin. I can reply to the honorable senator only by saying that the action of sealing off the frontier in Berlin is a complete violation not only of the original occupation statute but also of the 1949 agreement entered into by Soviet Russia after her abortive attempt to impose the blockade on Berlin which was broken by the airlift. The 1949 agreement specifically guaranteed freedom of movement. There can be no question at all about that agreement being valid.

The action taken in Berlin is yet another example, if another is needed, of the fact that one cannot trust the Soviet Government to adhere to its international obligations even when they are spelt out in treaty form. I believe, Sir, that the action taken clearly points out two other facts. First, thousands, even hundreds of thousands, of workers in East Germany are prepared to leave ‘behind their homes, in some cases their families, their possessions and their jobs to go out into a strange world to escape from the Communist rule of the East German puppet government.

Senator O’Byrne:

– They come to Bonegilla but cannot get a job.

Senator GORTON:

– They are even prepared to accept that situation, so much so that 2,700,000 persons have fled from East Germany in recent years. I would add another point, if I may. It is this: What has happened is a proof, if proof were needed, that the real government in East Germany is the Soviet Government, which is prepared to call up its tanks and its troops to prevent East German workers from leaving the country. That clearly indicates that the so-called government of East Germany is purely a puppet regime.

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Senator BROWN:

– I ask the Minister representing the Minister for Labour and National Service these questions - Is it not a fact that before the credit squeeze was applied thousands of women were employed in industry? ls it not a fact that since Operation Credit Squeeze began thousands of women have left industry? Is it not a fact that these women cannot draw unemployment pay? Has the Minister any information about the number of married women who have been forced out of industry since the credit squeeze commenced?

Senator GORTON:

– To the best of my knowledge the figures published by the Minister for Labour and National Service contain details of males registered for employment and males receiving unemployment benefit. The figures also contain details of females registered for employment and females in receipt of unemployment benefit. I am not aware of anything that prevents a woman registering for employment and receiving unemployment benefit, but on that I speak subject to correction and will seek an endorsement of my statement from the Minister himself. In view of what I have said, the figures supplied by the Commonwealth Statistician should provide the answer to the honorable senator’s question.

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Senator McMANUS:

– Will the Minister for Customs and Excise state whether there has been any noticeable increase in recent months in attempts to smuggle into Australia dangerous narcotic drugs? How is Australia co-operating, through the United Nations authorities, with other countries to cope with this dangerous trend?

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– I have not been advised of any significant increase in the illegal drug traffic. The officers of my department have made some good hauls of narcotics in various ports in the last few months. They are doing that kind of thing all the time because the drug traffic is with us at all times. I do not know of any significant increase in the traffic at the moment. My department is working as closely as ever on this problem at the inter national level. We are receiving great assistance in this work.

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Senator VINCENT:

– My question, which is directed to the Minister representing the Minister for External Affairs, relates to the Berlin crisis. Is the Minister able to assure the Senate that the Minister for External Affairs is in the closest possible touch with the situation as it deteriorates from day to day? In view of the rapidly deteriorating situation in Berlin, will the Minister request the Prime Minister to make a statement to the Parliament at the earliest possible moment so that the Parliament may debate this very serious matter?

Senator GORTON:

– I can assure the honorable senator that both the Department of External Affairs and the Minister are in daily and constant touch with developments in East Berlin, although I point out that Australia is not a party principal, as it were, to the agreement which is being violated there. All I can say is that I will bring to the Minister’s attention the suggestion made by the honorable senator. Possibly, at some future date, if that does not cut across the lines of any other arrangements the Minister has made, he may see fit to accede to it.

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Senator O’BYRNE:

– I direct a question to the Minister for Labour and National Service. First, I would like the Minister to clear up the matter that was raised by Senator Brown, who referred to the wife of an unemployed person registering for employment and applying for unemployment benefit. Will the Minister inform the Senate whether the wife of an unemployed man may register for employment and receive unemployment benefit? I do not think the Minister dealt with that matter when he answered Senator Brown’s question. Secondly, in view of the plight of many unemployed family men who, as a result of Government policy, are at present finding it impossible to get permanent employment but are still expected to provide food, clothing and shelter for their wives and families on the unemployment benefit of £6 2s. 6d. a week, will the Government consider permitting married men to take casual work for a day or so a week and thereby bring their income up to the amount of the basic wage without suffering a reduction of their unemployment benefit?

Senator GORTON:

– The question which Senator Brown asked me was whether thousands of women had been forced out of employment, and, if so, how many women were involved. The answer I gave to him was that to the best of my knowledge any woman who had been employed and ceased to be employed could register as seeking employment in the ordinary way, as all people are able to do, and consequently the figures issued by the Commonwealth Statistician should provide the answer to the question he asked.

Senator O’Byrne has now asked, a completely different question. He wishes to know whether the wife of an unemployed man may register for unemployment benefit. I believe that the wife of an unemployed man or an employed man, or any woman at all, may register as seeking employment; but the wife of an unemployed man, as such, to the best of my knowledge, is not eligible to receive unemployment benefit because it is paid to her husband. I will bring the other matters raised by Senator O’Byrne to the notice of the Minister for Labour and National Service. They relate to matters of policy.

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Senator SCOTT:

– I direct a question to the Minister for National Development. In view of the fact that the Government, in the Budget, has granted extra money to companies exploring for oil in Australia, can the Minister advise me whether any consideration has been given to altering the method of subsidizing drilling operations and geological survey work carried out by interested companies?

Senator SPOONER:

– Additional activities will become eligible for subsidy. I am not prepared to go further than that statement at this stage. The matter is of such importance that I think I should defer saying more about it until I bring down the relevant legislation in the Senate. There will have to be definitions of the type of operations and the nature of the circumstances in which the activity will become eligible for subsidy. I do not think I should deal with that matter loosely. It is better to make the announcement of the actual terms of the legislation the first public indication of it so that some organization does not embark upon something in the hope that it will be eligible for subsidy and then eventually learn that it is not so eligible. I think it is better to be definite and clear about the matter than to make a loose statement upon it. I am trying to get the legislation drafted and completed as soon as practicable.

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Senator TANGNEY:

– My question is directed to the Minister representing the Minister for Health. Is it a fact that there is dissatisfaction and concern among pharmaceutical chemists over the working of the pharmaceutical benefits scheme? Does not the Minister consider that a better understanding could be reached if an independent chairman were appointed to the standing committee which discusses certain problems, so that in the event of disagreement between the representatives of the Government and the chemists the chairman could sum up the problem and present his views to the Minister?

Senator HENTY:

– I understand that this proposal, or one along similar lines, has been placed before the Minister for Health and he is considering the matter. When he has reached a decision he will make an announcement.

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– I desire to ask the Minister representing the Minister for Labour and National Service a further question, arising from his replies to the questions I asked previously. Does he know whether the 1,800 or more unemployed foreign migrants, as distinct from British migrants, are taken into consideration by the Commonwealth Statistician in calculating the number of people who are out of work?

Senator GORTON:

– I shall as’k the Minister for Labour and National Service to provide an authoritative answer, but to the best of my knowledge no differentiation is made between migrants of any kind or between migrants and Australian citizens in the right to register as seeking employment in Australia.

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Senator SCOTT:

– Can the Minister representing the Minister for Labour and National Service inform the Senate by how much the unemployment benefit has gone up since the miserly amount of £1 5s. a week was paid in 1948-49?

Senator GORTON:

– I understand that the miserly amount of £1 5s. a week referred to by the honorable senator was paid by a previous government, when there was 5 per cent, or 6 per cent, of unemployment in Australia. The unemployment benefit has gone up by stages-

Senator O’Byrne:

– Why do you not announce that Queen Anne is dead?

Senator GORTON:

– If I did, it would be news to you. The amount of the benefit has gone up by stages. It is now, I understand, £6 2s. 6d., compared with the £1 5s. that was doled out by the previous Labour Administration.

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Senator DRURY:

– I ask the Minister representing the Attorney-General, upon notice -

  1. When a Commonwealth vehicle is involved in an accident and there is a doubt as to which driver is at fault, and the case has come before the court, must the driver of the Commonwealth vehicle meet all legal expenses out of his own pocket?
  2. If the answer is in the affirmative, will the Attorney-General give consideration to making available free legal assistance to the Commonwealth driver?

I received a letter from Senator Gorton about this matter, but I should still like to have the answer to the question placed on record.

Senator GORTON:

– I am glad to have this opportunity to repeat in the Senate the answer I gave to Senator Drury after the Senate rose, in the letter dated 31st May, 1961.

  1. and 2. The subject-matter of the honorable -senator’s questions is dealt with by Treasury instructions, and is complex. It can be taken however, that, in civil cases, if the Common wealth driver’s only fault is that he drove negligently, the Commonwealth will arrange his defence at Commonwealth expense. In other cases (e.g., where the driver was under the influence of liquor) special considerations will arise. If the honorable senator has a particular case in mind, and will put me in possession of the circumstances, I shall be glad to ask the Attorney-General to make enquiries, so that I may advise the honorable senator further.

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Senator WRIGHT:

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

What amount was paid in expenses of interstate transfer of officers in the year 1959-60?

Senator WADE:

– The PostmasterGeneral has supplied me with the following answer: -

The amount of £12,336 16s. 9d. was paid in expenses of interstate transfer of officers of the Postal Department in the financial year 1959-60.

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asked the Minister representing the Minister for Primary Industry, upon notice -

In connexion with the Government’s announced policy of building up Australian overseas balances - (a) Has any request been received from South Australia for funds to enable more grain silos to be built? (b) Is it a fact that, with the rising cost of corn sacks, about £1,500,000 will be required to finance South Australia’s import requirements for next harvest? (c) Does the Minister agree with the suggestion said to have been advanced by the Premier of South Australia, Sir Thomas Playford, that a Commonwealth loan of £1,000,000, backed by a State Government guarantee of £500,000, to enable the growers’ company to expand silo capacity in South Australia to 30,000,000 bushels, would make an important saving in import expenditure on corn sacks and thereby help conserve Australia’s overseas balances?

Senator WADE:

– The Minister for Primary Industry has supplied the following answer: -

  1. No request was received from South Australia for funds, but support was requested in obtaining a loan from the Commonwealth Trading Bank, (b) £1,500,000 appears to be a reasonable estimate of the cost of imported cornsacks for the coming harvest, (c) I agree that the expansion of silo capacity will make a saving in import expenditure and T am pleased to learn from newspaper reports that the bulk handling authority has recently been successful in negotiating a loan of £1,000,000 against a guarantee for half that amount given by the State Government.

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Report of Public Works Committee

Senator O’BYRNE:

– I present the report of the Public Works Committee on the following subject: -

Proposed construction of Cadets’ Barrack Blocks at the Royal Military College, Duntroon, Australian Capital Territory.

There is an urgent need for additional barrack blocks for cadets at the Royal Military College, so that the use of temporary accommodation, which is of a poor standard, may cease as soon as possible. If no decision has yet been made, the committee recommends - and it hopes that the appropriate authorities will note this part of its report to the Parliament - that residential development overlooking the college should not take place and that the Pleasant Hill lookout should remain a public reserve.

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Minister for Civil Aviation · Western Australia · LP

– by leave - On behalf of the Treasurer (Mr. Harold Holt), I lay on the table the following paper: -

Commonwealth Committee on Taxation - Report dated June, 1961.

Honorable senators will recall that the Commonwealth Committee on Taxation was appointed in December, 1959, to examine and inquire into the operation of our income tax laws for the purpose of ascertaining any anomalies, inconsistencies, unnecessary complexities and other similar defects. The committee met at intervals from February, 1960, until the end of March, 1961. It received a very large number of written submissions and also heard in person most of those submission writers who expressed a wish to come before it for discussions. The committee received representations upon a wide variety of subjects and as a consequence its recommendations cover a very wide field. These recommendations can, from the Government’s viewpoint, be conveniently divided into three broad categories. The first category consists of recommendations of the committee regarding the avoidance of income tax.

The committee has drawn attention to several parts of our income tax law which are being exploited to the serious detriment of the revenue. The areas of avoidance of tax to which the committee specifically draws attention are -

  1. Superannuation funds;
  2. Family partnerships, trusts and alienation of income; and
  3. Leases.

The Government shares the concern of the committee that ingenious taxpayers should make use of the existing provisions in a manner not intended by the legislature, thus obtaining advantages at the expense of their fellow taxpayers. The committee places the annual revenue loss due to these stratagems at no less than £14,000,000.

The Government proposes to give its close attention to the recommendations of the committee to close these particular avenues of tax avoidance, and will in due course bring down amending legislation which will be operative from to-day’s date - that is thedate of tabling of the committee’s report. I cannot, at this stage, indicate the precise form which the proposed legislation will take: Certainly due weight will be given to the recommendations of the committee on these matters. But the prevention of tax avoidance raises all manner of complex issues which will require detailed study before the drafting of remedial legislation can be started.

The committee has also drawn attention to the ways in which the present provisions relating to the taxation of private companies are being misused and has made recommendations to counter these practices.. However, the recommendations of the committee on this subject are bound up with their more general recommendations on the taxation of companies and shareholders. As honorable senators appreciate, the taxation of companies and shareholders is a most complex matter, which has exercised the minds not only of our own taxation administration but also of taxation administrations in many other countries. Consequently, these particular recommendations of the committee will require very extensive examination, and the precise form of any legislation which might be adopted by the Government to block off the existing avenues of tax avoidance will require considerable research and investigation. I propose, however, that any legislation to be introduced to prevent the abuse of the existing legislation will also date as from to-day.

The committee has made a number of recommendations which quite clearly fall within its terms of reference and the Government will consider them from the stand-point of simplifying our legislation or removing anomalies and inequities. The report also includes a number of recommendations which appear to the Government to fall within the field of taxation policy. Their implementation would, as the committee itself recognizes, have the effect of depleting revenue and in some cases could result in the introduction of future anomalies into our income tax system. Recommendations falling into this category will be considered at the appropriate time by the Government, but they will have to be treated as taxation policy issues.

I would like to take the opportunity of placing on record the Government’s appreciation of the unremitting labours of the committee. In a little more than eighteen months it considered a tremendous volume of submissions and representations in what is clearly a most complex and intricate field of endeavour. It produced a report which has reduced this material to manageable proportions and which presents recommendations which in themselves are models of clarity and precision. We, as a government, and I am sure I speak on behalf of taxpayers generally in this regard, would like to express our appreciation of the manner in which the committee has approached its task and to assure it that its work will make a permanent contribution to the simplification of our tax procedures. In particular I would like, on behalf of the Government, to thank the chairman of the committee, Sir George Ligertwood, who, despite ill-health, insisted on completing his assignment as chairman of the committee.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I move -

That the paper be printed.

I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

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Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Henry) read a first time.

Second Reading

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– 1 move -

That the bill be now read a second time.

The purpose of this bill is to provide machinery for financing the eradication of foot and mouth disease from the Australian Capital Territory and the Northern Territory should that disease ever gain access to either of these Commonwealth Territories.

Foot and mouth disease is an extremely contagious and devastating disease of cattle, pigs and sheep. It is widespread throughout much of the world, including the continents of Europe, Asia, Africa and South America. It is one of the worst livestock diseases in the world. A vigilant, highly competent quarantine service has so far ensured that Australia is still free of this disease. This has been possible, however, only by imposing rigid prohibitions and controls on imports of such things as meat, hides, fertilizers, fodder and of animals which might bring the disease into this country. Precautions are also taken to ensure that rural migrants do not introduce the disease into Australia in soil on their boots or clothing.

Notwithstanding all the precautions taken through quarantine, the possibility nonetheless exists that the disease could break through, for example, by wilful evasion of the quarantine laws. Should it ever do so, there will be grave implications for our economy. A rigorous and costly eradication campaign would have to be implemented to combat an outbreak of the disease to prevent its spread throughout the country. Furthermore, it would be necessary to act quickly to effect the immediate slaughter of infected animals and animals in contact with them, and the destruction of all other sources of infection.

The principles to be followed, and the action to be taken, in such an event were agreed some time ago by the Commonwealth and State members of the Australian Agricultural Council. The Commonwealth has agreed to share the costs of an eradication campaign on a £1 for £1 basis wherever foot and mouth disease might break out in Australia. However, it will be necessary to have funds available to conduct an eradication campaign, and owners of slock and property will have to be compensated for their losses. For these reasons, this bill proposes the establishment of a trust account to provide for compensation payments and other expenses in the event of a campaign ever having to be mounted against foot and mouth disease in the Australian Capital Territory or the Northern Territory.

Moneys received from the States under agreements to share the costs of eradication of foot and mouth disease will be paid into the trust account, as will amounts from Commonwealth Consolidated Revenue. These will be used to pay the expenses of eradication measures and to pay compensation.

This bill could be described as an effective means of providing for a situation we all hope will never occur. Should it, in fact, occur, then the existence of an act embodying the provisions of this bill will be of material assistance in enabling the outbreak of foot and mouth disease to be dealt with swiftly and effectively. I commend the bill to honorable senators.

Debate (on motion by Senator Dittmer) adjourned.

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Debate resumed from 16th August (vide page 51), on motion by Senator Spooner -

That the following paper -

Australia and the Common Market - Statement by the Prime Minister dated 16th August, 1961- be printed.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Last evening, the Leader of the Government in the Senate (Senator Spooner) presented to us the speech of the Prime Minister (Mr. Menzies) on the very important subject of Great Britain’s application to become a member of the European Economic Community. He submitted a motion, “That the paper be printed “. To that motion, on behalf of the Opposition, I move the following amendment -

Leave out all words after “That”, insert - “the Senate, while declaring that the United Kingdom’s move to join the Common Market requires the strongest action to protect Australia’s interests, expresses no confidence in this Government’s ability to provide it because of its lack of foresight and frankness in this matter, its dilatoriness now, and its continuing failure, as demonstrated by the Prime Minister’s speech, to appreciate the real issues which are involved”.

I am indebted to the Prime Minister for developing in some detail, in the course of his speech, the constitution and structure of the Treaty of Rome and the European Economic Community. Although I shall touch upon those aspects, certainly his speech does save me considerable time. It is interesting to go back to 1946 and to find that the then Prime Minister of Great Britain, Mr. - now Sir - Winston Churchill, made the first call for a united Europe. He said that Europe should be united politically, economically and socially. Since then, we have seen the miracle of accord between the traditional enemies, France and Germany, in the formation of the European Coal and Steel Community and in other mutual activities. Ultimately, that led to the opening of negotiations at Venice on 29th May, 1956, between the countries that now constitute the Common Market. Those negotiations were concluded at Rome on 25th March, 1957, establishing the European Economic Community and, upon ratification, it came into operation on 1st January, 1959. The treaty is an enormous document, a complicated document, containing some 24 protocols, conventions and declarations running to a total of 378 pages. So it has an enormous spread, in the first instance. What impressed me in reading through the treaty was the concept of tough cohesion between the members constituting the community. That is insisted upon at every point. The broad purposes of the community are to have a common market, to eliminate all tariff barriers between the member countries and to eliminate import quotas and restrictions of every type.The countries have set a twelve-year period for that, divided into three periods of four years each, the first period alone being capable of extension. The fact is that the community has proceeded so fast that already it is ahead of the schedule for the elimination of tariff barriers amongst its members. In all the circumstances contemplated by the treaty, a completely free common market is to be established, at the outside, in fifteen years. Nearly three years of that period have gone and already the common market scheme is well ahead of the schedule. Finally, there is to be a common tariff, established over a similar period, operating in favour of all members against all outsiders - all countries not belonging to The Six constituting the Common Market.

The community has various institutions, including a parliament, which is at present comprised of representatives from the various parliaments of The Six. That is to be altered, lt is in contemplation that the representatives from the various member countries will be elected on a universal franchise. The community has already reached the position that the text of a convention for universal franchise was settled by the European Parliament on 17th May, 1960. When that is operative, then, during a transitional period only, one-third of the members will be elected by the parliaments of the member nations from the political parties in those parliaments. Due representation will be given to all political parties. The remaining two-thirds will be elected on a universal franchise. It is important to note that these men are not to be national in their outlook. They are not to be subject to their own countries as to directions, according to the convention, which provides that the representatives shall vote individually and personally and that they shall receive neither instructions nor an imperative mandate. During the transitional period, membership of the parliament will be incompatible with membership of the government of a member state. So one sees emerging a new concept of European statesmanship, divorced altogether from personal and natural affiliations.

There is a council, which is a body of six persons appointed by the six member governments. Those persons, of course, are not prohibited from taking a national outlook in that situation. They have a duty to secure the co-operation of the various countries in carrying out their obligations under the treaty. When one comes to the executive body, a commission of nine people who are to be entirely independent and not bound by any government at all, one finds repeated even more strongly the type of thing that has been stated about the members of the parliament. There is a prohibition of any country seeking in any way to influence members of the commission. At page 139 of the treaty, clause 2 of Article 157 states -

The members of the Commission shall perform their duties in the general interest of the Community with complete independence.

In the performance of their duties they shall not seek or accept instructions from any Government or other body. They shall refrain from any action incompatible with the character of their duties. Each Member State undertakes to respect this character and not to seek to influence the members of the Commission in the performance of their duties.

Here is an entirely new concept - one which divorces men from their natural allegiance. It is different from the concept of the United Nations, primarily because of the philosophic consideration that, although there is objective solidarity in the United Nations, there is no subjective solidarity.

As Prime Minister Macmillan indicated, this has been an exciting provision for the peoples of the six countries concerned and has captured the minds of men in those countries. If that is a fact, as I believe it to be, it is the greatest assurance not only of the success of the community but also of its permanence. Those are the thoughts that occur to me in relation to that.

There is a court of justice consisting of seven members, who are to be completely independent and in a position to pass judgment upon States against which it may be alleged that they have failed to carry out their obligations under the treaty. There is a provision for enforcement of the judgments, not by forced execution against the States but against individuals and corporations. The penalties that the court may invoke are to be prescribed by regulations. As yet, my reading has not brought me to a knowledge of whether the regulations are in existence. They may be, but I am not aware of the position.

Then there are various other institutions. There is a European Social Fund. In this organization there is a determination to weld into one cohesive unit not only the economic and political policies of the constituent countries but also their social policies. A fund is established to ameliorate the conditions of workers who are displaced and who may be involved in transfer to some other part of the Common. Market area. There is provision for the enforcement of equal pay for the sexes for equal work.

One can see, in a mere glance at the treaty, the enormous concept that is involved. There is a European Investment Bank, the capital of which is provided by the constituent members. Its function is to help any undeveloped or new Common Market countries, and already it has been most active in promoting projects of value throughout the area. Then there is an Economic and Social Committee, established on a consultative basis only, but having very real functions to perform.

Looking at the history of this matter, the Prime Minister last night indicated the various decisions that the United Kingdom Government had had to make. Its first decision, at the inception of the Common Market, was not to seek an opportunity to join. As the Prime Minister put it, the United Kingdom took that attitude for three reasons, the first being the danger the scheme constituted to the United Kingdom’s internal agricultural policy.

Every country is concerned with its internal agricultural policy as being basic to its survival and of the essence of its security. The United Kingdom made its decision, secondly, because of trade arrangements in the Commonwealth, which was formerly called the British Commonwealth, and finally, because of its unwillingness to abdicate any portion of its national sovereignty. That was the first decision. The United Kingdom then sought to form an industrial free trade area throughout Europe and to attract The Six into it. The scheme would not have involved the agricultural policies of the various countries and would not have disturbed Commonwealth preference. That failed. There was then formed the European Free Trade Association which consisted of noncontiguous countries with a relatively small population in toto compared with the population of the Common Market countries. The total population of the E.F.T.A. countries was some 82,000,000 as against nearly 170,000,000 in the Common Market countries. Of that population of 82,000,000 Great Britain contributed the major portion, which amounted to some 50,000,000. That association has not been a success. It made an effort to co-operate with and to form a union with the Common Market, but without success.

Now Britain, the mainstay of The Seven, as those countries are called, is seeking to move away from the association and into the Common Market. There are indications that Denmark will do the same. So, looking at the scene, one must see the disintegration of the body that was sponsored by Great Britain and the continued strengthening of the Common Market countries. It is inevitable and desirable that there should be a united Europe, politically as well as economically. Fortunately, in this speech I am absolved from developing any argument in relation to the political implications of the Common Market. Those implications have been dealt with at very great length by the Prime. Minister, and accordingly it is not necessary to argue the point. They are conceded. Of course, right at the base of the Common Market are these grave political decisions. That is one of the aspects which make the importance of this matter in regard to the future of the Commonwealth so acute.

Britain at last has decided to seek to join the European Economic Community. In doing so, Britain acknowledges that she made an error when she did not join back in 1956 or before the treaty was ratified in 1959. The three factors that kept Britain out earlier are still present. I refer to her own agricultural position, her ties with the Commonwealth, and her own sovereignty. The only difference is that the position is now more difficult for Britain. So, in making application to join, Great Britain acknowledges the success of the Common Market and that in effect she made an error in not moving into that community when she had an opportunity to do so right at the beginning.

Senator Wright:

– That is an overstatement of the position.

Senator McKENNA:

– The honorable senator may so regard it, but I do not agree with him. I am looking at the matter objectively and historically, and I believe that the comment I have made is quite fair - that is, that the position is no different to-day, except that it is now a little more difficult for Great Britain to join.

Senator MATTNER:

– I think the word “ mistake “ may lead us to misinterpret your remarks.

Senator McKENNA:

– The word I used was “ error “, and I adhere to it. I think “ that is a fair comment when one looks at the whole situation, because the only difference that I can see between conditions now and when Britain had an opportunity to join back in 1959 is that now it is not so easy for her to get what she wants. Undoubtedly, entry to the Common Market has not become easier; it has hardened, as I shall show presently.

I concede at once that it is essential to avoid the division of Europe into Sixes and Sevens and that from every angle it is desirable that these countries be got together. But to come back to the point to which I was referring, I wish to direct attention to the “ Financial Times “ of 7th November, 1960, when a magnificent publication dealing with the success of The Six was presented. It is a most comprehensive document which includes an article at page sixteen prepared by Professor Hallstein, who is the president of the commission of the European Economic Community - in other words, the executive body of the Common Market. Professor Hallstein referred to Article 237, which is the article under which any European nation may apply to join. He said the article was a standing invitation to join, but he added -

Under this Article, however, only certain adjustments, no substantial changes, can be made to the Treaty - and we know that signing the Treaty would, for the present, pose a large number of problems to our partners in the rest of Europe.

There is a clear indication from the chief executive of the Common Market countries that no one can expect any substantial changes. One must face up to that situation.

It is that statement, amongst other things, which leads me to the belief that it will now be harder for Britain to gain entry on advantageous terms than it was some years ago. One can understand the hardening of the attitude of the Common Market countries, having regard to the vast success which they have achieved. Professor Hallstein also said -

But already, trade within the Community in the first six months of 1960 stood over 30 per cent, higher than in the corresponding period of 1959. . . . The Community’s exports to the r est of the world in the first six months of 1960 already stood 22 per cent, higher than in the first six months of 1959, and her imports 24 per cent, higher.

He set out all the activities those countries have been engaged upon in the promotion of the objectives. I shall not bore the Senate by repeating them. I content myself by saying that they are amazingly wide, including even the improvement of roads in each other’s network.

All in all, the Common Market countries have done exceedingly well. I understand that Italy has increased her production by some 40 per cent, over the brief period for which the treaty has been in operation and that other countries have increased production by 30 per cent. But over the relevant period the increase in Britain’s production and activity has been merely 9 per cent. Can one wonder that the United Kingdom, from the purely economic aspect alone, is now contemplating moving into this dynamic, virile, successful organization - quite apart from the political aspect of the matter and the undesirability of a division of Europe? The Prime Minister, in the speech he delivered last night, indicated that internally the nations of The Six had improved their trade by 50 per cent, in the brief period for which the Common Market has been in operation. The emergence of those facts makes Britain’s desire to join the European Economic Community inevitable.

There are many passages in the speech delivered on 3rd August by Mr. Macmillan, the Prime Minister of Great Britain, when he announced the decision of his country to apply to join the Common Market which show that he accepts the inevitability of Britain’s joining. I should like to quote two or three of those passages to emphasize the point. One is somewhat long, but the other two are very brief. At page 3 of ‘the document which has been circulated by the United Kingdom Information Service with great helpfulness and courtesy, Mr. Macmillan is reported as having said -

I have sometimes heard it asked: ‘What would happen if one of the countries with which we might be associated in Europe fell into political difficulties, or even went Communist? Would not this have a grave effect on us if we were members? ‘ Of course, but the effects would be equally grave whether we were members of the

Community or not. If a member of N.A.T.O. or W.E.U. went Communist or semi-communist what would be the position of the other member states? If all the countries of Western Europe became satellites of Moscow what would be the position of this island? We have only to pose the question to answer it. We do not escape from the consequences of such a disaster by seeking in isolation a security which our geographical position no longer gives us.

Here is the important part of his speech -

Surely from this point of view it will be better for us to play our role to the full and use the influence we have for the free development of life and thought of Europe.

Another passage reads -

I believe that our right place is in the vanguard of movement towards greater unity of the free world and that we can lead better from within than outside. At any rate I am persuaded that we ought to try.

Another paragraph reads -

I ask myself the question: How can we best serve the Commonwealth? By standing aside from the movement for European unity or by playing our full part in its development? By retaining our influence in the new world or by allowing it to decline by a relative shrinking of our own political and economic power compared with the massive groupings of the modern world? Britain in isolation would be of little value to our Commonwealth partners and I think that the Commonwealth understands this.

I would say that Mr. Macmillan has served on the Commonwealth clear notice of his Government’s intention to join the Common Market. I make bold to say - I realize the risk involved in making such a prediction - that Great Britain will go into the Common Market regardless of what the terms of admission may be. I think Britain must do that. She is persuaded to that course also by the United States of America, which has urged upon Britain the desirability of joining the Common Market. The United States has taken that course not for her own economic interests. She has done so from the point of view of her political outlook that a united Europe is very important to the defence of the free world. One readily concedes that. The strength of the United States’ conviction in the matter is apparent from the fact that she is prepared to accept discrimination and more discrimination in the Common Market against her products for the sake of the greater political unity mat the West would be able to achieve.

Senator Henty:

– Britain has made some pretty good statements to the contrary. She has denied that she would go in under any circumstances.

Senator McKENNA:

– There may have been statements to the contrary, but I take full responsibility for expressing my opinion, knowing the risks involved. The role of prophet is always a dangerous one. That is why I acknowledge the risk.

Senator Hannaford:

– You were going on the terms of the treaty.

Senator McKENNA:

– I am going on the facts - on the huge success of the Common Market.

Senator Hannaford:

– And the terms of the treaty.

Senator McKENNA:

– I am going on the mind of Prime Minister Macmillan. I am influenced by the phrases that I have quoted, and there are many more like them, which indicate the way in which his mind is running. Nevertheless, I concede the technical position that at the moment nobody knows what terms will be given. But the indications are, judging by what Professor Hallstein said, whose remarks I quoted, that tough conditions will be imposed. The Six are in a very strong position and the way will not be easy. In view of the fact that America is persuading Britain to join, and in view of the other facts that I have put before the Senate, I have taken the risk of stating that I believe Britain inevitably will join.

That brings me to the next point. All of these developments might have been foreseen far sooner by this Government than has been the case. The Opposition contends that the Government has been blind to the significance of all these developments down the years. At the risk of boring the Senate I propose to read extracts from the Governor-General’s Speeches during the last ‘few years. They are very brief, fortunately, but they betray the complete lack of urgency in the Government’s mind as to the now-apparent danger that has been developing through the years. In his Speech on 19th March, 1957, the GovernorGeneral said -

The United Kingdom has entered upon negotiations for a free trade area which would bring her, and perhaps other countries of Europe, into association with the common market of the six.

Such far-reaching changes could have important implications for the Australian economy and these developments are being kept under close review.

One finds similar statements repeated year by year. In February, 1958, the GovernorGeneral said -

The inauguration of the European Economic Community on 1st January, 1958, is of historic importance. The implications for Australian export trade are being closely watched.

In 1959 almost the same thing was said. In his Speech on 17th February, 1959, the Governor-General said -

The Australian Government has been studying closely the continuing trend towards economic integration in Europe in which a notable development on 1st January this year was the revision of tariffs and quotas between the six nations of the European Economic Community. Negotiations are continuing towards the creation of a European Free Trade Area under which other Western European countries, including the United Kingdom, would be associated with the European Economic Community. My Government will continue to keep in touch with these developments and to act as required to safeguard Australia’s interests.

On 8th March, 1960, the Governor-General said -

The emergence of two rival trading areas in Europe and the developments flowing from the recent Paris Economic Conference, are being closely watched by my Government which is alert to Australia’s trading interests in these matters.

On 7th March, 1961, the Administrator said -

The Government continues to follow closely the movement towards closer economic integration in Western Europe, including in particular the implications of such a move for Commonwealth trading relations. The attitude of my advisers has been, and will continue to be, based upon Australia’s trade and other interests.

Need I say any more than that those statements betray beyond all possibility of argument a lack of appreciation of the danger that was looming to the major primary producers of this country? There was no sense of urgency: The matter simply needed watching closely. Will somebody tell me when, during the whole of that period, a major speech was delivered on this matter or a major debate initiated by the Government of this country? What steps were taken by the Government to alert interests involved in Australia? What steps were taken to call for further production, further efficiency or new industries? What has been done? Other things indicate the

Government’s complacence and lack of understanding of the position.

Senator Wright:

– Do you not think that the Japanese Trade. Agreement was negotiated with an eye to the matters to which you have referred?

Senator McKENNA:

– No, I do not.

The only reference to this matter was made in the speech of the Treasurer (Mr. Harold Holt) on 10th November, 1959, after his return from abroad. He struck a very minor note. Speaking about international finance, trade and development he said -

The European Common Market is now an established fact and the negotiations for drafting the charter of the proposed European Free Trade Association have reached an advanced stage. The Australian Government, although a supporter on political as well as economic grounds of closer European economic integration, has viewed recent developments with some concern.

Somebody referred a while ago to an understatement or an overstatement. I have indicated a lack of urgency running through the Government’s approach to this matter.

Senator Henty:

– You put your faith in speech. We put our faith in action.

Senator McKENNA:

– In a moment we will see what action you have taken. On 6th April last year Senator O’Byrne asked a question in this place. He drew an answer from Senator Spooner, who plays an important part in the economic consultations of the Government. If honorable senators will refer to page 468 of “ Hansard “ of that date they will find that Senator Spooner committed himself to this statement -

I think that we can become too concerned about the developments in Europe.

Senator Mattner:

– Give us the context.

Senator McKENNA:

– I have referred you to the page. You may look at the context. I cannot read the whole story to you. There, plainly and beyond all possibility of contradiction, are exposed the minds of the Treasurer and the Leader of the Government in the Senate. That shows a complete lack of a sense of urgency.

All honorable senators have heard Senator Hendrickson, month after month since 1957, posing what now appears to be the most knowledgeable view of the developments that have in fact taken place. He was clairvoyant. But he was laughed at by the Government again and again. I hope that Senator Hendrickson will stand up in his place and, in the light of recent developments, read the questions that he asked month after month. I hope that there will be some red faces among the Ministers when he reads their replies over the years. I am. merely building the case that the Government has lacked an appreciation of the significance of this development to Australia. Senator Hendrickson pointed out in his speeches that the day of reckoning was not far away. Senator Cooke, Senator Benn, Senator O’Byrne and Senator Willesee pointed to the danger. I pointed to the danger in February 1960 when import controls were lifted. I directed attention to the danger that the Common Market constituted to our primary production. That was one of the arguments I addressed to the Senate as indicating that that was the wrong time to lift import controls, having regard to Australia’s broad balance-of-trade position. That was perfectly clear from statements made in Britain.

I will now read from what is probably the most excellent short document I have read on the Common Market. It was prepared by the Central Office of Information, London, in December, 1960 and its number is R.4862. It reviews the treaty, all the Common Market developments and Britain’s approach at the various stages. At page 25 it reads -

Britain’s relations with Europe were debated at some length in the House of Commons on 25th July, 1960- that is over a year ago - . . when the then Foreign Secretary summarized the United Kingdom Government’s policy. He stated categorically the Government’s wish for a united Europe, politically, economically and commercially; there were, however, certain problems. Acceptance of a common tariff as laid down in the Treaty of Rome would mean the end of the principle of Commonwealth duty-free entry of goods and commodities. Another was agriculture - the agricultural policies in four of the Rome Treaty countries were basically different from those in the United Kingdom.

The then Foreign Secretary, Mr. Selwyn Lloyd, concluded with these words -

It is obvious that Western Europe must come closer together.

Was that an adequate warning to the Australian Government which has a primary responsibility for the trade of this country, the preservation of our overseas reserves and the maintenance of a favorable balance of payments position on current account? I leave that phase of my remarks with the thought that the Government has failed to prepare. I concede that it should have hoped for the best, but it should have prepared for the worst. That is the indictment that the Australian Labour Party levels against the Government. It should have prepared for the worst which clearly is now about to come upon us.

Senator Hannaford:

– For how long will these negotiations continue?

Senator McKENNA:

– I cannot answer that. The expectation is that they may take some months. It is incumbent upon the Government, when any case has been put to the Common Market, to fight to be heard on its own account. We would support the Government in its approach on that matter. If it cannot be heard on its own account, insofar as its trade interests are affected it should certainly be present as an observer, at the very least, at every stage.

I now wish to speak about the changing pattern of trade between Australia and the rest of the world. I shall distribute a statement that I have taken out from Department of Trade publications based on the Commonwealth Statistician’s figures, showing how greatly trade has changed. I have taken out the figures of imports and exports for each year from 1955-56 up to 1960-61. In that period our trade dealings with the United Kingdom have been unfavorable to the tune of £462,687,000; our dealings with New Zealand have been favorable to the tune of £234,326,000; our dealings with Japan have been favorable to the tune of £530,609,000; our dealings with the United States of America have been unfavorable to the tune of £395,360,000; but in our dealings with the Common Market countries, extraordinarily enough, we have the amazing surplus of £501,452,000. With the concurrence of honorable senators, I incorporate the statement in “ Hansard “. It is as follows: -

  1. shall now point out the remarkable position that has developed in our exports of greasy wool. Last year Great Britain - the country with which traditionally we have done most of our trading for many years- - bought only one-half of the quantity of wool bought by Japan. The United Kingdom bought £50,200,000 worth of wool from, us in 1960-61 and Japan bought £103,791,000 worth of wool. There are many lessons to be learnt from that. I do not propose to put them all before the Senate.
Senator Vincent:

– Does that suggest that the Government has failed to prepare for this crisis?

Senator McKENNA:

– I would be very happy to hear somebody tell me the action that has been taken by the Government. The Government has appointed a Cabinet sub-committee on this matter; but we were told that it did so the other day after Britain had made its application. The Government appointed a Cabinet sub-committee to go into the proposal and it appointed committees of the Department of Trade to talk to the Australian interests that might be adversely affected.

Senator Hannaford:

– What about all our trade promotion efforts and seeking alternative markets?

Senator McKENNA:

– That should be done. But let me ask this question: What about new products as well as new markets?

Senator Mattner:

– What would you suggest?

Senator McKENNA:

– In another phase of my speech I will deal with what I regard as the defects in the Government’s approach to this matter. At the moment I want to stay on the matter of the development of the broad pattern of trade and where Australia is getting. Let us look at page 7 of the White Paper distributed by the Treasurer (Mr. Harold Holt) this week. Our balance of international payments on current account last year was down by £369,000,000. That was made good by borrowing about £100,000,000 overseas and by the greatest inflow of capital that we have yet had. The capital inflow was £140,000,000 more, than in. the previous year and ran to about £326,000,0001

Senator Henty:

– That is obviously because the overseas investors think that we are muddlers!

Senator McKENNA:

– Ohe of the most dangerous factors in the Australian economy is the Government’s blind reliance on the continuance of capital of that character year after year. If it fails to flow in one year - and there is no assurance that it will flow in year after year - this country will be in dire straits with employment and our standard of living threatened and our development halted. What is the expectation of its continuance in the future?

Senator Scott:

– It all depends on the political party in power, of course.

Senator McKENNA:

– I do not think that is the answer. I have here a report of a statement made by Senator Spooner - a statement with which I completely agree. It deals with the likely effect of the Common Market upon our capital inflow. He was addressing those present at the 1961 Hoover Marketing Award Presentation Dinner on 14th July. According to the report, he said -

If Britain is to open its doors to competition from the Continent subsequent investment in United Kingdom industry will be directed to re-organization and modernization of plant.

Will this not mean less capital for investment overseas?

Is it not likely also that United States investors will invest in industries in the Common Market area to avoid tariff barriers, and will this not mean less United States capital for investment in Australia?

For once, I agree completely with the honorable senator. I think those two developments are inevitable and I suggest that the drying up of these funds that we may expect is indicated by what is going on in the Common Market area at the moment. It is unquestionable that, particularly in the development of supersonic aircraft, in which the United Kingdom hopes to lead, the United Kingdom will develop her industries in conjunction with the capital and resources of the Common Market areas. She will put her capital into the Common Market.

Some of her industries perhaps will wither on the vine as the result of pressure from Common Market countries, but in others there will be boom and growth. She will have to re-organize her industries and streamline them, because she will face fierce competition within the area. America will certainly endeavour to get over the tariff barriers by establishing industries within the Common Market area. So we in this country will be faced with the gravest emergency in our balance of payments position - and our prosperity depends completely upon that. I cannot imagine a blinder act on the part of any government, in the face of these developments, than the act of this Government in not thinking these things through to their possible conclusion. I do not blame the Government for not seeing through to the end, but I do blame it for not seeing the possibilities and for not preparing for the worst. That is the outlook of the Opposition on this matter.

Now I shall deal with the future, and I have only a few minutes left in which to do so. I .was greatly disappointed by the Speech of the Prime Minister. I thought that we would hear from him that we were facing a great challenge. It is a fact that we are likely to lose our advantageous position in the British market for our primary production, and that that could be disastrous. Instead of lying down and crying about that, I thought he would say that Australia would stand up and fight vigorously. The present position presents a challenge, but it can be turned into a great opportunity. It is a situation where one can translate adversity into advantage if there is enough imagination and determination. I listened to the Prime Minister’s speech last night with the utmost disappointment. There is an old French saying that he who excuses himself accuses himself. A large part of the Prime Minister’s speech was taken up in telling us that this is not a new development and that we knew it was coming.

What was the Prime Minister’s claim on behalf of his Government? Only that it has established more trade posts, that it has expanded trade activities and trade promotional activities around Australia. That is all good work. It is necessary whether Britain enters the Common Market or not. V/hat else does he propose for the future of this nation? Where is the vision to meet this challenge? This is an opportunity for Australia to stand squarely on its own feet and go on to nationhood in the highest sense. Not one word was said about that. I defy any honorable senator opposite to point to one positive contribution that the Government has in mind.

Senator Wright:

– Do you think the Japanese Trade Agreement was an advantage?

Senator McKENNA:

– What we have to do in this country, I would say, is to make up our minds firmly to be intensely Australian. We produce one commodity in which we have almost a monopoly. Why do we not export products manufactured from wool? Why do we not manufacture those products in our country? Why do we export our raw material and deny ourselves employment opportunities? Why do we permit overseas companies to come to this country to establish industries and deny local concerns an opportunity to export? I am not suggesting that we should breach any contractual arrangements that have been made, but surely the Government, in this emergency, should say, in effect, to overseas concerns, “ You can bring your capital in, but you cannot take away from local firms the opportunity to export in future “. We might have had that from the Government. We might have had an intimation that the Government was determined to make this country as selfsufficient as it could be. If private enterprise will not develop industries of that type in this country, what would be wrong with the Government giving a lead and doing so? It has the power to do so. One of the great things to be done in this emergency is to find new products, apart from new markets. As Senator O’Byrne asks, should we be content to stand by and let foreign corporations take charge of our raw products such as bauxite? Should we let them take over our vast aluminium industry and export our products when we should be using those products to provide employment opportunities in this country?

Senator Scott:

– We are going to use them.

Senator McKENNA:

– But when? There is a £200,000,000 project in New Zealand which will use our alumina. Why do we not stand on our own feet, use our own raw materials, develop our own employment opportunities and produce our own finished products? We will not be a great trading nation unless we get into industrial production to a much greater extent. Let me say to the Senate that there is nothing more valuable either to peace or military power than a strong industrial potential. That is an inescapable fact.

Every time we make a move to build up our industry and build up our trade, we help our balance of payments position. When we develop industries with all the new technological devices and with all the modern aids, we build up the security of our country as well as make it prosperous. I want to see all these things done. I have seen no call for greater production and greater efficiency or for co-operation with the trade union movement in the emergency that certainly faces this country. I have seen no call for vigorous Australian nationalism - the type of thing that, if it were encouraged by the Government of this country, could capture the mind of the nation just as the Common Market of Europe has captured the mind of Europe, to use the words of Mr. Macmillan.

Senator Henty:

– What you want ls vigorous Australian socialism. That is the basis of your complaint.

Senator McKENNA:

– It is nothing of the kind. If the honorable senator had listened carefully to what I said, he would realize that I have been making a plea for the development of Australian industry with Australian raw materials. I said that if private enterprise would not do that, the Government should give a lead. It lacks no power. All that it needs is the will.

Let me mention a few other things. I have spoken about the sale and the development of new products. Let us consider oil search in this country. How often down the years, before any move was made by this Government, did I beg the Government to get on with oil search? I would say that the Government is only playing with this matter even to-day. If we look at the present Budget-

Senator Henty:

– You voted against a provision for oil search.

Senator McKENNA:

– We voted against a grant of £2,000,000, but only on the ground of its utter inadequacy and the inadequacy of the Government’s approach.

When you say that we voted against it, bear in mind the reason that was given. The Government is tinkering with the situation, although it has now been established that we have oil in this country. The one thing that is necessary is to find it in commercial quantities. We want a bold and imaginative approach, because with such an approach we could revolutionize our balance of payments position overnight. Despite what the Government has done in recent years, and despite its proposal to employ the Petroleum Institute of France for another year and to spend an additional £1,800,000 by way of subsidy, I still say that we are tinkering with a matter that is vital to our security, in any event, and one which could dramatically alter our overseas balance of payments position.

Why do we not establish a shipping line that could operate overseas instead of leaving the primary producers of this country at the mercy of the shipping lines of other countries? Why do not we do something about the invisible costs, such as insurance? Why does not Australia act in that matter instead of allowing all the profits and other returns to go overseas? Above all, why do we not halt inflation in this country? That is one of the things that operates most grievously against our overseas trade. It is one of the things upon which this Government was elected. It gave a solemn pledge to halt inflation and put value back into the £1. In utter dereliction of that pledge and its public duty to Australia, the Government has let inflation run unchecked for twelve years. We have the glib pretence by members of the Government that an inflationary boom developed last year. That is completely untrue. Inflation has run unchecked from the day that this Government took over.

Senator Hannaford:

– It has not run unchecked.

Senator McKENNA:

– Then, let me say that it has run unhalted There has not been a year, since this Government came to office, in which we have not had a spate of inflation. The people of Australia have been offered the mean pretence that inflation developed last year. It did nothing of the kind.

There are great opportunities for the Australian nation in the decision of the United Kingdom to negotiate on admission to the European Common Market. We do not need to be depressed if we face a grave danger. We must do something about it. The first thing is to get rid of a government that has shown the lethargy of the present Government in relation to such a matter.

Senator Spooner:

– You will be a bit uphill with that solution.

Senator McKENNA:

– Nevertheless, it is the correct solution. I guarantee that if a Labour government comes to office it will put a new face on Australia and speed it on the way to nationhood in no uncertain manner. I am very happy that my remarks have stimulated so much interest on the Government side of the chamber. I should like some honorable senator opposite to tell me what the Government proposes to do in this emergency, apart from getting on with the normal expansion of trade. The Government must do something bold and imaginative unless it wants to land this country in a terrific mess, with more unemployment and lowered standards.

I cannot pass from this subject without saying something about the effect of the decision of the United Kingdom Government on the Commonwealth generally.

The Prime Minister apparently fears that the approach of Great Britain to the European Common Market may have a serious effect on Commonwealth relations. I do not share that fear. There are material considerations for the countries of the Commonwealth, but in the view that I take, they are not the important things. I think that the essential aspect of the Commonwealth is the spirit that binds the various countries together. If I am right in that, then I think that that spirit will be strong enough to withstand any blows that it may receive from the present situation. The quotations that I have read from Mr. Macmillan’ s speeches indicate that Great Britain supports that view.

I am grateful to the Senate for the attention that it has given my remarks. This is a colossal many-headed subject. I do not pretend that I have dealt with it adequately, in any phase, in the time that has been available to me. One would need hours and perhaps days or weeks of study to acquire even the beginnings of an understanding of all the problems that are involved in it. We of the Opposition have no confidence in the Government’s handling of the matter. In fact, the Government has not handled it. It has done nothing to avert the calamity that is now upon it. In conclusion, Mr. Deputy President, I commend to the Senate the terms of the amendment that I have moved.

Sitting suspended from 12.51 to 2.15 p.m.

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I quote from, an article in the “ Economist “ of August 12th, at page 618, which reads -

The British Government on Thursday followed up Mr. Macmillan’s statement of July 31st to the House of Commons with a formal application to the European Economic Community. This took the form of a letter signed by the Prime Minister to the Chairman of the Community’s Council of Ministers, who happens at the moment to be Dr. Erhard. The Council is likely to pass the letter to the European Commission for an opinion which it will give, presumably, at its next meeting on September 25th.

So the least we can say about this matter is that in taking this historical and politically significant step the United Kingdom has acted with commendable speed, because the sooner we know the results of her application to join the Common Market the better for all concerned. There should not be any doubt in anybody’s mind, following the statements of the Australian Prime Minister (Mr. Menzies) and senior Ministers of the Government, that the Australian Government will not give away £1 of its export income. It will continue to find additional markets in which to sell Australian goods.

I listened to the Leader of the Opposition (Senator McKenna) with a great deal of interest. I am indebted to him for the first part of his speech, which was most interesting. It showed that he had spent a lot of time on research. He has the capacity to express the results of that research in simple language which is so easy for us to understand. The first part of his speech was quite interesting and informative. But our interest in his speech declined when he, acting on his riding instructions, moved an amendment to the motion that the paper be printed. I propose to refer to some of the arguments that he submitted in support of his amendment.

The words of the amendment are not without interest. It reads -

Leave out all the words after “ That “, insert “the Senate, while declaring that the United Kingdom’s move to join the Common Market requires the strongest action to protect Australia’s interests, expresses no confidence in this Government’s ability to provide it because of its lack of foresight. . . .

I want to talk about those words because they are very interesting. The Leader of the Opposition in another place, Mr. Calwell, made the same charge that Senator

McKenna made. Mr. Calwell said that the Prime Minister had never brought this matter to the attention of the Parliament until the other day. Mr. Calwell at least had the grace to apologize to the Prime Minister in the House of Representatives this morning and say that his information was wrong. If honorable senators care to turn to “Hansard” of 13th August, 1959, for the House of Representatives, page 186, they will see that the Prime Minister discussed this matter in the House of Representatives. If they turn to page 200 they will see that Mr. Calwell replied to the Prime Minister’s statement. Mr. Calwell, as I have said, has had the grace to correct this morning the statement that he made. Knowing Senator McKenna as I do, I have no doubt that when he is convinced as Mr. Calwell is, he, too, will apologize.

Senator McKenna has said that the Government has shown great lack of foresight and has done nothing about this matter. All that the Opposition has been doing has been to make speeches about the matter whereas we on this side of the chamber have been acting. In 1956 this Government set up the Department of Trade as a separate ministry. Formerly trading matters came within the scope of the Department of Trade and Customs and the Department of Commerce and Agriculture. The Department of Trade has been most vigorous in finding markets throughout the world for Australian goods. The department has been active to export our goods to all parts of the world, acting on the sound adage that it is wise not to have too many eggs in one basket.

The accomplishments of the Department of Trade in the last five years make a very good story - one that I propose to tell. I like telling good stories. During the past five years a number of trade agreements have been negotiated with other countries. Those agreements have given a tremendous advantage to Australia. An agreement was negotiated with the United Kingdom. An agreement was negotiated with Japan. Honorable gentlemen opposite fought tooth and nail the signing of that agreement, but the benefits gained from it have greatly assisted Australia. Agreements have been entered into with the Federation of Malaya and with West Germany. We have undertaken a revision of our treaties with Canada and with Rhodesia. These are facts. They are not airy speeches like the speeches honorable senators opposite have been indulging in during the twelve months that they have known about the Common Market. I am not referring to speeches that the Government has made. I am referring to actions that it has taken in the past five years. We have had understandings with Indonesia and Ceylon. We also have an understanding with the United States of America concerning the disposal of its surplus agricultural products. The marketing of surplus agricultural products is a matter of great interest to Australia. We have special arrangements with France and Germany to protect our exports of flour.

In his speech last night the Prime Minister referred to the fact that in 1949, that significant year when the socialists bit the dust - they have bitten the dust ever since and are likely to continued to do so while they propound their programmes of nationalization - we had seventeen trade commissioner posts in twelve countries. At the present time we have 37 trade commissioner posts in 28 countries. Yet the Opposition claims that we have lacked action! We have put into effect an export payments insurance scheme which has been of great benefit to Australian exporters. We have adopted a series of export incentives, which have been acclaimed by Australian exporters. Through the various trade posts we have conducted vigorous campaigns to stimulate the sale of Australian goods. We have arranged for three trade vessels to visit the ports of the world to display the manufactured wares of Australia for the people of other countries to see. We have done good business as a result. These actions have led to our exports being spread over many countries. Whereas formerly we depended on the United Kingdom to take 50 per cent, of our exports, to-day only 26 per cent, of our total export trade goes to the United Kingdom. In my opinion those are commendable actions - actions with purpose and design. For five years the Government has been planning to deal with this problem because it could see the difficulties that were ahead. Those actions completely debunk the statement made by Senator McKenna that this Government has done nothing. They completely nullify the amendment which says that the Government has lacked foresight. Its actions over the past five years speak for themselves.

I should like to refer briefly to some facts and figures which I believe put us in quite a good light. I am not downhearted about this problem, serious as it is. We have maintained good bargaining power. Do not ever minimize that! The first thing to which I direct the attention of the Senate is that Australia buys from these three blocs as they are at the moment - the European Economic Community, the United Kingdom and the European Free Trade Association - £112,000,000 worth of goods a year more than they buy from us. Nobody can tell me that a country has not good bargaining power with other countries when it is buying from them £112,000,000 worth of goods more than it is selling to them. We are in a strong bargaining position.

Last year we exported £158,800,000 worth of goods to the Common Market countries, which represented 16.4 per cent, of our exports. Wool accounted for £97,000,000 of that. I do not believe that any honorable senator opposite will say that at this stage our sales of wool are jeopardized. I think I heard the Leader of the Opposition say that we sold every bale of wool that we. produced. Hides and skins, which are not plentiful commodities in the world, accounted for £19,000,000; minerals for £4,000,000; and bullion and specie, together with a few odds and ends, for £7,300,000. That leaves only £30,000,000, of which wheat accounts for £14,300,000. Surely no one will contend that we will not be able to sell those commodities. We can sell wheat to any country because it is a seasonal product and when other countries have droughts or are in any trouble they want to buy wheat and we have wheat to sell. That leaves only about £15,000,000 in danger.

We sold £231,900,000 worth of goods to the United Kingdom, or 23.9 per cent, of our exports. Wool accounted for £55,500,000; meat and hides, for which we have an agreement which operates until 1967, for £19,700,000; metals and minerals that the United Kingdom needs for her manufacturing industries accounted for £13,000,000 and £5,000,000; and bullion and specie, together with some other odds and ends, for £42,200,000. Those amounts totalled £135,000,000 - only about £96,000,000 less than the total exports to the United Kingdom - of which butter and cheese accounted for £18,200,000; wheat for £18,500,000; and sugar for £17,700,000. We exported only £9,300,000 worth of goods to the European Free Trade Association countries. Wool and hides accounted for half of that. So, we are in a pretty good bargaining position in respect of our exports which could be rejected by the countries concerned through the medium of tariffs. I thought I should place those figures before the Senate to let honorable senators know the position.

Before I devote the balance of my time to the Common Market, I want to deal briefly with some of the other matters that Senator McKenna brought before the Senate. He said that the Government had made no call for greater production. I do not think he really knew what he was saying when he said that, or he must have been in complete and utter isolation. One would almost think that he was in a sputnik going around the world if he has not seen the calls for increased production that the Government has been making and the increased production that has been achieved.

Senator O’Byrne:

– What about the credit squeeze and the unemployment?

Senator HENTY:

– I know that you marched on Sunday afternoon with about thirteen others, including a couple of Commos. You could raise only thirteen, people apart from a couple of members of Parliament. So do not start talking about that. I know that you stood up on the platform in a free speech area alongside your Communist cobbers. I was speaking about the Government’s policy of calling for increased production. I think we should send Senator McKenna some of the statements that have been made and information on some of the actions that we have taken in the last year or two. They would convince him that his charge that the Government has not called for greater production is completely without foundation.

The honorable senator also said that the Government has not given sufficient or any encouragement to the search for oil. He said that if only we could find oil our balance-of-payments difficulties would disappear overnight. This is not the first time that has been said. I have heard it said by quite a number of people on a number of occasions. It is nothing new. 1 recall that when the Government brought forward a proposal to spend an additional £1,000,000 on the search for oil, the Labour Party opposed it on the ground that the amount was not sufficient. But what a proposition they put to the Australian people! They said: “We will not accept the £1,000,000 that the Government offers. We will vote against it and nothing will be provided.” It was £1,000,000 or nothing and the Labour Party went for nothing. That was one of the poorest arguments that one could imagine.

I come now to the Labour Party’s answers to the problem. They are very interesting indeed. The first was the call for the nationalization of industry. The Labour Party said, “ If private enterprise will not do these things the Government should come in and do them”.

Senator O’Byrne:

– That is all they are doing in the Common Market.

Senator HENTY:

– That is just about the limit of your understanding of the Common Market. Senator McKenna called for the nationalization of insurance. He said that we should set up an insurance scheme to retain in Australia all the insurance that now goes out of the country. He said that we should establish a nationalized shipping line to take goods out of Australia. Nobody has yet asked what we would bring back in those ships. Such a line could very well run only one way. That was the trouble with the previous national shipping line and that was why it lost the millions of pounds that it did lose. But a governmentowned or nationalized shipping line to take primary produce out of this country was another of Senator McKenna’s propositions. All I can say about it, based on past experience, is, “Heaven help the primary producers if they are to be dependent upon a government shipping line to reduce their overseas freights”.

I noticed that Senator McKenna did not join his colleague in another place in the invitation for Russia to join the European Economic Community.

Senator O’Byrne:

– Russia will be in it, too.

Senator HENTY:

– I know that you would like the Russians in, too. Senator McKenna did not join Mr. Calwell in that invitation. This is not the first time that we have seen a split in the Labour Party. This is not the first time that we have seen the Leader of the Opposition in another place and the Leader of the Opposition here not on the same beam. Senator McKenna did say something that I thought was of great significance. He proposed that we should adopt an isolationist policy. He said that commodities over which we have a monopoly should be sent out of Australia only in a manufactured form. You can imagine what stores we would have to build in Australia to hold our manufactured woollen goods - manufactured at our costs of production - while waiting to sell them in competition with goods made from manmade fibres in America, Hong Kong and Japan. We would have to build an enormous number of warehouses to hold our goods because we could not sell them overseas. I do not think Senator McKenna was really serious when he made that suggestion. I know that he had this rather nebulous amendment to support and I realize that it is sometimes difficult to support an amendment such as that. I do not think he really meant that we should refuse to sell our raw products and should sell only manufactured goods.

Senator Courtice:

– He did not say that

Senator HENTY:

– He said exactly that. He said that we should refuse to sell raw materials over which we have a monopoly.

Senator O’BYRNE:

– You were not present.

Senator HENTY:

– I was present all the time. He said that we should not sell our raw materials overseas except in manufactured form. He went on to talk of bauxite, as though we had a monopoly of the bauxite in the world. What nonsense! Bauxite is produced in many countries of the world. I know that Senator McKenna does go occasionally to Tasmania, but in case he does not know of this let me tell him that we are using bauxite at Bell Bay, on the Tamar river in Tasmania. We have had shipments of bauxite from Weipa. I thought he would like to know that, coming from a fellow Tasmanian.

An isolationist policy of that kind would be completely wrong for a country which has, under this Government, assumed the role of a great trading nation. It is nonsense to say that we should not sell our raw materials except in the form of products manufactured in Australia. That is a proposal which 1 did not believe I would hear from the Leader of the Opposition.

Senator Ormonde:

– You will apologize to-morrow when you see that he did not say that.

Senator HENTY:

– If I have quoted Senator McKenna wrongly, I will apologize. I wrote down what he said. He said that we should not send out of this country, except in manufactured form, any raw materials over which we have a monopoly. If he did not say that, I will apologize to him. If I have misquoted him in any way I ask him, when I sit down, to rise and say that I did so.

I have dealt with the propositions put forward by the Leader of the Opposition. I think the facts I have submitted completely refute the arguments he used. I wish now to deal with the position that Australia is iri. I believe that Australia will be in a very strong bargaining position in the event of Great Britain joining the European Economic Community. The total value of Great Britain’s imports is £4’,500;000,000, Of that total, £662,000;000 worth of imports come from’ the European Economic Community and £462,000;000 from- the European Free Trade Association, but £1,753,000,000 comes from the Commonwealth. Great Britain exports, in total, goods to the value of £3,536,000,000. The value of exports to the European Economic Community is £514,300;000; to’ the European Free Trade Association, £379,000,000; and to the Commonwealth, £1,492,000,000. I think those figures disclose that the Commonwealth is in a very favorable bargaining position. I do not wish to be a prophet, but I am in agreement with Senator McKenna who said that he felt that Great Britain would join the European Economic Community.

Senator Wright:

– He said that it would join on any conditions.

Senator HENTY:

– He said on any conditions.’ From what I have, read, I am inclined to think that the se’ales will come down on the side of Great Britain joining, the. market.- However, I think that the value of the market which the Common wealth represents to Great Britain - a market worth nearly £1,500,000,000 a yearwill place the Commonwealth in a strong bargaining position.

I will not at this stage attempt to deal in detail with the subject of the European Economic Community. It is a very wide subject indeed. There are tremendous issues involved and there is a great deal which is still in the realms of conjecture. The Australian Government intends to fight for the primary producers of Australia and to protect their markets overseas. It intends to be represented in the negotiations that will take place because only it can put the point of view of Australia in these matters.

Far from there being any substance in. this tragic amendment that has been moved by the Opposition, I believe that the Government has been far-sighted. History will show that a tribute should be paid to’ the Government for being far-sighted five years ago and, from that time onwards, attempting to divert Australia’s trade intoother channels. The successful policy adopted by the Government is something that we will look back upon’ with great pride.

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

– The Senate is debating a statement by the Prime Minister (Mr. Menzies) on what is known as the European Common Market. Really there is very little to debate in the statement itself. It was a statement of recent events. What is wrong with the statement from my party’s point of view is that no indication is given of what the Government’s policy will be in the event of Great Britain joining the European Common Market.

To my mind,- Great Britain is about to make the most momentous decision that it has made since 1939. In that year it made the momentous decision to plunge the world into war for the sake of democracy. I believe that in 1961 Great Britain is making a momentous decision to plunge the world into peace by joining the European Common Market. I say that, because at the present moment we have a very loose union or confederation of European States which desire democracy and peace. On the opposite side of the iron curtain we have a very strong, self-centred group of nations which are ready to destroy the peace of the world. If we can get those peace-loving nations of Europe into a strong confederation, tied economically and finally tied politically, we shall have the greatest buffer against communism that the world can expect at the present time.

That is why I say that Great Britain is making a momentous decision. I think it is up to us to look at the wider aspects of Great Britain’s entry into the Common Market, because they are the things that will count in the long run. At the present time, we in Australia are looking at the matter from a rather parochial viewpoint. I think that that is true of the attitude of the Government, to a certain extent, and also of that of the Australian Labour Party. Our attitude seems to be: How can we save the Australian economy, especially the primary industry section of it? That is an aspect that must be looked at, of course, but it is not the main one. The decision of Great Britain to join the Common Market could be the means of saving democracy throughout the world. That is the most important aspect of it.

The Australian Democratic Labour Party, in conjunction with the Queensland Labour Party, has been studying these problems for quite a long time.

Senator O’Byrne:

– What with?

Senator COLE:

– With more than the honorable senator has. We have had numerous meetings of representatives of the two parties, and from those, meetings we have evolved what I believe is a quite dynamic policy. It is a policy that probably will give rise to much criticism, but we are prepared for that. I believe that now is the, time to initiate an appropriate scheme if we are to take both a longterm and a short-term view of the implications of Britain’s entry into the Common Market.

I should say that almost ten years will elapse before there is a complete meeting together of the economic and political interests of the countries associated with the European Common Market. SO, we have approximately ten years to evolve means to safeguard both our primary industries and to improve our defence against the other danger that we face- that of Communist China. When the Common Market succeeds in knitting together 250,000,000 people in Europe, with common ideals and common policies, that will be a defensive buffer. We must do the same thing in the Pacific sphere. Communism must be contained until the people within the borders of Communist countries can destroy communism from within. I believe that that is the only way in which it can be destroyed. We have put forward, Mr. President, a policy which I believe should be studied. Honorable senators may disagree with it if they wish, but nevertheless I want to put it on record in this Parliament so that our policy in relation to the European Common Market will be made known.

We believe that neither the Government nor the Australian Labour Party has yet measured up to the major issue - perhaps even the crisis - which to-day faces the nation. The apparently inevitable entry of Great Britain into the European Common Market poses problems of tremendous magnitude and danger for Australia. Nevertheless, those problems present a challenge which must be met with courage and imagination. The new situation offers vast possibilities. The Democratic Labour Party places this question in the forefront of its policy and its thinking at the present time because from it will emerge completely new economic and political implications for our country. The reasons which now require Great Britain to become an economic partner of European nations, just as she has become a partner of Western European countries, for security reasons, in the North Atlantic Treaty Organization, impel Australia to become an economic partner of nations in our own geographical sphere, nations with which we must have, in an increasing degree, common economic and political ties.

The defeat of the British forces in Malaya and the capture of Singapore in 1942 ended British military predominance in the Far East. The confiscation of British investments in China by the Communist Government destroyed British economic power in that region. The necessity to enter the European federation, in order to retain political influence in Europe, is the culmination of that development. Great Britain’s withdrawal compels Australia to seek additional sources of military protection and assistance for economic development, while maintaining our British cultural heritage and, of course, Britain’s major contribution to our way of life - the rule of law. While Australia enjoys the greatest goodwill from the United States of America, its links with that country are too loose to provide the sole effective alternative for the economic security provided by Great Britain, which is now being disturbed. There is no certainty that American interests in the south-west Pacific will be the same as those of Australia. The economies of our two countries are not necessarily complementary. The Anzus and South-East Asia Collective Defence Treaties have an important but very limited role.

The Democratic Labour Party stands for clear and coherent principles of action in which Australian security and political and economic interests can find expression. The paramount principle is that Australia should take the initiative in the formation of a Pacific confederation of nations with similar defence interests and foreign policies and with economies which could complement each other. These nations could include Australia, New Zealand, Japan, the Philippines, Malaya, Thailand, South Viet Nam and Taiwan. Such an association would be a confederation of .sovereign states, not a new single state. Economically, it would be an association of states whose economies were linked together by tariffs, concessions and preferences, but less than a customs union. In terms of foreign policy, it would be an alliance of nations intent upon preserving their independence against the aggressive economic, military and political designs of Communist China. Ultimately, it could be much more effective than Seato.

We must face the position that Australia, if she is to preserve a balance of trade, will find it virtually impossible to retain preferences in this country for British goods, if Australian goods are denied preference on the British market. Preference as a matter of trade survival may have to be given only on a basis of reciprocity. This possibility should be placed immediately before the British Government as it enters its negotiations with the European Economic Community. The commodities which Australia can export to free Asia include fruit, wool, meat, wheat, rice, processed dairy and other primary products, and coal and base metals. These commodities already are readily saleable in Asia. Even greater opportunities exist for an increased export programme if we can expand and develop the industries producing in these fields. These are the industries which should receive positive encouragement from the Australian Government, both capital and labour being diverted to them in the first instance by taxation and other concessions.

The development of these industries will, in addition, result in the rapid expansion of Australia’s transport network to open up the undeveloped northern part of Australia, where the greatest opportunities lie. A serious situation, however, will face those primary producers who at present are producing for Europe primary commodities which may, according to the present consumption pattern, be unsaleable in Asia. This problem must be examined now. If Australia is in the not distant future required to reorient its trade in a major degree from Europe to Asia, we may have to change many of our patterns of agricultural and pastoral production. If so, this will involve grave difficulties for many individual primary producers, commodity boards and governments. The resultant problems will require both study and money but both must be forthcoming immediately.

We propose that an immediate national survey be undertaken by commissions appropriately constituted on a representative basis to investigate alternative primary production and to. provide subsidies in sections of primary industry where production at present levels would not find immediate markets in the new Asian trade, and that the Commonwealth Government establish immediately and build up as required a primary production reorientation and stabilization fund. The purpose of this fund would be to assist primary producers to alter their types of production, if necessary, when the effects on Australia of Britain’s entry into the Common Market can be assessed, and steps must be taken to meet the emergent situation.

Mr. Deputy President, I believe that I have placed before the people of Australia and before this Parliament some details of definite steps that can be taken now. I am not arguing about what Mr. Menzies has said in his statement; I am putting before the country what can be done to expand our primary trade. I know that the

Government has done certain things, including encouraging trade ships to visit these countries. That is all very well. Trade ships, and so on, are increasing trade with certain areas, but I believe that there has to be something more than just a loose - a very loose - economic union between the countries I have mentioned.

I have spoken about Japan. I suppose that country is keeping the employment rate high in Australia at the present moment. If it were not for our exports to Japan, I should say that there would be much more unemployment in Australia than there is to-day. The Opposition has been chided because it did not support the Japanese Trade Agreement. When that treaty was brought forward, my party did give it full consideration and full support because we could see the implications regarding trade with the areas 1 have mentioned. We urged the Government to make sure that Australia got that trade. We are selling about twice as much wool to Japan as we are to England. At the moment, Japan is begining its ten-year plan of economic expansion, during which her imports and exports will be trebled. Within ten years, the value of Japan’s imports and exports will rise from about £3,000,000,000 to £9,000,000,000. Now that Australia will not be tied to England in the matter of preferences, why cannot we get our fair share of that trade? I believe that the expansion of that country will be tremendous and that our trade with it will be tremendous. We cannot expect England to throw away an opportunity to trade with 250,000,000 people instead of 10,000,000 or 12,000,000 people in Australia and New Zealand. We must grasp the opportunity that is presented to us.

I said in my last policy speech that trade would be a matter of reciprocity. If we can get reciprocity from the European Common Market I say that we should accept it, but if we cannot, then our trade should flow to countries from which we can get reciprocity.

It must be remembered, too, that we are now importing annually from England, where our preferences will be wiped, about £250,000,000 worth of goods. The United Kingdom cannot expect to hold that market. Those commodities can be diverted to countries that will buy our primary pro ducts. That will not affect the United Kingdom, because it will have established its markets somewhere else. There we have a good bargaining point. We must look to these areas in the East. Formosa, or Taiwan as it is sometimes called, has an expanding economy and a standard of living just as high as that of Japan. It is a country of 10,000,000 people with which we can trade. Although, as Senator Henty mentioned, trade posts have been established in, I think, 28 countries, the amazing fact is that Formosa is not one of these. We have quite a large potential trade with that country.

We believe in the proposal that we have brought forward, for the same reason that we support the United Kingdom’s entry into the European Common Market. It is a matter of Australia’s survival. We must bring together those nations, which may not have similar regimes to ours and which may not have as much democracy but which have the same hatred of communism and will fight against its inroads into their own countries. We must combine them into a very solid bloc so that we can contain Communist China. At present we have the South-East Asia Treaty Organization. I know that the Labour Party says that we should get rid of it.

Senator Hendrickson:

– Who said that?

Senator Vincent:

– You fought its establishment for years.

Senator Dittmer:

– He just asked a question. Let the speaker answer it.

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid). - Order!

Senator COLE:

– The Australian Labour Party believes in the disbandment of Seato and in its becoming just a cultural organization.

Senator Hendrickson:

– Yes.

Senator COLE:

– I am sure that the “ Corns “ would be very pleased to meet a cultured gentleman. They are used to other types of person.

Senator Hendrickson:

– The Japanese were just as bad.

Senator COLE:

– The “ Corns “ were just as bad in India. That is where the conception came from.

Senator Hendrickson:

– You should be fair. A lot of our boys had their heads cut off and were tipped into the grave.

Senator COLE:

– If we aire to follow that line, we shall never get peace in the world. At present, Seato is fulfilling a certain function towards holding back the Communists from invading South-East Asia. It is not doing very much and it is not being very strong. The organization that we foresee will put Seato out of action. Seato will be replaced by something stronger. We do not want it replaced at the present time. Seato is not very strong militarily, mainly because the United Kingdom and France are members of it. Neither of those countries has any longer much interest in this part of the world. Their objective, of course, is not to allow America to be embroiled in this area, because that would take America’s interests away from the European scene. That is why Seato is not working effectively to-day. I believe that it was one of the leaders of the Labour Party in England who was realistic enough to say that all of the United Kingdom’s commitments east of Gibraltar should be forgotten. There should be a combination of the countries that really matter in this area. We want a political and economic confederation of them.

I have not dealt at length with America, which has a different economic sphere. Its economic sphere is in South America, where it will build up its trade. Militarily, of course, the Philippines are under the protection of the United States, and so they feel safe enough. We must have a bloc of nations, including the Philippines, that are strong. Australia must have strong defences. We should not say, “All we shall spend will be £200,000,000 a year “. That repre.sents only 3.7 per cent, of the value of our gross production, as against expenditure by the United Kingdom of 7 per cent., and by America of 11 per cent., of their gross production on defence. If we continue in the way we have been going and do not build up our defences, we shall be only asking for trouble. I do not see why the Government must tie itself down in its expenditure on defence. It should act according to the country’s needs. If we have a solid bloc, economically, politically and militarily, Australia will have a chance of surviving over the next few years. li we do not have such a bloc, I am afraid that the southward march of communism from Communist China will continue. If it does, the future of Australia will be very, very uncertain.

Senator VINCENT:
Western Australia

Senator Cole is to be commended upon endeavouring to add something constructive to this debate on such a vital question. Although I do not agree with a good deal of what he said, his party is endeavouring to contribute something towards resolving the serious dilemma in which we may find ourselves in the next twelve months. I quite agree with Senator Cole’s advocacy of a tighter security federation in South-East Asia. It is probably most desirable. I think that the Government would agree with him. I go further and say that the Government has endeavoured to obtain a tighter security agreement with the free nations of South-East Asia and that its efforts have not succeeded has not been due to any neglect on the Government’s part. When it comes to an economic confederation such as Senator Cole suggested, I become very suspicious. That is a matter that we must consider very carefully. If he means an economic confederation of the free nations of South-East Asia, modelled upon the European Common Market, that would be calamitous for Australia. It would probably put every second person in Australia out of work straightaway.

Senator Cole:

– I did not say that.

Senator VINCENT:

– I am not sure of what the honorable senator said. If that is what he meant, it would be calamitous. If he did not say that, I am not certain of what he meant by an economic confederation. Does it mean a loose arrangement of nations for their mutual economic good? If it does, I suggest that the Government has already achieved that objective. Just let me read to the Senate particulars of new trade agreements which have been responsible for additional trade between Australia and other countries in the past few years. In 1955 we had a trade agreement with certain African States including the Rhodesias and Nyasaland; in 1958 we had a new trade agreement relating to additional trade with the Federation of Malaya; in 1957 there was the famous trade agreement with Japan which was so stoutly opposed by members of the Opposition; and in 1959, there was a new trade agreement with Indonesia. 1 suggest to Senator Cole that all those new trade agreements amount to what he really is talking about when he speaks of a loose confederation. If you get a tight confederation, you introduce the elements of the Treaty of Rome, which we are now discussing. That would be rather unfortunate for Australia. I cannot see how we can do any more than agree with these countries to trade with them as much as possible. Any further curtailment of our sovereignty either economically or for any other reason would be most undesirable.

I turn now to the rather destructive criticism offered by the Australian Labour Party. Such criticism is not surprising. I suggest that Senator McKenna did not do himself any justice to-day when he delivered a speech in which he did not attempt to grapple with the problem but in which he turned the debate into a party political discussion. The. substance of Senator McKenna’s speech, surprisingly enough, was that Australia was not producing enough, that we should ‘be producing more, and that if private industry could not be persuaded to produce more then the Government should take over in the good old socialist way. I think that summarizes Senator McKenna’s argument. I am astonished to think that a proposition like that should be put forward by the Leader of the Opposition in this place. Surely if any government should get full marks for stimulating production, it is this Government. Surely our record over the last twelve years has been notable, if for nothing else, then for an increase of production such as this nation had not seen for the previous 150 years. We have broken all production records and all records in overseas trade, and we will continue to do so. I am not saying that that is enough, but if it is not regarded as being enough do not tell me that the way out is to nationalize the production of this country. If it is suggested that nationalization would further increase production, I am astonished.

Even if it were true that Australia’s problem has been one of production - I reject any such suggestion - surely the goods we produce have to be sold. Are we not facing a problem of marketing rather than one of production? Will not the crisis that may be upon us any day not be one of the need to increase production but one of marketing our products? Surely that is the problem. But not one word came from Senator McKenna about the problem of marketing our goods. For some years this Government quite obviously has been well seised of the dangers that may flow from a merger of Britain and the European Common Market. We negotiated with Japan, the most powerful industrial nation in the East, a trade agreement which was bitterly opposed by our friends in opposition. Now honorable senators opposite have the effrontery to criticize what they describe as the lack of action of this Government. I do not think there can be any valid criticism along those lines. This Government may be criticized for many things, but it cannot be criticized for not being aware of what will happen and for not having done what it could. I suggest that in the circumstances it has very ably done what it could.

I should like to turn now to the real problem that confronts us - the suggestion that Britain should join the European Common Market. First, let me make some observations about the situation that confronts Great Britain, because that is an important matter. It is important not only to Australia but also to Europe and the whole of the free world. I believe we could well pause to consider how Britain will be affected by this move. In this context, I agree entirely with what has been said by Senator Cole. I believe that basically this is a political merger. It is in the form of an economic treaty, but it is substantially political in design and in real effect. I believe it is the answer to the menacing growth of Communist Russia and her satellites. I believe that this move is a very courageous attempt on the part of the Western democracies to adopt some form of political and economic confederation which will forever tend to eliminate friction between those democracies. We have the amazing spectacle at the moment of two notorious enemies, Germany and France, which for generations have fought each other, now working side by side in harmony in a political confederation. That is a second reason why the treaty we are considering is so overwhelmingly serious and important. , , j

In the circumstances that exist, I believe that Britain is forced to join this confederation. I cannot see how she can avoid being in it, for political reasons alone. Of course, it means a substantial curtailment of the sovereignty of member nations. I should like to digress at this point and refer to that matter, because I think it was one of the major reasons why Britain deferred entry into the Common Market in 1957. One has only to turn to the treaty to realize the rather amazing effect it has upon the sovereignty of nations. The first aim set forth in the document is a rather overwhelming statement which implies a great deal in relation to sovereignty. It reads -

It shall be the aim of the Community, by establishing a Common Market and progressively approximating the economic policies of Member States, to promote throughout the Community a harmonious development of economic activities, a continuous and balanced expansion, an increased stability, an accelerated raising of the standard of living and -

I regard this as being most important - closer relations between its Member States.

There is a statement of policy which I suggest is most profound in its meaning and almost overwhelming in its possible consequences.

Then, Sir, we come to the detailed activities of the community which are set out in eight or nine paragraphs. I shall refer to them only briefly. The first relates to the abolition of customs barriers and other similar impediments to free trade. Above all things, this is a free trade document. Article 3 states that the activities of the community shall include -

  1. the elimination, as between Member States, of customs duties and of quantitative restrictions in regard to the importation and exportation of goods-

I pause here because I think this is a very material portion of the article. It continues - as well as of all other measures with equivalent effect;

To my mind that means thatnot only have customs and tariff barriers gone, but also gone are all national subsidies, the imposition of quotas and provisions relating to dumping and so on. All matters appertaining to the restriction inter se of trade between the member nations have now gone. That, of course, is a most profound curtailment of sovereignty so far as member nations are concerned. When you go further you realize the overwhelming effect of this treaty on member nations. Article 3 (to) refers to - the establishment of a common customs tariff’ and a common commercial policy towards third countries;

Article 3 (c) refers to the abolition between member States of obstacles to the free movement of persons, services and capital. Each of those words - persons, services and. capital - has a profound implication in relation to sovereignty. Then we have, of course, the inauguration of this difficult common agricultural policy between members. That is a matter that has not yet been decided upon. I suggest that at this moment the British are most conscious of that fact, as perhaps are the Germans also. Perhaps the Germans are most anxious for Britain to apply to join the Common Market before any common agricultural policyis decided between member nations.

Getting back to the matter of abrogation of sovereignty, we find very important principles in the document. We have the provision for the establishment of a common transport policy. That is a profound element in the plan because it could mean the integration of such things as air services. It could mean even the rationalization of air services as we have it in Australia. I suggest that it will certainly mean a common freight policy between nations and within nations. It will therefore mean common policies relating to road transport and so on.

Another provision, which relates to unfair trade practices, will be of great interest to honorable senators on both sides of the chamber. Article 3 (f) provides for the establishment of a system ensuring that competition shall not be distorted in the Common Market. Another provision deals with the co-ordination of the economic policies of member states in order to remedy disequilibria in their balances of payments. Those provisions cumulatively have a profound effect on sovereignty. I was slightly amused when I read the report of Mr. Duncan Sandys statement about this matter in the House of Commons. The United Kingdom Information Service states -

Mr. Sandys assured the House that the Government had no intention of bringing before it proposals which would involve any derogation of British sovereignty outside the sphere specifically covered by the Treaty of Rome. What that meant was that derogation of sovereignty did not extend beyond the economic and social sphere set out in the Treaty.

That is a typical example of British understatement because the derogation outlined in the treaty is profound. Let us go further with it and see. The document provides for the creation of a European social fund in order to improve possibilities for employment of workers. In short, there will be a common social services programme for all workers in Western Europe. Provision also is made for the establishment of the European Investment Bank, which will be something like a super reserve bank, superimposed on the. reserve banks of the member nations and acting as a central reserve bank for western Europe. Again British sovereignty is involved to a very marked extent because, as is well known, the activities of central banking these days are most material to economic progress.

Finally, we have the establishment of what amounts to a super parliament. There is an assembly with representatives and there are two executive bodies - the council and the commission. We also see that there is a court of justice, which will act very much like our High Court. It will ensure that the provisions of the treaty are carried out and it has power to impose penalties.

The treaty is very complex and I can well understand the British demurring in 1956 at joining the Common Market. However, it is all very fine to be wise after the event. We can say now that the. British missed the bus; they should have joined in 1956. Of course they should have. I think they would be the first to admit that. It is rather ironical to contemplate that the British now say that they can overcome difficulties in relation to sovereignty and problems with the Commonwealth in relation to trade, as well as their own agricultural problems, whereas in 1956 they said that those things could not be done. However, all that is past history and I do not think we gain anything by criticizing the British for not joining in 1956. But it is most unfortunate that Britain did not join in 1956 because at that time she had bargaining power with the other nations. She held the trumps in 1956. Now the boot is on the other foot.

A re-invigorated France and a considerably more powerful Germany now hold the trumps. Britain’s position has gone from bad to worse. Her bargaining powers at the moment are very much weaker than they were in 1956. But that is now past history.

Senator Hendrickson:

– What has been the cause of that?

Senator VINCENT:

– The cause has been the relative strength of the Common Market countries. They have risen in importance and power to the unfortunate detriment of the British.

Senator Ormonde:

– Over all, is it good or bad?

Senator VINCENT:

– I have only 30 minutes in which to speak. I do not think we can express the matter in such simplified terms. I feel that Britain is forced to join the Common Market. I think that for political reasons her joining will be a very fine thing. I hope that it will be very fine for economic reasons also, although, having joined, she faces grave economic problems herself. She faces tremendous competition from a very powerful and industrialized Germany, which has modern equipment. Sometimes it pays to lose a war. Germany had the advantage of being able to modernize the Ruhr whereas the British, who won the war, were not so fortunate. In addition, the British did not get Marshal] Aid. Those are facts that all of us know. For the record I think we should say that it is inevitable that Britain will join the Common Market. I think we should start from that point and then consider what will happen in the future rather than what has happened in the past. The view is clouded with obscurity. We know that Britain will lose her sovereignty, just as every other nation has lost hers. Things must be rather desperate for the British to agree to forgo this sovereignty of which they are so proud. We have to look at the future and ask ourselves what Britain’s entry to the Common Market means to Australia. I suggest that in doing so we get into the realm of conjecture. It is not so easy as it appears to speak with authority on what will happen in the future.

I believe that, broadly speaking, the effect on Australia should be considered from three different standpoints. First, if the

United Kingdom joins the Common Market, as I think she will, unconditionally, what will be our situation? Secondly, if the United Kingdom joins and is able to persuade the member nations to preserve the status quo in regard to Commonwealth preferences, what will be our situation? The third alternative is this: If the United Kingdom joins and some compromise is reached between the member nations and the United Kingdom in respect to Commonwealth trade, what will be our situation? Any one of those three things could happen.

I believe that the first alternative I mentioned - the possibility of Britain joining without any conditions - is rather remote. Mr. Macmillan has made it pretty clear that Britain will not join without conditions. I do not think that France, which is regarded as a stumbling block to any conditions, would insist that Britain join without conditions. The solution of this problem is not so easy as it looks because it has many facets and many pressures could be brought to bear so that Britain could obtain some advantage in joining. For example, the powerful state of West Germany is desperately anxious for Britain to join the Common Market, for political and economic reasons. After all, Germany, like England, is a nation of shopkeepers. The Germans believe in making goods and they make them very well. Germany is very interested in obtaining cheap food. The position is the same as it was more than 100 years ago when Britain was discussing her corn law reform. Germany is just as anxious to obtain cheap food for her workers as Britain is. She will not stand idly by and allow France to insist on Britain’s admission without conditions because she wants cheap food.

The United States of America has shown quite clearly that she is most anxious - in fact, desperately anxious - that Britain should join the Common Market. She understands that a disunited Europe could mean catastrophe and she has a stake in the political future of Western Europe. With a confederation of nations in Western Europe led by Britain, America could relax. America is running short of gold and dollars. Her gold is being poured out of Fort Knox at a rate that alarms her. She cannot give foreign aid forever. She must establish a situation in which Western Europe can look after itself and be self-supporting. America knows that Western aid cannot continue forever. She is vitally interested not only in the security of Western Europe but also in its economic advancement. Therefore, I believe that America is very anxious that Britain should join the Common Market. I think America can be persuaded to assist the British negotiations with General de Gaulle so that Britain’s entry will not be unconditional.

I do not believe that my second alternative is possible either. The Common Market nations will not permit Britain to enter and preserve the status quo of Commonwealth trade because that would cut right across one of the important provisions in the Treaty of Rome - the establishment of a common policy in relation to agriculture. That would be blowing a hole in that document straight away. I am optimistic enough to believe that there will be a compromise. What that compromise will be no one can tell. That compromise will requirediscussion and I believe that Australia is entitled to be in on that discussion. As our Prime Minister (Mr. Menzies) has said, we have earned, that right.

There are many reasons why we have earned that right. This is not only a matter of economics; it is also a matter of discussions between Australia and the members of the Common Market. A lot of good Australian blood has been spilt in France to preserve France for posterity. On that ground alone we are entitled to discuss with France this matter of our survival and prosperity. Australians have fought in two world wars. They were not made by Australia; they were made by the nations of Europe. However, Australia was in them and such things count when it comes to international discussions. I believe that Australia has earned the right to discuss these matters.

Senator Branson:

– Do you think General de Gaulle will recognize that?

Senator VINCENT:

– I think he is a very fine man and he understands these matters, as well as we do. I do not think he is. stupid enough not to believe that Australia has always accepted more than its share of” international obligations when it has come to the spilling of blood.

Australia is a big customer of these nations. We buy and sell a lot of food and’ goods to Central and Western Europe. Those countries cannot quarrel with ai customer like Australia. That is the second reason why 1 think Australia should be heard at these discussions. I think these nations will be anxious to hear the Australian point of view on these matters because they are not building up a Common Market for the purpose of taking in their own washing. They are building it up so that they can trade with nations like Australia. Trade is a bilateral exercise. People ask why we do not trade with such-and-such a nation in Asia. How can we possibly do so when that nation cannot sell anything to us? There has to be a two-way traffic in trade. Our trade has always been with -Europe, and as far as I can see, very substantially although not altogether, it will always remain so because we want goods from those countries and I hope they will continue to want our goods. That makes trade possible. It is very difficult for a country to conduct trade with a nation that cannot buy any of its goods and wants to sell goods to it. We have another bargaining power in that respect. Australia is a good .customer. We are a big trading nation.

Finally - and do not let this be forgotten - with a very great deal of assistance and encouragement from Europe, and particularly from Britain, the Australian economy has been established as a primary producing economy for the purpose of supplying Europe with food. That has been going on for more than 100 years. Would it be morally and internationally proper for those nations which have encouraged us to grow food for them suddenly to say, in effect, “ We do not want your food any more. We are going to be self-sufficient “? I do not think that argument is a very sound one. We have some very strong reasons not only for being present at discussions but also for persuading the members of the Common Market at those discussions that we have a good case and a just cause. We have reasons why they should buy our goods, because we want to trade with them. The way Australia is going, before very long it will be one of the very great trading nations of the world. I think the members of the Common Market understand that. They are not fools altogether. For those reasons, I suggest that not only have we the right to be heard but we will be heard by these nations.

That brings me to my final point. The advocacy of our cause is perhaps the most important feature of the problem. The manner of putting Australia’s cause to the member nations of the Common Market will be vital in the next few months. Having said that, what better man have we got to put our cause than our own Prime Minister? I have the utmost faith in him and his ability to plead Australia’s cause overseas in the next few months. I hope that when he goes overseas to plead Australia’s cause on this most vital peace-time question members of the Opposition will not say that it is time our Prime Minister stayed at home, as they usually say in such circumstances. I hope that when he does go, the members of the Opposition will, as a man, say to him, “ Good luck to you, R. G. Menzies; you are fighting our case as well as the case of the Liberal and Country parties. You are fighting the nation’s case. We think you are good enough to do it.” I am certain he will do it in the proper way and I am certain that he is the best man to do it. I think that if a good case is put to these nations we will obtain something reasonable from them.

I am sure that when Mr. Duncan Sandys came here, representing the British Government, he put the position very plainly. I do not know what went on behind the scenes but I imagine there was some straight speaking between these two men - as there ought to be, of course. I feel that our only chance of gaining some advantage is by having a man such as our Prime Minister to present our case, and I wish him well. For those reasons, I support the statement that has been made.


– I was astounded by what Senator Vincent said in the last part of his speech. He said, in effect, that he hoped the Opposition would not throw cold water on any advocacy that the Prime Minister (Mr. Menzies) made on our behalf when he went overseas. I do not think that at any time during the Prime Minister’s term of office the Australian Labour Party has underrated or under-estimated his ability to put a case for Australia overseas.- I think the only person who has done that is the Prime Minister himself. On no occasion when he has gone overseas to put a case for Australia has he first submitted it to this Parliament, nor has he even confided in Senator

Vincent. He has gone overseas and put his own case.

The first occasion was in connexion with the Suez crisis. He did not consult this Parliament about that. His last performance was at the United Nations. The present Attorney-General (Sir Garfield Barwick), for whom I have the highest regard, had prepared the speech he intended to make to the United Nations and had circulated it to the press of America. In the early hours of the morning he received an urgent message from the Prime Minister to the effect, “ Hold your hand; I am coming over. I am going to put the case for Australia.” The press statement issued by the Attorney-General had to be withdrawn and three or four days later Mr. Menzies proposed a resolution at the United Nations, in opposition to a resolution that had been submitted by the representatives of other nations, including the Prime Minister of India. Two-thirds of the delegates got up and walked out and when the final vote was taken Mr. Menzies received five out of a possible 90 votes.

I say in all sincerity that the Opposition will never act in any way detrimental to a man who has the confidence of the electors when he goes overseas to put a case for Australia. I do say, however, that Mr. Menzies has a responsibility, before he goes overseas, to place the views that he proposes to express before this democratic Parliament. I give an assurance to Senator Vincent that the Opposition has never done anything to harm Mr. Menzies in that way. The fact is that Mr. Menzies has harmed himself politically in the eyes of the world.

I turn now to the statement that was read by the Prime Minister in the other place. He said that he had given no thought to the European Common Market until after the last Prime Ministers’ Conference in England. Anybody who gives any thought to world affairs to-day must realize that the decision to form the European Common Market was a momentous decision. Mr. Menzies has just discovered that that is so. Having given the matter some thought, he should, as the Prime Minister of Australia, have had more to say about it in this Parliament than he said in the past.

Everybody knows that if the free world is to survive and prosper there must be some concrete organization amongst the nations which oppose fascism, nazism, communism or any other “ ism “. The only way to go about this - as should have been done after the First World War - is to act along the lines suggested in the Rome Treaty in 1956-57. I think that Mr. Menzies, and the members of his Cabinet, should have given more thought, and much earlier, to the problems that will confront this country in the future and which also will confront Great Britain and other members of the Commonwealth as a result of the formation of the European Common Market.

I do not want to say much about the problems that confront those who have to decide whether Great Britain should join this organization. I hope and trust that if the decision is delayed until after December, Mr. Calwell will be speaking on behalf of Australia to the people who will have to deliberate on the conditions under which Great Britain will join the Common Market. I want to stress again, as I have done on many occasions, the dilatoriness of this Government in deciding to take action or to discuss ways and means to assist our Mother country in this time of crisis, when she has such great problems to solve. The decision to join or not to join the Common Market is one for the British Government alone. When it makes that decision, the British Government will have to stand up to it. Whether the decision be in our interests or against our interests, I am sure that Great Britain would not at any time want to do anything which would be in any way harmful to the people of other parts of the Commonwealth. I am sure that at all times she will give the utmost consideration to our needs; but we have to consider the set-up in Europe and the problem with which Great Britain is confronted to-day. I say that advisedly, because the people of Great Britain have fought two world wars, won both of them and paid for both of them. To-day, they are faced with one of the greatest problems with which any Christian country could be faced.

Australia, as a member of the Commonwealth of Nations, should have been giving greater consideration to ways and means of helping Great Britain to solve her problem. For five years, Mr. Deputy President, I have been asking in this Parliament questions pertaining to the European Common Market.

Senator Mattner:

– It had not started five years ago.


– I did not say anything about when the Common Market began.

Senator Dittmer:

– It was discussed in 1956 and became a living thing in 1957.



Senator Mattner is a primary producer and I should have thought that he would have given at least some consideration to this matter. I make it quite clear that we in Australia all depend on the success of the primary industries. Because of the peculiar political situation in Australia to-day, this Government has become complacent.

Senator Hannaford:

– What does that mean?


– It means that the Government has tossed away our parliamentary way of life because it knows that it does not have to fight elections on issues that can be dealt with politically. The Government parties receive assistance from other organizations to give it a majority in this chamber and in another place. So, I say that the Government has become complacent.

Even the Australian Democratic Labour Party is suggesting that it has an answer to the problems that we face. I was very pleased to note that there are Government supporters, in this chamber and in another place, who also suggested that we have some answers to those problems. But what has been the attitude of the Government over the last five years? Its attitude has been simply to ignore representations that have been made to it, or requests for information, by honorable senators on this side of the chamber. I have asked many questions on this subject since 1957.

Senator Scott:

– You said that before, did you not?


– Yes, and I shall probably repeat the questions. I assure Senator Scott that the tactics which the Government parties have used at election campaigns in 1949 and since then, will not be available to them when they face the electors in December next.

Senator Scott:

– I know of 2,000 electors who will not be available to you in Western Australia.


– I do not go to Western Australia. The people of Australia are taking a very dim view of the performance of this Government in relation to the European Common Market over the last four or five years.

In 1957, I had the privilege of being elected by my party as a member of a parliamentary delegation which visited Delhi. While I was there I spoke to the Minister for Labour and National Service (Mr. McMahon) and told him that I had not been able to gain information in this Parliament regarding the European Common Market. I said that I intended to investigate the matter by questioning antiLabour delegations from Great Britain at the conference and also the Labour delegation led by Mr. Gaitskell. Mr. McMahon said, “ I would be pleased if you would let me know what they have to say “. I shall let the Parliament know what they had to say. Both groups of representatives said that whichever political party was in office in Great Britain when the time arrived for a decision to be made, the country would be forced, both economically and politically, to join the Common Market.

Do you not think, Mr. Deputy President, that the Government of this country, in fairness to the people whom, it claims to represent, should have attempted, during the last four or five years, to evolve ways and means to help people, who were confronted with communism, to establish an organization that might be instrumental in keeping the free world free? But what did the Government do, apart from mouthing its opposition to communism, assisted ably by our two members of the Democratic Labour Party? What did it do of a practical nature to help defeat this “ ism “ that it has used in every election campaign that it has fought? I say that it did nothing.

When I was appointed a delegate to attend the United Nations in 1959-

Senator Mattner:

– You have had some good trips.


– Yes. AH that I am saying is that I have tried to do something to further the interests of the people.

Senator Hannaford:

– You had a good companion at the United Nations.


– That is true. I got on very well with Senator Hannaford, who was my co-delegate. During my stay in New York I made inquiries regarding the European Common Market. I think that Senator Hannaford will agree that I mentioned the subject to him on many occasions. I also had the opportunity at that time to visit England, France, Belgium and Italy. I realized then that our only hope was for Great Britain to become a member of the European Common Market.

Senator Henty:

– Did you tell Mr. Macmillan that?


– I did not tell Mr. Macmillan. I point out that in 1959, during the general election campaign, he was not prepared to tell the people of England what they were up against, although he was then aware of the problem posed by the European Common Market. Instead, he fought the election on issues that had nothing to do with the case, just as the Government parties in this country have done.

It is rather alarming for members of all political parties in this Parliament to know that we have been caught flat-footed, in regard to our exports, by the situation that has arisen. I do not remember whether it was Senator Cole or Senator Vincent who referred earlier to our trade treaty with Japan. What difference does that treaty make to us? Japan always has taken our wool. The only difference that the treaty has made is that we get a few more million pounds’ worth of junk coming into this country.

Senator Scott:

– No. The Japanese are buying more from us.


– I am speaking in all sincerity. I have given my opinion and the honorable senator may give his later.

Senator Scott:

– But that is not correct.


– The

Japanese Trade Treaty was discussed and debated before the European Common Market was discussed. If I am not being misled by Ministers in this Parliament, those who admitted that they knew nothing about the European Common Market were the ones who negotiated the Japanese

Trade Agreement. Therefore, that agreement was not negotiated, as has been claimed by a senator on the Government side, in order to counter things that would have to be done consequent on the admission of England into the European Common Market. I do not intend to quote all the questions that I have asked on this subject and the replies that have been given to me in this chamber, as that would take too long.

Senator Henty:

– We can listen.


– It is all very well for Senator Henty to say that. Let us see how learned was the Leader of the Government in this chamber, or how much he was prepared to tell us about this matter in 1957. What I said in a question that I asked on 16th May, 1957, had to be done was exactly what the Prime Minister (Mr. Menzies) now says has to be done, that is, to convene a conference of interested people. The only section that he leaves out is the trade union movement, and I believe that the Government will have to include this most important section before the present situation is resolved. This is the question that I asked on that occasion -

I should like to address a question to the Minister for National Development, who is at present acting as the Leader of the Government in this chamber. In view of the complexity of the many problems associated with the European free trade area and the contemplated establishment of a common market, together with the effect of a common market on imports, and in view of the fact that the Government is no doubt in receipt of copious messages from trade representatives in Europe and the United Kingdom, will the Government prepare a preliminary authoritative memorandum on the subject and have it distributed to members of the Parliament, the Associated Chambers of Commerce, the Chambers of Manufactures, trade unions, primary producers’ organizations, bankers and industrialists?

That was in May, 1957. What does the Prime Minister call for to-day? He calls for exactly what I then asked for.

Senator Mattner:

– That was the first question you asked on this subject.


– No. Mr. Deputy President, when one has no knowledge of anything, he interjects so that he will not get any knowledge. I think that is what Senator Mattner is trying to do, but I shall try to force knowledge on to him. My question continued -

Will the memorandum include (1) a comprehensive statement of the attitude of Great Britain to the free trade area, with special reference to her obligations under the General Agreement on Tariffs and Trade and her obligations to Australia under the recently signed trade agreement; (2) a summary of the discussions relating to the question of the free trade area which took place at the last meeting of the Organization for European Economic Co-operation - whose activities directly affect more than 250,000,000 people, and whose membership includes some countries which are Australia’s best customers - and a summary of the discussions which took place at Gatt recently; (3) a detailed statement showing whether any sensitive Australian products are likely to be affected, and, if so, how valuable is the trade in them; (4) the main outlines of the tariff structure of the common market?

I ask the Government to give serious consideration to the calling of a meeting in Canberra, during the parliamentary recess, of representatives of the organizations mentioned, so that Australia’s position can be thoroughly examined and the full impact on Australian exports of meat, wheat, wool and butter can receive the closest examination. In view of the necessity to maintain a favorable trade balance, this matter is of serious importance to every section of the Australian community. From the viewpoint of international trade it is one of the major problems of the twentieth century.

Now listen to the reply of the Minister to my question. He said -

As the honorable senator has said, the matter is of profound significance from a commercial point of view. We have recently debated in the Senate the new United Kingdom trade agreement, which bears upon this matter. As to what my colleague is doing, T could not say offhand, because this problem is the subject of constant discussion and consideration by the Department of Trade, chambers of commerce, chambers of manufactures and other members of the commercial community. I can say no more than that I shall put the honorable senator’s suggestions before the Minister for Trade. I very much doubt whether the Minister will adopt them, because the problem has so many ramifications. It would be difficult to prepare a factual statement upon the subject, let alone to express opinions on it in answer to a question.

At that point, I interjected -

This conference would provide an opportunity to do so.

Senator Spooner:

asked “ Which conference? “ and I said -

The conference that I have suggested should be called in Canberra during the forthcoming parliamentary recess.

The Minister then continued his reply, as follows: -

If I were the Minister for Trade, I would not call a conference at this stage, because, as the honorable senator mentioned in his question, I think, there are to be discussions of this matter in Gatt’ between Great Britain and Australia.

He was not prepared to call a conference, yet four years later the Prime Minister and the Minister for Trade (Mr. McEwen) are hanging their political hats on the fact that they want a conference of the people concerned, with the exception of the trade union movement, which they never consider at any time other than in the Commonwealth Industrial Court. I asked another question on this subject on 15th October, 1957, and it appears in “ Hansard “, volume S.ll, at page 549. The question was as follows: -

I direct a question to the Leader of the Government in the Senate. On many occasions I have tried’ to get an authoritative statement from the Government regarding the European free trade area and common market, and its possible repercussions on Australian exports, but so far I have not been successful. The Treasurer, who returned to Australia yesterday, had a lot to say about the matter in a press interview. As I have had many inquiries from interested people and organizations, could a considered statement on the subject now be made to the Senate?

At that time Senator O’sullivan - now Senator Sir Neil O’sullivan - was the Leader of the Government in this chamber. He replied in the following terms: -

The matter is not in respect of which an answer with any mathematical accuracy can be given. By the very nature of the matter, any answers given must be statements of opinion.

I interjected, “ But it is a serious matter “, and he continued -

It is a very important matter, and the honorable senator has every reason to be interested in it. I do not know whether the Treasurer has a dogmatic opinion upon the possible effects of the arrangements. Much has been written about the matter. The honorable senator has access to that material in the Library. I do not know whether the Treasurer feels disposed to express an opinion, but I shall mention the matter to him.

I have never heard any more of the matter from the honorable senator. I went to the Library, as he suggested, but I could not find any material on the subject there. I was reminded of an occasion when a chap was speaking in the Sydney Domain.

Senator Sir Neil O’sullivan:

– That was not I.


– I thought that it might have been you. He asked: “ What did Billy Hughes do in 1916? What did Bob Menzies do in 1940? “ A fellow who was listening said: “ I will be the goat.

What did they do? He said, “ Look it up in the Library “. That is what the honorable senator told me to do, but I could not find any material there on the subject at the time. On 23rd October, 1957, I asked the following question -

I direct a question to the Leader of the Government in the Senate. In view of the many conflicting statements being made by Ministers about the possible results of European economic plans, and particularly in the light of the disturbing diagnosis made by Doctor Menzies at the meeting of the council of the Liberal Party in Canberra this week, will the Government now give sympathetic consideration to the suggestion I made some months ago that a conference be convened so that representatives of primary producers, trade unions, chambers of commerce and manufactures, and others who are interested, may be able to examine the trends and effects of these farreaching proposals and see how they are likely to affect Australia’s export markets? It is well known that at the present time the head arid deputy head of the Department of Trade and a large number of senior officials of the Department of Trade and Department of Primary Industry are abroad, and that the Treasurer recently returned to Australia armed with all the latest information. With all this information at the Government’s disposal it is felt that the Parliament of Australia rather than a Liberal Party tea party should be given an authoritative statement.

The Leader of the Government replied -

Senator Hannaford:

– Who was the leader then?


– He was

Senator O’sullivan, now Senator Sir Neil O’sullivan. He has since been displaced from that office. If you want to know the reason why he was displaced, you will have to ask Mr. Menzies. Senator O’sullivan replied -

If the honorable senator is really thirsting for information, I shall go to the bother of getting for him a copy of the Prime Minister’s statement. It is well worth studying. If the honorable senator does not understand it, I am prepared to explain it to him.

At the time I said that I did not understand it. Actually, I do not know whether it exists. It was the same old tale. Senator O’sullivan has not turned it up yet. I am still waiting to read the Prime Minister’s statement and to have the honorable senator explain it to me.

Senator Toohey:

– Give him time.


– That was four years ago, and I have not received it yet. I thought I would get the information in another way and I directed the following question to the Minister representing the Minister for Trade: -

Some months ago, I asked a series of questions relating to the Common Market and the European free trade area, and their possible impact on Australian commodities sent to the United Kingdom and Europe. I did not receive a very encouraging answer - possibly because the Minister did not understand the tremendous implications of these international proposals. The Minister for External Affairs-

Who is now Lord Casey - is reported to have said, last month, when passing through London, that Australia had nothing to worry about. If the Government has a policy in regard to these proposals, will it present to the Senate a considered statement on the subject, placing particular emphasis on the way in which Australian primary products are likely to be affected?

Senator Spooner replied ;

I shall ask my colleague, the Minister for Trade, whether he is prepared to make a statement on the subject for presentation to the Senate. This is a very complicated question, and I should like to correct any impression that it is not receiving the Government’s most careful and constant consideration.

That is just what he had said months before, then all this went into the locker for four years. The Minister continued -

It gives rise to matters of great importance. For instance, honorable members will have noticed in this morning’s press a sort of by-product of it - the suggestion that there should be a British Commonwealth free trade area.

I went on asking questions right throughout, but I received no real reply from the Government. The point that concerns me to-day is that the Government has come into the picture only at this late hour and we have all kinds of suggestions that have never been considered by the caucus of the Liberal-Country Party or by any other political organization in the country. The rank and file of Government supporters have never had an opportunity to debate the pros and cons of the European Common Market and its effect upon Australia or the United Kingdom. They knew nothing about it until the Prime Minister’s statement in the House of Representatives last night.

I had intended to say much more, but my Whip informs me that my time has nearly expired. This is a most serious question. If the Government is sincere when it says that it does not want communism to invade the free world - I do not believe that it is sincere because it relies upon communism to keep it in office - the Government should play its part in helping the Mother Country. It should not smother the Mother Country. It should call a conference of all interested persons in Australia, including representatives of the trade union movement, to try to decide ways and means of overcoming the obstacles confronting us. We shall not find new markets in the free world. They will be in Russia, mainland China, North Korea and Czechoslovakia. Let Government supporters tell me of any likely new markets we can expect to find in the free world during this great reorganization. They cannot cite them. I wholeheartedly support, as I know the people of Australia will support, the amendment moved by my leader. When we go before the electors, they will not dilly-dally as the Government has dillydallied over the years, in regard to a matter that they regard as sacrosanct to the British way of life and the Mother Country. They will put in office the party that did the job from 1941 to 1945, when we faced another crisis. They will put the Labour Party back to ensure the preservation of our free way of life.

Senator McKELLAR:
New South Wales

, - There is no doubt in the minds of any of us that the subject we are discussing is of very great importance to Australia, the United Kingdom, and the six countries that now form the European Economic Community and, indeed, to a very large proportion of the free world. As the Prime. Minister (Mr. Menzies), on the Government’s behalf, has stated, most Australians have a very real fear that the entry of the United Kingdom into such a community will mean, inevitably, a very great difference in the ties that have bound us for so many years. We hope that if there is any weakening of those ties, it will be in only a small degree, but we fear that the weakening will be very serious and that is something that no member of this chamber or of any Parliament in Australia would like to see.

We recognize that the matter of entry to the European Economic Community is a matter for the United Kingdom alone to decide. That was stated most emphatically during the recent visit of Mr. Sandys, both during the discussions and at their conclusion. The decision is one that the United

Kingdom alone has a right to make. It is ironical that the people of that brave little island, Great Britain, who twice did more than any other people in the free world to save the world from disaster, who endured greater discomforts during those conflicts than did any other victorious nation and greater discomforts afterwards than did many vanquished countries, should find themselves forced to enter a new sphere by an alliance with some of their former foes as well as some of their war-time allies. The United Kingdom is faced with such a threat to its economic life that it has to consider seriously turning its back, to a marked degree, upon countries with which it has had very close associations for a very long time. As the Prime Minister (Mr. Menzies) said last night -

We want whatever decisions are finally taken to bring added strength to Great Britain, for her own sake, for our sake, and for the sake of the world. For we are both British and Commonwealth.

Every honorable senator will go along with the sentiment expressed in that statement.

We have been told that when the United Kingdom first talked of entering the Common Market, the present members of the European Economic Community said that if it did join there must be no strings attached to the joining. They said, in other words, “ Any agreements you may have with the other Commonwealth countries may have to be revised or dropped “. It was a great comfort to read only a fortnight ago that now there is a feeling amongst some of those countries that a very strong Commonwealth is essential for the satisfactory working of the European Economic Community.

We Australians owe a great deal of gratitude to the Australian Cabinet for the way in which it conducted negotiations with Mr. Sandys. I am quite sure that the tenor of those discussions was a great and possibly very unwelcome shock to Mr. Sandys. I repeat that we in Australia owe members of the Cabinet a great deal for the stand they took. If they had been prepared to accept the view that it was right and proper for Britain to enter into negotiations and that we here in Australia should go along with her without bringing to the notice of Mr. Sandys the great economic difficulties that such & decision may entail for Australia, they would have been deserving of severe censure. It may not be correct to say that New Zealand seemed to capitulate, but to many of us she seemed to acquiesce in a very short space of time. Perhaps she regretted her action later; I do not know. But after a week or more of very hard bargaining in Australia Mr. Sandys left these shores a very much wiser if not a sadder man. Our Cabinet did a very great job for all Australians in pointing out the great difficulties involved. When all is said and done, what is the first duty of any government? Its duty is to defend the country and the people who live in it. I repeat that that is the first task of any government, irrespective of its political colour.

There seems to be no doubt at all that, if Britain decides to join the European Economic Community, quite apart from the ten or fifteen years that will be needed to establish completely the working of the community Australia will need a further ten, fifteen or perhaps twenty years to find new markets. So we are hoping that the very strong representations that were made to Mr. Sandys will strengthen Great Britain’s hand when she takes her place at the bargaining table with member nations of the community.

This afternoon the Opposition has criticized what has been done in negotiating new trade treaties and agreements with other countries. I remind honorable senators opposite that in 1949 we had seventeen trading posts in twelve countries. Now we have 37 posts in 28 countries. The Minister for Trade (Mr. McEwen) and the officers of his department have been unceasing in their quest for new countries with which to trade. It has not been a matter of having the goods or of obtaining the desired price; it has been a matter of being able to have our goods admitted to additional countries. The Minister and his officers have never let up on this task. So the allegation that the Government has done nothing in this direction simply goes by the board; it is quite untrue.

Most of us realize that Great Britain has been our traditional market for wheat, butter, dried fruits, sugar and many other export commodities. Many aspects of the subject we are debating this afternoon are matters of pure conjecture, because at this stage we do not know what conditions

Great Britain will be asked to accept if she decides to join the European Economic Community. However, an opportunity has been given to us to debate the subject and to become better acquainted with the whole set-up of the Common Market. Of course, the preliminary talks have only just commenced, but we have no doubt at all that Great Britain will put the strongest case she can for Australia. I was very glad to hear Senator Hendrickson express that view. But no matter how hard she tries, she cannot put the case nearly as well as could our own Australian representatives. Here again we owe a very great deal to the Cabinet for stating very firmly that we should be represented where our interests are concerned. I deprecate very strongly and indeed refute the allegations that were made in the London “Economist” of 15th July and the “New Statesman” of 14th July to the effect that our objections flowed mainly from the fact that there was an impending Australian election. Over the past nine months this Government has shown very strongly indeed that it does not hesitate to court unpopularity when it believes that the welfare of Australia is at stake. So such allegations really are not worth considering.

Let us consider some of our exports which will be affected if Britain decides to join the European Economic Community. Last year we sent to Britain £14,000,000 worth of wheat under an agreement Which provides that she has to take a minimum of 750,000 tons annually. In the same year we sent to Britain £16,000,000 worth of sugar, £22,000,000 worth of butter, and £24,000,000 worth of beef and veal under an agreement which gives us the right of unrestricted entry to the British market until 1967. As honorable senators know, an adjustment was made only a few days ago. In the same period we exported to Great Britain £10,000,000 worth of canned meat, in relation to which we have a preference of 20 per cent, and free entry. Our exports of apples and pears last year were worth £5,000,000. If Britain joins the Common Market, we could be faced with a duty of from 8 per cent, to 10 per cent, on those commodities. Our exports of canned fruit and fruit juices last year were valued at £11,000,000. We could be faced with a duty of 25 per cent, on those commodities.

We exported to Britain £4,000,000 worth of cheese, in relation to which we may be faced with a duty of 23 per cent. We exported to Britain also eggs and egg pulp to the value of £2,000,000, in relation to which we may be faced with duty of from 12 per cent, to 15 per cent. Our exports of processed milk were valued at £2,000,000. In addition to the commodities I have enumerated, we exported honey, wine, metal manufactures and machinery, leather, barley, flour and manufactured goods worth more than £46,000,000. Is it any wonder that we are concerned about the possible effects on our economy if Britain joins the E.E.C., without some thought about what her commitments have meant to us and, of course, to her, because there has been reciprocal trade with Britain.

Now let us consider the prices that were received within the European Economic Community for various products in 1959-60. In relation to wheat, Belgium received £1 14s. Id. per cwt.; France, £1 8s. Id.; West Germany, £1 16s. 9d.; Italy, £1 17s. lid.; and the Netherlands, £1 9s. The price received in the United Kingdom was £1 6s. 3d. In relation to milk, the price received in Belgium was 2s. per gallon; in West Germany, 2s. 7d.; in Italy, 2s. 4d.; and in the Netherlands, 2s, 6d. The price in the United Kingdom was 3s. Id. The prices received by producers of fat cattle were as follows: - In Belgium, £7 4s. lid. per cwt. live weight; in France, £6 19s. 8d.; in West Germany, £8 8s. 1 Id.; and in Italy, £9 8s. 5d. The price received in the United Kingdom was £7 4s. 5d.

In 1956-57, 28 per cent, of our total exports went to the United Kingdom. In 1957- 58 the figure was 27 per cent. In 1958- 59 the figure was 32 per cent. In 1959- 60 we exported to the United Kingdom 26 per cent, of our total exports. The figure was 29 per cent, in 1960-61.

I am informed that there are 9.000,000 farms in the European Economic Community area. Of that number, 5,50’J.OOO are less than twelve acres in area. Seventy per cent, of German farms, 80 per cent, of Belgian farms and 85 per cent, of Italian farms are less than 25 acres in area. Compare agriculture in the countries that I have mentioned with agriculture in Australia. The aim of the European Economic Community apparently is to consolidate the small farms into units of greater acreage. The community proposes to set up a marketing board. It hopes to have uniform price levels and hopes to safeguard its domestic markets by restrictive trade policies against imports from outside the community.

In view of the feeling that seems to be prevalent, that the European Economic Community is another Garden of Eden, it may be interesting to point out that the community apparently has its share of difficulties. I think 1 heard somebody say to-day that it is well ahead of its target schedule. Mr. Edwin L. Dale, who is a correspondent for the “ New York Times “, in a dispatch from Paris published on June 25th last, said -

The European Common Market, after sailing with a fair wind for several years and creating an image of success, is running into stormy weather.

It has reached the stage where the governments concerned must begin to take painful decisions. If these governments act as governments have usually acted throughout history, the Common Market could bog down.

The test will come before the end of this year, and it will revolve mainly around that agonizing problem which afflicts almost every government in the world - how to deal with farm prices, farm incomes and farm imports and exports.

During the past few weeks it has been suggested that if Britain decides to join the Common Market, the United States may follow suit. That is important. Only a few days ago, Senator Fulbright, chairman of the United States Senate Foreign Relations Committee, referring to Britain’s move to join the European Economic Community, is reported to have said -

I think if it happens eventually, this country-

That is, the United States - will give serious consideration to joining and eventually will probably join, because it is in this direction in which the salvation of the free peoples lies.

In yesterday’s Sydney “ Sun “ Mr. Chester Bowles, United States Under-Secretary of State, is reported to have said that Britain’s entry into the European Economic Community meant a great deal for Europe. He is reported to have said also that Britain’s entry would strengthen the community because Britain had a great reputation as a leader and her membership could be of great benefit to the community.

It will be seen that there are varying points of view about Britain’s entry into the

Common Market. The point I make is that Britain’s decision will be a most momentous one. Her decision will be of such great importance to Australia that we must try to obtain all the information possible. We must then see that when the occasion arises our case is put to the best advantage.

The editor of “The Land”, the Hon.

  1. V. Budd, has been overseas for some months and has been taking a great deal of interest in the European Economic Community. He has carried out a good deal of investigation into this matter and he has written some good articles on it. I propose to quote from an article published in “The Land” on 10th August, 1961, which read -

The fact is, as one Australian trade representative said to me in Geneva, the Common Market countries have so far been making only the easy decisions. The difficult ones have all to come, and among these are those relating to agriculture.

It is interesting to note at this point just what has been done so far in the matter of tariff adjustments by the SIX. - First, as between themselves, tariffs were reduced by 10 per cent, on January 1, 1959. Two other cuts of 10 per cent, have since been made, one on January 1, 1960, and the other on January

page 98


I, 1961

The next cut of 10 per cent, is due on January 1, 1962. There has been talk of increasing this to 20 per cent, because of the smoothness with which the earlier cuts have been effective, but France is jibbing at an acceleration because of Germany’s unwillingness to begin the application of the agricultural plan.

The second part of the Tariff objectives of the Treaty of Rome - the establishment of a common external tariff - is to be accomplished in stages over a period of 10 to IS years.

Dealing with wheat, the article states -

The tariff against wheat imports at present contemplated is 20 per cent, but this figure may be entirely superseded by whatever import levy may be deemed justifiable under future circumstances.

The article also states -

In Continental eyes, Australia and New Zealand as food producers are like Japan in the field of manufacturing. Our capacity for cheap production oil a large scale is something that just cannot be fitted in with the high cost structure of farm production in most parts of Europe where the climate makes great differences in farm and animal husbandry routines.

This afternoon Senator Cole suggested that it may be necessary to change our farming practices and policies in this country. It is all very well to say that, but it is not nearly so easy to put such a suggestion into practice. Such ideas may be satisfactory on paper. Senator McKenna said that Australia should seek new markets. I have given evidence to show that we have been doing nothing else for the last three or four years - perhaps longer.

Senator Hendrickson seems to think that the Japanese Trade Agreement did not amount to much. I think Senator Cole said that but for the agreement with Japan unemployment figures in Australia to-day would be far higher than they are. I do not think anybody will disagree with that statement. Whereas formerly Japan bought only a comparatively small amount of our wool, she is now our best customer. I will not dwell on this theme because I know that speakers who follow me in this debate will deal with the benefit that has flowed to Australia as a result of the trade agreement entered into with Japan.

Criticisms have been levelled at the Government because this matter of Britain’s entry into the Common Market has not been discussed earlier. If we pause for a moment I think we must realize that it would have been futile to discuss this matter earlier. What on earth would have been the advantage in discussing this matter six, twelve or eighteen months ago, at a time before Britain herself had decided to approach the European Economic Community for admission? I have never heard of anything so futile as the suggestion that conferences should have been held. From now on, of course, the utmost endeavours must be made to educate all Australians to an understanding of the implication to Australia if Britain decides to become a member of the Common Market.

The matter of sovereignty was raised by Senator Vincent. That, also, is an important aspect. It is one not lightly to be glossed over. I do not suppose that any of us would care to forecast at this stage the eventual outcome of Britain’s entry into the Common Market. Some of us may have ideas on the subject, but time alone will produce the answer.

The Australian Government has acted in the best interests of the country in adopting the attitude that it has adopted and taking the very firm stand that it has taken. I am very glad that that occurred. It certainly presented no bar to Britain joining the European Economic Community, as 1 see it. Indeed, the Government did a very great service in bringing to the notice of the British representative in Australia, Mr. Sandys, the feelings of one of the most loyal members of the Commonwealth and voicing its misgivings that some of the rosy and optimistic ideas about British manufactures which seemed to be prevalent in Britain may not be borne out. We must realize that Germany has a very great potential. At this stage it seems that she is able to manufacture goods more cheaply than Britain is able to manufacture them. That could present a very great headache indeed.

I speak without any definite knowledge, but a feeling I have gleaned from reading different articles is that one of the drawbacks is that our former ally, France, does not seem to be as keen as we might have expected her to be for Britain to join the Common Market. If Britain wishes to join, France seems determined to make the conditions of entry rather harsh. I hope that before a decision is made the French attitude will be considerably modified and softened.

This is one of the most momentous decisions that Britain has been called upon to make since World War I. It is a matter of great moment to all of us who take pride in our British heritage. We all must take advantage of every available avenue for obtaining further information about this subject. Quite apart from the welfare of the British people or in conjunction with their welfare, we must see that our people get the best possible deal.

I reject the amendment submitted by the Opposition, Mr. President, and I commend the Government on the action it has taken.

Senator O’BYRNE:

.- This debate on the entry of Great Britain into the European Economic Community and its impact on the Australian economy in the immediate and distant future is one of the most important debates that could take place in this Parliament. Great Britain’s decision to enter the Common Market is an historic political step that has probably shocked the Australian Government more than it is prepared to admit. During the Second World War Mr., now

Sir, Winston Churchill said that he had no desire to preside over the disintegration of the British Empire. I am quite certain that Churchill had a great and abiding sentiment for the concept of the British Empire, but he also realized that history has a habit of unfolding and that we must face up to the inevitable. Out of the disintegration of the concept of the British Empire came the concept of the British Commonwealth of Nations and later the Commonwealth of Nations which incorporated all conditions of race, blood and family ties, commerce and other factors and gave this group of peoples a status in the world.

Unfortunately, I see the present situation that has arisen as a result of the formation of the European Economic Community as a very grave crisis and the start of the disintegration of the Commonwealth of Nations. For many years, in my own humble way I have warned the Senate of the inherent weaknesses of our economic system. I have pointed out that our economic system, as it works, proceeds from one crisis to another. A boom occurs in a group of countries or in one country and then diplomatic moves are made to try to overcome the effects of the boom, the result usually being a depression. We have seen attempts to barter by countries, and tariff agreements have been made and all sorts of protective walls have been put up to overcome temporarily the critical situation. Each time this cycle of events has ended in a war, and the wars have been of increasing ferocity and intensity.

This crisis, which is happening at about the time that previous crises have resulted in war, is happening without a war, although there has been a cold war. For the first time in the long history of Europe a family union is posing us with a problem that we in Australia have not had to face before. As I see it, the people, of Europe, which has a population of between 150,000,000 and 200,000,000, have the same opportunities as the United States had over a period of 100 years to exploit their own markets, develop their own natural resources and get the strength that comes from unity. That is quite a normal and natural state of affairs. It is mutual protection and a coming into the fold when trouble is near.

Great Britain has been in a very awkward situation, because her interests have been spread throughout the world. Her family has more or less grown to maturity. She has done a magnificent job in establishing many of her institutions and laws throughout the world. I believe that history will always pay tribute to the British people for that. Now, for survival Great Britain has to make a momentous decision. I cannot see her making any decision other than to join the Common Market. Geographically, it is imperative that she join. It is only a short journey from take-off to landing across the English Channel to France. From the exchange of goods, it is natural for Great Britain to look beyond her own population of 45,000,000 to 50,000,000 to the wider fields and greener pastures of the countries of Europe whose standards of living, relatively speaking, have risen more than those of any other part of the world. Over the last century these people have been impoverished by successive wars and critical situations and now, through this European Economic Community, they have found the secret of common trade. We must admit, of course, that they had a tremendous amount of help to enable them to recover from the 1939-45 war - help out of all proportion to that which Great Britain has had. We have seen the recovery of Germany, Italy and France, which were on their knees fifteen of sixteen years ago. Their peoples were grovelling in the rubble to get little bits and pieces together to make shelters for themselves, and eating anything they could find - old pieces of potato and frost-bitten vegetables. They were grubbing in the fields for food. That is not an exaggeration. I saw the European people doing that. Yet in a period of fifteen or sixteen years they have built such an economic edifice that Great Britain is compelled to join them for its economic survival.

It is of great interest to see what Great Britain has done to hold the status quo. I am quite certain that the overwhelming majority of the British people would like to see the British Commonwealth grow and prosper, but economic survival, which involves physical survival, is very important. When you have to make a choice between sentiment and the stomach, the stomach vins. We have seen Great Britain trying to organize the Outer Seven - Sweden. Norway, Denmark and the other fringe coun tries. They are all industrious countries and traditionally very good customers of Great Britain and, for that matter, of Australia. However, Great Britain found that the organization inside central Western Europe was so strong that all her attempts te build up an opposing economic bloc met with no success. She is now faced with the problem of deciding whether she should join the European Economic Community in order to survive economically and, as I will show later, politically.

One of the remarkable things about the Treaty of Rome is that on the economic level - after all, business is business - these countries of central western Europe have been able to reach agreement for the first time for many centuries. The countries concerned are old, traditional enemies. Germany and France, for some reason or other, whether it be psychological, racial or religious, have been like oil and water or like cats and dogs. They have always been able to find some reason to fight. Now we find that on the economic level, and for the purpose of economic survival, they have reached agreement.

Italy has been considered to be one of the pauper nations of Europe industrially, with a large impoverished peasant population; yet, as a result of joining the Common Market, her national overall production has gone ahead by leaps and bounds. According to the Treaty of Rome, these countries have decided, in their common interests, to come together, along with Belgium, the Netherlands and Luxembourg. The lat’er countries are small but they are compact, with very intelligent people who have had a relatively good standard of living in the past. They have been prepared to forgo their sovereignty in this European Economic Community.

The commission that has been set up is a supra-national body. It is not a parliament as we know a parliament. I cannot see how it could be a democratic body, for the simple reason that Herr Hallstein. the chairman of the commission, will have virtually dictatorial economic power over this tremendously important and economically powerful group of countries. In a statement that he made at Le Havre on 22nd May, he said -

We are not in business to promote tariff preferences; or to establish a discriminatory club to form a larger market to make us richer, or a trading bloc to further our commercial interests. We are not in business at all. We are in politics.

In that statement of Hallstein’s you find the deeper significance of the European Economic Community. The co-ordination of common interests - economic and political - is one of the most revolutionary events in modern history. The Common Market, as a political unit with a population of 200,000,000 intelligent and well disciplined people, has tremendous political significance.

I have explained my views of the new concept of the United States of Europe. If you follow this thing through, that is exactly what it will become. The six, with the addition of Great Britain, will become seven and, with the addition of the other six countries of the European Free Trade Area, will become thirteen. Other nations will become either associate members or full members, and we will be confronted with a United States of Europe.

I come now to Australia’s position in relation to the events that are rapidly developing. Why was Australia settled by white people? It was not for the love of getting down into the southern hemisphere that the British people came here. First, it was convenient for Britain to have people here to hold the country owing to its geographical and strategic importance. In addition, Australia offered some opportunities for development, as was found later on. It lent itself to wool-growing and to agriculture, but mainly it was an important part of the British Empire strategically.

Over a period of years Australia has been a very good member of the British Empire and the British Commonwealth. It has built up a sturdy race of British stock and has made contributions in many fields of endeavour- in science, art, sport and in other ways. It has established a reputation for itself. But we are still a nation with only a little over 10,000,000 people and we are in the Asian sphere. The reason for our existence here as a branch of the European family was our membership of the British Empire or the British Commonwealth. It was because of the knowledge that they enjoyed the protection of the British fleet that people in this part of the world felt they could plough their fields, sow the next season’s crops, build their monuments, erect their offices, develop their resources and so on. Now, we are faced with a change in that fundamental aspect of our relationships. The distance from our racial relatives will be lengthened because, in my opinion, the sentiment that has bound us together as parts of the family of British nations will have to go by the board as a result of England’s decision to enter the European Common Market.

I do not share the view of many supporters of the Government that a subcommittee of our Cabinet, our diplomats and our economic advisers and, for that matter, the economic advisers of the British Government, will be able to influence the attitude of the members of the Common Market in an arrangement which is well and truly established. From the point of view of Western world economics, those nations are in the box seat. They are driving the chariot. Great Britain, in proposing to get on to the chariot, has to go virtually cap in hand. After a long history of association with the family of British nations, the people of the United Kingdom have now to choose between one or the other. The decision that they must make is a tremendously important one. As I said earlier, they have to choose between economic survival and the continuance of sentimental associations.

As has been pointed out during the course of this debate, we have taken certain precautions. We have found alternative markets to take the place of traditional British markets. We have found people who are prepared to buy our wool. It is true that Japan is buying Australian wool, but she does so for the simple reason that she cannot obtain the quantity of wool that she requires, of a quality that the Australian wool provides, anywhere else. Japan’s economy is largely dependent on her ability to have ready access to Australian wool. She is becoming very rich as a result of that access. So, Japan is on a very good wicket in being able to get first cut at our wool, at a price that is only just keeping our wool-growers in business.

Senator Scott:

– But it is sold at world parity, is it not?

Senator O’BYRNE:

– I shall come back to that point. First, there is a very important matter that I want to discuss. There is a possibility that our British market preferences will be bargained for the entry of the United Kingdom into the Common Market, and that, in turn, could lead to surpluses of wool which have not existed previously. Nations that have been prepared to pay certain prices for our wool might, because of the increased competition, seek a reduction of the price of wool.

Senator Scott:

– There is no threat to Australian wool.

Senator O’BYRNE:

– In my opinion there is a threat that this arrangement could depress the prices of Australian primary commodities. The British market has been a great backstop. In times of crisis the family of British nations has got together for mutual protection. That happened at the time of the inauguration of the Ottawa Agreement and the Statute of Westminister. Those arrangements have served Australia well, and they have also served Great Britain well; but if Great Britain goes info the Common Market she will be tied hand and foot. There is no doubt that the Treaty of Rome gets the nations in and keeps them in.

Senator Vincent referred to loss of sovereignty. I believe that we are not aware of the extent of the loss of sovereignty that is involved in joining an organization under terms such as those provided for by the Treaty of Rome. I do not know exactly how the present members of the top echelon of the European Economic Community were appointed. They are not elected representatives of the people. A commission has been appointed but we have never been fully informed of the method of appointment. We do not know the direction in which their minds run economically. We do not know whether, for instance, they have particular sympathies for Germany, for France, or for one of the other European powers. The important point is that, in the decision of Great Britain to join the Common Market, we see a country with a long and proud history virtually handing over its sovereignty, to a commission which could become a dictator.

While the world politics are in the hands of the United Nations the full searchlight of world opinion may be turned on them. The United Nations Organization, for better of for worse, is a forum in which the activities of nations can be thrashed out. It is, in my view, the best hope for the maintenance of world peace. I see in this politicoeconomic unity of European nations the establishment of an organization which could threaten the importance, if not the very existence, of a strong world force such as the United Nations. The European hatreds and jealousies may influence, with their new-found strength, world affairs and world politics.

I certainly hope that economics, as we have known it, can take a higher aim and envisage a wider horizon than the mere pursuit of profit. The members of the European Economic Community should appreciate the great power that they have taken unto themselves. I hope that England will be able to exert her knowledge of democratic government and make use of the know-how that she has gained throughout the years. I say, in the kindest way, that this new force is basically and numerically un-British. I hope that it will not lead the British people along the traditional lines of European politics which inevitably have resulted in war. As Professor Hallstein has said, the members of the European Economic Community are not in business for common marketing or for purposes of tariffs and such matters; they are in business for politics.

As a result of the debate of this matter in the Parliament, I think that the people of Australia will give a lot more thought to it than they have in the past. I feel that the Australian people have been let down by the Government because it has not informed them through the avenues of propaganda, such as the services of the Australian Broadcasting Commission and the press, of what is involved in this change of status that has been occuring for quite a number of years. The Prime Minister (Mr. Menzies) claims that he has taken an interest in it. But other people have been throwing out warnings, and it was inevitable that the present situation would arise. All the information that came to us about the European Free Trade Association, through our normal lines of communication, indicated that it was a good idea. When the association failed, we were not warned of the significance of the failure. The Australian people were not advised of that. It came to the forefront all of a sudden when Mr. Duncan Sandys, a member of the British Government, came to us and said, in effect, “ We will have to join the Economic

Community and you will have to take it or leave it “. That is virtually what the British Government was forced to say to Australia. The Prime Minister, in his own inimitable way has smoothed the situation over as with syrup. He has made such astounding statements as “ lt is difficult to assess the prospects “ and, when speaking of the beef cattle and sugar industries in the north of Australia, “ None of these industries could exist on its present scale without large exports “.

Senator Vincent:

– Is not that true?

Senator O’BYRNE:

– Yes, but I am certain that very few people engaged in the beef or sugar industries knew about the Common Market until the fait accompli was presented as a result of Mr. Duncan Sandys’ visit to Australia.

Senator Vincent:

– We are not trying to join the Common Market. Great Britain is applying to join.

Senator O’BYRNE:

– I realize that, but I want to know the implications and what will flow to this country as a result of the disintegration or the alteration of the traditional concept of the British Commonwealth, which is inevitable.

Senator Vincent:

– Even the British Government does not know that yet.

Senator O’BYRNE:

– We should be thinking about it, finding out about it, informing the people about it, and making plans.

Senator Wedgwood:

– Well, do not make wild statements about it.

Senator O’BYRNE:

– I have not made any wild statements. I have given my opinions. I am entitled to do so. Honorable senators on this side of the chamber have not yet reached the stage that Government senators have reached in which we all have to talk along the same orthodox lines.

Senator McCallum:

– Oh!

Senator O’BYRNE:

– If Senator Wright or any other Government senator gets out of line, he is very strongly rebuked. Just because every senator on the Government side has to speak along orthodox lines, do not think that everybody on this side has to do so.

We on this side of the chamber realize the facts of economic life. We realize that we are living in critical times, that the old order changeth giving place to a new. I only hope and pray that, out of this difficult situation will emerge a condition of affairs that will improve the lot of the peoples of the world. We have reached a crisis; the profit-seeking of the capitalist system has met its end with the development of the threat to us from the East through methods of production and form of presentation. The objective is production not for profit, but only for strategic purposes. The threat that is being posed to us to-day is one that we must meet. We must meet the challenge.

Senator Vincent:

– Do you like that idea?

Senator O’BYRNE:

– I am expressing a point of view. I say that if this Common Market enables the people of Europe to improve their standard of living and increase their hope and their faith, not only in themselves but also in their continent, the peoples of Asia and Africa and Latin America, in turn, will have faith in their future. That will be a good thing.

Senator Paltridge:

– Do you think that Australia should join the Common Market?

Senator O’BYRNE:

– I believe that, indirectly, Australia will have to tag along and take the crumbs from the rich man’s table. I think that, due to our geographical position, our numbers and our financial position, we shall just have to take whatever is given to us. We are not strong enough to bargain. We shall be left like a shag on a rock. That is the situation in which we find ourselves as a result of the present economic position. We are a part of Asia, but we have not made friends there as we should have done. We talk about making friends with Indonesia and other parts of Asia, such as Malaya, but we immediately qualify our statements. The Australian Democratic Labour Party has advocated a fantastic kind of trade agreement. None of the countries that would be included in the agreement can afford to buy anything. Figuratively speaking, people in those countries are living on a bowl of rice and a slap on the back. That would be a wonderful organization!

Although this matter has been presented to us at the last minute, there is no alternative for us but to support the entry of Great Britain into the European Economic Community. I hope - although I have my fears about this - that this Government, having been caught in its own web of inflation and having costed us out of the markets of the world, will be able to get a good deal for Australia out of the scramble that will follow.

New South Wales

– We are debating a motion and an amendment to that motion. I shall speak to the amendment first, because I think it is very petty and trivial and can be easily dismissed. I shall reply first to what Senator Hendrickson has said. Because over the years he had asked a number of questions and had not got the kind of replies he wanted, he made the astounding statement that he knew what was going to happen but that apparently nobody on this side of the chamber knew.

Senator Vincent:

– A Daniel come to judgment!

Senator McCALLUM:

– Yes. I could have answered his questions but my answers would not have been official; they would have been only private opinions. It is not the function of a Minister of State to act as a research officer, and any of the answers that could have been given by the Government could have been obtained by Senator Hendrickson by visiting the Library.

The Government has obviously been carefully watching the situation for years. The whole of our trade policy, the establishment of the Department of Trade and the building up of new trade areas are a recognition of the fact that the Government knew that the possibility of trade diversion existed.

I shall now answer the contentions that have been made by Senator McKenna. I think that his contribution to the debate was a very good one. Obviously he knows a great deal about the new institution that has been set up. I listened to him with very great interest until he quoted little excerpts from speeches that had been made by former Governors-General just to prove that the Government was wrong. I shall answer only the serious allegations that he has made. Senator McKenna and other honorable senators, including Senator O’Byrne, have given the impression, perhaps unwittingly, that Great Britain will come in too late, as a mendicant bowing humbly before an established group. I hope to demonstrate in the course of my speech that that is not the situation at all. For one thing, the Prime Minister said last night that we have friends in Europe. I have discovered one. He is no less a person than Mr. Luns, the Foreign Minister of the Netherlands. I have read an article that he wrote in May, 1961, which was published in a very authoritative journal, “ La Revue Politique et Partlementaire “ in which he stated as the opinion of the Government of the Netherlands that The Six must guard against the division of Europe into different camps and that it should aim to allow any free country in Europe to enter. He stated that it was considered essential that the door remain open at least to the participation of Great Britain. If that is so, Great Britain certainly will not be going there as a mendicant.

Senator McKenna said that the United Kingdom should have entered and could have entered at the beginning. It could have entered at the beginning but its reasons for hesitation were very sound. The Common Market means, as honorable members have stressed, not only an economic association but also a political association on a new and untravelled path, the end of which nobody can see to-day. Great Britain’s policy ever since there was first a Great Britain, which was in 1603, and England’s policy from the time of Cardinal Wolsey, a very wise statesman, was that England should never enter the Continent except on special occasions, in the main to prevent the rest of Europe from falling under the hands of one tyrant. So Britain did intervene in a few little wars and a few bigger wars against Louis XIV., Napoleon, and later on in the two wars with Germany. Always the British Government and the British people believed in their insularity. They thought that they should be part of Europe but nevertheless in their island home distinct from it, and that their intervention should only be to prevent the complete domination of Europe by some form of tyranny. Those days have gone. But we know perfectly well that the basis of Britain’s insularity and security was the navy in the days when the navy was the sole force outside the big landed territories. That situation has gone and to-day it is necessary that Britain should participate in Europe.

Senator McKenna neglected, too, the fact that another reason for Britain’s dilatoriness, if one could call it such, was the desire to protect her own agriculture. In giving his rather eulogistic account of the success of the Common Market and the European Economic Community, he neglected to state one of the most important facts, which is that on agriculture a common policy has not yet been found, and it may be that Britain has come in at the right time, when such a policy is being sought.

All that has happened about agricultural policy is that the commission - I shall explain a little later what I know about these various bodies - which we can regard as a technical body, not a representative body, has made certain recommendations about agriculture, which have been referred to the council, and the council has not yet come to a decision. Consequently, Britain is entering at a time when the whole question of agricultural protection and agricultural common policy is open. From my knowledge of Europe, I think that there is as much hostility between the agricultural populations of various countries of Europe as there is between them and Great Britain, and Great Britain probably will help in a solution which the others have not yet been able to find. As honorable senators know, in any country the peasant is a very hard person to deal with.

Senator Wade:

– Where are you looking?


– At you, Sir. The man on the land is a very hard man to deal with, possibly because he is close to nature, possibly because he understands the realities of life better than do some of us in the cities. I know the French peasant. I do not know the other European peasants, but I am quite sure that they are just as difficult to deal with. To give a little reality to the promises that have been built on this successful community which is already in control of Europe - that is the impression I would derive from some statements made - I mention that M. Debre, the present Prime Minister of France, speaking to some peasants in one French province who were coming out with pitch forks on their shoulders, as if they were about to start a revolution, said, “The Rome Treaty is full of fine sentimentalities, but there is not much hard reality in it “.

So we are not dealing to-day with an established family business, and I think it is well to look at these institutions to see what they are. Senator O’Byrne spoke of loss of sovereignty. If all of the provisions of the treaty are faithfully carried out, it is quite certain that some of what is commonly regarded as sovereignty will be transferred to this supra-national body, but the real sovereignty still resides with the national government. How much sovereignty some of them are prepared to concede is shown to-day by their actions in other directions. I hope that there are not too many lawyers in the chamber at present. I am not a lawyer but I once did read and listen to lectures on sovereignty and my layman’s interpretation is that the sovereign is the man who can give the command which must be obeyed. The only sovereign bodies in Europe are still the national states. The degree of sovereignty or authority that has been transferred rests on treaties. That is very important, because it has long been regarded in Europe as a matter of international law that treaties must be obeyed, and that a government cannot denounce a treaty unilaterally but only by agreement with others. But treaties have been broken, sometimes most blatantly, and when they have not been broken various by-ways have been found for getting round them. This supra-national body, the European Economic Community, is still subject to the six nations which belong to it. Certainly in the case of the three greater powers, and I imagine in the case of Holland and Belgium, that means that it must convince the governments, the people, and public opinion in each of those countries before a further step can be taken.

Let us have a look at these institutions which are apparently above the nation. The original statement does show that a perpetual institution is intended. The last clause in the treaty states that these arrangements are intended to go on virtually forever. That is quite definite, but all of the authority rests only on a treaty. Many of the things that are contemplated are to be done only if a renewal of a mandate is given by the governments of the separate countries. The institutions set up are these: First, there is an assembly that is at present chosen by the parliaments of the six countries. It is in the power of that assembly, with the consent of the countries, to have the system altered to popular election. As Senator McKenna said this morning, a measure has already been taken to see that this is partly done and probably it will be done fully. At the moment, its members are elected by the parliaments of their countries. The representation is a compromise between our systems of electing the House of Representatives and the Senate. Each of the three greater powers, Germany, France and Italy, has 36 members. Belgium and the Netherlands have fourteen members, and little Luxembourg has six. I see that Senator Wright is not behind me so 1 can say that Luxembourg is as much over-represented as is Tasmania in the Australian Parliament.

Then there is a commission, which is a technical body. It is to be, as it were, the heads of the public service of the assembly. The treaty does not state exactly how the members are chosen, except that they are chosen by the council. Apparently it is by common agreement amongst the countries concerned. The only stipulation I have found in the treaty is that there must not be more than two members on the commission from any one country. I suppose that means that the greater countries will have two members and the smaller countries possibly one. But that is not a political body; it is not a representative body. It is in the nature of a public service. It can make representations to the assembly and the council, but it has no authority except to carry out what has already been agreed to. Of course, a great deal has been agreed to. Then there is the court of justice, but as far as I know, so far that has had nothing to do. As far as I am able to understand them, its functions are rather vague.

We must not consider the European Economic Community as an already established institution which has great power in and of itself. Its power still depends on the parliaments, heads of state and the people in the countries concerned.

Senator Vincent:

– And the treaty.

Senator McCALLUM__ And the treaty, of course. It is all strictly regulated by the treaty.

Senator O’Byrne:

– Will the treaty or the parliaments have the power?

Senator McCALLUM:

– First of all, the treaty but ultimately the parliaments would have the power. The power has never been transferred to this new body as a sovereign body; it simply rests there on the treaty. .

Senator O’Byrne:

– Whoever controls the finance controls the people and the whole show.

Senator McCALLUM:

– There we are getting down to something that is very elementary. I believe that the strength of the organization rests on what the people of the countries concerned want. I believe, moreover, that there is a very profound conviction in all those countries that Europe is so menaced by the threat from the East that it must mobilize to be ready, and furthermore that the advantages flowing to all intelligent men in any kind of occupation are so much greater in a common market or big free trade area that they can improve their standard of living by establishing such an organization.

In addition, there is in Europe amongst people who understand these things a deep sense of the old European tradition. Let it be remembered that once there was a belief that Europe was a unity. It has only been in the last four centuries that various nationalisms have been so intense and strong that we have come to regard Europe as a sort of greater Balkans - a place where nation fought against nation. Behind this body we are considering is that sentiment. That, I believe, is its real strength. If they wished, the parliaments of the separate countries could abrogate the treaty just as treaties have been abrogated in the past, but I do not think they will do so. Thi point I have been making all along is that the picture of Britain coming along and humbly asking to be admitted is quite wrong. I have quoted the views of the Foreign Minister of the Netherlands. And I believe that in the other countries there are people who would welcome Britain, because she will be a fourth greater power.

Britain’s relations with Italy, France and Germany are better than the relations that any of the latter three have ever had with one another. That is one of the important and profound facts of European history. Italians - certainly democratic Italians, who love the parliamentary tradition - recall that Britain helped in the unification of their country. So did France. For that reason, apart from the bitterness of the last war, which was caused by a dictatorial government, there has always been an undercurrent of good feeling between the French, the Italians and the British. Germany is further removed from them all. But many of us believe that, since the Federal Republic of Germany was founded under that magnificent statesman, the Chancellor Adenauer, who is one of the grandest men in the world to-day, that part of Germany which can speak for itself has once and for all turned its back on militarism and has adopted the institutions which she failed to make work in the past. There always was a great German liberal tradition, but unfortunately whenever it tried to assert itself it was crushed. It was crushed first by the militarists and later by this madman Hitler and the gang he had behind him.

SenatorO’Byrne. - The militarists?

Senator McCALLUM:

– Certainly, you cannot accuse Adenauer of being a militarist. He has fought all his life against the militarists and everything they have stood for. I have great confidence in him, the men working with him, and the democratic tradition in Germany, which at last is finding its own. There was another reason - I advert again to Senator McKenna’s speech - why Britain was hesitant to enter the European Economic Community at the beginning. At that time, Europe did not look nearly as stable or as sound as it is to-day.

Senator Scott:

– Particularly France.

Senator McCALLUM:

– I had the fullest confidence in what was happening in France. As a matter of fact, I assumed the role of a prophet and said that what, in fact, has happened over the last two years would happen. I found that few people would agree with me, and I did not blame them. When all is said and done, when you have a parliament in which it is difficult to form a cabinet and in which good cabinets, led by very able and wise men, crash within a few months, you cannot expect the outsider to regard the country concerned as being stable. Even to-day, of course, there is reason for disquiet. Nevertheless, since the last war France has progressed immeasurably. In fact, she was progressing even before the present Presi dent, General de Gaulle, came to power. That, I believe, was largely because of a certain stability in the people of the country. A German-speaking Swiss observer, whose comments I have read, summed up the French by saying that they obey invisible laws. If honorable senators ever happen to be in France, that would be a wise saying for them to keep in mind, because if you break one of those invisible laws you are finished and done with. That is one reason why I think some tourists misunderstand the French. People fall into misunderstandings and presumptions and then find they are quite wrong.

Whatever the reason is, to-day France is as stable and secure as any other country. Even the great problem of her overseas empire has largely been solved, almost in the same way that the problem of Britain’s overseas empire has been solved. The North African business is so intricate and difficult that it is not solved yet; but no one can doubt that the present Government has taken great risks and has shown great courage in its attempts to solve that problem. France has lost one or two parts of her empire just as Britain has completely lost one or two parts of what was formerly the British Empire. But just as the mass of the British Commonwealth is in close relationship with us, so the mass of the former French empire is in close relationship with France. Mr. President, I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

page 107



Reports on Items.

Senator GORTON:

– I lay on the table reports by Deputy Chairman of the Tariff Board on the question whether temporary duties should be imposed on the following items: -

Acrylic yarns.


Copper strip and copper alloy strip.

Electrically-operated clocks.


Man-made fibre piece goods.

Nitrogenous fertilizers.

Paper and paper boards - two reports.

Piece goods of wool or containing wool.

Non-pile fabrics imitating furs.

Pile floor coverings - two reports.


I lay on the table, also, the reports of the Tariff Board on the following items: -


Citrus pulp and citrus juices.

Cycle parts and accessories.

Hoop and strip of iron and steel.

Lawnmowers and air-cooled internal combustion engines not exceeding 10 brake horse-power.

Narrow fabrics.

Tailors’ and dress-makers’ dummies.

Tetrasodium pyrophosphate and sodium tripolyphosphate.

Dried figs.


The Government has accepted the board’s recommendations on dried figs, but it has decided to retain the existing revenue duties. The duties on ginger in brine or syrup, also, are being retained.

Senate adjourned at 5.46 p.m.

Cite as: Australia, Senate, Debates, 17 August 1961, viewed 22 October 2017, <>.